Hits & Takes
John Lothian & JLN Staff
CME Group Executive Chairman and CEO Terry Duffy has penned a commentary for the Financial Times titled “Risk management is the alpha for a time of uncertainty.” That is a very insightful and catchy title. The subheadline is “After two decades of easy money, investors will have to manage portfolios with almost constant market challenges ahead.”
I particularly liked this paragraph from Mr. Duffy’s commentary, which sounds like the wisdom we have come to expect from the long-serving CME chairman:
“But not every idea is a good one – a sobering fact that was less obvious in the recent environment where the elevator only went up and everyone could seemingly get to the penthouse. Innovation needs a use case that demonstrates purpose, solves a problem or creates a benefit. Without that, it is merely noise.”
Word has reached JLN that Mike Newsham has passed away after a brief illness. He was recently diagnosed with esophageal cancer, sources said. Newsham was ever present at any industry activity. He started his career with O’Connor & Associates. RIP Mike.
The Wall Street Journal has kindly assembled a timely Tax Guide for 2023. One of the first things it notes is that for people who don’t itemize, the $300 for 2020 or $600 for 2021 ability to deduct for cash donations is gone. That helped charities during the pandemic.
The John L. Keeley Jr. Center for Financial Services and the Department of Finance at DePaul University will hold a program titled “The Digital Transformation of Finance” featuring Nasdaq, Coinbase, Northern Trust, Wells Fargo and Fintech Startups. I will also be making a few comments near the beginning of the program.
The CME Group, through its strategic investment arm, CME Ventures, has invested in Kemiex. Other investors are DTN and the family office Wille Finance. Kemiex AG is “a specialised and fast-growing provider of procurement, sales and intelligence platforms for physical raw materials.”
On June 26 and 27, 2023, P.R.I.M.E. Finance will hold its tenth Annual General Meeting at the Peace Palace in The Hague, the Netherlands. P.R.I.M.E. Finance, based in The Hague, has been established to assist judicial systems in the settlement of disputes on complex financial transactions. Its management board is chaired by Robert Pickel, former CEO of the International Swaps and Derivatives Association (ISDA).
The Association for Financial Markets in Europe (AFME) yesterday sent out a message following the announcement of a political agreement on a Northern Ireland protocol deal. Adam Farkas, chief executive of the Association for Financial Markets in Europe (AFME) commented:
“AFME strongly welcomes the agreement reached today between the EU and the UK. This should now unlock formal regulatory cooperation in the area of financial services based on the joint declaration accompanying the EU-UK Trade and Cooperation Agreement. It is crucial that both sides now activate the Memorandum of Understanding to establish regulatory dialogue and enable enhanced cooperation and coordination, including allowing for regular exchanges on trade and market access issues as well as equivalence provisions.”</p?
Paul Wightman has been promoted to the role of senior director in the research and product development group at the CME Group.
Yesterday an hour after JLN was published the emergency storm warning alarm in Elmhurst went off as we were under a tornado warning. Two tornadoes touched down, one in Joliet and another near Naperville. This massive storm later triggered storm alarms near Indianapolis near where Patrick Lothian lives. And this same storm is headed to the northeast US and prepared to deliver to New York and parts of New England the largest snow storm of the season, NBC News reports.
There is an auction of unique Chicago assets going to market that start at the ground floor and jump to championship levels. Michael Jordan’s Championship Air Jordans, one from each Chicago Bulls Championship game, are going up for auction. Here is your chance for some sneaker art, but the auction is in Dubai today, The Wall Street Journal reports.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Trading Technologies has partnered with Bantix Technologies, an options software development company, to make QuikStrike, Bantix’s options analysis software application, available via the TT platform. The move allows TT users trading listed derivatives, including options on futures, such capabilities as options pricing, analytics and data retrieval, historical volatility tools, risk analysis and more. Brokers and traders will be able to access the QuikStrike interface through TT via a single click. ~SR
Intro to the OIC, OCC, and How to Analyze Volatility; Mat Cashman, Experienced Trader & Principal of Investor Education at the OIC, Explains These Concepts in Part One of This Options Discovery Full Interview
In this Options Discovery full interview, Alex Teng sits down with Mat Cashman, principal of investor education at the OIC, to discuss Mat’s background, the OCC, and volatility. To learn more about the OIC and access their host of free options tools, go to https://www.optionseducation.org/.
Options Discovery Episode 14: Volatility Analysis; OIC’s Mat Cashman Breaks Down the Relative Value Framework with JLN’s Alex Teng
In this episode of Options Discovery, Alex Teng introduces the concept of the relative value framework and volatility analysis. Alex also speaks with Mat Cashman, principal of investor education at the OIC. Mat explains implied and historical volatility and how to use the relative value framework to analyze options. To learn more about the OIC and access their host of free options tools, go to https://www.optionseducation.org/.
Risk management is the alpha for a time of uncertainty; After two decades of easy money, investors will have to manage portfolios with almost constant market challenges ahead
Terry Duffy – Financial Times
Well, it was fun while it lasted. Two decades of easy money with low to zero interests, further juiced by successive rounds of ever larger stimulus spending, turned prudent investment principle on its head. Scores of novice investors flocked into the markets with the belief that buying every dip was a masterclass strategy to guarantee profit. That’s understandable; when there is only upside, it’s easy to be fooled into thinking flash can replace knowledge and that gimmicks can substitute for discipline.
****** Terry Duffy is the Alpha-dog of risk management.~JJL
Thomas Lee Is Remembered by Milken, Kraft as Wall Street Trailblazer; The private equity pioneer, who died last week by self-inflicted gunshot wound, evokes memories of being generous with both his time and money.
Amanda L Gordon – Bloomberg
Thomas H. Lee began his senior year of Harvard setting up a table with a sign: “Meet Tom Lee.” That was his novel presence at registration day for extracurricular clubs like chess, Shakespeare and astrophysics. Lee, according to family lore, was looking for a girlfriend (and, the story goes, found one). Inevitably, he also put himself out there to gather interesting and interested people – the kind who’d approach such a booth with optimistic curiosity – into his orbit.
****** I have a cousin named Thomas Lee, so I always paid attention to this Thomas Lee. My Tom Lee, son of my mother’s late sister and husband, John Lee, is a distant relation to Robert E. Lee, the Civil War general of the Confederacy. ~JJL
Downtown Chicago Now Has More Residents Than Before the Pandemic; Loop’s population is estimated to have grown 9% since 2020; Future of downtown will be more residential: Loop Alliance CEO
Isis Almeida – Bloomberg
You wouldn’t know it from the empty streets on a Friday morning, but there are now more people living in downtown Chicago than before the pandemic. The number of residents in the Loop – as the city’s central business district is known – grew by almost 9% since 2020, according to estimates from the Chicago Loop Alliance.
****** I am just wondering if they are counting people or rats.~JJL
Fed says overvalued commercial real estate poses risk to financial system
Aaron Elstein – Crain’s New York Business
Worries about empty office towers have reached the Federal Reserve, which has warned that ongoing problems in commercial real estate threaten the stability of the financial system.
****** There has always been so much “bloviation” in commercial real estate that given the pressures they are under now, it has to be that much worse. Buildings will give you months of free rent, so they can say their average paid rents are so much higher. There are so many games they play to manipulate the numbers so things look better than they actually are.~JJL
China should pay reparations if Covid leaked from a lab
Matthew Lynn – Then Telegraph
It might have been a moment of carelessness. It might have been a rogue worker. Or it might even have been done deliberately. Whatever the explanation, there is a growing belief within security, intelligence, and medical circles that Covid-19 escaped from a laboratory in Wuhan. Three years of lockdowns, an estimated six million deaths, and a shattered global economy may all have been caused not by a horrific accident involving food markets and bats, but because a virus broke out of a lab and infected humans.
******You could never prove this to the Chinese government beyond a reasonable doubt, and even then I doubt they would believe or accept it.~JJL
Monday’s Top Three
Our most clicked item on Monday was the job posting for a Manager of Corporate Communications at the CME Group. Second was a tie between the memoir by the late Joe Sullivan from Cboe’s historical collection and Goldman Sachs has lost its way, subtitled “The wisdom of Solomon’s strategy will be weighed by investors,” from the Financial Times. Third was Arming Ukraine: how war forced the EU to rewrite defence policy, also from the Financial Times.
27,222 pages; 243,180 edits
CFTC Picks Former Cybercrime Prosecutor as Enforcement Chief; Ex-Manhattan prosecutor’s experience points to commission’s growing focus on digital-asset risks
Dave Michaels – The Wall Street Journal
The Commodity Futures Trading Commission hired a former cybercrime prosecutor who oversaw some early federal cases involving cryptocurrencies as its enforcement chief, the latest example of regulators adapting to the risks posed by digital assets and other financial innovations. In his new post, Ian McGinley oversees a team of 120 civil-enforcement attorneys who investigate fraud and misconduct in futures markets tied to energy and agricultural commodities, as well as the newer world of digital assets that qualify as commodities, CFTC Chairman Rostin Behnam said Monday in an interview.
