Citadel Securities Loses Flash-Boys Legal Fight Over IEX Product

Aug 1, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Condolences to my good friend Ryan McNally and his family on the passing of Ryan’s father, Dr. Randall E. McNally. The Chicago Sun-Times has a rather lengthy obituary on Dr. McNally, who led a notable life. The obituary is titled “Dr. Randall E. McNally, Chicago plastic surgeon who treated ‘napalm girl’ in Vietnam, dead at 92.”

Ryan is a business development executive at GuavaTech, Inc. who I met when he was at LIT America. He was very influential in helping me in my early years of electronic trading and brokering.

On August 3, Bevon Joseph and the Greenwood Project in partnership with Citadel and Citadel Securities will ring the closing bell of the New York Stock Exchange. The Greenwood Project will be represented by 20 of its college scholars, many of them from Chicago. This is an event that should generate some press coverage from Chicago media, IMHO. It is a historic event.

ASX has a new CEO starting today, as Helen Lofthouse takes over as chief executive officer of the Australian exchange. The ASX published an interview with her titled “Meet Helen Lofthouse, ASX Chief Executive Officer” to introduce her as CEO.

Marex is going to acquire ED&F Man Capital Markets as expected. Marex says the deal will strengthen the group’s global franchise, expand client offerings in clearing, metals, fixed income and equities, and create a leading US franchise, as well as extend the company’s global footprint to Dubai and APAC.

Tony Saliba is getting some love from Insider today with a story titled “A legendary options trader who banked 70 consecutive months of profits above six figures shares his top 4 tips.”

The Oxford Institute for Energy Studies is out with their June Forum publication, issue 132 that features an article by Owain Johnson of the CME Group titled “The Carbon Future Markets: Pricing Carbon Expectations.

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


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• 315 companies are departing the Russell 2000 Index. 21 companies are moving to the Russell 1000 Index, 249 are moving to the Russell Microcap Index, and another 45 companies are leaving the Russell US Indexes universe altogether.

Read Now: INTRO – Russell 2000 Index quarterly chartbook Q2 2022 (


Price of Beer in Australia Surges to A$15 a Pint
Sybilla Gross – Bloomberg
Australian drinkers woke up to more than a hangover on Monday as accelerating inflation and a quirk in the tax system sent the price of beer surging. In its semi-annual CPI indexation review, the Australian Tax Office lifted the excise on a frothy by 4%. It was the largest increase in over 30 years, according to the Brewers Association of Australia.

****** I can only imagine the cost of a beer at a rugby game.~JJL


The Disastrous Record of Celebrity Crypto Endorsements; From Matt Damon’s infamous ad to Reese Witherspoon’s NFT partnership, celebrity crypto touts haven’t gone well for fans
Immanual John Milton – Bloomberg
Matt Damon started touting crypto investing when Bitcoin was worth twice as much as it is now. Mike Tyson’s NFTs have plunged more than 90% since he introduced his collection. And investors who allege they lost millions on a pump-and-dump scheme are suing Paul Pierce. Months into a rout for crypto assets, the full extent of the financial pain suffered by millions of everyday Americans is still being calculated. What’s clear, though, is that scores of celebrities touted the life-changing power of crypto investing at the worst possible time — just as the speculative mania was approaching its peak. The entreaties to get involved in the space came in multiple forms — everything from big-budget TV ads trumpeting particular exchanges to cryptic tweets touting obscure tokens.

****** ‘Don’t follow the recommendation of celebrities for crypto’ is a pretty good rule.~JJL


Crypto Newbies Have Family and Friends to Thank for Losses; Many investors nursing big losses from the plunge in digital assets were introduced to crypto by loved ones, making for awkward conversations now.
Anna Irrera and Tanzeel Akhtar – Bloomberg
Brian Hourigan, a New York-based real estate executive, prides himself on keeping a portfolio of assets with modest but predictable returns. Yet as cryptocurrencies rallied to records last fall, the 38-year-old made an uncharacteristically risky bet. Hourigan invested $20,000 in Bitcoin and Ether in October, hoping to turbocharge his plan to buy an apartment. His inspiration: Adam Ghahramani, a close friend and crypto entrepreneur who was making a killing in digital tokens and had been enthusing about the sector for years.

****** I guess we have to add that we shouldn’t follow the recommendations of friends and family for crypto either.~JJL


Exclusive: 30-year-old billionaire Sam Bankman-Fried has been called the next Warren Buffett. His counterintuitive investment strategy will either build him an empire—or end in disaster
Jeff John Roberts – Fortune
Sam Bankman-Fried does not look like the most powerful man in crypto. Friendly and rumpled, with an unruly halo of curly hair, the 30-year-old widely known as SBF has an affinity for League of Legends, fidget spinners, and other trappings of nerd culture. But underneath the goofy facade is a trading wunderkind whose ambition knows no limits. An MIT physics grad, SBF honed his trading skills at renowned quant shop Jane Street Capital before launching a successful firm of his own, Alameda Research. In 2019 he founded crypto exchange FTX, hailed by some as the best derivatives platform ever built.

****** I have been going through Sam Bankman-Fried profile withdrawal, as we have not had one in a while. Thank goodness for Fortune.~JJL


The recession debate is so intense that Wikipedia has blocked new users from editing its recession page because people keep changing the definition
Christine Mui – Fortune
It seems that no one can agree on the definition of a recession, let alone if we’re in one right now. Some define it as two consecutive quarters of negative GDP growth, no matter what other indicators—like a strong labor market—say about the economy.

****** Let’s play nice out there. This is not generating economic growth, one way or another.~JJL


Friday’s Top Three
Our top story Friday was Lessons learned from Flash Boys from The Trade. Second was The Lonely Office Is Bad for America, Peggy Noonan’s column for The Wall Street Journal, illustrated with yet another parody of Edward Hopper’s ‘NightHawks.’ Third was a tie between Mondovisione’s Alberta And Saskatchewan Securities Regulators Expand The Self-Certified Investor Prospectus Exemption To Facilitate Investment and Bloomberg’s Middle East’s Biggest Oil Hub Disrupted by Unusual Rain.


MarketsWiki Stats
26,960 pages; 239,911 edits
MarketsWiki Statistics


Lead Stories

Citadel Securities Loses Flash-Boys Legal Fight Over IEX Product; Appeals court upholds SEC approval of exchange’s D-Limit order; Citadel sued SEC, alleging regulator botched approval process
Katherine Doherty – Bloomberg
Citadel Securities LLC lost its case against the SEC over a market order type from the IEX exchange of “Flash Boys” fame that features a 350-microsecond delay, after arguing the regulator botched its approval. A trio of federal judges in Washington on Friday upheld the US Securities and Exchange Commission’s decision on the order type, the exchange operator’s D-Limit, whose delay is meant to reduce the advantage of high-frequency traders. The electronic trading firm founded by billionaire Ken Griffin argued that D-Limit hurts investors by delaying their orders and that the SEC approval process broke the laws and rules that govern it.

Marex Agrees to Buy ED&F Man Brokerage in Global Expansion; Deal is one of final steps in restructuring of ED&F Man; Marex has been expanding its business over past few years
Isis Almeida and Mark Burton – Bloomberg
Marex Group will buy ED&F Man Holdings Ltd.’s brokerage business, cementing its position as one of London’s largest commodities dealers and expanding its business in the US. The acquisition of ED&F Man Capital Markets is expected to close by the end of the year, the companies said in a statement Monday. The deal is valued at $220 million, according to people familiar with the matter who asked not to be identified discussing private information.

***** Here is the press release about this deal.~JJL

‘Industry’ Has a Message for Wall Street Bosses: Beware the Junior Bankers; A cautionary tale for aging managers who get eaten alive by their underlings
Ellen Gamerman – WSJ
Frightening forces converge in the finance drama “Industry”: the screaming bosses, the bad market bets and the unrelenting pressures. But perhaps scariest of all, at least to their superiors, are the 20-something strivers ready to unseat their elders. Generational tensions run high between the old guard and the young hungries in the second season of the HBO show starting Monday. The series about junior bankers at the fictional London company Pierpoint & Co. funnels this unease into the character of Eric Tao, played by Ken Leung. In the waters of the trading floor, the 50-year-old managing director of cross product sales is both shark and shark bait.

