Hits & Takes
John Lothian & JLN Staff
Yesterday I posted a video interview I conducted a while back with a student and former student in Roosevelt University’s quantitative finance CCCF Honors program. Assistant Professor of Finance Justin Shea was also part of the interview. The subject is a market for near earth space commerce. Bryan Rodriguez and Luis Arreola looked at how to build a market for space commodities, including delivery in space. They looked at launch costs and did regression analysis on all the launches over the years and showed how costs were continuing to drop dramatically, which made commodities markets more practical. With the number of new launch platforms, space tourism, countries in space and more, having key commodities in space available via a competitive market makes a lot of sense.
When I met Bryan and Luis at a presentation of senior theses at Roosevelt last spring, I told them their research might just be the basis of a market in the future, much as the research done for the Uhlmann Award was after World War II when the CBOT was trying to reestablish its narrative and then-President Richard Uhlmann created a $3000 prize for the best research about the futures markets. That prize was given away for eight years and that research helped set the academic basis for later financial futures. So maybe this fun research project will have some real impact in the years to come. The title of the interview is Roosevelt University Students Propose Futures Market for Space.
There is a story in the Ukraine Invasion news that I think is very important for our markets and companies. The story is “Ukraine Sees Russian Cyberattacks Growing More Sophisticated,” by Bloomberg. The reason I mention this is that many times big technological advances are made during times of war as the warring parties seek an advantage over the other party. Russia has been using cyber warfare on the rest of the world for a long time, so this increased capability and sophistication becomes a bigger risk for all of us.
Michael Saylor’s multibillion-dollar bet on Bitcoin is profitable once again as Bitcoin has rallied amid speculation of an impending Bitcoin ETF approval. This is also evidence that buying scale down can work, which is what Saylor has seemingly done as Bitcoin has collapsed from big rallies in recent years. Bloomberg has the story, “MicroStrategy’s Bitcoin Bet Turns Profitable Again During Crypto Rally.” Bitcoin has rallied to as high as $35K in the latest move up.
The Robb Report says “Billionaire Ken Griffin Is Building Himself the World’s Most Expensive Home.” So much for Mar-a-Lago. The story is based on a story in the New York Post titled “Inside Ken Griffin’s property and art empire: $1B Palm Beach spread is only the beginning.”
Is it time for you to take your annual “Anti-Bribery & Anti-Corruption Course (FCPA)”? Exchange Analytics is offering the 30 to 40 minute course for $30. This course is designed for U.S.-based businesses with international operations and interests outside of the United States to gain the knowledge and skills needed to effectively navigate anti-bribery laws in all jurisdictions in which they operate. The course offers a look into the complex and evolving landscape of anti-bribery and anti-corruption regulations worldwide, with a particular focus on the U.S. Foreign Corrupt Practices Act (FCPA).
Bloomberg Columnist Jessica Karl has an opinion piece titled “Is America Raising a Nation of Scaredy-Cats?” with the subheading “Helicopter parents are failing to prepare their children for the kind of risk-taking they will need to succeed in their careers.” One of the values of the Scout Law is to be brave. I taught my Scouts not to be afraid to make a mistake, to take a risk. But they needed to learn from their mistakes. If a kid has a parent hanging over them, they will never burn the bacon and learn from that how to cook it right.
FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with TT’s CEO Keith Todd and subsidiary Abel Noser Solutions CEO Peter Weiler at FIA EXPO in what FinanceFeeds billed as “an exclusive opportunity for an insightful conversation.” You can watch the FinanceFeeds exclusive opportunity for an insightful conversation HERE and you can watch our non-exclusive conversation with the same parties HERE. For the record, when I published our interview with Todd and Weiler, I was unaware they had done a video interview with Finance Feeds and I put the word “exclusive” in the headline. It has been removed.
Mark Shore, executive director of The Arditti Center for Risk Management, posted to LinkedIn that The Arditti Center will host its 10th Annual Cyber Risk conference: “Attack of AI” on November 28th from 9 am to 5 pm at DePaul University, 1 E. Jackson Blvd, Chicago, IL. For a 20% discount from the current price, please use the code: shore23. The first early bird pricing ends October 31st.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The International Energy Agency (IEA) sees an energy system by 2030 with almost 10 times as many electric cars worldwide; solar generating more electricity than the entire US power system does currently; and renewables’ share of global electricity use as 50%, up from around 30% today. In addition, heat pumps and other electric heating systems will outsell fossil fuel boilers globally and investment in new offshore wind projects will be three times that of investment in new coal- and gas-fired power plants. The IEA’s World Energy Outlook 2023 report released today sees a vast change in energy systems used around the globe by 2030. Download the report and view an explanatory video on the IEA’s website. ~SAED
Our most read stories yesterday on JLN Options were:
Chevron Will Discontinue Oil Hedging Once Hess Deal Is Complete from Bloomberg.
Why Bill Gross expects a U.S. recession to begin by year’s end from MarketWatch.
CME in ‘strongest position’ for deals, CEO says, despite rising competition ~JB
Subscribe to the JLN Options Newsletter HERE (it’s free).
Roosevelt University Students Propose Futures Market for Space
Roosevelt University’s CCCF honors student Luis Arreola and former Professor Bryan Rodriguez are pioneering a concept that might shape the future of near earth space commerce. Merging Arreola’s research on water futures with a mentor’s study of space markets, they have embarked on an ambitious project: a futures market for space commodities.