Chairman Behnam Announces Veteran Federal Prosecutor Ian McGinley as Enforcement Director; McGinley Arrives with Significant Experience in Commodity Fraud, Crypto and Cyber Enforcement
Commodity Futures Trading Commission Chairman Rostin Behnam today announced that longtime federal prosecutor Ian McGinley will serve as the agency’s Director of Enforcement. Mr. McGinley’s arrival supports the Chairman’s continued focus on aggressively monitoring and policing commodity markets at a time of heightened stress and volatility, emerging digital threats to financial markets, including cryptocurrency frauds, cyber-enabled financial fraud, and cyberattacks. Mr. McGinley spent more than a decade as a prosecutor at the United States Attorney’s Office for the Southern District of New York (SDNY), where he co-led the Complex Frauds and Cyber Crime Unit, and also served as a senior member of the Securities and Commodities Task Force, among other positions.
SPACs Shift to More Obscure Exchanges to Keep Deal Dreams Going
Bailey Lipschultz – Bloomberg
Struggling SPACs that are facing a broad investor desertion are moving their listings to smaller exchanges in an attempt to keep alive their hopes for eventually cutting a deal. At least seven special-purpose acquisition companies have down-shifted to stock exchanges with more lax requirements this year after the vast majority of investors pulled out their money. That means blank-check firms with less than a minimum number of publicly held shares or a smaller investor base can survive.
As Americans Work From Home, Europeans and Asians Head Back to the Office; Return-to-office rates in Paris and Tokyo have climbed to over 75%, while U.S. often sits around half
Konrad Putzier – The Wall Street Journal
While U.S. offices are half empty three years into the Covid-19 pandemic, workplaces in Europe and Asia are bustling again. Americans have embraced remote work and turned their backs on offices with greater regularity than their counterparts overseas. U.S. office occupancy stands at 40% to 60% of prepandemic levels, varying within that range by month and by city. That compares with a 70%-to-90% rate in Europe and the Middle East, according to JLL, a property-services firm that manages 4.6 billion square feet of real estate globally.
The Fed Doesn’t Care About Wall Street as Much as Wall Street Thinks
Emily Graffeo – Bloomberg
There’s something of a ritual performed each time Federal Reserve Chair Jerome Powell speaks to the press: A reporter asks Powell about financial conditions; he says they’ve tightened a lot; the Wall Street crowd snickers. To them, the notion seems ludicrous. Notwithstanding the selloff the past few weeks, markets have rallied in start-and-stop spurts for four months, swelling equity valuations and making it easier for companies to raise cash in stock and bond markets. The implication is that the Fed is letting investors undermine its efforts to choke off the flow of money and tame inflation.
The SPAC Fad Is Ending in a Pile of Bankruptcies and Fire Sales; At least eight businesses that went public through mergers with “blank-check” companies have sought protection from creditors.
Bailey Lipschultz and Jeremy Hill – Bloomberg
It took only 10 months for Quanergy Systems Inc., a maker of high-tech sensors and software, to go from its stock market debut to filing for bankruptcy. Fast Radius Inc., a 3D-printing company, made it nine months. Online retail startup Enjoy Technology Inc. lasted eight-and-a-half months before it filed.
Euronext CEO Confident IPO Conditions Are Poised to Improve; Market volatility is still seen weighing on outlook for IPOs; TMP Group, Lottomatica show activity starting to pick up
Diederik Baazil and Sarah Jacob – Bloomberg
Euronext NV, Europe’s largest stock-exchange group, says the pipeline for initial public offerings remains strong even amid a current drought, but companies are having difficulty picking the right time to list because of market volatility. There’s a vibrant set of businesses, particularly in the technology sector, that are ready to go public, Euronext Chief Executive Officer Stephane Boujnah said in a video interview from Paris Monday.
T-Bill Sales to Get Slashed Soon as Debt-Cap Deadline Draws Near
Alexandra Harris – Bloomberg
The US Treasury Department is on the cusp of once again having to slash the amount of Treasury bills floating around, potentially creating ripples in funding markets as investors chase a dwindling supply of securities or hunt for other places to stick short-term cash.
TD, other banks reach $1.35 billion settlements to end Stanford litigation
Jonathan Stempel – Reuters
Three banks agreed to pay $1.35 billion to resolve litigation by former Allen Stanford investors who accused them of contributing to the imprisoned financier’s massive Ponzi scheme. Canada’s Toronto-Dominion Bank will pay $1.205 billion, HSBC Holdings Plc will pay $40 million and Independent Bank Group Inc, formerly Bank of Houston, will pay $100 million.
Binance Moved $1.8B in Stablecoin Collateral to Hedge Funds Last Year: Forbes
Jamie Crawley – CoinDesk
Cryptocurrency exchange Binance moved $1.8 billion of collateral meant to back its customers’ stablecoins to hedge funds last year, according to a Forbes article on Monday. According to the report, Binance transferred the collateral to hedge funds including Alameda and Cumberland/DRW and did so without informing its customers.
Cash-Like ETF Attracts $2.5 Billion in Biggest Haul Since 2020; Short-duration bond funds see huge inflows as stocks whipsaw; Six-month Treasury bills yield about 5%, highest since 2007
Katherine Greifeld – Bloomberg
Turbulent equity markets and lofty bond yields has cash back in high demand. Nearly $2.5 billion flooded into the $23 billion iShares Short Treasury Bond ETF (ticker SHV) last week, data compiled by Bloomberg. That’s the biggest weekly influx for SHV, which holds bonds maturing in one year or less, since the depths of the pandemic in March 2020. With yields on short-dated Treasury bills hovering near multidecade highs, cash is enticing investors once again after record demand in 2022.
China’s IPO reforms: speculators abandon ‘indecent’ penny stocks as new rules reduce incentives for back-door listings
Zhang Shidong – South China Morning Post
Punters have been dumping penny stocks on China’s exchanges, driving prices down far enough and long enough for some companies to face delisting, as sweeping rule changes tamp down speculation about back-door listings and clean up a dark corner of the nation’s US$11 trillion stock market. Shares of Sichuan Western Resources Holding have been trading below the minimum value of 1 yuan for 20 consecutive days as of Monday in Shanghai, meeting the delisting threshold set by the Shanghai and Shenzhen exchanges.
Trafigura Lines Up Russia Aluminum Deal in Challenge to Glencore; Trafigura is in talks to buy about 150,000 tons from Rusal; Top Rusal buyer Glencore said it won’t enter new Russian deals
Jack Farchy and Alfred Cang – Bloomberg
Commodity trader Trafigura Group is in talks to buy aluminum from United Co. Rusal International PJSC, highlighting its willingness to strike new deals with Russian companies even as its biggest rival balks. Trafigura and Rusal are discussing a term contract for about 150,000 tons of aluminum on a delivered-China basis, according to people familiar with the matter, who asked not to be identified as the matter isn’t public.
Trafigura: the 10-day unravelling of an alleged $500mn fraud; Commodity trader alleges the ‘controlling mind’ behind nickel scheme repeatedly tried to stall for time
Harry Dempsey, Leslie Hook and Robert Smith – Financial Times
A heart attack, a handwritten note and 1,000 shipping containers full of unknown material – the details of one of London’s biggest commodity fraud cases read like a thriller. Singapore-based trading house Trafigura has accused metals tycoon Prateek Gupta and his companies of selling it fake nickel cargoes worth hundreds of millions of dollars, in a high-profile lawsuit that has sent shockwaves through the sector.
Glencore Must Pay Almost $30 Million to Bribery Victim Crusader Health; Healthcare provider shut down by Glencore unit, judge says; Glencore paid about $1.5 billion to settle bribery probes
Chris Dolmetsch – Bloomberg
Glencore Plc was told to pay almost $30 million in restitution to the founders of a company that provided healthcare related services in the Democratic Republic of the Congo and was forced to shut down as a result of the commodities giant’s global bribery scheme. US District Judge Lorna G. Schofield in New York on Monday ordered Glencore to pay $29.6 million to the company, Crusader Health, for bribing a public official in the Democratic Republic of the Congo in exchange for dismissing a lawsuit brought by Crusader against a Glencore subsidiary. Crusader had sought more than $50 million.
Charlie Javice, the 30-year-old Frank founder accused of fraud, says Jamie Dimon took a personal interest in her $175 million acquisition
Luisa Beltran – Fortune
Charlie Javice alleges it was Jamie Dimon, JPMorgan Chase’s powerful billionaire CEO, who took a personal interest in the bank’s acquisition of her financial aid site Frank, telling her in July of 2021 that he thought JPMorgan should “get the deal done,” according to court documents filed Monday in Delaware District Court.
Robinhood Received Crypto-Related Subpoena Request From SEC: 10K
Nelson Wang – CoinDesk
Robinhood Markets (HOOD) received an investigative subpoena from the U.S. Securities and Exchange Commission regarding its crypto operations shortly after the FTX crypto exchange filed for bankruptcy protection in November, the popular trading platform revealed in its latest 10-K filing.
Amazon Employees Will Be Able to Use Stock as Collateral for Home Loans; Arrangement with Better.com will allow borrowing against shares for down payments at higher interest rates at a time when tech giant’s stock is down
Dana Mattioli – The Wall Street Journal
Amazon Inc. employees will soon be able to use their company shares as collateral when buying homes, under an arrangement with online mortgage lender Better.com. A new Better.com product, Equity Unlocker, will allow employees to pledge stock for loans for down payments, the companies said, rather than having to sell the stock to raise cash. To protect itself from a continued slide in Amazon’s stock price, Better.com will charge a higher rate on the mortgages of employees pledging stock-between 0.25 and 2.5 percentage points above the market rate, depending on how the down payment is structured, the company said.