Citadel Securities Loses ‘Flash Boys’ Lawsuit
Alexander Osipovich – WSJ
Electronic trading giant Citadel Securities lost a legal battle over an effort by the stock exchange featured in Michael Lewis’s “Flash Boys” to prevent the potential harms of high-speed trading. In a ruling Friday, federal judges said the Securities and Exchange Commission acted properly when it allowed stock-exchange operator IEX Group to launch a new trading mechanism intended to thwart ultrafast trading strategies.

London Fines Show Brokers’ Role in $1.9 Billion Cum-Ex Scandal; TJM became third broker to receive penalty from UK regulator; Broker said Solo Capital was ‘chicken that laid golden egg’
Jonathan Browning and Donal Griffin – Bloomberg
When Sanjay Shah was detained last month in Dubai, prosecutors hailed the arrest as a key moment in their efforts against a tax scandal that cheated the Danish treasury of a “staggering” $1.9 billion.

Vitalik Buterin calls MicroStrategy’s Michael Saylor a ‘total clown’
Danny Park – Forkast
Ethereum cofounder Vitalik Buterin has taken a shot at MicroStrategy chief executive officer Michael Saylor, calling him a “total clown” after the latter called the world’s second-largest cryptocurrency “inherently unethical.”

Philosophically, It Doesn’t Matter Whether Cryptos Are Securities; Practically, It Does; When a main U.S. regulatory body defers to Crypto Twitter for leads on securities law violations, you know these categories are subjective.
If the SEC decided tomorrow that bitcoin was a security, it would change nothing about bitcoin fundamentally.
George Kaloudis – Coindesk
I promised Twitter I would write about proof-of-stake and proof-of-work for this newsletter, but my computer (which kept restarting uncontrollably for a couple of days) and my immune system (which gave into a rhinovirus that deposited wet cement into my head) had other ideas.

From Profits to Pay, JPMorgan’s Gold Secrets Spill Out in Court; Business made more than $100 million each year from 2008; Defendants’ compensation drew gasps from Chicago jury
Eddie Spence and Jack Farchy – Bloomberg
The trial of JPMorgan Chase & Co.’s former head of precious metals has offered unprecedented insights into the trading desk that dominates the global gold market. Michael Nowak, who ran precious metals trading at JPMorgan for over a decade, is being tried in Chicago along with colleagues Gregg Smith and Jeffrey Ruffo for conspiring to manipulate gold and silver markets. The focus now is on the jury, which began deliberations late Friday, but the proceedings have already shone a new light on the inner workings of the business, from its profitability and market share to its largest clients.

Market Mayhem Triggers Deal-Making Drought; Lack of clarity about direction of economy and markets has put damper on M&A
Laura Cooper – WSJ
Merger activity has slowed dramatically after a record year in 2021, and some deal makers are bracing for an even quieter second half. In the U.S., about $1 trillion of deals had been struck in 2022 through late July, according to Dealogic. That is the lowest in five years—excluding 2020, when deal making ground to a halt at the outset of the pandemic—and a nearly 40% drop from the same period in 2021. Globally, some $2.4 trillion of deals were announced, representing a roughly 30% decrease. The total number of transactions also was down.

JPMorgan Is Building a Giant Travel Agency; Need a five-star hotel room or a safari with that checking account? JPMorgan wants to book that for you.
David Benoit – WSJ
JPMorgan Chase & Co. wants to be your travel agent. For the past 18 months, the nation’s biggest bank has been assembling the pieces to launch a full-service travel business where customers can plan and book trips ranging from a simple domestic flight to an extravagant safari. It bought a booking system, a restaurant review company and a luxury travel agent. It is building its own airport lounges and a force of thousands of travel agents. A new website will launch in the coming months.

Why the Crypto World Flinches When the SEC Calls Coins Securities
Lydia Beyoud and Allyson Versprille – Bloomberg
Cryptocurrency traders have been put on notice that the US Securities and Exchange Commission considers a range of widely traded digital assets to be securities, a position that could impose regulatory requirements that many boosters say could be crippling. But figuring out what does or doesn’t make a coin a security is a complicated question.

Carson Block SEC Payout Mystery Deepens With Suit Outing Him
John Holland – Bloomberg
Carson Block seemed an unlikely candidate for a multimillion-dollar SEC whistleblower award in March, and not just because he was under Justice Department investigation for potential stock manipulation. For starters, the information he provided the SEC in 2011 wasn’t confidential, but instead had been blasted to thousands through emails and social media in a report he made public before sending to investigators. Block, the CEO of short selling firm Muddy Waters Inc., didn’t submit the required whistleblower tip form until years after the deadline outlined in the whistleblower program law, and then only after the commission finished its investigation of the company his online report exposed.

Short Seller Carson Block Sued Over $14 Million Whistleblower Award; Lawsuit highlights the often lengthy and complex road to winning SEC whistleblower awards
Mengqi Sun – WSJ
A private investor is seeking $7 million in a lawsuit against short seller Carson Block and his equity research firm Muddy Waters LLC in a dispute over an approximately $14 million whistleblower award by the Securities and Exchange Commission. Kevin Barnes said he worked with Mr. Block on a report on Focus Media Holding Ltd. that formed the basis of a SEC action, and that the two had agreed to share proceeds from legal or regulatory actions stemming from their research on the China-based advertising company. Mr. Block is known for investigating Chinese companies.

Gen Z Uses TikTok Like Google, Upsetting the Old Internet Order; Combination of search, social and fun clips wins over young; Rivals use upstarts to deflect claims they’re anti-competitive
Norah Mulinda and Amina Niasse – Bloomberg
Google is for search. TikTok is for entertainment. At least that’s how it used to be. But for the rising generation of teens and young adults, TikTok is becoming the place to find information, taking on the functions of established internet giants. The service, which boasts more than a billion users, is more than just an app where 10-to-25-year-olds watch video clips, and the older guard is taking notice.

Thai Crypto-Bourse Deal Stuck in Due Diligence, Co-Founder Says; Bitkub CEO declines to give further details on pact with SCB X; Regulator’s actions haven’t affected company ‘much,’ CEO says
Suvashree Ghosh, Rishaad Salamat, and Yvonne Man – Bloomberg
A deal to sell a majority stake in Thailand’s largest crypto exchange to the nation’s oldest bank remains stuck in due diligence more than eight months after the plan was unveiled, according to the platform’s co-founder. The proposal with SCB X Pcl that helped propel Bitkub Online Co. into a so-called unicorn has yet to be wrapped up, according to Jirayut Srupsrisopa, chief executive officer of Bitkub Capital Group Holdings.

Pearson Says Blockchain Could Make It Money Every Time E-Books Change Hands
Thomas Seal – Bloomberg
The chief executive officer of Pearson Plc, one of the world’s largest textbook publishers, said he hopes technology like non-fungible tokens and the blockchain could help the company take a cut from secondhand sales of its materials as more books go online.

Germany Has Three Months to Save Itself From a Winter Gas Crisis; Olaf Scholz’s government was slow to react when Russia squeezed gas supplies. Now cities are cutting back on lighting and hot water in a bid to avert disaster.
Vanessa Dezem, William Wilkes, and Arne Delfs – Bloomberg
Germany’s presidential palace in Berlin is no longer lit at night, the city of Hanover is turning off warm water in the showers of its pools and gyms, and municipalities across the country are preparing heating havens to keep people safe from the cold. And that’s just the beginning of a crisis that will ripple across Europe.

Deutsche Bank Chief Sees Germany as Well Prepared for Gas Crisis
Iain Rogers – Bloomberg
Germany’s economy is extremely resilient and more than capable of withstanding the impact of Russia cutting gas supplies, according to the chief executive officer of the country’s leading bank.

CPMI Commences FX PvP Settlement Consultation
Colin Lambert – The Full FX
Just under a year after it called for ideas on the issue, the Committee on Payments and Market Infrastructure (CPMI) has issued a consultative report on increasing adoption of payment-versus-payment (PvP) mechanisms to reduce settlement risk.