It is time we paid nature back; New financial tools are at hand to help us invest in the value of the economic benefits the natural world provides
Paula DiPerna – Financial Times
Nature is history’s most exploited underpaid labourer, so has the time come to make good? It would seem so. “Nature needs money,” said the president of Brazil, Luiz Inacio Lula da Silva, at the Amazon summit in early August. It’s time, he declared, for the world to “create a mechanism to fairly remunerate the environmental services that our forests provide to the world”. There’s nothing new in that assertion. I heard a similar challenge at the landmark Earth Summit in 1992, when a Brazilian woman asked: “If the north cares so much about the rainforest, why don’t they rent it from us?”
***** We did an interview with Paula DiPerna about her book on this subject in a podcast titled Paula DiPerna’s Inherent Contradiction and Paradox Book: Pricing the Priceless.
Springsteen Shows Private Equity Who’s Boss; If you’re going to sell out, do it at the top of the market.
Lionel Laurent – Bloomberg
Bon Jovi fans may have been aghast at seeing guitar hero Richie Sambora dressed as a giant baked potato on The Masked Singer TV show in February, gamely running through hits by Fleetwood Mac and The Pretenders.
****** Private equity is going to own all the good music. Luckily, I can get AI to replicate it.~JJL
Monday’s Top Three
Our top story Monday was CME in ‘strongest position’ for deals, CEO says, despite rising competition, from Reuters. Second was the FIA’s photo gallery of highlights from FIA Expo 2023, featuring exchange leaders, industry experts, regulators and a lot of other folks. Third was The Wall Street Journal’s America’s Downtowns Are Empty. Fixing Them Will Be Expensive.
Citigroup CEO Jane Fraser Says the ‘New S’ in ESG Is Security
Matthew Martin – Bloomberg
The escalating tensions between Israel and Hamas are prompting global business chiefs to think more about security issues, according to Citigroup Inc. Chief Executive Officer Jane Fraser. “There is a new S in ESG which is security, be it food security, energy security, it could be defense, or financial security,” Fraser said on the first day of Saudi Arabia’s flagship investment conference. “That’s certainly a theme for all CEOs around the world – how to build more resilient companies and countries.”
US IPO Market Teetering on Edge After Fall Class Disappoints; Arm-led listings quartet are all trading below prices in IPOs; Brightspring is said to join Rubrik, Turo in pondering delays
Ryan Gould and Amy Or – Bloomberg
US initial public offerings had been forecast to rebound with high-profile listings like Arm Holdings Plc and Birkenstock Holding Plc leading the way, setting up 2024 for a bigger listings comeback. After a rough ride in September and October, many IPO candidates are retrenching and reviewing whether to put their plans on hold. Brightspring Health Services Inc., a KKR & Co.-backed health-care services provider that had been planning to raise $1 billion, is among those mulling a delay, said people familiar with the matter who asked not to be identified because it was private.
UK set to axe cap on bankers’ bonuses; Move to boost the City in the wake of Brexit would abolish EU rule that limits payouts to twice base salary
Laura Noonan and George Parker – Financial Times
The UK will on Tuesday confirm that it is scrapping the cap on bankers’ bonuses that was inherited from the EU as part of its post-Brexit push to boost the City of London, according to people familiar with the situation. The move follows a consultation earlier this year on plans to abolish a 2014 rule limiting bonuses to twice base pay for employees of banks, building societies and investment firms.
World oil, gas, coal demand to peak by 2030, IEA says
Alex Lawler – Reuters
World fossil fuel demand is set to peak by 2030 as more electric cars hit the road and China’s economy grows more slowly and shifts towards cleaner energy, the International Energy Agency said, undercutting the rationale for any rise in investment. The report from the IEA, which advises industrialised countries, contrasts with the view of oil producer group the Organization of the Petroleum Exporting Countries, which sees oil demand rising long after 2030 and calls for trillions in new oil sector investment.
*****From the Financial Times, IEA warns energy companies against banking on strong oil demand; Risks stemming from over-investment in fossil fuels have ‘evolved’, says energy watchdog. This story in The Washington Post, The clean-energy transition is ‘unstoppable,’ IEA says. The Associated Press reports, Gaza has oil markets on edge. That could build more urgency to shift to renewables, IEA head says. And from The New York Times, Energy Agency Sees Peaks in Global Oil, Coal and Gas Demand by 2030.
Dealmakers see Chevron-Hess tie-up as the start of oil ‘arms race’; The $53bn deal has sparked speculation that BP and Shell may feel forced to respond
Myles McCormick, David Sheppard and Jamie Smyth and James Fontanella-Khan – Financial Times
The two biggest US oil companies have set off a race to secure petroleum reserves for the decades ahead, inking multibillion-dollar transactions to snap up the most promising production hotspots despite predictions that demand will peak by 2030. Chevron on Monday announced its biggest ever acquisition: a $53bn deal for US operator Hess, giving it a foothold in oil production off the coast of Guyana, the industry’s most significant discovery in the past decade.
Chevron Muscles Into Hottest Oil Patch With $53 Billion Purchase
Kevin Crowley and Peter Millard – Bloomberg
The crown jewel of Chevron Corp.’s $53 billion acquisition of Hess Corp. is a piece of larger rival Exxon Mobil Corp.’s prized asset – 11 billion barrels of oil off the coast of South America.
Big Oil gets bigger
Andrew Ross Sorkin – The New York Times
To oil analysts and investors, Chevron’s $53 billion takeover of Hess confirmed that there’s a new cycle of consolidation in the industry, coming less than two weeks after Exxon Mobil’s $59.5 billion bid for Pioneer Natural Resources. Even as fossil-fuel producers face pressure from climate-minded policymakers, investors and activists to embrace greener energy – more on that below – they’re instead focusing on getting bigger. That could create a larger gap in the industry between those who have the firepower and freedom to buy rivals, and those who, because of politics or finances, do not.