Digital Pound Could Protect Consumers in Bank Runs, BOE Says
Lucy White – Bloomberg
Bank of England Deputy Governor Jon Cunliffe said a new digital version of the pound could help protect consumers in the event of a failure in the banking system, adding to arguments in favor of a project make a form of cash usable online. The official said that consumers are already living “in an era of instantaneous bank runs” where depositors can move money quickly to another institution if they’re worried about the solvency of the bank where they keep deposits.
Credit Suisse ‘Seriously Breached’ Rules in Greensill Case; Bank made ‘partly false’ statements to Finma about funds; Regulator opening enforcement proceedings against individuals
Hugo Miller and Myriam Balezou – Bloomberg
Credit Suisse Group AG “seriously breached” its risk management obligations in the Greensill Capital supply-chain financing affair, Switzerland’s banking regulator has concluded as it closed its probe against the bank. The Swiss bank was ordered to take remedial measures by Finma, which include a periodic executive board level-review of the most important business relationships for counterparty risks, the regulator said in a statement on Tuesday. The bank must also record the responsibilities of its 600 highest-ranking employees in a “responsibility document,” Finma said.
Credit Suisse breached supervisory law over $10bn Greensill funds; Swiss regulator Finma concludes two-year investigation into bank’s failings on supply chain funds
Owen Walker and Robert Smith – Financial Times
The Swiss financial regulator has concluded its two-year investigation into Credit Suisse’s failings over the collapse of specialist finance firm Greensill Capital, finding there had been a “serious breach of Swiss supervisory law”. The implosion of Greensill in March 2021 caused Credit Suisse to suspend and close $10bn worth of funds that had lent money via the supply-chain finance business, trapping the savings of 1,000 of the Swiss bank’s most prized clients.
Crash Course: Cryptocurrencies Vs. Reality; A learning moment, brought to you by the Winklevoss twins, crypto, innovation and raw hucksterism.
Timothy L. O’Brien – Bloomberg
One of my favorite scenes in The Social Network, Aaron Sorkin’s takedown about Facebook’s founders, is when the actor playing Harvard president Larry Summers upbraids the actor playing the dual role of the Winklevoss twins. Don’t ask the university to intervene in your petty dispute with Mark Zuckerberg, he tells them. “Everybody at Harvard is inventing something,” he adds. “I suggest again that the two of you come up with a new, new project.”
Shell explored quitting Europe and moving to the US; Executives discussed potential shift in 2021 in effort to close group’s valuation gap with US rivals
Derek Brower and Tom Wilson and Anjli Raval – Financial Times
Shell’s top executives explored moving the Anglo-Dutch energy group to the US in a proposal that threatened to deliver a hammer blow to the City of London. Wael Sawan, the oil and gas group’s new chief executive, was among a group of top managers who in 2021 discussed the advantages of shifting the company’s listing and headquarters to the US, according to people familiar with the talks.
A Gold Mine of Clean Energy May Be Hiding Under Our Feet
Peter Coy – The New York Times
Sometimes we miss things in front of our faces. We don’t see what we aren’t looking for. “We can be blind to the obvious, and we are also blind to our blindness,” Daniel Kahneman, the psychologist who shared a Nobel in economic science, wrote in his 2011 book, “Thinking, Fast and Slow.” A flower, for instance. “Nobody sees a flower – really – it is so small – we haven’t time – and to see takes time, like to have a friend takes time,” the artist Georgia O’Keeffe once wrote. You know what else has been hiding in plain sight? Hydrogen, the most abundant element in the universe. Hydrogen, which is heralded as the clean energy carrier of the future because its only combustion product is water. Sure, we’ve known about the hydrogen that’s locked up with oxygen in water molecules and with carbon in fossil fuels like propane. But we – and by “we” I mean everybody except for a handful of scientists and some people in Mali (I’ll get to that) – never really saw, and never expected to see, hydrogen floating around on its own in gaseous form.
Ukraine-Russia war: Putin says Russian people ‘may not survive’
Maighna Nanu – The Telegraph
Vladimir Putin has said that Russian people may not survive in their current state as he claimed the West was trying to “disband” Russia. The Russian president said the West wanted to divide up Russia and then control the world’s biggest producer of raw materials, a step, he said, that could well lead to the destruction of many of the peoples of Russia including the ethnic Russian majority. Putin’s existential framing of the war allows the 70-year-old Kremlin chief to gird the Russian people for a much more deeper conflict while it also allows him much greater freedom in the types of weapons he could one day use.
Russia Turns to China’s Yuan in Effort to Ditch the Dollar; Moscow has jettisoned longstanding concerns about giving China too much leverage over its economy
Chelsey Dulaney, Evan Gershkovich and Victoria Simanovskaya – The Wall Street Journal
Russia’s economy, restricted from Western financial networks and the U.S. dollar, has embraced a burgeoning alternative: the Chinese yuan. Energy exporters are increasingly getting paid in yuan. Russia’s sovereign-wealth fund, a war chest to support government spending burdened by battlefield costs in Ukraine, is using the Chinese currency to store its oil riches. Russian companies have borrowed in yuan, also known as renminbi, and households are stashing savings in it.
Lithuanian utility wants to donate windfall profits to Ukraine; Ignitis launches public appeal to more than 50 energy groups in the US and Europe to follow suit
Richard Milne – Financial Times
Energy companies such as ExxonMobil, Shell and BP should donate one-tenth of their windfall profits directly to Ukraine as they earned them due to Russia’s war, according to a proposal from Lithuania’s largest utility. Darius Maikštėnas, chief executive of Ignitis Group, launched a public appeal to more than 50 energy groups in the US and Europe to follow suit after the listed Lithuanian company said it would ask its annual meeting for approval to pay about 10 per cent of its extra profits from 2022, or EUR12mn, to help rebuild Ukraine’s energy infrastructure.
Scrounging for Tanks for Ukraine, Europe’s Armies Come Up Short; The struggle to deliver on promises to provide Leopard 2 tanks for use against Russian forces has exposed just how unprepared European militaries are.
Erika Solomon, Steven Erlanger and Christopher F. Schuetze – The New York Times
Nearly a month after Berlin gave European allies permission to send German-made tanks to Ukraine, the flow of tanks so many leaders vowed would follow seems more like a trickle. Some nations have discovered that the tanks in their armory don’t actually work or lack spare parts. Political leaders have encountered unanticipated resistance within their own coalitions, and even from their defense ministries. And some armies had to pull trainers out of retirement to teach Ukrainian soldiers how to use old-model tanks.
Exchanges, OTC and Clearing
TNS migrates clients to new LSEG data centre; The firm will continue to allow institutions to co-locate and directly access the London Stock Exchange Group via its new data centre near the Docklands in London.
Annabel Smith – The Trade
Transaction Network Services (TNS) is in the process of migrating its clients to the new Docklands-based London Stock Exchange Group (LSEG) data centre. TNS acquired “significant” infrastructure capacity at the new site to do so and has listed the new data centre to its Layer 1 accessible markets. The firm will now continue to allow institutions to co-locate and directly access the London Stock Exchange Group alongside the other venues under its growing umbrella including AIM, Turquoise, FXall and Tradeweb.
Press Release No. 1 News about Adani Green Energy Limited
The media had reports that Adani Group’s $442 Million Renewable Energy Projects Approved by Sri Lanka. The Exchange, in order to verify the accuracy or otherwise of the information reported in the media and to inform the marketplace so that the interest of the investors is safeguarded, had written to the company on February 27, 2023. A copy of the clarification is available on the NSE website (http://www.nseindia.com) under (List > Corporate filings > Announcements)
Clearing houses, exchanges gear up to move trillions away from Libor; Dress rehearsals are ramping up as the end of the rate nears; LCH anticipates it will convert $45tn of swaps tied up in more than 500,000 contracts when it executes the move to the new rate Jason Alden/Getty Images
Jeremy Chan – Financial News
Exchanges and clearing houses are racing to ready their systems as trillions of dollars in legacy Libor contracts must move to a new rate by the summer. Hundreds of thousands of dollar Libor swaps need to be changed to the Secured Overnight Financing Rate (Sofr), the replacement rate for dollar Libor, when it comes to an end on 30 June.
Tel Aviv Stock Exchange Plans to Let Customers of Its Nonbank Members Trade Crypto
Sandali Handagama – CoinDesk
The Tel Aviv Stock Exchange, or TASE ,which operates Israel’s only public equity trading platform, wants to expand authorized activities to allow customers of its nonbanking members to trade crypto, according to a Monday announcement. Nonbanking financial institutions can provide services like investments, consulting, brokering or cashing checks but can’t accept deposits from the public.
ASX Limited 1H23 results; Helen Lofthouse, Managing Director and CEO Andrew Tobin, Chief Financial Officer; Presentation and Speaking Notes
Good morning and welcome to ASX’s financial results briefing for the first half of the financial year ending 30 June 2023. Thank you for taking part in this virtual presentation. I hope you are safe and well wherever you are joining us. My name is Helen Lofthouse, and I am the Managing Director and CEO of ASX. I am delighted to be presenting these results, and joining me today is ASX’s Chief Financial Officer Andrew Tobin.
Cboe Digital Selected as DMIST Ambassador by FIA
Cboe Digital is pleased to announce it has joined the Derivatives Market Institute for Standards, Inc. (DMIST) as an Ambassador. Supported by the Futures Industry Association (FIA), DMIST is an industry-governed standards body focused on improving the efficiency, resiliency, competitiveness and innovativeness of the exchange-traded and cleared derivatives markets. Standards published by DMIST aim to improve the efficiency and resilience of the clearing ecosystem.