SEBI notifies social stock exchange framework
The Hindu
The social stock exchange is a novel concept in India and such a bourse is meant to serve the private and non-profit sectors by channelling greater capital to them. Capital markets regulator SEBI has notified a framework for the social stock exchange to provide social enterprises with an additional avenue to raise funds. The framework for the Social Stock Exchange (SSE) has been developed on the basis of the recommendations of a working group and technical group constituted by the regulator.

Regulator sympathy for crypto evaporates
Felix Salmon – Axios
Inflicting billions of dollars in losses is a great way to lose sympathy among politicians. Time has run out: It’s too late for the crypto industry to get the kind of regulation it’s been pushing for. The crypto winter arrived before any new laws could be written, and has changed the whole tone of the debate in Washington.
Why it matters: Crypto insiders have long dreamed of a world where everything they do is carved out into their own bespoke regulatory regime: one primarily designed to encourage innovation, and that doesn’t try to apply 20th century laws to a 21st century financial system.

Heifer International Acquires Cryptocurrency Platform
Peggy Wright –
The nonprofit BitGive has agreed to transfer all of its intellectual property and financial assets, including its trademarked GiveTrack cryptocurrency blockchain donation platform, to Heifer International in Little Rock, Ark. BitGive’s leaders had been in talks with Heifer for nearly a year. The platform recently stopped accepting Bitcoin and other cryptocurrency donations and this week announced the asset transfer that includes the GiveTrack technology, brand name and logo.

Crypto Prices Crashed, but True Believers Are Holding On; A divide is growing between investors looking to make money and those who believe in crypto’s mission
Pia Singh – WSJ
Crypto prices plunged this year, but Drew Larsen says that is no concern. Over the past two years, Mr. Larsen, 54, has poured about 10% of his savings into cryptocurrencies like bitcoin, Ethereum and solana. He believes it is a smart hedge for his investment portfolio, the rest of which is in real estate, stocks and bonds. But more than that, he feels a deep connection to the idea of digital assets, which makes the pain of bitcoin’s plunge this year a lot more bearable.

FDIC’s Message to Crypto Investors: Digital Assets Aren’t Insured; FDIC says some crypto firms misled customers about insurance; Federal agency only protects deposits in insured banks
Alex Nguyen – Bloomberg
The Federal Deposit Insurance Corp., which protects customers in certain bank failures, has reiterated that it doesn’t insure crypto assets. The agency released an advisory on Friday to clarify the scope of its safeguards, and said several crypto companies had led customers to mistakenly believe that their products were FDIC-insured. The move comes a day after the agency demanded Voyager, a bankrupt crypto company that partnered with FDIC-insured Metropolitan Commercial Bank, to correct “false and misleading statements” about its deposit insurance coverage.

Flash Friday: Retail Options Trading Draws Regulatory Scrutiny
Anna Lyudvig – Traders Magazine
In March 2005, the options markets were the fastest growing segment of the retail community. At that time, Matt Andresen, President of Citadel Execution Services, told Traders Magazine that the continuing growth in trading volume will attract regulatory scrutiny.

Citadel Securities loses ‘Flash Boys’ appeal; A federal court has ruled that the SEC’s decision to approve a controversial type of market order from IEX Group was lawful, in the latest twist of the Flash Boys drama.
Laurie McAughtry – The Trade
Global market maker Citadel Securities has lost its case against the US Securities and Exchange Commission (SEC) regarding a type of market order called a D-limit, launched in 2020 by stock exchange operator IEX Group. The decision was made in a court ruling on 29 July, 2022. IEX was founded by former RBC electronic traders Brad Katsuyama and Ronan Ryan, notorious for their portrayal in 2014 Michael Lewis’ book ‘Flash Boys’. In 2020 the group applied for approval for the D-limit order, which it claimed would combat adverse selection, levelling the playing field between HFTs and slower market participants.

JPMorgan’s Gold Chief Not ‘Mastermind’ That US Claims, Lawyer Says; Defense says evidence shows Nowak good trader, followed rules; Prosecutors allege gold desk spoofed to manipulate prices
Joe Deaux and Tom Schoenberg – Bloomberg
Michael Nowak, the man who led the highly profitable JPMorgan Chase & Co. precious-metals desk, isn’t the cheater and crook that federal prosecutors painted him out to be in a massive market-rigging case against him and two others, his lawyer told a jury in Chicago.

Wall Street Stock Tipsters Risk Million-Dollar Salaries for Paltry Gains; Ex-Goldman banker reaped $85,000 from insider trading, US says; Brijesh Goel has pleaded not guilty to securities fraud
Bob Van Voris – Bloomberg
Sometimes crime really doesn’t pay. Brijesh Goel had made it from investment banker to a principal at Apollo Global Management when he was arrested for allegedly passing deal tips during his time at Goldman Sachs Group Inc. For now, prosecutors claim he made $85,000 from the scheme.

Ukraine Invasion

“Relief for the world” as Ukraine grain ship leaves Odesa
Natalia Zinets – Reuters
A ship carrying grain left the Ukrainian port of Odesa for Lebanon on Monday under a safe passage agreement, Ukrainian and Turkish officials said, the first departure since the Russian invasion blocked shipping through the Black Sea five months ago.

Russian Invasion of Ukraine Widens Spiritual Rifts Among the Nations’ Christians; Russian Orthodox Church leader’s blessing lent a spiritual cast to invasion, driving Ukraine’s religious leaders West from Russian advance
Alan Cullison – WSJ
After a solemn Mass in the Church of the Transformation, the Rev. Marco Fedak retired to a back room to review the latest news on his iPhone. Artillery rattled the church windows, and Ukrainian soldiers in fatigues prayed on hewed wooden church pews. If Ukraine’s army retreats, Father Fedak said, he must leave with them. “I wouldn’t live long among the enemy,” he said.

US ambassador to UN: Russia aims to ‘dissolve’ Ukraine from world map
Eileen AJ Connelly – NY Post
Russia is reportedly moving forward with plans to hold staged votes that would enable it to annex parts of Ukraine where its army has taken control. “Across the newly occupied territories in southern Ukraine, Russian-installed authorities are highly likely under increasing pressure from Moscow to consolidate their control over the region and prepare for referendums on joining Russia later in the year,” the UK Ministry of Defense said Saturday in an intelligence update posted on Twitter. “Local authorities are likely coercing the population into disclosing personal details in order to compose voting registers.”

Lebanon Seizes Ship Accused of Carrying Stolen Ukrainian Grain
Youssef Diab and Omar Tamo – WSJ
Lebanon has seized a ship loaded with barley and wheat flour while it determines whether the cargo may have been stolen from Ukraine, said Public Prosecutor Ghassan Oueidat.

Ukraine Downgraded by S&P as Default Becomes ‘Virtual Certainty’; Nation was cut to CC from CCC+ on Friday by S&P on debt plans; Ukraine asked its foreign creditors to defer payments on debt
Sydney Maki – Bloomberg
Ukraine had its credit grade cut by S&P Global Ratings after the war-ravaged nation asked foreign creditors for permission to delay payments on its external debt after Russia’s invasion. The country was downgraded to CC from CCC+ on Friday by S&P, which kept a negative outlook given the high probability that officials move forward with plans to restructure its foreign debt. The rating could be cut again by S&P to selective default if the government in Kyiv gets bondholders to agree to a two-year payment freeze and changes to coupons on its so-called GDP warrants by the middle of next month.

Gazprom Halts Gas Supplies to Latvia, Citing Purchase Violations; Latvijas Gaze had said it continues to buy via intermediary; Russian gas supplies to Latvia will be banned from 2023
Bloomberg News
The Russian gas producer Gazprom PJSC halted supplies to Latvia, saying the Baltic nation had “violated the conditions” of its purchases.

Meet the Russian Architect of Putin’s Economic Counterattack; Kremlin aide Oreshkin author of key ideas like gas-for-rubles; Once seen as westernizers, economists now leading defenses
Bloomberg News
When sanctions made the Fortress Russia he helped build seem less impregnable, Maxim Oreshkin came up with a signature gambit to try and break the economic siege. Russia’s war on Ukraine wasn’t yet a month old and its blitzkrieg was already turning into a slog. The economic blowback was harsh, too, as the government struggled to avoid a default and the ruble went into in a nosedive.

