Hits & Takes
John Lothian & JLN Staff
I am concerned that there is such a rush to find a vaccine for COVID-19 that shortcuts are being taken which will reduce the reliability of the vaccine. There is pressure from the Trump administration ahead of the fall election. There is pressure internationally from Russia and China to be the first with a vaccine. This all plays into the hands of the anti-vaccine crowd, which is also getting outsized media attention right now.
Let’s just say I will not be first in line to get any vaccine and will continue to stay quarantined and safe at home until I have confidence in the vaccine or vaccines.
Brookings Institution, a nonprofit public policy organization based in Washington, and Georgetown Law are holding a webinar on September 2 from 3:00 to 4:15 EDT titled “Where are the Black financial regulators?” The event features a keynote speech by Rep. Maxine Waters. A panel discussion includes former CFTC Commissioner Sharon Y. Bowen. You can register HERE.
Here is a running list of restaurants closed in Chicago because of the coronavirus. The list, compiled by the Chicago Tribune, includes Trattoria No. 10, which was once the site of a CBOT press dinner during FIA EXPO.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
As part of a webinar series, Reuters is offering a live webinar exploring the potential of the ASEAN market in the wake of COVID-19. “Navigating ASEAN Beyond COVID-19” will take place Tuesday, August 25, 2020 at 8:00 AM GMT. You can register for that and other Reuters webinars HERE.~SR
Tom Rinaudo – MarketsWiki Education Open Outcry Traders History Project
Tom Rinaudo was selling real estate when his mother heard about a job at the Chicago Board of Trade. He had no idea what the Board of Trade was all about, but he said yes and was hired by JK McKerr in a back office job. Rinaudo wishes he could have started 10 years earlier as many of the exchange members he got to know and who mentored him were 20 years older than he.
The Spread: Mini Derivatives Arms Race
This week on The Spread, FTSE Russell and SGX form a strategic alliance, Cboe’s mini VIX futures sell like hotcakes, and more.
As Census Count Resumes, Doubts About Accuracy Continue to Grow; Officials project optimism. But a chorus of experts says the pandemic and politics could lead to a deeply flawed count.
Michael Wines – WSJ
With the 2020 census into its final stage, more than one in three people hired as census takers have quit or failed to show up. Many still on the job are going door to door in areas that largely track places where there are elevated rates of coronavirus infections, according to calculations by the National Conference on Citizenship, Civis Analytics and The New York Times.
*****My wife Cheryl is working as an enumerator for the Census Bureau. They are giving bonuses to people who work extra hours in order to finish up the work. They have also asked her to go to Iowa to help with areas there where they don’t have enough workers. Iowa was rocked by storms a couple of weeks ago that destroyed a lot of crops.~JJL
Lumber prices soar to all-time high on renovation demand; Suppliers curtailed production and liquidated inventories in expectation of plunging sales
Harry Dempsey – FT
Gold and silver have outshone most assets, but another commodity is shaping up to be this year’s best performer: lumber. Prices for the wood have hit a record high after demand surged as homeworking as a result of Covid-19 spurred a wave of renovation projects, from fences to sheds, at a time when inventories were running low.
*****I was re-using some wood planks from a pallet that was used to deliver building supplies to my home to re-side my garage this weekend. Unfortunately, I stepped on a rusty nail while taking the pallets apart. The good news is I will be good for another 10 years from needing a tetanus shot.~JJL
Friday’s Top Three
Our top story on Friday was Kodak’s $765 Million Moment: How It Happened and How It Went Wrong, from the Wall Street Journal, about Trump’s trade adviser Peter Navarro and a failed attempt to get Eastman Kodak into the pharmaceutical business. Second was a LinkedIn posting from Allan Schoenberg of Nasdaq about how much he loves his job there as senior vice president, global head of corporate communications and social media. Third was JLN’s Suzanne Cosgrove’s story, Legal Cannabis Ups the Ante for Alternative Payment Systems.
185,430,621 pages viewed; 24,417 pages; 225,862 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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City employers plan for lasting switch to remote working; Banks, asset managers, insurers and accountants in London’s financial centre expect less time spent in office in future
Owen Walker, Nicholas Megaw, George Hammond and Attracta Mooney – FT
Banks, asset managers, insurers and accountancy firms in London’s financial centre and across the country are setting out plans for staff to work from home more regularly, as emergency measures introduced during the pandemic turn into permanent lifestyle changes.
Alarm across Europe over surge in coronavirus cases; Governments eager to avoid new lockdowns face risk of more deaths and public anger
A sharp rise in the number of coronavirus infections over the past two weeks has put European governments on high alert as holidaymakers return home to big cities and teachers and pupils prepare for the start of the school year after months of disruption.