CME Sees Opportunity for Futurization
Shanny Basar – Marketsmedia
CME Group sees growth potential in futurization, or providing an alternative to over-the-counter markets, as capital efficiency has become more important with regulatory tailwinds, such as the uncleared margin rules. Regulators have phased in uncleared margin rules since 2008 to reform the over-the-counter derivatives market and encourage a shift of more products into central clearing following the global financial crisis.
Derivatives Holiday Trading Days (Scheduled) in 2024
Osaka Exchange, Inc. (OSE) and Tokyo Commodity Exchange, Inc. (TOCOM) announce the scheduled derivatives holiday trading days in 2024 as follow website. (The finalized dates for the first half and second half of the next year shall be announced in June and December respectively.)
Warranting Of Russian Primary Aluminium, Copper, Lead, Nickel And Nasaac Brands In Us Warehouses
London Metal Exchange
Summary 1. Following the announcements by the US authorities on 24 February 2023 imposing additional tariffs of: (1) 200% on certain Russian origin and third country manufactured aluminium articles and aluminium derivative articles; and (2) raising up to 70% the non-most favoured nation (“MFN”) tariffs on specified Russian origin aluminium articles as well as other metals (including copper, lead and nickel), this Notice announces an immediate suspension of the warranting, applicable only to LME-listed warehouses located in the US, of any new primary aluminium, copper, lead, nickel or aluminium alloy (in the form of NASAAC).
Nasdaq Announces Mid-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date February 15, 2023
At the end of the settlement date of February 15, 2023, short interest in 3,455 Nasdaq Global MarketSM securities totaled 9,937,951,277 shares compared with 9,983,462,569 shares in 3,463 Global Market issues reported for the prior settlement date of January 31, 2023. The mid-February short interest represents 2.68 days compared with 2.70 days for the prior reporting period.
Trading Technologies partners with Bantix Technologies to provide QuikStrike options suite through TT platform
Trading Technologies; Bantix Technologies via PRNewswire
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, and Bantix Technologies, LLC an options software development company, announced today that the firms have partnered to make QuikStrike, Bantix’s options analysis software application, available via the TT platform. The move brings TT users trading listed derivatives, including options on futures, a suite of new capabilities to enhance and streamline their trade execution workflow, including options pricing, sophisticated analytics and data retrieval, historical volatility tools, risk analysis, custom reporting and comprehensive market information.
Man Group and Bloomberg to bring data and front-office research solution to market; New product seeks to simplify working with dynamic data structures while adding key functionality to Bloomberg’s BQuant platform.
Wesley Bray – The Trade
Man Group and Bloomberg have entered a multi-year open-source technology development and product integration agreement for ArcticDB, a new DataFrame database product. Python-native database, ArcticDB, was built to address the continuously increasing amount of data and complexity of front-office research at Man Group, a challenge that many large buy- and sell-side institutions face.
Apple pays $12.1 million fine for alleged app market abuse in Russia – Antimonopoly Service
U.S. tech giant Apple has paid a 906 million rouble ($12.12 million) fine in a Russian antitrust case alleging abuse of its dominance in the mobile apps market, Russia’s Federal Antimonopoly Service (FAS) said on Monday. Apple, which did not immediately respond to a request for comment, has previously “respectfully disagreed” with a FAS ruling that Apple’s distribution of apps through its iOS operating system gave its own products a competitive advantage.
UK Launches £5.5 Million ‘Virtual Hub’ for Fintech Sector
Aisha S Gani – Bloomberg
The UK Treasury and City of London Corporation are launching a £5.5 million ($6.6 million) program to bring together experts from all fields in support of the nascent financial technology industry. The Centre for Finance, Innovation and Technology, which was recommended in the 2021 Kalifa review of the sector, is being launched on Tuesday in Leeds.
UK cities set to host fintech hubs to help drive innovation; Government-backed plans will be co-ordinated by new Centre for Finance, Innovation and Technology
Daniel Thomas and Siddharth Venkataramakrishnan – Financial Times
Financial innovation hubs will be established in cities across the UK and placements on offer at leading fintech firms to students at leading universities as part of government-backed plans. The plans are part of a push to encourage financial innovation which will be co-ordinated through a new Centre for Finance, Innovation and Technology (CFIT). One of its other roles will be to work with the government, regulators and the Bank of England on improving rulemaking in the sector.
Wirecard Had a Wild Run; Also ChatGPT at banks, biochar, the Wormhole reverse hack and the wrong Base.
Matt Levine – Bloomberg
One risk for short sellers or journalists or other sorts of investigators looking into a financial fraud is mistaking Thing 2, money laundering, for Thing 1, regular financial fraud. Thing 1 is more tractable, to the average sort of financial person. Thing 1 is a crime of spreadsheets: The criminal act consists of writing a spreadsheet with fake numbers in it and getting your auditors to believe it.
Goldman Sachs pledges to stem losses at new fintech unit; Wall Street bank reaffirms wealth management expansion plans during investor day presentation
Joshua Franklin – Financial Times
Goldman Sachs chief executive David Solomon has reaffirmed plans to expand in asset and wealth management and pledged to stop losses at its consumer lending and financial technology business by 2025. In presentations for an investor day, Goldman reiterated old targets, urged shareholders to look at results over a three-year period rather than disappointing financial numbers in 2022 and laid out a timeline to sell the bank’s volatile investments made with its own capital.
Goldman’s Digital-Asset Team Open to Hiring as it Rolls Out Blockchain Platform; Division head McDermott says team will hire ‘as appropriate’; Goldman’s GS DAP blockchain was used in Hong Kong bond sale
Kiuyan Wong – Bloomberg
Goldman Sachs Group Inc.’s digital-asset team signaled it’s open to bolstering staff strength and flagged the potential for blockchain technology to improve the functioning of markets such as private equity. In an interview, the team’s global head Mathew McDermott said the bank remains “hugely supportive” of exploring blockchain applications and that the digital-asset division will hire “as appropriate” this year.
Make companies liable for software insecurity, top cybersecurity official says
Tim Starks – The Washington Post
Below: The National Security Council is hosting a roundtable on artificial intelligence today with experts from the United States and European Union, and the U.S. Marshals Service suffered a “major” security breach last week. First: Congress should advance legislation allowing software manufacturers to be held legally liable for the insecurity of their products, and it should also shield companies that develop secure software from legal liability, Cybersecurity and Infrastructure Security Agency Director Jen Easterly said Monday.
US Marshals Suffer Ransomware Breach of Sensitive Information; Department of Justice conducting forensic probe into attack; Hackers accessed data about law enforcement investigations
Margi Murphy – Bloomberg
The US Marshals Service has suffered a ransomware attack, resulting in the breach of sensitive information about employees and the subjects of its investigations. A standalone computer system was seized as part of the attack on Feb. 17, Drew Wade, the agency’s communications chief, said in an emailed statement.
Why Hire A Virtual CISO In 2023?
Michelle Drolet – Forbes
As businesses across the world expand their technological footprint, they are becoming increasingly vulnerable to a vast array of cyber crimes such as cyberattacks, CEO fraud in the manner of business email compromise (BEC attacks), theft of intellectual property, privacy breaches and much more. Threat actors are upping their game constantly, making cyberattacks more serious with each passing year.
Top US cyber official warns software firms aren’t doing enough to stop damage from hackers from China and elsewhere
Sean Lyngaas – CNN Politics
Chinese hackers are too frequently going “unidentified and undeterred,” and software companies aren’t doing enough to secure their products from cyber-attacks that “can do real damage” to US interests through the loss of trade secrets, a top US cyber official said Monday. “The risk introduced to all of us by unsafe technology is frankly much more dangerous and pervasive than the spy balloon, but somehow we’ve allowed ourselves to accept it,” US Cybersecurity and Infrastructure Security Agency Director Jen Easterly said in a speech at Carnegie Mellon University.
Binance’s Asset Shuffling Eerily Similar To Maneuvers By FTX
Javier Paz and Steven Ehrlich – Forbes
Late last year, as crypto markets were struggling to regain their footing, the world’s biggest cryptocurrency exchange quietly moved $1.8 billion of collateral meant to back its customers’ stablecoins, putting the assets to other undisclosed uses. They did this without informing their customers. According to blockchain data examined by Forbes, from August 17 to early December-about the same time FTX was imploding-holders of more than $1 billion of crypto known as B-peg USDC tokens were left with no collateral for instruments that Binance claimed would be 100% backed by whichever token they were pegged to.
Coinbase to Delist Binance USD Stablecoin Amid Regulatory Scrutiny
Andre Beganski – Decrypt
Cryptocurrency exchange Coinbase warned customers Monday the company will suspend trading for Binance USD in less than a month, two weeks after Paxos Trust disclosed it will stop minting the Binance-branded stablecoin, citing regulatory pressure. Coinbase’s announcement follows a recent internal review, the San Fransisco-based exchange stated on Twitter, adding it will suspend BUSD trading on March 13.
Coinbase Trade Volume Surpasses Uniswap’s, Countering Expectations for a DEX Surge
Jocelyn Yang – CoinDesk
Cryptocurrency exchange Coinbase’s trading volume has surpassed the popular decentralized exchange platform Uniswap’s this year, according to a report from crypto data firm Kaiko. As of Friday, trading volumes for Coinbase had reached more than $185 billion, nearly double the $93 billion on Uniswap, Kaiko said. At one point in 2022, the exchanges’ respective volumes were nearly equal.