Russia ‘running out of steam’ in Ukraine, UK spy chief says
Russia is “running out of steam” in its assault on Ukraine, the chief of Britain’s MI6 foreign intelligence agency, Richard Moore, said in a brief comment on social media on Saturday.

Exchanges, OTC and Clearing

CME Notches Record Crypto Derivative Trades in Q2; The derivatives exchange reports a record average daily open interest across crypto products, despite a volatile market
Ben Strack – Blockworks
CME Group’s crypto derivatives posted record open interest and higher than average daily volumes during the second quarter — even as the sell-off in digital assets markets intensified. Average daily open interest across its crypto products was 106,000 contracts, an all-time quarterly high, according to a report published by the derivatives exchange Wednesday. Average daily volume was about 57,000 contracts — the second-highest quarterly total.

Euronext reports ‘solid’ Q2 results; The pan-European exchange saw a 14% increase in overall revenue and income in the second quarter of this year, with trading revenue jumping on the back of high FX and fixed income activity.
Wesley Bray – The Trade
Euronext, Europe’s largest exchange, has reported a ‘solid quarter’ driven by the sustained dynamism of non-volume activities and of trading operations. The exchange reported a 14% increase in revenue and income in Q2 of this year, compared to the same period last year, which reached EUR374.7 million – driven by the growth of non-volume related business and trading activities.

Cboe Writes Down Value of ErisX Acquisition
Shanny Basar – The Trade
Cboe Global Markets wrote down the value of its acquisition of ErisX, which operates US digital asset spot and derivatives markets, by more than half but management affirmed that they continue to be enthusiastic about the long term opportunity in the new asset class.
In its second quarter results CBOE reported a $460m goodwill impairment on the purchase of ErisX which closed on 2 May.

India, Singapore Exchanges Kick Off Derivatives Trading Link; NSE IFSC-SGX Connect was formally launched on Friday; Start of the link marks an end to quarrel that erupted in 2018
Stephen Stapczynski – Bloomberg
A cross-border derivatives trading link between the Singapore Exchange Ltd. and the National Stock Exchange of India Ltd. has started, ending years of delays after they ended a bitter feud that left global investors in a lurch. The NSE IFSC-SGX Connect was formally launched by Indian Prime Minister Narendra Modi on Friday, and is ready to clear Nifty equity derivatives for global institutions, according to a statement from the Singapore Exchange dated July 29. The link, similar to the Hong Kong-Shanghai connect, allows global investors to trade stocks listed on the local Indian bourse instead of an earlier arrangement that allowed such trades via the Singapore exchange only.

The Spanish stock market trades 26.4 billion euros in July
Monthly Trading Statements For BME’s Markets
The volume traded in Equities so far this year is 10.7% higher year on year; Fixed-income trading in July amounted to 6.3 billion euros, while the outstanding balance was 1.77 trillion euros, up 3.4% year to date. Trading in Futures contracts on the IBEX 35 ® index increased by 10.5% in the first seven months of the year. The Spanish stock market traded 26.4 billion euros in Equities in July, up 1.7% year on year and down 19.8% from the preceding month. The trading volume in the first seven months of this year grew by 10.7% from the same period a year earlier. The number of trades in July was 3 million, down 18.3% year on year and down 8% from a month earlier.

SIFMA, ICI and DTCC Publish T+1 Implementation Playbook as the Industry Readies for Accelerated Settlement
New Resource Provides Guidance Around Activities, Timelines, Dependencies and Risks Associated with a Move to T+1
The Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), and The Depository Trust & Clearing Corporation (DTCC) today published The T+1 Securities Settlement Industry Implementation Playbook.

Amendments to the Floating Price Rules of the Japan C&F Naphtha (Platts) Brent Crack Spread Futures and the Japan C&F Naphtha Dubai (Platts) Crack Spread Futures Contracts and Temporary Suspension of Trading and Clearing Certain Listed Contract Months
CME Group

Cash market sales statistics for July
Deutsche Börse Group
A trading volume of EUR120.2 billion was achieved on Deutsche Börse’s cash markets in July (previous year: EUR143 billion).Of this, EUR102.2 billion was attributable to Xetra (previous year: EUR115.7 billion), meaning that the average daily Xetra turnover was EUR4.9 billion (previous year: EUR5.3 billion). EUR2.3 billion was traded on the Frankfurt Stock Exchange (previous year: EUR3.8 billion) and EUR15.7 billion on the Tradegate Exchange (previous year: EUR23.5 billion).

Amendments to the Clearing Rules and Clearing Procedures of OTC Clearing Hong
Kong Limited (“OTC Clear”)
Clearing Members of OTC Clear are requested to note that the Securities and Futures Commission has approved amendments to the Clearing Rules and the Clearing Procedures of OTC Clear for the purposes of (a) introducing the Multilateral Compression Service in co-operation with TriOptima AB(the “Multilateral Compression Amendments”); (b) updating the product eligibility requirements for rates derivatives transactions (the “Product Eligibility Requirements Amendments”), (c) enhancing stress testing measures (the “Enhancement of Stress Testing Amendments”) and (d) some housekeeping changes.

Trading Overview in July 2022
Japan Exchange Group released Trading Overview in July 2022.
Cash Equity Market. In July 2022, the daily average trading value for the Prime Market (domestic common stocks) was JPY 2.9986 trillion. The daily average trading value for the ETF market was JPY300.5 billion.
Derivatives Market. In July 2022, total derivatives trading volume was 29,107,492 contracts. In July 2022, total derivatives trading value reached JPY 196 trillion. In July 2022, trading volume for the night session and the ratio of the night session were 11,186,931 contracts and 38.4%. In July 2022, total trading volume for DJIA Futures was 67,610 contracts, the third highest record.

LMEprecious membership termination
The London Metal Exchange (the “LME” or the “Exchange”) and LME Clear Limited (“LME Clear”) hereby notify the market that, with effect from 2 August 2022, and following the Service Withdrawal Notice (LME Notice 22/150 and LME Clear Circular 22-033 dated 25 May 2022), the LMEprecious Service will terminate. Those Members who are Members of both the LMEbase and LMEprecious Service, will continue as LMEbase Members and Members of LME Clear, and those who are Members only of the LMEprecious Service will cease to be Members of the Exchange and LME Clear.

The Moscow Exchange has developed guidelines for the disclosure of information by public companies
The Moscow Exchange has developed and published recommendations on disclosure of information by issuers of securities admitted to organized trading that have made a decision [1] to limit the amount of information disclosed. The document was developed on the basis of an information letter from the Bank of Russia and is recommended for use by the Listing Expert Council of the Moscow Exchange. Issuers of securities are advised to take into account the possible negative consequences in connection with the restriction of information disclosure, in particular, the possible risks associated with the lack of information from investors necessary for making investment decisions.

The Investor Path course of the Moscow Exchange School is available at Okko
The Moscow Exchange has introduced a new format for training in the financial market – the “Path of the Investor” course is now available in Okko.

MIAX Options Exchange – August 1 2022, SPIKES Options Fee Changes
Fee Change Alert
Effective August 1, 2022, MIAX Options will change SPIKES Options fees to a) introduce a new Routing EEM Rebate Program, b) bifurcate and adjust Simple and Complex fees, and c) adjust PRIME and cPRIME fees

Market for Underlying Security Used for Openings on MIAX Options, MIAX Pearl Options and MIAX Emerald Options for Symbol SLGN Effective Monday, August 1, 2022
Silgan Holdings Inc (“SLGN”) has transferred primary listing from the NASDAQ Global Select Market to the New York Stock Exchange (“NYSE”) effective Monday, August 1, 2022. MIAX Options, MIAX Pearl Options and MIAX Emerald Options will use NYSE as the “market for the underlying security” for the purpose of Openings on the Exchange.

Miami International Holdings Announces that Webull will Begin Offering Clients Access to SPIKES Options
Miami International Holdings, Inc. (MIH), owner of Miami International Securities Exchange, LLC (MIAX®), MIAX PEARL, LLC (MIAX Pearl®), MIAX Emerald, LLC (MIAX Emerald®), Minneapolis Grain Exchange, LLC (MGEXTM), and Bermuda Stock Exchange (BSXTM), announced today that Webull Financial LLC (Webull) is now offering SPIKES® Options on its trading platform. SPIKES Options will be available to customers who are approved to trade options on Webull’s trading platform.