US Majors Betting Big on Oil Leave European Peers Behind; Back-to-back megadeals by Chevron and Exxon may widen the valuation gap with their overseas counterparts.
Laura Hurst – Bloomberg
US Big Oil is getting bigger. Less than two weeks after Exxon Mobil Corp. swooped in to buy Pioneer Natural Resources Co., Chevron Corp. followed with its own megadeal. The California-based major said Monday it would buy Hess Corp. for $53 billion. In the short-term, Hess only gives Chevron about 350,000 barrels of oil equivalent a day of production.
Chevron Bets on Peak Green Energy; The oil giant invests $53 billion to acquire Hess’s oil and gas assets.
The Editorial Board – The Wall Street Journal
The climate lobby’s pronouncements that the end of fossil fuels is nigh appear as premature as warnings two decades ago that supply would soon run out. Chevron on Monday announced a $53 billion bid for Hess Corp. because it knows the world will need oil and gas for the foreseeable future no matter how much politicians subsidize green energy.
Sorry, European Banks. Investors Just Aren’t Into You; The lenders are priced for danger, but there could be some positive third-quarter surprises in store.
Paul J. Davies – Bloomberg
Investors just don’t fancy European banks. This distaste has left valuations languishing at levels low enough to imply imminent financial disaster. While this view is far too bleak, the industry’s third-quarter results in coming weeks aren’t likely to change anyone’s mind.
The Fed Pivot That Turbulent Treasuries Need; The world’s most-important central bank has ended up fueling volatility in the US government bond market. Here’s a recipe for change.
Mohamed A. El-Erian – Bloomberg
Greater stability in US Treasuries is needed for the smooth functioning of other segments of the financial market, housing and the economy more broadly, both in America and beyond. Such stability is unlikely to be anchored anytime soon by either clarity about economic prospects or an abundance of volatility-repressing financial flows. What is needed is a policy anchor that, at this stage, must necessarily have a significant monetary policy component.
China Shut the Door on Two Online Brokers. Then Their Stock Prices Boomed; Futu and Up Fintech have been unexpected beneficiaries of higher U.S. interest rates
Elaine Yu – The Wall Street Journal
When a Chinese regulator blocked investors from opening accounts with online brokers Futu FUTU 3.41%increase; green up pointing triangle and Up Fintech, it dealt a blow to the pair, which had for years seen mainland China as a key source of growth. So why have the U.S.-listed stocks of the two companies surged since then?
Ukrainian AI attack drones may be killing without human oversight; Ukraine is using drones equipped with artificial intelligence that can identify and attack targets without any human control, in the first battlefield use of autonomous weapons or “killer robots”
David Hambling – New Scientist
Ukrainian attack drones equipped with artificial intelligence are now finding and attacking targets without human assistance, New Scientist has learned, in what would be the first confirmed use of autonomous weapons or “killer robots”. While the drones are designed to target vehicles such as tanks, rather than infantry, it is almost certain that the resulting explosions are killing Russian soldiers without a direct command from a human operator, although no casualties have been confirmed.
Ukraine’s race to build its own arms industry; Kyiv is converting US missiles for new uses and prioritising joint ventures with western companies
Alec Russell and Christopher Miller – Financial Times
“Infantry wins battles, logistics wins wars,” General John Pershing, the commander of US forces in the first world war, famously said. More than a century later his aphorism is underpinning strategy in another grinding trench war, as Ukraine tries to build its own munitions industry to lessen its reliance on western allies in its fight against Russian aggression.
Ukraine Sees Russian Cyberattacks Growing More Sophisticated; Nearly 4,000 cyberattacks recorded since January last year; Ukrainian deputy foreign minister speaks in interview
Philip Heijmans – Bloomberg
A senior Ukrainian official said Russian cyberattacks are growing more sophisticated and have become daily occurrences aimed at disrupting vital infrastructure during wartime. Deputy Foreign Minister Anton Demokhin, who’s also the ministry’s chief digital transformation officer, said hackers continue to target government bodies, security agencies and commercial businesses including financial institutions to try to disrupt services and acquire personal data. While Ukraine is largely able to deter the attempts, “they’re effective in the sense that we do put in a lot of effort” to prevent them, he said during an interview in Singapore.
Inside the Commando Raids Unnerving Russia in Crimea; The lightning assaults are part of a larger campaign using drones and missiles to degrade Russian forces and demoralize the public.
Carlotta Gall and Oleksandr Chubko – The New York Times
Late one evening this month, two Ukrainian commandos eased into a side street in Kyiv in a battered SUV. Back from a dangerous nighttime assault on Russian positions in the Crimean Peninsula, they slipped into a sparsely furnished apartment where they sat at desks, weary and a little disheveled, and described their latest operation in matter-of-fact fashion.
Gaza consumed by hunt for water; UN agencies warn residents are resorting to drinking dirty supplies
Mai Khaled and Heba Saleh – Financial Times
Hana Abu Awda and the 40 people with whom she shares a home in Rafah, at the southern end of the Gaza Strip, have been unable to shower for more than a week. They are crammed into one house after hundreds of thousands of Palestinians were forced to flee to the south of the territory by Israeli bombardments and orders to leave the heavily populated north of the besieged strip.