Crypto Broker Voyager Digital Sends $121M in Crypto to Exchanges, Sells Ether, Shiba Inu Holdings
Krisztian Sandor – CoinDesk
Embattled crypto broker platform Voyager Digital has been selling off its cryptocurrency holdings at a fast rate, blockchain intelligence firm Arkham Intelligence tweeted. Blockchain transaction data by Arkham shows that Voyager transferred at least some $54 million of cryptocurrencies to exchanges Coinbase and Binance.US in the past week, likely to sell the tokens. It transferred at least $24.7 million of ether (ETH), $12.2 million of shiba inu (SHIB) and $2.5 million of Chainlink’s LINK to exchanges through the last seven days, per Arkham’s data.
Cryptoverse: Bitcoin moves towards Satoshi’s payment dream
Medha Singh and Lisa Pauline Mattackal – Reuters
Satoshi Nakamoto would be proud. Adolescent bitcoin may finally be repaying its creator’s faith. The 15-year-old cryptocurrency has filled many roles – from source of speculation to hedge against inflation – but has struggled to find a clear identity. Now there are growing signs it’s edging towards its intended purpose: payments.
Crypto Con Artists Leave Trail of ‘Rip Deal’ Victims From Amsterdam to Rome
Margaux Nijkerk – CoinDesk
The nascent and barely regulated crypto industry is rife with exploits, hacks and digital pump-and-dump schemes – some of them netting upwards of hundreds of millions of dollars in a matter of seconds, from a computer somewhere, the identity of the perpetrator typically obscured behind a fake online identity.
Crypto Traders Worried About Continued Liquidity Thinning in Bitcoin and Ether
Omkar Godbole – CoinDesk
Liquidity conditions in the bitcoin (BTC) and ether (ETH) markets continue to worsen and the situation is now more alarming than it was three months ago. That has traders worried about abrupt price swings in the crypto market. Liquidity refers to the ability of the market to absorb large buy and sell orders at stable prices. The commonly used metric for assessing liquidity conditions is 2% of market depth – a collection of buy and sell offers within 2% of the mid-price or the average of the bid and the ask/offer prices.
Celsius Examiner Report Mentions FTX More Than 150 Times. Why? (Podcast); Findings from an independent examiner’s report show deep-rooted issues at the now bankrupt crypto lender.
Sharon Beriro – Bloomberg
The story of crypto lender Celsius Network’s bankruptcy officially began last summer, when it filed for Chapter 11 and cited a severe liquidity crisis. At the time, FTX and its CEO were still heralded as promising figures in the industry, even as companies and users were struggling to get by in the midst of a grueling crypto winter. But now, we’re getting a glimpse of just how bad things were at Celsius, almost from its inception.
Winning ‘Dookey Dash’ Key NFT Sells to Billionaire for $1.63 Million in Ethereum
Kate Irwin – Decrypt
Esports player Kyle “Mongraal” Jackson has sold his winning “Dookey Dash” key NFT to billionaire entrepreneur Adam Weitsman for 1,000 ETH, or $1.63 million, the 18-year-old gamer announced Monday. Mongraal had previously listed the key NFT for sale for 3,333 ETH, which is equivalent to $5.43 million. “Super nice guy and thrilled the sale went through with him,” Mongraal said of the sale to Weitsman.
Bitcoin Core Developer Luke Dashjr Calls Out Unauthorized Ordinal NFT With His Name
Sam Reynolds – CoinDesk
One of the core developers of Bitcoin is disavowing an auction for an ordinal that incorporated some of the code he contributed to the digital asset protocol. “I was not involved with the creation and sale of this or any other NFTs. I have not consented to the use of my code or my name for this purpose,” Luke Dashjr, one of the Bitcoin core developers, tweeted. “Due to the misrepresentation involved and actual buyer confusion, I strongly insist upon 100% of the auction proceeds to be refunded to the buyer.”
U.S. Supreme Court to hear fight over consumer watchdog agency’s funding
John Kruzel – Reuters
The U.S. Supreme Court on Monday agreed to decide whether the Consumer Financial Protection Bureau’s funding structure established by Congress violates the U.S. Constitution in a case that President Joe Biden’s administration has said threatens the agency’s ability to function and risks market disruption. The justices took up the CFPB’s appeal of a lower court’s ruling in a lawsuit brought by trade groups representing the payday loan industry that the agency’s funding mechanism violated a constitutional provision giving lawmakers the power of the purse.
Sunak threatens to push through Brexit deal on Northern Ireland without DUP; UK prime minister says new accord with Brussels will unlock investment in the region
Jude Webber and Jim Pickard – Financial Times
Rishi Sunak has hinted the UK government will press ahead with his new Brexit deal for Northern Ireland even if it is rejected by the Democratic Unionist party, saying the agreement was not about “any one political party”. The British prime minister arrived in Belfast on Tuesday to sell this week’s agreement with the EU to business leaders, arguing it would unlock fresh investment in the region.
UK and EU Seal ‘Decisive Breakthrough’ on Northern Ireland; Sunak, Von der Leyen agree pact to ease cross-border barriers; UK PM seeks backing of unionists and pro-Brexit Tory MPs
Ellen Milligan, Alberto Nardelli and Kitty Donaldson – Bloomberg
The UK and European Union reached a new deal on Northern Ireland’s trading arrangements aimed at ending years of often acrimonious wrangling and paving the way for warmer relations more than half a decade after Britons voted for Brexit. Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen said negotiations had led to a change in the legal text of the Northern Ireland Protocol, a part of the UK’s divorce deal with the EU governing trade with the region.
Emmanuel Macron Lures Foreign Investors, But Popularity in France Takes Hit; Polls say a majority of French oppose Macron’s pension reform; President doubles down on need to attract foreign investors
Ania Nussbaum – Bloomberg
French President Emmanuel Macron’s government says his business-friendly agenda is luring foreign investors. But it’s not winning him many friends at home. The French government says foreign investors continued to add jobs in the country last year, shrugging off higher inflation and the war in Ukraine. A total of 1,725 projects created or “maintained” 58,810 jobs, up 31% compared to 2021, according to Business France, the government agency charged with helping French businesses abroad.
Hong Kong to scrap Covid mask rules for both indoors, outdoors from Wednesday after 3 years
Elizabeth Cheung and Ng Kang-chung – South China Morning Post
Hongkongers and tourists can go mask-free from Wednesday as the city finally lifts its last major Covid-19 restriction after almost three years. At a media session before the Executive Council meeting on Tuesday, Chief Executive John Lee Ka-chiu announced the city’s indoor and outdoor mask requirements, as well as on public transport, would be scrapped from March 1. But wearing face coverings would still be required at some premises with administrative functions, such as care homes for the elderly and hospitals, he added.
Hong Kong to constantly benchmark itself against London and New York, finance chief vows
Chris Lau – South China Morning Post
Hong Kong will constantly benchmark itself against London and New York in its aim to remain as a top international financial centre with Western countries having a substantial stake in it, the city’s financial chief has said. Speaking at a South China Morning Post conference on Monday, Financial Secretary Paul Chan Mo-po also further explained the new capital immigration scheme he introduced in his budget last week, saying it was aimed at enticing some of the world’s wealthiest 5 per cent to support the city’s top industries.
Nuclear Power’s Revival Reaches the Home of the Last Meltdown
Shoko Oda – Bloomberg
Twelve years after one of the worst nuclear disasters in history shook Japan and turned the public against atomic power, a global energy crisis is encouraging the country to switch its reactors back on. Faced with rising heating bills this winter after a sweltering summer spent worrying about blackouts, more people are now reappraising the benefits of cheaper and more stable energy.
Credit Suisse Breached Law in Greensill Lapses, Regulator Says; Swiss regulator Finma didn’t impose any profit penalties but said the bank failed to meet its duties as an asset manager
Margot Patrick – The Wall Street Journal
Credit Suisse CS 2.00%increase; green up pointing triangle Group AG failed in its duties as an asset manager and violated Swiss supervisory law in its operation of $10 billion in investment funds with now-bankrupt financing partner Greensill Capital Management. Switzerland’s financial regulator, Finma, outlined a range of measures the bank must take to improve governance and comply with Swiss rules. It said it opened enforcement proceedings against four former Credit Suisse managers.
China Data-Transfer Law Adds to Strains on Multinationals; Foreign and domestic companies have been racing to meet Beijing’s audit deadline
Raffaele Huang – The Wall Street Journal
Multinational companies doing business in China raced to submit their data practices for Beijing’s review ahead of a Wednesday deadline as the country seeks to identify national security and cybersecurity risks from the increasingly global flow of data. In September, Beijing gave companies operating in China six months to seek approval before allowing some locally-generated data to be exported outside its borders, part of a broader tightening of data security as geopolitical tensions rise between China and the West.
SEC’s Updated Insider Trading Rules Take Effect Today: Here’s What You Need to Know
Ward Williams – Investopedia
Updated insider trading regulations approved by the Securities and Exchange Commission (SEC), aiming to deter investors from exploiting existing Rule 10b5-1, take effect today. Here’s what you need to know.
Statement Regarding Huntleigh Advisors, Inc. and Datatex Investment Services, Inc.