Euronext, CDP group bids for Borsa Italiana bond platform unit: sources
A consortium comprising France’s Euronext (ENX.PA) and Italian state-lender CDP is among bidders for the bond-trading platform of the London Stock Exchange’s (LSE) Borsa Italiana unit, two sources said on Saturday.
Out of office: why some are going back and others are staying away; Two recent surveys suggest a difference of opinion between the US and UK and other countries
In some parts of the northern hemisphere, it feels almost like a normal summer: city centres are quiet, schools are on holiday, offices closed. But this illusion conceals deeper uncertainty about what happens next. Assuming those offices reopen next month, will workers return? If not, why not?
Many Companies Planned to Reopen Offices After Labor Day. With Coronavirus Still Around, They’re Rethinking That; Companies had hoped to bring homebound workforces back in September, but employee outcry and fears over outbreaks have led bosses to change course
Lauren Weber and Chip Cutter – WSJ
This summer, executives at health-care-technology firm Epic Systems announced a plan: Most of the 9,500 employees at its 1,000-acre campus in Wisconsin would be expected back in the office in September. The company, like many others, says its employees do their best work when they can collaborate in the same space. But blowback to the mandate was swift. Employees expressed fears about safety and spreading the new coronavirus. Local health officials questioned the move. So Epic joined legions of other companies making late-in-the-game changes to office-reopening plans, saying this month that staffers could work from home at least through the new year.
Education experts urge caution as pupils return to classroom; Some countries have shut schools again amid disparity on protocols for safe reopenings
Andrew Jack – FT
Schools around the world have reopened their doors or are preparing to restart, in many cases while coronavirus transmission rates are rising, provoking fresh concerns about whether and how the process should take place. After a near global shutdown of education settings as the pandemic spread earlier this year, 22 countries have now fully reopened their schools. By mid September, 12 will do so and 55 have permitted partial reopening, using different strategies to mitigate the risk of transmission, according to an analysis by Insights for Education, a Swiss-based non-profit group.
Global dividends suffer worst quarterly fall since 2009; Janus Henderson’s index shows cut in payouts in every region except North America
Attracta Mooney – FT
Global dividends suffered the worst quarterly fall in a decade, with more than $100bn wiped off their value in the three months to June, as companies ditched payouts in response to the coronavirus pandemic.
The Real Danger With $26.5 Trillion of U.S. Debt; For America’s creditors, the cost of servicing our borrowings took a back seat to questions about how our government operated.
James Clark – Bloomberg
As the U.S. Treasury Department’s Deputy Assistant Secretary for Federal Finance during the Obama administration, I spent a lot of time talking to the major buyers of our nation’s debt. When I left my job overseeing the government’s finances in 2017, the unpaid tab for the first 240 years of the “American Experiment” was $20 trillion. In less than four years, that number has risen to $26.5 trillion, the result of essential outlays on pandemic relief and completely non-essential tax cuts for the wealthy.
Hong Kong Reports First Coronavirus Re-Infection in Technology Worker
Jinshan Hong – Bloombereg
Man found to be infected 4.5 months apart by different strains; Case shows that re-infection may occur within a few months
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. A man was infected with the coronavirus after recovering from an initial bout in April in what scientists said was the first case showing that re-infection may occur within a few months.
The Stock Market Was Rocked by a Mysterious ‘Flash Crash’ Five Years Ago. What You Need to Know.
Evie Liu – Barron’s
Monday marks the fifth anniversary of the stock market’s last major “flash crash.” Today, the capital markets seem to be in a healthier place. Changes to market structure, implemented in response to the 2015 seemed to help avoid another similar occurrence during stocks’ sharp selloff in February and March. And one market-structure expert is confident the markets can withstand future tests, as well, whenever volatility inevitably returns.
ETF Boom Fuels Gold’s Sharp Rise; Surge in precious-metals prices this year comes alongside rising exchange-traded-fund purchases and increased volatility
Amrith Ramkumar – WSJ
The 2020 gold rush in markets is starting to unnerve even some longtime fans of precious metals. Gold futures are near records and up about 28% for the year, while silver has more than doubled since hitting a multiyear low in March. The moves aren’t entirely surprising, given the scale of the coronavirus-driven economic shock and the countervailing global stimulus led by governments and central banks. Many investors fear economic stagnation, an outbreak of inflation or some combination of the two—a recipe for rising demand for metals viewed as a store of value in trying times.
Money Funds Waive Charges to Keep Yields From Falling Below Zero; Roughly $5 trillion industry faces pressure as interest rates plummet
Dawn Lim – WSJ
Many investment firms are waiving their charges on money funds to keep the yields that investors earn from dropping below zero. Money-management giant BlackRock Inc. is waiving costs typically borne by customers for certain money-market funds to prop up investor yields, said people familiar with the matter. Fidelity Investments, Federated Hermes Inc. FHI -0.32% and J.P. Morgan Asset Management are also ceding some fees to stave off negative yields.