Lebanon on edge over threat from Israel-Hamas conflict; Residents stock up on supplies and flee border towns amid rising fears that their country could be dragged into hostilities
Raya Jalabi – Financial Times
Residents of Lebanon are stocking up on food, fuel and emergency supplies as fears intensify that the Israel-Hamas war, now in its third week, will broaden and engulf them. From the southern border with Israel to the capital Beirut, Lebanese are increasingly on edge and preparing for their worst-case scenario, which would see the Mediterranean country drawn into the spiralling conflict.
Hamas releases two more hostages seized in assault on Israel; Emmanuel Macron lands in region amid diplomatic efforts to stop conflict escalating as more than 200 people remain in captivity
James Shotter, Mehul Srivastava and Leila Abboud – Financial Times
Hamas has freed two of the more than 200 hostages that its militants captured during their assault on Israel this month, as diplomatic efforts continued on Tuesday to contain soaring tensions in the Middle East.
American troops at risk across Middle East amid rising tensions, US warns; Washington sends more air defence systems to the region as Israel continues bombardment of Gaza
John Reed and James Shotter, Neri Zilber, Raya Jalabi and Felicia Schwartz – Financial Times
The US has warned that American troops and other personnel in the Middle East face the risk of a “significant escalation” of attacks against them as the Israel-Hamas war threatens to broaden into a regional conflict. Lloyd Austin, the US secretary of defence, said on Sunday he was “concerned about potential escalation” of fighting in the region.
How to Fix Gaza, From the Man Behind Israel’s Withdrawal; Ex-Premier Ehud Olmert sees a way forward but it must be without Hamas.
Marc Champion – Bloomberg
Ask Israel’s former Prime Minister Ehud Olmert whether the 2005 plan he drove to withdraw Israeli troops and settlers from the Gaza strip was an attempt to further the creation of a Palestinian state alongside Israel, or to avoid one, and the response is a kind of verbal shock and awe.
Palestinians Are Refusing to Flee Israeli Bombing in Gaza. ‘If I Die, I Die.’; Many families won’t leave their homes in the north, fearing a repeat of the mass displacement 75 years ago
Chao Deng, Stephen Kalin and Omar Abdel-Baqui – The Wall Street Journal
Exchanges, OTC and Clearing
Euronext Clearing introduces an innovative VaR-based margin methodology for Italian equities, ETF and financial derivatives markets
Euronext Clearing, Euronext’s multi-asset clearing house, today announced the introduction of a new VaR-based margin methodology on the Euronext Milan equities, ETF and financial derivatives markets. As a reminder, the VaR-based margin methodology was already made available in 2022 for Italian, Portuguese, Spanish, and Irish government bonds on MTS and BrokerTec cash and repo platforms.
NGX To Promote Derivatives Market With Single Stock Futures Workshop
Nigerian Exchange Limited (“NGX” or “The Exchange”) is set to host a derivatives workshop in partnership with institutional investors and capital market stakeholders aimed at educating investors and other stakeholders on trading of Single Stock Futures on its Exchange Traded Derivatives (ETDs) market.
Amendment of Basic Methodology for KRX Equity Indices and Methodologies for KRX Bluechip Index
KRX amends the methodologies specified below with aims to (i) prevent any ineligible securities, which are in connection with rapid price change, abnormal trading activities or other market issues not set forth in the existing methodologies from being added to an index*, and (ii) to improve consistency of the data used when screening the stocks whose trading has been resumed after being under long-term trading suspension following a listing maintenance review.
Revision To Delivery Of Late Input Performance Statistics Report
Summary 1. Regulation 3.5.1 of Part 3 of the LME Rulebook (“the Rulebook”) states that each Member that is responsible for the input of an Agreed Trade into the Matching System, or responsible for the approval of an Agreed Trade entered by a Registered Intermediating Broker (“RIB”), must do so within specific timescales (the “Requirement”).
Tatyana Grishina appointed Director of Communications of the Moscow Exchange
Tatyana Grishina has been appointed Director of Communications of the Moscow Exchange. This is a new role in the company, which includes the transformation of work with the content of the Moscow Exchange. Previously, Tatyana held the position of Director of Public Relations at Ingosstrakh-Investments Management Company, where she built a process for interacting with the media and achieved high results in terms of mentionability and brand visibility.
Nvidia to Challenge Intel With Arm-Based Processors for PCs; AMD also preparing Arm-based PC chips for 2025 debut; News sends shares of Arm higher, while Intel declines
Ian King – Bloomberg
Nvidia Corp. is using Arm Holdings Plc technology to develop chips that would challenge Intel Corp. processors in personal computers, ratcheting up competition between the two semiconductor makers, according to people familiar with the situation. Nvidia, whose artificial intelligence accelerator chips already dominate that market, is attempting to make central processing units for PCs, said the people, who asked not to be identified because the matter is private. The CPUs would run Microsoft Corp.’s Windows operating system and go on sale as soon as 2025.
Leaders in Trading 2023: Meet the nominees for… Outstanding Post-Trade Services Provider; Learn more about the four firms shortlisted for The TRADE’s 2023 Editors’ Choice Award for Outstanding Post-Trade Services Provider, including: Cboe Clear Europe, Eurex, Euronext Clearing and LCH.
Editors – The Trade
The annual Leaders in Trading gala is the most distinguished awards night for the trading community. Among the most coveted awards categories is the Editors’ Choice Awards and today we bring you the 2023 nominees for Outstanding Post-Trade Services Provider.
BNY Mellon launches new white labelling solution for its LiquidityDirect platform; Morgan Stanley Investment Management will be the first to adopt the new offering, delivering efficient cash management solutions to clients.