Commissioner Hester M. Peirce and Commissioner Mark T. Uyeda – SEC
We dissent from the finding in this Order that Huntleigh Advisors, Inc. and Datatex Investment Services, Inc. (together, the “Advisers”) breached their duty to seek best execution “by causing certain advisory clients to invest in fund share classes that charged 12b-1 fees when share classes of the same funds were available to the clients that presented a more favorable value under the particular circumstances in place at the time of the transactions.” In a substantive area where significant efforts have been undertaken to define fiduciary duty through the notice and comment process, it is unfortunate that the Commission chooses to create novel regulatory interpretations through enforcement.
SEC Charges Texas Stockbroker for Stealing Funds from Elderly Customers
The Securities and Exchange Commission today announced the filing of a civil injunctive action against Bradley Morgan Holts of Beaumont, Texas, for allegedly misappropriating customer funds.
ASIC launches first Court proceedings alleging greenwashing
ASIC has launched its first court action against alleged greenwashing conduct, commencing civil penalty proceedings in the Federal Court against Mercer Superannuation (Australia) Limited (Mercer) for allegedly making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
Investing and Trading
Trafigura’s Non-Existent Nickel Was Bought by a US Firm
Jonathan Browning and Jack Farchy – CoinDesk
Trafigura Group sold cargoes of nickel it now believes may not have contained any of the metal to buyers including a US trade finance firm and a state-owned Indonesian mining company, according to court documents. The question of how far through the market containers of non-existent nickel had spread has been one of the top concerns for traders ever since Trafigura revealed earlier this month that it had been the victim of what it described as a “systematic fraud.”
Plea in $9M Ponzi scheme to turn California cow manure into green energy after feds call BS
Joshua Tehee – The Fresno Bee
A California man bilked investors out of $8.75 million over the span of five years by pretending to be in the business of turning cow manure into green energy, according to the Department of Justice. He even moved to Montana and changed his identity to escape civil judgments against him, the DOJ said in a statement.
Drawing Insights from Thematic Exposures: The (Natural) Language of Growth Investing
Anil Rao – MSCI research
Last year might be remembered as a pivotal one for artificial intelligence (AI), as an array of new abilities captured the public’s attention. Interactions with popular services such as ChatGPT, released to the public in late 2022, seemed human-like, yet otherworldly.
Adani Continues Investor Roadshow in Hong Kong to Win Back Trust; Two-day meetings come after outreach to investors in Singapore; Bonds are still below levels seen before short-seller’s report
Ameya Karve – Bloomberg
The crisis-ridden Adani Group is moving an investor roadshow to Hong Kong Tuesday, continuing its charm offensive to ease concerns about its financial health and corporate governance induced by a short-seller’s allegations. The two-day roadshow in Hong Kong follows a series of investor meetings on Monday in Singapore, where executives said the Indian conglomerate has enough money to repay debt due over the next three years in addition to an $800 million credit facility.
Wheat Futures Drop to 17-Month Low Amid Ample Supplies; Futures fall on expectations of Black Sea grain-deal extension; Region’s strong outlook poses challenge for US grain
Tatiana Freitas – Bloomberg
Wheat futures declined to the lowest in 17 months amid ample near-term supplies. The most active contract fell 1.6% to settle at $7.10 a bushel, the lowest since September 2021. The grain heads for a decline of 6% this month, the biggest monthly loss since November. Top-shipper Russia is expected to post record-high exports in the second half of the season, while Ukraine is seeking to extend its Black Sea grain-export deal by one year.
Pimco Is Saddled With a $1.7 Billion Default in Office-Market Meltdown; Columbia Property Trust feels the fallout of rising interest rates
Peter Grant and Konrad Putzier – The Wall Street Journal
In 2021, the asset-management firm known as Pimco banked on an office-market comeback. Interest rates were near historic lows, and the economy was humming. Cities were expecting a surge in newly vaccinated workers returning to the office. In September that year, Pacific Investment Management Co. said it was acquiring Columbia Property Trust Inc., which owned 19 office buildings in New York, San Francisco, Washington, D.C., and other cities. The deal valued Columbia at $3.9 billion.
Welcome to the 5% World, Where Yield Chases You; The dark cloud of rising interest rates comes with some significant silver linings
Jason Zweig – The Wall Street Journal
Bonds are getting beaten down again. That means they can do a better job of protecting the rest of your portfolio from getting beaten up. Investors have resumed worrying the Federal Reserve will have to crank up interest rates higher and longer to stifle inflation, after dismissing such fears a few short weeks ago. So long-term Treasury securities have lost about 5% so far this month, and the bond market as a whole is off about 3%. That dark cloud has several layers of silver lining.
Citi Strategists Say Traders Are Piling Up Short Bets on Stocks; Positioning turned ‘markedly more bearish’ last week: Citi; HSBC’s Kettner still sees a higher chance of a relief rally
Sagarika Jaisinghani – Bloomberg
Investor sentiment toward stocks is becoming more pessimistic as they build short bets in both US and European equity futures, according to Citigroup Inc. strategists. In a “markedly more bearish” swing last week, traders added nearly $3 billion of new shorts to S&P 500 futures positioning and pulled a net $5.1 billion from exchange-traded funds, the team led by Chris Montagu said. In Europe, wagers on a decline in the Euro Stoxx 50 tripled, albeit from a low base, they said.
Commodity Futures as Inflation Hedge Have Their Moment; With inflation likely to stay elevated, preserving wealth becomes as important as maxing returns. And stocks may not be the best hedge. Meanwhile, the US housing market remains robust.
John Authers – Bloomberg
Not everyone invests in financial assets with the sole purpose of maximizing profits. With inflation surging to 40-year highs, preserving wealth seems at least as important. How to do that best is anyone’s million-dollar guess. Rather than look to bet on which security will reap the most generous gains, what traders want is a safe hedge that will minimize the risk that inflation eats away their wealth.
BoJ finally corners 10-year JGB market; Just incredible stuff
Robin Wigglesworth – Financial Times
The Bank of Japan is just unstoppable. We’ve written recently about how its bond-buying is now more than making up for the bond-selling being done by the likes of the Federal Reserve, the impact on Japan’s massive overseas savings and the new governor’s intellectual heritage. The cherry on the cake was Deutsche Bank’s titbit that the BoJ “may” have bought more than 100 per cent of some Japanese government bonds, as it buys the JGBs, lends them out again to ensure the market still has some supply, short sellers borrow it and dump them in the market, only for the BoJ to buy it once more.
Environmental, Social and Corporate Governance
Dow said it was recycling our shoes. We found them at an Indonesian flea market; U.S. petrochemicals giant Dow Inc and the Singapore government said they were transforming old sneakers into playgrounds and running tracks. Reuters put that promise to the test by planting hidden trackers inside 11 pairs of donated shoes. Most got exported instead.
Joe Brock, Yuddy Cahya Budiman And Joseph Campbell – Reuters
At a rundown market on the Indonesian island of Batam, a small location tracker was beeping from the back of a crumbling second-hand shoe store. A Reuters reporter followed the high-pitched ping to a mound of old sneakers and began digging through the pile. There they were: a pair of blue Nike running shoes with a tracking device hidden in one of the soles. These familiar shoes had traveled by land, then sea and crossed an international border to end up in this heap. They weren’t supposed to be here.
The EU Is Cracking Down on Plastic. Will Others Follow? Tougher EU targets on packaging waste could provide a framework for better global plastics policies.
Olivia Rudgard – Bloomberg
When UN negotiations over a global agreement on plastic waste convene for a second session this spring, the European Union will bring evidence that it practices what it preaches. In November, the European Commission proposed sweeping packaging regulations that would require companies selling products in EU countries to make their packaging easier to reuse, recycle or in some cases compost. Takeaway food, hot and cold drinks, wine and other alcohol would have to be provided at least partly in reusable packaging by 2030, and the rules would limit unnecessary empty space in packaging. The EU’s overall goal: to reduce packaging waste by 5% by 2030, compared to 2018 levels, and by 15% by 2040.
Why 2023 might just be a turning point for climate action; Policy and regulatory breakthroughs are coming together – but will government and business deliver?
Pilita Clark – Financial Times
Barring surprise developments, 2023 will be the first year of the 21st century when no G7 country has a general or presidential election. With luck, this period of relative political calm will also help to make 2023 a turning point in efforts to tackle one of the great dilemmas of our age: climate change. There are gathering signs that the meaningful government climate action that has long been missing from the drive for net zero emissions will start to take shape this year.
A battle simmers in Illinois over plans to pipe in and store millions of tons of planet-warming carbon dioxide underground
Nara Schoenberg – Chicago Tribune
On a subfreezing day in January, John Feltham drove his two-seat Kawasaki utility vehicle over neatly furrowed fields glistening with snow. There were deer and coyote tracks, black crows flapping against a powder blue sky, and signs everywhere of Feltham’s deep roots in this fertile land. The white farmhouse near the road? That was where Feltham’s mother grew up. The little cemetery just beyond the cornfield? That was where Feltham’s parents, great-grandfather and great-great-grandfather were buried. Feltham, a farmer in Knox County, 160 miles southwest of Chicago, paused to point out another local sight: His custom sign that reads, “No Trespassing by Navigator CO2 Surveyors”, directed at the Omaha company that wants to send part of a proposed 1,300-mile carbon dioxide pipeline under land his family has owned for more than 100 years.
Sensible strategy or ‘woke’ investing? The red state-blue state divide vexes ESG.
Judith Crown – Crain’s Chicago Business
The red state-blue state divide is roiling the staid world of investing. The practice of considering environmental, social and governance, or ESG, risk has gained mainstream traction over the past two decades – in some quarters, it’s almost routine. Is it wise to invest in an oil and gas producer if the market is shifting away from fossil fuels, or in a company that has a record of sexual harassment complaints?