Notice on Collecting Order Fees on Futures and Option Contracts Based on Client Message Amount
All Members, To enhance supervisory efficiency and ensure market stability, and as provided under Article 37 of the Clearing Rules of the Shanghai Futures Exchange, Shanghai Futures Exchange (SHFE) plans to collect order fees on futures and option contracts, based on the extra amount of client messages over the benchmark, starting from August 5th, 2022 (i.e., during continuous trading on the evening of August 4th).


Musk Files Defense Under Seal as Twitter Trial Set for Oct. 17; Five-day trial set for Musk’s cancellation of $44 billion deal; Billionaires’ lawyers filed answer to Twitter suit under seal
Jef Feeley – Bloomberg
Twitter Inc.’s lawsuit against Elon Musk over a canceled $44 billion buyout of the social-media platform is set for a five-day trial starting Oct. 17 in Delaware, with the billionaire filing his defense and counterclaims under seal.

Social Media Can No Longer Hide Its Problems in a Black Box; Tales of AI’s inscrutability have been exaggerated. Big Tech should prepare for regulators to peer deep inside their platforms in the near future.
Parmy Olson – Bloomberg
There’s a perfectly good reason to break open the secrets of social-media giants. Over the past decade, governments have watched helplessly as their democratic processes were disrupted by misinformation and hate speech on sites like Meta Platforms Inc.’s Facebook, Alphabet Inc.’s YouTube and Twitter Inc. Now some governments are gearing up for a comeuppance.

Indonesia Briefly Blocks PayPal in Move to Police Its Internet; PayPal block was briefly lifted to let users access wallets; Tech giants agree to comply with regulations to avoid a ban
Fathiya Dahrul – Bloomberg
Indonesia began blocking websites from gaming store Steam to digital wallet PayPal Holdings Inc. over the weekend, making good on promises to bar internet services that don’t register locally and submit to a tightening regulatory regime.

Pakistan OneLoad Raises Funds as Fintech Competition Picks Up; Pakistan has the world’s third-largest unbanked population; OneLoad is one of the early leaders among Pakistan’s fintech
Faseeh Mangi – Bloomberg
Pakistan’s fintech OneLoad, which targets micro-retailers, has raised $11 million to fund a growth phase as it focuses on tapping the world’s third-largest unbanked population.

The Microchip Era Is Giving Way to the Megachip Age; To continue making our gadgets more powerful, engineers have worked out a new way to get around the barriers to making microchips faster: Just make them bigger.
Christopher Mims – WSJ
If microchips were cities, the new, industrywide strategy for making them better could be summed up in one word: sprawl. In some case, the chips inside our most powerful devices are taking up so much real estate they hardly qualify as “micro” anymore.

Tellimer launches new financial insights and research platform; The investment research firm’s new platform aims to simplify market professional’s ability to access a broader range of analysis that is otherwise invisible to them.
Wesley Bray – The Trade
Investment research firm Tellimer has launched Scriber, a new financial research and insights platform for the independent investment community, aimed at providing research, insight and business commentary for the growing investment and trading community.


A Cyberattack Illuminates the Shaky State of Student Privacy; At a moment when education technology firms are stockpiling sensitive information on millions of school children, safeguards for student data have broken down.
Natasha Singer – WSJ
The software that many school districts use to track students’ progress can record extremely confidential information on children: “Intellectual disability.” “Emotional Disturbance.” “Homeless.” “Disruptive.” “Defiance.” “Perpetrator.” “Excessive Talking.” “Should attend tutoring.”

We’re Spending Billions Each Year on Cybersecurity. So Why Aren’t Data Breaches Going Away?
Perry Carpenter – CPO Magazine
According to the FBI’s 2021 Internet Crime Report, there were 847,376 cybersecurity complaints last year, representing almost $7 billion in business losses. That’s an increase from 301,580 claims representing $1.4 billion in losses in 2017. This, despite the fact that businesses and governments spend billions of dollars to fight these attacks. Microsoft alone spends about $2 billion annually to address cybersecurity.

Updated TSA Directive for Cybersecurity for Pipelines
Catherine D. Little, Annie Cook, Seth D. DuCharme, Anissa L. Adas and Mandi Moroz – The National Law Review
Following significant collaboration with the industry, the Transportation Security Administration (TSA) issued a revised directive, effective July 27, 2022, which updates one of the prior directives issued in the wake of a May 2021 cyberattack on one of the nation’s largest interstate oil pipelines. Similar to the prior directives, this latest version, Security Directive Pipeline-2021-02C, incorporates several key modifications that provide more flexibility for operators of critical pipeline and LNG infrastructure who are subject to the directives.

White House cyber hire highlights diversity challenges in tech workforce
Ines Kagubare – The Hill
The White House now has a point person to carry out its pledge to expand diversity in the cyber workforce.
Camille Stewart Gloster, a Google executive, was hired to head up Biden administration efforts to develop the nation’s ecosystem for tech talent, including building a more diverse cyber workforce and strengthening cyber education.
It’s a tough task but a pressing one, with the cyber sector facing widespread workforce shortages.


Ex-Voyager Executive Explores Competing Restructuring Plan for Crypto Lender; Shingo Lavine wants Voyager to stop its crypto lending program; Bankrupt companies often retain control of restructuring plans
Jeremy Hill – Bloomberg
An erstwhile executive of bankrupt crypto lender Voyager Digital Ltd. is exploring a competing restructuring plan that would oust existing management and take the platform out of the lending business.

Troubled Crypto Lender Babel Lost Big While Trading Client Funds; Proprietary trading arm used wealth-management funds: document; In June plunge, Babel’s prop-trading shop lost 8,000 Bitcoin
Muyao Shen – Bloomberg
Babel Finance, the Hong Kong-based crypto lender that froze withdrawals last month, incurred “massive” losses while using customer funds for its own proprietary trading, according to a restructuring plan seen by Bloomberg.

Tighter Bank Rules Give Dubai’s Crypto Shops a New Allure; OTC shops like Coinsfera have attracted Russians, Iranians; Coinsfera says it makes full checks of potential customers
Ben Bartenstein – Bloomberg
In the lobby of a Dubai skyscraper, a doorman fields queries about an increasingly popular crypto shop, directing clients to office 501, down a grubby corridor on the fifth floor.

‘Wen Flippening?’ Crypto Fans Wager on Ether Surpassing Bitcoin; Bitcoin’s market value is still more than double that of Ether; Optimism is growing over long-anticipated Ethereum upgrade
Vildana Hajric and Olga Kharif – Bloomberg
Bitcoin, the world’s biggest cryptocurrency, has always reigned supreme in the land of digital assets. But now, thanks to an eye-popping surge by Ether, fans of the No. 2 token by market value are reviving predictions that it is destined to one day take over the throne.

‘Others Could Fail’—IMF Issues Stark Crypto Warning After Terra Luna-Led Crash Wiped $2 Trillion From Bitcoin, Ethereum And Crypto Market Price
Billy Bambrough – Forbes
The bitcoin price, after dipping under $20,000 per bitcoin last in June, has somewhat recovered but remains far under its peak of almost $70,000 set late last year as recession fears play havoc with the market the Federal Reserve’s outlook. The ethereum price has also rebounded from recent lows with ethereum cofounder Vitalik Buterin issuing a surprise ethereum price prediction.

What Happens When Cops Seize Crypto and Bitcoin? Looking in couch cushions and behind photo frames is part of law enforcement’s new role when seizing digital assets.
Victoria Vergolina – Bloomberg
Picture this: you’re the FBI, trying to track down the digital keys that will give you access to illicit or stolen crypto. You’re rifling through books and papers stuffed in suitcases or tearing open gum wrappers. Seems like something out of a movie, but in the world of crypto these odd nooks and crannies have become normal places for law enforcement to look for digital passwords. In 2021 alone, cops in the US and UK seized billions of dollars worth of crypto assets from various criminal busts. With so much money on the line, enforcement agencies around the world have had to learn quickly how to spot these digital assets and seize them from accused criminals.