Wesley Bray – The Trade
BNY Mellon has launched a new white labelling service for its LiquidityDirect platform, offering financial institutions a liquidity management solution for their end clients. LiquidityDirect’s technology can be leveraged by financial institutions seeking to include short-term investments in their offerings suite to provide an improved user experience through a single sign-on for their clients.
ION’s LIST completes client migration onto Euronext’s Optiq trading platform; Phase two of the migration provides Italian sell-side clients increased access to international investor bases.
Wesley Bray – The Trade
ION subsidiary LIST has completed phase two of the migration of its Borsa Italiana clients onto Euronext’s Optiq technology trading platform. The move follows a successful rollout of the equity segment in March. LIST has upgraded its FastTrade trading solution to accommodate the migration of Italian bond markets to the new platform, providing Italian sell-side clients increased access to international investor bases.
Cyber-defense systems seek to outduel criminals in AI race; AI tools on the web can craft spear-phishing emails, break passwords and write malware
Gopal Ratnam – Rollcall.com
Not long after generative artificial intelligence models like ChatGPT were introduced with a promise to boost economic productivity, scammers launched the likes of FraudGPT, which lurks on the dark web promising to assist criminals by crafting a finely tailored cyberattack.
ChatGPT-written phishing emails are already scary good
Sam Sabin – Axios
ChatGPT is already pretty good at writing believable phishing emails, despite efforts to limit its ability to do harm, according to new IBM research. Why it matters: Cybersecurity officials and industry leaders have long warned that hackers could weaponize ChatGPT and similar AI tools to quickly write phishing emails that the average person would think are authentic.
Tech help really wanted: 315,000 cybersecurity jobs available across US
Cybersecurity employment opportunities numbering in the hundreds of thousands and at all career stages are available across the country, according to the latest update from CyberSeek, the most comprehensive source of information on the U.S. cybersecurity workforce. Data released during Cybersecurity Career Week shows the labor market for cybersecurity talent remains undersupplied, with approximately 315,000 more workers needed to close current supply gaps. An estimated 1.1 million people currently work in cybersecurity jobs across the country.
Most of the world’s biggest advertisers have stopped buying ads on Elon Musk’s X, exclusive new data shows
Lara O’Reilly – Insider
An overwhelming majority of the world’s biggest-spending advertisers have stopped advertising on X following Elon Musk’s acquisition of the company, according to new data provided exclusively to Insider by the marketing consultancy Ebiquity.
Trade Like Crazy Unveils Revolutionary AI-Powered Platform for Cryptocurrency Trading
Trade Like Crazy, a trailblazing venture founded by a group of twenty seasoned traders with expertise in cryptocurrency arbitrage, futures trading, spot trading, and scalping, is thrilled to introduce its innovative AI-powered platform set to transform the world of digital asset trading. With a steadfast mission to provide a seamless trading experience, the company has witnessed impressive average monthly returns of 20-80% over the last six months, establishing itself as a trusted name in the cryptocurrency market.
Grayscale Gets Court Order in Fight With SEC on Bitcoin ETF; Appeals court sends the case back to the SEC for review; Grayscale wants to launch a Bitcoin exchange-traded fund
Sabrina Willmer – Bloomberg
A federal appeals court formalized a victory for Grayscale Investments LLC in its bid to create an exchange-traded fund based on Bitcoin over the objection of the US Securities and Exchange Commission. The move sends the matter back to the SEC. The mandate puts into effect the court’s ruling in August, when it overturned the SEC’s rejection of Grayscale’s proposal to convert its trust into an ETF. Judge Neomi Rao called the SEC’s decision “arbitrary and capricious” because the regulator failed to explain why it approved similar products. The SEC had argued that an ETF based on Bitcoin lacked adequate oversight to detect fraud.
Digital Currency Group Has Paid Off $575 Million in Debt This Year
Vicky Ge Huang – The Wall Street Journal
Digital Currency Group, the crypto conglomerate founded by finance veteran Barry Silbert, has paid off about $575 million in debt since the end of 2022. The repayments, which haven’t previously been disclosed, were broken down in DCG’s third-quarter shareholder letter.
Argentina’s Money Machine and Fear Were All It Took to Stop Milei’s Surge; Argentina’s Peronism defies odds in presidential election; Economy Minister won first round vote despite 138% inflation
Manuela Tobias – Bloomberg
Javier Milei truly believed he would celebrate turning 53 by winning Argentina’s presidency in the first round. The ballroom in a traditional yet dÃ©modÃ© hotel in downtown Buenos Aires was thrumming to club beats and glowing in his signature campaign purple. Guests had been flown from around the world to toast the upset.
Lawmaker Tom Emmer Throws Hat in Ring for House Speaker Role; The House hasn’t had a speaker since the beginning of October, threatening any further advancement of crypto bills sitting before the legislative body.
Nikhilesh De – CoinDesk
Congressman Tom Emmer (R-Minn.), who’s sponsored a number of crypto-related bills over the past few years and is a co-chair of the Congressional Blockchain Caucus, said Saturday he’s making a bid for the vacant Speaker of the House position.
CFTC’s Energy and Environmental Markets Advisory Committee to Meet November 13
CFTC Commissioner Summer K. Mersinger, sponsor of the Energy and Environmental Markets Advisory Committee (EEMAC), today announced the EEMAC will hold a public meeting on Monday, November 13 from 9:00 a.m. to 12:00 p.m. (EST) at CFTC’s Washington, D.C. headquarters. Members of the public may also attend the meeting virtually or in person, if space permits.