What is ESG investing? Test your knowledge.
Crain’s Chicago Business
Maybe you’ve heard of ESG. It’s been both a hot investment strategy and a political lightning rod in recent years. But how much do you really know about ESG? Take this Crain’s quiz and find out. After you take the quiz, check out this month’s ESG Forum.
The ‘Environmental Injustice of Beauty’: The Role That Pressure to Conform Plays In Use of Harmful Hair, Skin Products Among Women of Color; A new study cites “growing public health concern” around the way that racialized notions of beauty drive women of color to use hazardous hair relaxers, skin lighteners.
Victoria St. Martin – Inside Climate News
Perched in a stylist’s chair at Yaya’s Natural Hair Boutique, Akeyla Peele-Tembong teared up as she recalled how, when she was a college student, one of her professors suggested that she straighten her natural hair to improve her chances of landing a plum work-study job. “I was like, ‘Yeah, I don’t want to.’ She was just, like, ‘I mean, just think about it.’ And that was it,” Peele-Tembong said, while her stylist twisted her natural hair into locs. “I didn’t realize how big of a deal that conversation was at that time.”
Iceland Shows Europe How to Run on Reliable, Clean Energy; Thanks to geothermal energy in Iceland, citizens pay almost nothing for electricity, the air is clean and outdoor swimming pools stay warm year around.
Danielle Bochove – Bloomberg
Beneath the road on a snow-dusted mountain in the Hellisheiði region of southwest Iceland, a river of boiling water flows through porous, volcanic rock. Above, thick steel pipes connect to geodesic domes, each of which houses a geothermal well. Steinþór Níelsson, a senior geologist with ISOR (Iceland Geosurvey), parks his car near one of the rounded huts. He and his team analyze rock samples taken from boreholes to figure out the best way to drill, and then track how the supply of hot water is affected by tapping its steam, which is used to create electricity for this area, as well as the capital of Reykjavik.
Solactive Wins “Most Innovative ESG Index Provider” At ESG Investing Awards
Solactive is proud to announce that it has won the award of “Most Innovative ESG Index Provider” at the ESG Investing Awards.The award ceremony also saw Solactive secure second place in the “Best ESG Index Provider” category. The ESG Investing Awards recognize and celebrate the best initiatives and companies in Environmental, Social and Governance (ESG) funds, research, and products.
1010data Announces Integration of ICE Climate Physical Risk and Social Impact Data To Offer ESG Analytics Solution to Structured Finance and Fixed Income Communities
1010data, a leading provider of fixed income data and analytics solutions, today announced an agreement with Intercontinental Exchange (ICE), a leading global provider of data, technology and market infrastructure, to use ICE’s Climate Physical Risk and Social Impact Data to support social and environmental risk assessments in the structured finance and fixed income communities. 1010data plans to integrate ICE’s Climate Physical Risk Data and Social Impact Data into the 1010data Insights Platform to help investors assess risk in specific geographies through quantitative analysis of social, environmental and climate conditions.
US Bond Funds Dominated Sustainable Flows for First Time
Fixed-income funds commanded the majority of 2022 sustainable fund flows in the US for the first time on record, according to research from data provider Morningstar. A Morningstar study, Sustainable Funds U.S. Landscape Report, said flows into sustainable bond funds increased to three quarters of overall flows in 2022, up from 16% in the previous year.
India Forecasts Heat Waves After Hottest February Since 1901; Higher temperatures in March pose a threat to the wheat crop; Extreme weather also burdens the country’s energy supplies
Pratik Parija – Bloomberg
India will face hotter weather over the coming months, stoking concern about a repeat of the intense heat wave last year that risks damaging crops and further straining the country’s power network. The weather office expects an enhanced probability of heat waves in most parts of the country during the three months ending May 31, according to S.C. Bhan, a senior scientist at India’s meteorological department.
Broker’s Handbook: GFI sets out building blocks for supercharging green home retrofits; Green Finance Institute publishes new handbook to help mortgage intermediaries and home buyers navigate ‘bewildering array of rules’ governing home retrofit solutions
Stuart Stone – BusinessGreen
The Green Finance Institute (GFI) has today published a new guide designed to educate mortgage intermediaries about different green retrofit solutions and technologies in a bid to help accelerate the decarbonisation of the UK’s homes.
As Black-Owned Banks Steadily Fade Away, Investors Step In to Form One; A former Trump adviser and a daughter of Rev. Martin Luther King Jr. help lead the planned Redemption Bank
Dion Rabouin – The Wall Street Journal
Black-owned banks are disappearing. But a group of investors led by a former Trump administration policy adviser and a daughter of the late Rev. Martin Luther King Jr. is creating one. Working through a public-benefit corporation called Redemption Holding Co., the group said Tuesday that it plans to buy a Utah bank named Holladay Bank & Trust. It expects to call the new bank Redemption Bank.
Towards Climate-related Statistical Indicators
European Central Bank
The European Central Bank (ECB) recently published its first climate-related statistical indicators. As the accompanying report explains, they are collectively intended to “improve transparency” on climate-related matters. They also bring the ECB “in line with its mandate” by measuring the development of green financing and quantifying the financial sector’s exposures and contributions to climate risks. The three sets of indicators cover sustainable debt instruments, carbon emissions and physical risk.
5 Priorities for Urban Climate Action in 2023 and Beyond
Rogier van den Berg and Pandora Batra – World Resources Institute
We now have less than seven years to cut emissions in half in order to keep global warming below 1.5 degrees C, the limit scientists say is necessary for averting some of the most dangerous climate impacts. 2022 saw flooding, drought and severe heat waves kill thousands and affect millions of lives around the world, providing us a small window into what we can expect if we fail. Responsible for more than 60% of global emissions and over half of the world’s population, changing our approach to cities must be at the center of efforts to thwart climate change.
FTSE 350 Hits Boardroom Gender Balance Target Three Years Early; Businesses on track for 40% women in leadership by end 2025; Findings from latest report by FTSE Women Leaders Review
Ryan Hesketh – Bloomberg
Women now hold four out of ten board seats on FTSE 350 companies, hitting a gender diversity target three years ahead of their 2025 target, according to a report by FTSE Women Leaders Review. 152 of the 350 boards on the index had no women on them at all a little more than 10 years ago. Now, the majority of the companies at least three women on their board. “This progress is very welcome, and I’d urge business to keep up this momentum to achieve better balance in leadership positions as well as in boardrooms,” said Kemi Badenoch, UK Business and Trade Secretary and Women & Equalities Minister
BP CEO Says More Oil and Gas Investment Is Good for the Climate Fight; Lack of investment may make shift to renewables harder: BP CEO; Climate protesters descend on energy conference in London
Will Mathis – Bloomberg
As the sound of climate protesters reverberated through the conference room, BP Plc Chief Executive Officer Bernard Looney made the case that investment in more oil and gas is crucial for the transition away from those very fuels. “Reducing supply without also reducing demand inevitably leads to price spikes, price spikes lead to economic volatility, and there’s a risk that volatility will undermine popular support for the transition,” he said at London’s International Energy Week. “We avoid that outcome by investing in today’s energy system, as well as investing in the transition.”
These ‘Net-Zero’ Banks Are Still Pretty Big on Big Oil; A BloombergNEF study reveals how energy financiers that pledged to move away from fossil fuels are way behind.
Tim Quinson – Bloomberg
Banks that sign up for the Net-Zero Banking Alliance commit to align their lending and investment portfolios with the goal of achieving net-zero emissions by 2050.
Goldman Sachs Kicks Off Investor Day With Report Card on CEO Solomon; Firm says new Platform Solutions unit to break even in 2025; Bank reassures investors after retail banking foray unraveled
Sridhar Natarajan – Bloomberg
Goldman Sachs Group Inc. kicked off its investor day by providing a report card of Chief Executive Officer David Solomon’s performance so far. The bank gave a detailed breakdown of how it has performed against previously established targets, trying to reassure investors that over a period of multiple years it can meet its targets even as it fell short on them in last year’s profit plunge.
Bankers Are Scoring Big Profits as Rates Soar. Now They’re Facing a Backlash; Savings rates in many nations are up less than lending rates; Central banks, regulators, pile on pressure with inquiries
Ainsley Thomson and Ambereen Choudhury – Bloomberg
In 2008, they were branded public enemies for eviscerating billions of dollars and tanking the global economy. Now, bankers in many parts of the world are back in the hot seat. This time, though, they’re being blamed for making too much money instead of losing it. As interest rates soar on seemingly everything except deposits, banks are scoring big profits on the widening gap between what they charge borrowers and pay to savers.
Goldman Considers Shrinking Its Consumer Business; CEO David Solomon said the bank was considering ‘strategic alternatives’ for its credit-card and specialty lending businesses
AnnaMaria Andriotis – The Wall Street Journal
Goldman Sachs Group Inc. Chief Executive David Solomon said Tuesday that the bank is “considering strategic alternatives” for its consumer platforms business, which includes the specialty lender GreenSky and credit-card partnerships with Apple Inc. and General Motors Co. Mr. Solomon made the comments while speaking at the bank’s investor day. “I’ve certainly reflected a lot over the course of the last three years,” he said, referencing the bank’s consumer businesses. “There were some clear successes, but there were also some clear stumbles.”