KuCoin exchange lists a USDT-denominated NFT ETF
Ali Raza – Inside Bitcoins
The KuCoin NFT ETF Trading Zone launched on Friday, according to an announcement by the company. This ETF was launched via a partnership with the Fracton Protocol, a provider of NFT infrastructure. The KuCoin NFT ETF is USDT-denominated. The ETF features NFT assets as the underlying assets. The NFTs featured in the ETF are the leading ones in the market, such as the BAYC, which will be among the five NFT ETFs launched by KuCoin.

Fidelity’s Bitcoin Move Is Getting All the Wrong Publicity
Brett Arends – MarketWatch
What would Ned Johnson do? The late, great Fidelity Investments honcho built his family’s Boston-based money management firm into one of the biggest in the world over the course of a long career. Johnson died on March 23 of this year, age 91.

China’s Communist Party mouthpiece launches NFT research project to ‘guide’ digital art development; The People’s Lingjing Research Institute is a joint venture between the paper’s corporate entity and Shanghai-based IP rights firm Sinofaith
Xinmei Shen – South China Morning Post
People’s Daily, the mouthpiece of the ruling Chinese Communist Party, has launched an NFT research project to “guide the orderly development of digital art” as the country’s NFT industry remains cautious amid mixed regulatory signals.

Metaverse Jobs Are Disappearing as Hiring Slows at Google, Facebook; Dropoff coincides with broader hiring slowdown in tech; Employers recalibrating hiring needs on recession concerns
Matthew Boyle – Bloomberg
Meta Platforms Inc., grappling with its first-ever quarterly sales slump, now has another problem: Jobs in the metaverse are disappearing. New monthly job postings across all industries with “metaverse” in the title declined 81% between April and June, according to workplace researcher Revelio Labs, after surging in the months following Facebook’s rebranding last fall. The dropoff coincides with a broader slowdown across the tech sector, which has prompted layoffs and hiring freezes, leaving workers from the Bay Area to Bangalore increasingly rattled. Job postings in tech hubs like San Francisco and Austin, Texas, dropped 8.4% in the past four weeks, according to job site Indeed.


China Repeats Military Would Take Action If Pelosi Visits Taiwan; Taiwan media speculate she may visit as soon as Tuesday
Beijing says military ‘won’t sit idly by’ if trip goes ahead
Bloomberg News
China again warned that its military would take action if House Speaker Nancy Pelosi makes a landmark visit to Taiwan, as speculation mounted in Taipei that she could arrive there as soon as Tuesday. The People’s Liberation Army “won’t sit idly by” if Pelosi visited Taiwan, Chinese Foreign Ministry spokesman Zhao Lijian said Monday, echoing similar comments made by the Defense Ministry last week.

US faces new era of political violence as threats against lawmakers rise; Members of the House will now get up to $10,000 to upgrade their home security as experts warn such threats endanger the health of US democracy
Joan E Greve and Lauren Gambino – The Guardian
Members of the US House of Representatives will now receive up to $10,000 to upgrade security at their homes in the face of rising threats against lawmakers, the House sergeant at arms announced last week, in yet another sign that American politics has entered a dangerous, violent new phase. As support for political violence appears to be on the rise in the US, experts warn that such threats endanger the health of America’s democracy. But they say the country still has time to tamp down violent rhetoric if political leaders, particularly those in the Republican party, stand up and condemn this alarming behavior.

Sting Warns During Warsaw Concert of Threats to Democracy
British musician Sting interrupted a concert in Warsaw on Saturday evening to warn his audience that democracy is under attack worldwide and to denounce the war in Ukraine as “an absurdity based upon a lie.”

The marriage of LIV Golf and Donald Trump is the stuff schemes are made of | Opinion
Eamon Lynch – USA Today
So much of the commentary about LIV Golf has focused on what it is not-as in, not a conventional tour, not a familiar schedule, not 72 holes, not a regular tee time format, not requiring good play for good pay, not on broadcast television, not well-attended by fans and not deterred by mass executions.

Presidents Don’t Move Prices. So Why All the Tweets? For Biden it’s gasoline; for Trump it was stocks. Taking credit on social media for market swings will always backfire eventually.
Jared Dillian – Bloomberg
President Joe Biden, or his designated representative, is having a good time tweeting about gasoline prices lately. Just about every time that the national average goes down by a penny, the White House is tweeting about it. We reached peak panic about gas prices about a month ago, Biden pledged to bring them down, and they fell. For sure, the White House wants to take credit. That’s just politics.

A profitable tax loophole for real estate could be axed in Manchin’s new deal to ease inflation
Juliana Kaplan and Alcynna Lloyd – Insider
A surprise spending deal by Democrats might lead to heftier tax bills for some ultra-wealthy real estate investors. On Wednesday night, key centrist Democrat Senator Joe Manchin released a statement that reverberated throughout the halls of Congress — and the pockets of high-earning investors: He had struck a deal with Senate Majority Leader Chuck Schumer, and part of it entailed closing up the carried interest loophole.

The Indian Government’s Fight Against ‘Fake News’ Targets Political Dissent; WhatsApp and Twitter are pushing back against calls to yank content and weaken encryption.
Mark Bergen – Bloomberg
Sandeep Ravindranath, an Indian filmmaker, posted his latest work to YouTube in May. The video, a nine-minute fictional drama with no dialogue titled Anthem for Kashmir, depicts a young political activist on the lam from authorities. Indian viewers likely picked up on its numerous references to alleged extrajudicial murders in the heavily militarized province, which India and Pakistan have contested for decades.


Jack Ma Plans to Give Up Control of Ant: DJ
Coco Liu and Lydia Beyoud – Bloomberg
Alibaba Group Holding Ltd. has moved a step closer toward getting booted off US stock exchanges for American inspectors not being able to access to financial audits.

SEC Re-Proposes Amendments to Exemption From National Securities Association Membership
The Securities and Exchange Commission today re-proposed rule amendments that would narrow the exemption from Section 15(b)(8) of the Securities Exchange Act, which requires any broker or dealer registered with the Commission to become a member of a national securities association unless the broker or dealer effects transactions in securities solely on an exchange of which it is a member. FINRA currently is the only registered national securities association.

in the Matter of Aegis Capital Corp., Administrative Proceeding File No. 33-11086; SEC Charges Broker and Registered Representatives in Connection with Unsuitable Recommendations of Highly Complex Structured Securities
The Securities and Exchange Commission charged Aegis Capital Corp., former Aegis Managing Director Alan Z. Appelbaum, and former Aegis registered representative Paul F. Gallivan in connection with unsuitable recommendations of structured products to certain of Aegis’s retail customers.

SEC Charges Broker and Registered Representatives in Connection with Unsuitable Recommendations of Highly Complex Structured Securities
The Securities and Exchange Commission charged Aegis Capital Corp., former Aegis Managing Director Alan Z. Appelbaum, and former Aegis registered representative Paul F. Gallivan in connection with unsuitable recommendations of structured products to certain of Aegis’s retail customers.

FCA clamps down on marketing of high-risk investments to consumers
Under the stronger rules, firms approving and issuing marketing must have appropriate expertise, and firms marketing some types of high-risk investments will need to conduct better checks to ensure consumers and their investments are well matched.
Firms also need to use clearer and more prominent risk warnings and certain incentives to invest, such as ‘refer a friend bonuses’, are now banned.
As part of its Consumer Investments Strategy, the FCA want to reduce the number of people who are investing in high-risk products that do not reflect their risk appetite.

Reply to Parliamentary Questions on implication of $7.4 billion loss reported by Monetary Authority of Singapore
Monetary Authority of Singapore
Mr Liang Eng Hwa, MP, Bukit Panjang SMC: To ask the Prime Minister (a) whether he can clarify the context on the loss of $7.4 billion reported by MAS in their financial statement for FY2021/22; and (b) whether the recorded loss will have implications on the Government’s strong Singapore dollar policy and overall budget position for the current financial year.
Mr Ang Wei Neng, MP, West Coast GRC: To ask the Deputy Prime Minister and Minister for Finance (a) whether the Government is prepared for MAS to continue making net losses over the next one to two years should the tightening of monetary policy be maintained; and (b) whether and, if so how, will Government funding be affected by MAS’ financial position.