CFTC Orders Minnesota Grain Merchandiser to Pay $3 Million Penalty for Attempted Manipulation of Oats Futures Prices
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against Ceres Global Ag Corp., a company based in Golden Valley, Minnesota, for attempting to manipulate the price of the July 2016 and March 2017 oats futures contracts.
Statement of Commissioner Caroline D. Pham on the Deliberative Process Privilege
There is a disturbing trend among federal agencies that involves overbroad use of the deliberative process privilege against defendants in enforcement actions, so that relevant facts or final policy or final determinations cannot be used to support a defense against the alleged charges. I am seriously concerned that such attempts to shield the truth from greater scrutiny deprives defendants of due process and a fair hearing. Such basic human rights are the essence of a free and democratic society, and are embodied in the United States Constitution and Bill of Rights. These protections of life, liberty, and property are why the United States of America is a beacon of freedom across the world, and a stalwart defender of the rule of law against authoritarianism and autocracy. It is because of these first principles that I believe that the deliberative process privilege in enforcement actions (unrelated to Freedom of Information Act (FOIA) litigation) is an executive privilege that cannot be delegated by the head of the agency-namely, that the Commission cannot delegate the authority to invoke the deliberative process privilege to agency staff.
Commissioner Mersinger to Participate in a Fireside Chat at the State of Crypto Policy and Regulation Conference
Commissioner Mersinger to Participate in a Live Interview with CoinDesk TV
Investing and Trading
‘Magnificent Seven’ tech stocks drive US equity domination to new highs; Handful of companies propel all of this year’s gains in the MSCI All-Country World index
Nicholas Megaw – Financial Times
Seven large US tech companies have driven all of the gains in global stocks this year, pushing the US dominance of equity markets to new heights. The so-called “magnificent seven” – Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia and Tesla – have been propping up the S&P 500 index of blue-chip US companies for most of the year because of investor excitement about the growth of artificial intelligence.
Nobody Wants Mutual Funds Now; Also contract redlines, bank bail-ins and carbon capture.
Matt Levine – Bloomberg
It feels like there are two dominant retail investment strategies: Buy and hold index funds, or Actively trade individual stocks and, while you’re at it, maybe options or crypto. Many ordinary people do not want to think about their investments much, and modern finance has designed a product that is ideally suited for them. It is the index fund (or index exchange-traded fund), whose essential thesis is that thinking about investments is unnecessary and in fact bad, and you should just buy the market and save on costs.
‘World’s Safest Asset’ Proves Anything But Amid Wild Treasuries
Liz Capo McCormick and Michael Mackenzie – Bloomberg
A surprisingly strong US economy and mixed signals from the Federal Reserve have fueled some of the wildest swings in Treasuries in recent memory. Add geopolitical angst and a surge in debt supply and you have a recipe for sustained volatility for months to come, market watchers say. Dubbed the “world’s safest asset,” Treasuries have not lived up to that title lately as dramatic moves in yields become an almost daily occurrence. Just last week, the rate on the 10-year swung in a range of almost 40 basis points, buffeted by crosscurrents including resilient retail sales and jobless figures, a bevy of comments from Fed officials and rising demand for haven assets amid concerns of an escalating conflict in the Middle East.
‘Catastrophe’ Bond Market Headed for Major Surge in Issuance; World Bank targets $5 billion in outstanding cat bonds; Issuance comes as insurers increasingly unable to cover losses
Gautam Naik – Bloomberg
The market for catastrophe bonds, one of this year’s best-performing debt classes, is about to see a significant increase in sales as the World Bank, a major issuer, prepares to ratchet up its offering. The lender plans to increase the amount it has outstanding in so-called cat bonds to $5 billion over the next five years, compared with $1 billion today. That represents a substantial bump for an overall market that’s currently worth about $40 billion in total.
Carbon Capture Desperately Needs a Reality Check After Lost Decade; The technology is held up as indispensable for meeting climate goals even as deployments continue to disappoint.
Akshat Rathi – Bloomberg
Each year, the International Energy Agency produces a hundreds of pages long report that lays out possible futures for the multi-trillion-dollar energy sector. As renewables such as solar power have gone from marginal to massive, the IEA’s scenarios have changed to reflect surging pace of the ongoing shift. Only one technology almost always gets an ever more bullish appraisal while failing to progress: carbon capture and storage (CCS).
Risking It All to Actually Understand Risk, on ‘The Businessweek Show’; In our latest episode, Jaime Rogozinski, Maeve DuVally and Sophia Chang talk about taking big chances.
Max Abelson – Bloomberg
A Major Driver of US Equities in the Past Decade Is Fading Fast; Stock repurchases declined 22% in the first half of the year; Buyback stocks trail S&P 500 by most since 1998 outside Covid
Michael Msika – Bloomberg
Environmental, Social and Corporate Governance
Apple’s ‘carbon neutral’ claims come under scrutiny; iPhone maker flags credentials of its latest Watch products as EU seeks to clamp down on ‘greenwashing’
Kenza Bryan – Financial Times
Apple faces scrutiny from European environmental and consumer groups over its claims that its latest devices are “carbon neutral”, a term that Brussels proposes to ban in corporate marketing because it is “misleading”. The iPhone maker last month put its “environmentally friendly” credentials at the centre of its biggest annual product launch. It called some Apple Watch models its “first-ever carbon neutral products”, part of a drive to extend the classification across all its devices by the end of the decade.
The Plucky Puffin, Endangered Yet Coping: Scientists Link Emergence of a Hybrid Subspecies to Climate Change; Studying puffin populations on three Norwegian islands, scientists have uncovered the first evidence to connect a large-scale hybridization to 20th-century warming trends. Yet a serious decline in the birds” genetic diversity does not bode well for their future.