TD Bank to Pay $1.2 Billion to End Suit Tied to Ponzi Scheme
Laurel Brubaker Calkins – Bloomberg
Toronto-Dominion Bank said Monday it agreed to pay more than $1.2 billion to settle a lawsuit by investors claiming it aided R. Allen Stanford’s $7 billion Ponzi scheme more than a decade ago. Settlements also were reached with HSBC Holdings Plc, which will pay another $40 million, and Independent Bank Group Inc., formerly known as Bank of Houston, which will pay $100 million, according to Ralph Janvey, the court-appointed receiver for Stanford International Bank. TD is shouldering the largest share because it played an out-sized role in Stanford’s wire transactions, according to the receiver.
Thomas Lee’s Firm Is Thrust Into Spotlight After Founder’s Death; Executives have held talks to reassure clients, employees; The firm had previously maintained a low public profile
Dawn Lim and Amanda L Gordon – Bloomberg
Thomas H. Lee’s second, smaller private investment firm – long known for making quiet bets – has now been thrust into the public glare after its founder’s death was ruled a suicide. Lee, who was 78, founded Lee Equity Partners in 2006 in a bid to relaunch his career after making his name as a buyout pioneer, and he continued to serve as chairman.
HSBC Riles Hong Kong Bankers With Plan to End Private Offices; Lender looks to keep lid on costs after Ping An urged cuts; Removal of offices could raise client confidentiality issues
Ambereen Choudhury, Denise Wee and Manuel Baigorri – Bloomberg
Senior investment bankers at HSBC Holdings Plc in Hong Kong could lose their private offices as the firm moves toward open-plan desks for the financial hub, causing angst among some executives who’ve complained about potential confidentiality risks. The investment-banking division isn’t being singled out and the plan is in line with a broader move across the company, people familiar with the matter said, asking not to be identified discussing private information.
JPMorgan Says Quants to Sell $50 Billion of Stocks If Chart Test Fails; A break in S&P 500 below 200-day average could spur exodus; Quants more sensitive to rout than a month ago: Morgan Stanley
Lu Wang – Bloomberg
After fueling the big Wall Street rebound, trend-following quants now look poised to offload stocks if the S&P 500 falls below a key technical threshold, warns JPMorgan Chase & Co.’s trading desk. Should the benchmark gauge slip under its average price from the past 200 days, so-called commodity trading advisors could be forced to unload about $50 billion of equities, the JPMorgan team estimated. The index on Friday came within 1% of the threshold, which sat near 3,940.
Ex-Goldman Banker Ng Says Malaysian Jail Was ‘Absolute Hell’
Patricia Hurtado – Bloomberg
Former Goldman Sachs Group Inc banker and convicted 1MDB conspirator Roger Ng said in a court filing that he spent six months in a squalid Malaysian prison where he was sometimes chained to as many as 20 other inmates.
Edmond de Rothschild Plans Dubai Hires With Eye on Mideast Money
Yousef Gamal El-Din and Nicolas Parasie – Bloomberg
Edmond de Rothschild, the privately-held Swiss investment firm, may hire up to 10 people each year in Dubai after obtaining a key license in the Middle Eastern business hub. The company is opening in the Dubai International Financial Centre with an advisory license and “eight extremely senior colleagues who recently joined us,” according to Saman Habibian, market leader for Edmond de Rothschild in the Middle East and Africa.
Work & Management
Fintech firm Amount lays off about a quarter of its staff
Steve Daniels – Crain’s Chicago Business
Chicago-based fintech firm Amount has laid off 130 employees, about 25% of its workforce. The deep cuts last month mark the second time in less than a year that the firm has significantly reduced staff. It laid off more than 100 in June. Amount is a spinoff of online consumer lender Avant. It provides technology support to banks and consumer lenders for their online consumer and small-business platforms.
Some traders say ChatGPT gives them out-of-date information and they waste time fact-checking
Ryan Hogg – Business Insider
Like many others, some traders in financial markets are turning to ChatGPT to lighten their workload – but they’re running into speed bumps using the artificial intelligence tool, according to a Bloomberg report. Traders told Bloomberg they had used the popular AI chatbot to aid in their jobs, but found it had several limitations, such as having to spend a lot of time fact-checking and removing out-of-date information.
A New Era of Books Helps Black Workers Navigate Corporate America; These days, most management books acknowledge it’s not up to individuals to fix a broken system.
Kelsey Butler, Ella Ceron and Jeff Green – Bloomberg
The current picture of Black Americans in the workplace is rife with contradiction. There have been some recent notable gains: wages are up and unemployment is down. But overall, Black workers still lag their White counterparts, particularly in the highest paying and most powerful jobs. Even after corporate America’s promises following the racial reckoning of 2020, the number of Black managers at the most prominent companies nationwide rose only 0.1%, according to the most recent data. These days, most management books acknowledge that individual people can’t fix the systemic issues that create such disparities. But newer strategies are laying out how Black workers can align their roots and values in order to thrive in corporate spaces while maintaining a sense of wellbeing.
Hong Kong Ends One of World’s Longest Mask Mandates After 945 Days; City has ‘completely’ returned to normalcy, leader Lee says; Hong Kong to have busiest month for events in years in March
Jinshan Hong, Kari Soo Lindberg and Shirley Zhao – Bloomberg
Hong Kong will stop requiring masks to be worn in public places from Wednesday, drawing to a close the prolonged Covid era that damaged its economy and standing in the world. Masks will no longer be needed outdoors, indoors or on public transport, Hong Kong leader John Lee told reporters on Tuesday. “From tomorrow we are completely returning to normalcy,” Lee said. “This year and the next year, we will focus on the economy and development.”
Australia to Double Tax Rate for Wealthiest Pension Savers; Government says 17 people have over A$100 million in accounts; Australian treasurer expected to hand down Budget on May 9
Swati Pandey and Ben Westcott – Bloomberg
Australia’s government plans to double the tax rate on large pension balances to 30% from 2025-26, saying the change will impact less than 0.5% of account holders and make the system more sustainable. The surprise decision to target those with superannuation balances above A$3 million ($2 million) comes as the government confronts rising debt amid growing spending pressures on defense, health, age care and disability support, Treasurer Jim Chalmers said Tuesday.
A $19 Billion Derivative Bond Trade in India Will Unwind With Modi’s New Tax; Bond forward-rate trades in India may drop by 20%, DBS says; The trades have boosted demand for long-tenure sovereign bonds
Subhadip Sircar – Bloomberg
A derivative trade that boosted demand for India’s sovereign bonds by billions is at risk from a proposed tax, piling pressure on a market straining under record government borrowings. Analysts say a New Delhi plan to tax high-value insurance policies will reduce demand, leading the industry to cut back on bond investments. For the past two years, banks have boosted the amount of debt bought for interest-rate swaps offered to insurers.
China’s Gold Reserves May Be Double What Official Reports Suggest
According Jan Nieuwenhuijs, of Gainesville Coins, the Chinese central bank owned 4,309 tonnes of gold on December 31, 2022, which is more than double than what is officially disclosed. My estimate would make China the second largest gold reserve country after the US. The Chinese private sector holds 23,745 tonnes, bringing the total amount of gold in China to 28,054 tonnes.
Russian Oil to Be Stashed in Ghana as Pool of Buyers Shrinks
Ekow Dontoh, Sherry Su and Lucia Kassai – Bloomberg
A cargo of Russian oil is heading for storage tanks in Ghana, a nation that exports crude itself and is on the doorstep of two regional supply powerhouses. The development suggests that traders could be scouring the market for new buyers of Russian barrels after the European Union stopped almost all seaborne imports from the country in December. The bloc’s measures made Moscow hugely reliant on Chinese and Indian purchases.
‘Embezzled’ Lebanese cash in Swiss banks: media report
Banks in Switzerland are holding a substantial amount of the millions of dollars Lebanese central bank chief Riad Salameh is accused of embezzling, Swiss media reported on Sunday. Salameh, 72, faces investigations related to suspicions of money laundering and illicit enrichment in Lebanon and abroad after he amassed a fortune in the country mired in financial crisis.
Germany in Talks to Merge Power Grids Through Buyouts; Government wants to upgrade network as renewables come online; Expanding transmission system projected to cost EUR50 billion
Michael Nienaber and Petra Sorge – Bloomberg
Germany’s government is accelerating efforts to merge four high-voltage grid operators because it believes that’s the quickest way to modernize power lines for a coming influx of renewable energy, according to people familiar with the matter. Chancellor Olaf Scholz’s cabinet is in talks with the Dutch government to pay more than EUR20 billion ($21 billion) for the local unit of Dutch operator TenneT Holding BV. Negotiations for stakes in rivals 50Hertz Transmission GmbH, TransnetBW GmbH and Amprion GmbH also are underway, with the eventual goal of forming a single unit, the people said, asking not to be identified because the discussions aren’t public.
Oil Bonanza in Argentina Hangs On Clearer Rules, Shale CEO Says; Shale-rich nation foiled by meddling in capital flows, prices; Vista chief Miguel Galuccio speaks in Bloomberg TV interview
Shery Ahn and Jonathan Gilbert – Bloomberg
Heralded shale patch Vaca Muerta can spur Argentina to export half a million barrels of crude a day within four years – if only politicians can provide clearer rules for drillers, according to Vista Energy CEO Miguel Galuccio. “What we need is to create a macroeconomic and political energy framework that allows us to fully develop our resources,” Galuccio told Bloomberg TV on Monday. “For that I would concentrate on two things: FX controls and clearer domestic crude pricing.”