Investing and Trading

Carry Traders Are Using Weak Euro to Win Big in Emerging Markets; Shared currency boosts arbitrage as its sinks to dollar parity; Euro seen extending fastest slump since 2005 against greenback
Colleen Goko – Bloomberg
For carry traders battered by the dollar’s rally and higher US borrowing costs, the euro’s worst plunge since 2005 couldn’t have come one moment sooner. Investing in emerging-market currencies with borrowed euros is raking profits of as much as 29% this year depending on the choice of the higher-yielding currency, according to data compiled by Bloomberg. The gains are being driven by the euro’s 10% drop against the dollar, which took the cross to parity for the first time in two decades.

Global Firms Halt Over $250 Billion in Financing Plans This Year; Americas sees highest number of deals postponed or canceled
Number of bonds held exceeds tally during peak of pandemic
Jacqueline Poh – Bloomberg
The number of companies that have delayed or canceled financing plans has soared to at least 358 as the global economy continues to battle inflation and energy shortages. The deals, including initial public offerings, bonds, loans and acquisitions, amount to more than $254 billion. The Americas saw the highest number of transactions being postponed or shelved at 184, which was more than double the tally for other regions, according to data compiled by Bloomberg.

The Power of Positive Thinking Returns to Markets; It sounds mad to ignore reality and listen only to what you want to hear. But markets work like this for a good reason.
James Mackintosh – WSJ
The ability of sentiment to influence the direction of markets was on full display this past week. Investors emerged from deep gloom and managed to find price-supporting rays of light even in clouded news. The most important was in the interpretation of comments by Federal Reserve Chairman Jerome Powell on Wednesday after the Fed lifted interest rates by 0.75 percentage point. Mr. Powell—finally—stopped offering guidance on what the Fed would do next, gave no reassurance that recession could be avoided and when asked about cuts next year pointed to last month’s forecast that rates would rise further in 2023.

You’d Be Stupid Not to Evaluate Risk; As the crypto crash showed, guarantees of high returns are never really certain.
Andy Kessler – WSJ
Before the 2008 financial crisis, one of my neighbors took out a home-equity loan from Wachovia, paying around 5%. Wachovia never sent an appraiser to the house, but that isn’t the weirdest part of the story. My neighbor asked his financial adviser what to do with the money left after he’d paid some expenses. The adviser suggested a money manager who guaranteed 12% returns, explaining “you’re borrowing at 5% and getting paid 12%—you’d be stupid not to do this.” It was stupid, all right. The money manager was buying homes and hockey teams, and his Ponzi scheme soon collapsed. No warning label said: “The more enticing the interest rate, the higher the risk.” Risk is often nebulous, hazy, unmeasurable—so it is usually ignored. Years of zero interest rates have caused havoc, but with the Federal Reserve raising short-term rates, investors should be extra careful shuffling money around.

In Crowdfunding Campaigns, Being a Woman Might Be an Advantage; A new study finds that women entrepreneurs who highlight their gender tend to raise more money than those who obscure it
Heidi Mitchell – WSJ
When women are looking for crowdfunding money, they can benefit by playing up the fact that they are women. When it comes to securing capital, women have traditionally had a much tougher time than men—for instance, women-led ventures received only around 2% of total U.S. venture money in 2020. The conventional wisdom says that to boost their chances, women must play down traits traditionally associated with their gender: They should dress less feminine, speak with a deeper voice, use less makeup and so on.

For Entrepreneurs Looking to Raise Money, It Pays to Turn to Their College Alumni Network; If the entrepreneur and investor share the same alma mater, it’s more likely that they will make a deal—and for more money
Alina Dizik – Bloomberg
Trying to get a startup off the ground? Your alma mater may matter a lot. Universities have long touted how their alumni networks contribute to the return on investment for graduates. University of Iowa finance professor Jon Garfinkel decided to see just how powerful those networks were for one group of graduates in particular: startup founders. He found that the alumni factor is real—and powerful.

Investors Are More Likely to Back Startups on Sunny Days, a Study Finds; The research says that sunny weather is a feel-good factor that can make a big difference
Alina Dizik – WSJ
A little sunshine can work wonders with investors. That is the finding of a study that looked into how startups fared with potential investors at big meetup events. On days that were sunnier than the previous day, startups had a greater likelihood of getting funding, according to researcher Gary Dushnitsky, associate professor of strategy and entrepreneurship at London Business School.

KPMG blames Carillion directors in fight against £1.3bn negligence claim; Big Four firm has defended its actions in a major Carillion negligence claim
James Booth – Financial News
KPMG has pointed the finger of blame at the directors of Carillion in its defence to a £1.3bn lawsuit that claims the Big Four firm’s audit negligence led to massive losses for the failed outsourcer’s creditors. The £1.3bn High Court claim was filed against KPMG in November by the Official Receiver — part of the Insolvency Service — which is acting as liquidator to Carillion and on behalf of its creditors.

Individual Investors Ramp Up Bets on Tech Stocks; Shares of Amazon, Alphabet, Meta Platforms and others have suffered double-digit declines, but believers say they expect a rebound
Gunjan Banerji – WSJ
Technology stocks have taken a beating this year. Many individual investors have used it as an opportunity to double down. The Nasdaq Composite Index—home to the big tech stocks that propelled the market’s decadelong rally—has fallen 21% in 2022. Shares of Inc. and the parents of Google and Facebook have suffered double-digit declines as well, stung by higher interest rates and souring attitudes about their growth prospects.

Environmental, Social and Corporate Governance

Europe to Put Key Plank of ESG Rulebook on Hold Amid Infighting; Social taxonomy shelved indefinitely, people familiar say Move may put ‘S’ in ESG off regulatory map till end of decade
John Ainger and Steven Arons — Bloomberg
The next milestone in Europe’s efforts to create a global benchmark for ESG investing has been shelved indefinitely as officials balk at devoting resources to a process that’s already marred by deep political division, according to people familiar with the matter. The so-called social taxonomy, which was to be the next plank in the years-long process to create a guidebook for driving capital into activities that meet environmental, social and governance standards, is unlikely to see the light of day in the next few years, the people said. It had tentatively been slated for debate before the current commission ends its term in 2024.

Billions Pulled From Europe’s Controversial ESG Investing Fund Category; Asset managers love them, while clients seem increasingly wary of them: Article 8 funds.
Tasneem Hanfi Brogger and Greg Ritchie – Bloomberg
It’s a category within Europe’s ESG investing rulebook that saw huge growth last quarter, as the asset-management industry slapped an Article 8 — also known as “light green” — tag on well over 600 funds that previously weren’t classified as sustainable, according to data provided by Morningstar Inc. At the same time, clients withdrew more than $30 billion from such products. A stricter environmental, social and governance classification — Article 9 — saw $6 billion of inflows.

Tune Out the Point-Scoring on ESG
Fred Krupp – Barrons Commentary
About the author: Fred Krupp is the president of the Environmental Defense Fund. There are thoughtful critics of environmental, social and governance standards for companies and investors—and then there are those trying to score political points. Knowing the difference will help investors and businesses refine ESG, build stronger companies, and create a more stable future.

Opinion: Ron DeSantis ramps up attack on ‘woke capital’ with; Florida governor promises to bar ESG-oriented investment funds in the state’s pension plan. There’s just one problem.
Brett Arends – MarketWatch
Florida governor Ron DeSantis says he is going to stop the state’s $240 billion pension fund from investing in stocks based on so-called ESG measures, meaning portfolios are built around environmental, social and governance issues. DeSantis’s announcement, made Wednesday at a press conference at Harpoon Harry’s Crab House in Tampa, should raise a cheer with GOP donors and primary voters in the 2024 presidential race.There’s just one problem. The state pension fund, known as the State Board of Administration, already doesn’t invest based on ESG metric.