Lydia Larsen – Inside Climate News
The brisk increase in warming rates in the Arctic is bringing rapid shifts in range for plants and animals across the region’s tree of life. Researchers say those changes can lead species that normally wouldn’t encounter each other to interbreed, creating new hybrid populations. Now, scientists have presented the first evidence of large-scale hybridization that appears to have been driven by climate change.
Iron Billionaires Are in a Green Energy Race; Gina Rinehart, a climate denialist, and Andrew Forrest, a born-again green evangelist, are duking it out in a remote and mineral-rich corner of Australia.
David Fickling – Bloomberg
Which of Australia’s iron ore billionaires has more money invested in advancing the energy transition? Andrew Forrest, a green evangelist who recently warned that “it’s business which will kill your children?” Or Gina Rinehart, a Trump-supporting culture warrior who’s characterized climate science as propaganda? Believe it or not, at this point it’s neck and neck.
ESG investing is dying on Wall Street. Here’s why
Nicole Goodkind – CNN
The market for environmental, social and corporate governance, or ESG, investing is fundamentally broken. The numbers speak for themselves. The cumulative flow of investments into US ESG funds has been flat to slightly negative since the first quarter of 2022, according to data shared exclusively with CNN by Lipper, a financial data provider. In the US, assets under management in ESG funds declined from $339 billion in the second quarter to $315 billion by the end of September.”ESG investing … entering the final quarter of 2023 continues to be a story of declining flows and assets under management,” said Robert Jenkins, head of global research at Lipper.
ESG fund closures in US outpace launches for first time since 2020 – Morningstar
Isla Binnie – Reuters
Money managers in the United States have closed funds with sustainability mandates faster than they opened new ones over the past three months as investor appetite waned for the asset class overall, data firm Morningstar said on Monday. Investment products with a declared aim to promote ethically responsible practices, from cutting greenhouse gas emissions to increasing workplace diversity, have lost their lustre in the U.S. since a 2021 boom, as regulators scrutinised how they were marketed and Republican politicians alleged industries were being boycotted to the detriment of retirees’ savings.
SEC Removes ESG From 2024 Audit Priorities, Is ESG Faltering?
Jon McGowan – Forbes (contributor)
Former Credit Suisse executive Francesca McDonagh to join fund group; Ex-Bank of Ireland boss is one of most high-profile departures from Swiss bank since UBS took over
Owen Walker – Financial Times
Former Credit Suisse chief operating officer Francesca McDonagh has agreed to join a private equity-backed German fund group as chief executive, according to people with knowledge of the appointment. The former chief executive of Bank of Ireland is one of the highest-profile executives to leave Credit Suisse since its takeover by former rival UBS this year and is the latest senior banker to be courted by the private equity industry.
St James’s Place suspends trading in property fund; UK’s largest wealth manager makes move after a surge in redemption requests by investors
Sally Hickey – Financial Times
St James’s Place has suspended trading in its property fund after facing a surge in investors’ redemption requests. The UK’s biggest wealth manager on Monday said it had prevented withdrawals from the £829.5mn property unit trust since Friday last week.
ETFantasmagoria; Is the glut of new ETFs an augury of a catastrophe?
Robin Wigglesworth – Financial Times
Back in 2016, then-Vanguard CEO Bill McNabb went to an exchange-traded fund conference to beg for restraint. If the proliferation of ETFs didn’t slow, he warned, the consequences might be dire:
BlackRock Revives Target-Date ETFs, a Decade After First Attempt
Katie Greifeld and Emily Graffeo – Bloomberg
BlackRock Inc. is taking another shot at a strategy long-dominated by mutual funds, target-date investing, but with an exchange-traded fund-twist. Last week, the world’s largest ETF issuer unveiled a suite of 10 funds that shift money into more conservative investments as holders age. The new line-up will target retirement dates every five years from 2025 through 2065. While target-date mutual funds and collective investment trusts hold roughly $2.8 trillion globally, BlackRock’s new funds are the only such strategy available in the ETF wrapper.
Work & Management
Georgia’s Medicaid program-the only one in the U.S. with a work requirement-has only enrolled 1,343 residents in 3 months
The Associated Press
Georgia Gov. Brian Kemp’s new health plan for low-income adults has enrolled only 1,343 people through the end of September about three months after launching, The Atlanta Journal-Constitution reports. The Georgia Department of Community Health has projected up to 100,000 people could eventually benefit from Georgia Pathways to Coverage. But the nation’s only Medicaid program that makes recipients meet a work requirement is off to a very slow start.
“Overemployed” people secretly work overlapping remote jobs
Kristin Schwab – Marketplace
Growing up, Molly was taught traditional workplace values. “Get a job, work in a cubicle or wherever they assign you, work 120% and move up the corporate ladder,” she said. Molly is an instructional designer and makes videos for employee onboarding and cybersecurity training. She lives with her husband near Los Angeles and has four kids. And for most of her career, she subscribed to that idea of being loyal to your employer.
Blackstone Chief Schwarzman Says Remote Workers Don’t Grind as Hard
Tom Metcalf – Bloomberg
Steve Schwarzman said part of the reason workers are proving difficult to lure back to offices is because they enjoy a lighter workload at home. The Blackstone Inc. boss, whose firm is one of the largest owners of commercial property, said people profited from remote work as they found “they didn’t work as hard” and saved money on commutes, lunches and work attire.