Letter: Anti-woke rhetoric on ESG will harm society
Dr Ioannis Ioannou, associate professor of Strategy and Entrepreneurship, London Business School, London NW1, UK
Stark amazement and horror is the only valid response to “ESG’s global rise collides with anti-woke politics in US capitols” (Moral Money,, July 25). Yes, it is true that “from Tucker Carlson to Mike Pence, bashing ESG investing has become popular sport among US conservatives” and, yes, it is true that in the “best of all possible worlds” such criticism “[might] be shrugged off as political posturing”. However, as Cacambo once observed to Candide, optimism is “the obstinacy of maintaining that everything is best when it is worst”. The anti-woke rhetoric, if tolerated, will have real and detrimental consequences not only for the states that adopt it but also for job creation, companies and society.

Why Fighting Climate Change Is a Laughing Matter (Sometimes); Weird and hilarious climate solutions remind us there are less depressing ways to view serious topics.
Laura Millan Lombrana – Bloomberg
We don’t laugh enough. That’s true of everyone, but especially those of us suffering from, studying and covering climate change. To help with that, consider a proposal the Australian government made some years ago that people hunt feral camels from helicopters. The government argued this was a way to both control the 1.2 million camels roaming the Outback and cut their enormous methane footprint. The kicker — that citizens would be awarded carbon credits in exchange for dead camels — made it even better.

McKinney fire explodes to become California’s largest of year, several communities threatened
Melissa Healy, Adam Elmahrek, Alene Tchekmedyian – LA Times
In the 20 years they’ve lived in Yreka, Calif., Vina Swenson and her husband have packed up their car and prepared to flee from fire five times — twice in the last two years. “We haven’t ever had to leave,” Swenson said Sunday, as flames burned less than five miles away. “So the reality probably hasn’t hit me” that this one could swallow up their home.


Unscheduled free float adjustment for Deutsche EuroShop AG in SDAX
Qontigo’s global index provider STOXX Ltd. has announced an unscheduled adjustment to the SDAX index.
The free float of Deutsche EuroShop AG changes by more than 10 percentage points.

HSBC in Talks With Ping An But Pushes Back on Break Up Call; HSBC CEO downplays politics, says Ping An issues ‘commercial’; Potential conflict of interest if Ping An takes board seat
Denise Wee and Manus Cranny – Bloomberg
HSBC Holdings Plc is in talks with its biggest shareholder, Ping An Insurance Group Co., but continues to push back at suggestions that the banking giant should be split up.

US Banks Passed the Latest Stress Test, But Are Still Unhappy; The regulatory checkups by the Federal Reserve are one reason no one’s talking about a financial crisis today.
Shubham Saharan – Bloomberg
Wall Street loathes bank stress tests—and arguably owes a lot to them. The regulatory checkups by the Federal Reserve, instituted after the 2008 global financial crisis with the aim of averting another one, run banks’ balance sheets through simulated doomsday scenarios to gauge whether they’d make it through. This year banks were tested on a hypothetical cocktail of surging unemployment, collapsing real estate prices, and a plunge in stocks.

HSBC Pledges to Restore Pre-Covid Dividends as Profit Jumps; British lender’s results were lifted by higher interest rates
Josh Mitchell and Elaine Yu – WSJ
Global banking giant HSBC Holdings PLC said it would resume paying full dividends to investors as early as next year and warned that its top shareholder’s push to split up the company would jeopardize profit and growth.

Wellness Exchange

When you have covid, here’s how you know you are no longer contagious
Lena H. Sun and Joel Achenbach – Washington Post
You’ve got covid-19. When can you exit isolation? If you do resume activities outside your home, can you be sure you’re no longer contagious? It’s complicated. Be forewarned: Guidelines from the Centers for Disease Control and Prevention are nuanced but a little confusing.

Reconnected After Years, College Friends Find Strength in Each Other; Their bond faded while they were raising children and starting careers. A jolt of bad news reunited them.
Clare Ansberry – WSJ
Years after graduating from Allegheny College, Ginny Hollis wrote to a group of her sorority sisters and told them she had breast cancer. She invited the group of women, then about 50 years old, to a family cottage on Conway Lake, N.H. The first day, they sat on a dock and went in a circle telling what had happened since they graduated. They started with career and family updates, then delved into the heartbreak of failed marriages and misgivings about choices made.

Initial strategy of vaccinating only known monkeypox contacts was ‘doomed to failure’ in the US, experts say
Jacqueline Howard – CNN
There is growing concern that the United States may have lost its chance to contain the monkeypox virus, as the nation has been slow to vaccinate those most at risk on a broader scale.

Inside the super-secure Swiss lab trying to stop the next pandemic
Jennifer Rigby – Reuters
The setting is straight from a spy thriller: Crystal waters below, snow-capped Swiss Alps above and in between, a super-secure facility researching the world’s deadliest pathogens.

He discovered the origin of the monkeypox outbreak — and tried to warn the world
Michaeleen Doucleff – NPR
Five years ago, Dr. Dimie Ogoina saw perhaps the most important patient of his career – a patient whose infection would eventually be linked to the largest monkeypox outbreak in history. On Sept. 22, 2017, an 11-year-old boy came to Ogoina’s clinic with a strange rash on his skin and sores inside his mouth. “He had very large lesions affecting his face and all over his body,” says Ogoina, an infectious disease specialist at the Niger Delta University in Nigeria.


China Banks May Face $350 Billion in Losses From Property Crisis; Mortgage boycotts and slowing growth are rattling authorities; Pressure seen growing on China’s $56 trillion banking system
Bloomberg News
China’s banks face mortgage losses of $350 billion in a worst-case scenario as confidence plunges in the nation’s property market and authorities struggle to contain deepening turmoil. A spiraling crisis of stalled projects has dented the confidence of hundreds of thousands of homebuyers, triggering a mortgage boycott across more than 90 cities and warnings of broader systemic risks. The big question now is not if, but how much it will batter the nation’s $56 trillion banking system.

German retail sales fall by largest rate on record
Valentina Romei – Financial Times
German retail sales fell at the largest annual rate since records began in 1994, highlighting the scale of the economic challenges facing the eurozone’s largest economy.
Retail sales volumes dropped 8.8 per cent in June compared with the same month last year, data from Destatis, the German office for national statistics, showed on Monday.

Indonesia inflation jumps to 7-year high, unfazed
Gayatri Suroyo and Stefanno Sulaiman – Reuters
Indonesia’s inflation accelerated to a seven-year high driven by soaring food prices, data showed on Monday, sparking calls for an interest rate hike, though the central bank governor signaled he was unperturbed as core inflation remained low.
At 4.94%, the July inflation rate was the highest since October 2015, reflecting rising prices of food, household fuel and airfare, and hikes in some electricity tariffs.

Pakistan’s annual inflation rises to 14-year high at 24.9% in July
Asif Shahzad – Reuters
Pakistan’s annual consumer price inflation reached 24.9% in July, up from 21.3% in June and the highest in 14 years, the statistics bureau said on Monday.
Non-food items, mainly fuel and electricity charges, were the major reason for the rise, it said, adding surging prices for vegetables, pulses, cooking oil, wheat flour and milk were also a significant factor.


Judge approves major parts of Boy Scouts’ bankruptcy exit plan; pieces remain unresolved
Cara Kelly – USA TODAY
A federal bankruptcy judge issued an opinion in the Boy Scouts of America case Friday, approving many portions of the nonprofit’s plan to exit bankruptcy in a ruling that creates a path for Scouts to move forward while leaving some issues unresolved.nJudge Laurie Selber Silverstein said in her conclusion that the youth organization has decisions to make regarding its plan for reorganization and may need time to determine how to proceed. During the four-week confirmation hearing in the spring, the Scouts laid out a plan to compensate survivors and rebuild the organization, which is facing its lowest enrollment levels since the 1930s. Central to the settlement is a nearly $2.7 billion trust fund for survivors of sexual abuse related to scouting. In return, the Boy Scouts of America and local councils, troops’ sponsors and insurance companies who contributed to the fund could no longer be sued for past abuse.

Why Salesmen Should Consider Growing Beards; A researcher looked at how consumers react to facial hair on men, and makeup on women
Heidi Mitchell – WSJ
If a salesman wants to convince people to buy what he’s selling, it helps if he has a beard. In a paper published in August 2021 in the Journal of Business Research, consumer-behavior psychologist Sarah Mittal discovered that facial hair on a salesperson increased people’s perceptions of expertise and trust—which means they were more likely to purchase an item or service.

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