Even Short Runs Have Major Health Benefits; Jogging a mile or two a few times a week can help you live longer and reduce your risk of disease.
Markham Heid – The New York Times
Running is one of the most popular forms of exercise in America. It may also be one of the healthiest. Numerous long-term studies – some involving thousands of participants – have shown that running benefits people physically and mentally. Research has also found that runners tend to live longer and have a lower risk for cardiovascular disease and cancer than nonrunners.
Seventy countries convene to step up primary health care
World Health Organization
One month after world leaders committed to redouble action on universal health coverage (UHC) at the United Nations General Assembly, 70 countries convened to step up primary health care investments by 2030. The International Conference on “Primary health care policy and practice: implementing for better results” marked the 45th anniversary of the Declaration of Alma-Ata and 5th anniversary of the Declaration of Astana on primary health care. The conference, which brought together over 600 health policy-makers and partners from countries, took place in Kazakhstan-the birthplace of the historic primary health care (PHC) declarations. It was co-hosted by the Government of Kazakhstan, the World Health Organization (WHO), and UNICEF.
Psychologists have figured out why you can’t stop eating that candy bar. Smokers may relate; A review of studies that use the Yale Food Addiction Scale found that ultra-processed foods are more similar to alcohol and tobacco than we may think.
Shalene Gupta – Fast Company
There are few blisses greater than diving into a bag full of chips or munching on candy. There might be a good reason for that: According to a new study from the British Medical Journal by researchers in the United States, Spain, and Brazil, ultra-processed foods are just as addictive as cigarettes and alcohol. The researchers reviewed 281 studies from over 35 countries, which used the Yale Food Addiction Scale to measure food addiction. The scale uses 11 different criteria for substance use disorder, such as withdrawals, craving, and continuing to use despite negative consequences. The researchers found that on average 14% of adults, 12% of children, and 32% of obese people had food addition. By comparison, 14% of adults have alcohol addiction and 18% cigarette addiction.
Anxiety is gripping China’s stock market more than anytime in the past year as the ‘Fear and Greed’ indicator slumps
Bloomberg via Fortune
Anxiety dominates China’s $9.1 trillion stock market now more than at any time in the past year, according to a Bloomberg indicator. The so-called Fear and Greed indicator, a measure of buying strength versus selling strength, for the Shanghai Composite index on Monday fell to its lowest level since October 2022. The ongoing slump has sent the equities gauge to the brink of breaking through a critical 18-year trend line.
BOJ Wades Back Into Bond Market to Curb Rising Japan Yields; BOJ’s tolerance for higher yields challenged before meeting; Speculation of BOJ policy tweak continues to weigh bonds
Yumi Teso and Hidenori Yamanaka – Bloomberg
The Bank of Japan announced yet another unscheduled bond-purchase operation to curb rising sovereign yields as traders challenge its resolve ahead of a policy decision next week. Tuesday marks the fifth time the central bank has stepped into the market with such buying since it adjusted its yield-curve control program in late July. It has also resorted to increasing purchase amounts in regular operations and loans to commercial banks that help them buy debt cheaply.
China’s Mystery 14,960 Municipal Debt Issuers; The true size of local government borrowings is unknown. Yet thanks to Beijing’s latest debt swap program, investors can’t get enough of it.
Shuli Ren – Bloomberg
Forget real estate developers. The gray rhino of China’s economy, and perhaps the most lucrative trade of the year, is hidden municipal debt. By some estimates, borrowings from local government financing vehicles, or off-balance-sheet entities deployed to fund infrastructure and stimulate regional economies, reached 57 trillion yuan ($7.8 trillion) last year, or 48% of China’s gross domestic product. LGFV debt is almost as big as central and local government borrowings combined, according to the International Monetary Fund.
China’s Property Crisis Is Upending Tens of Thousands of Lives; Default is all but official at one of China’s largest developers. That’s intensifying the pain for struggling homebuyers, workers and investors, just when the economy most needs a boost.
In August, shortly after the news broke that Country Garden Holdings Co. had hit a full-blown funding crisis, 38-year-old Huailan crept into the Shandong construction site where her new family home should have been all but finished. She ducked under the wire fence, climbed 18 flights of stairs to a nearby rooftop and took in a view that made her heart plummet. Idle cranes. Slabs of cement dotting ankle-high grass. A mud pit.
Chinese Pork Processor WH Sees Profits Plunge, Dragged by US
Hallie Gu – Bloomberg
China’s WH Group Ltd. – one of the world’s biggest pork processors – said “difficult” conditions for its US business are hampering profits and it expects the situation to last through the end of the year. The company on Tuesday reported a 30% drop in profit in the first nine months of the year to $585 million.
Australia Reveals $1.3 Billion Expansion in Critical Mineral Financing; PM Albanese is in the US for a four-day official visit; Critical minerals will make up a large part of his agenda
Ben Westcott – Bloomberg
Russian Says US Is Seizing $300 Million Yacht From Wrong Owner; Billionaire accused of violating sanctions by using US banks; Ship was sized in Fiji last year, then sailed to San Diego
Bob Van Voris – Bloomberg
Why Venezuela Is About to Lose Its Oil Crown Jewel; Parent of energy refiner will be sold to satisfy creditors; Sale process launches Monday; auction is set for June 6
Fabiola Zerpa, Nicolle Yapur, and Jef Feeley – Bloomberg
Suriname Launches Terms of $675 Million Debt Restructuring Deal; South American nation offers oil-linked notes in swap; Committee of large bondholders says it supports the deal
Karl Lester M Yap and Ezra Fieser – Bloomberg