Carbon trading: the ‘one-way’ bet for hedge funds; The EU’s ‘green’ recovery plan has driven up the price of carbon credits amid warnings that speculators stand to gain
David Sheppard – FT
The EU decided long ago that if it was going to effectively cut pollution then it needed to put a price on carbon, and over time that price had to rise. Some of the world’s biggest oil traders and hedge fund managers now appear to believe it. In the past four months, the price of European carbon allowances — tradable securities that dictate how much it costs power stations and industry in Europe to emit a tonne of carbon dioxide — have soared to a near record high above EUR30. In turn they have raised the cost of polluting for businesses such as electricity utilities and will soon do so for manufacturers of products like cement and steel.
Shareholders Feel Muted as Companies Switch to Virtual Annual Meetings; Remote events have been shorter and allocated less time to shareholder questions, study finds
Nina Trentmann – WSJ
Companies are finding virtual shareholder meetings to be cheaper and less time-consuming, but shareholders complain they don’t get as much time to ask their questions. A majority of the companies in the S&P 500 this year have decided to move their shareholder meeting—usually an in-person event—online due to coronavirus-related restrictions on large gatherings. Faced with the option to postpone the meeting until later, 87% of businesses opted for a virtual event compared with 23% of meetings held remotely in 2019, according to data provider MyLogIQ.
Facing a Profitability Crisis, Europe’s Banks Rush to Restructure; Coronavirus accelerates implementation of plans to address years of underperformance
Margot Patrick and Simon Clark – WSJ
At beleaguered European banks, coronavirus is fast-tracking plans for fundamental restructuring after years of poor performance. Many of the region’s most prominent lenders are tearing up old business models, cutting business lines or doubling down on domestic markets as they try to find a formula that works for them.
Eurex’s incoming options speed bump could disadvantage liquidity takers, HFT firm warns; As Eurex prepares to launch its PLP speed bump initiative on the DAX index options market next week, HFT firm Optiver has warned the scheme could harm liquidity takers.
Hayley McDowell – The Trade
European proprietary firm Optiver has warned the launch of a speed bump to slow down aggressive high-speed trading on the Eurex DAX index options market could disadvantage liquidity takers.
White New Yorkers’ Income Exceeds Black New Yorkers’ in Many Industries; Mayor de Blasio’s administration promises more city and private-sector support for Black entrepreneurs
Kate King – WSJ
New York City Mayor Bill de Blasio has said his administration will address historic inequities in rebuilding the city’s economy after the coronavirus pandemic. A new analysis of the wage and employment disparities facing Black New Yorkers shows how hard that will be.
Chinese managers apply to launch first Hang Seng Tech index ETFs; The new index includes Chinese tech giants such as Tencent, Alibaba and Meituan
Echo Huang – FT
Two Chinese managers have applied to launch exchange traded funds that will track the newly launched Hang Seng Tech Index, according to records from the China Securities Regulatory Commission.
What steps will central bankers reveal at Jackson Hole summit? Market Questions is the FT’s guide to the week ahead
The world’s central bankers will convene virtually on Thursday and Friday for a discussion about the future of monetary policy. The annual event, typically held in Jackson Hole, Wyoming, was moved online earlier this year because of coronavirus.
Inflation Shock Will Hit Bonds Hardest in India, Russia, Mexico
Marcus Wong and Livia Yap – Bloomberg
Nations have smallest margin to spare if CPI quickens: study; ‘We are watching inflation very closely’: Goldman Sachs Asset
If the recent spike up in U.S. inflation numbers is a sign of things to come for global markets, that could prove especially bad news for investors in Indian, Russian and Mexican bonds.
Wall Street Is Looting the American Retirement System. The Trump Administration Is Helping; The Trump administration is opening up retirement funds to private equity — at workers’ expense
David Bradly Isenberg – Rolling Stone
The Trump administration is pushing dramatic changes to the American retirement system that will benefit Wall Street but push average citizens into plans that are riskier, less profitable, and loaded with high and hidden fees.
Virgin Islands Will Subpoena Billionaire Investor in Epstein Case; The territory’s attorney general wants to know more about Leon Black’s dealings with Jeffrey Epstein, who died while facing sex-trafficking charges.
Matthew Goldstein, Steve Eder and David Enrich – NY Times
Officials in the U.S. Virgin Islands want the billionaire investor Leon Black, one of the most powerful men on Wall Street, to hand over information about his decades-long business ties to the convicted sex offender Jeffrey Epstein.
As Covid-19 Clobbers Tourism, Millions Lose a Lifeline; In resorts like Cancún, tourism has lifted many out of poverty. What happens now?
Santiago Pérez – WSJ
Since this once-sleepy stretch of Mexico’s Caribbean coast began its transformation into a glitzy resort community 50 years ago, it has thrived by attracting millions of vacationers during its summer and winter seasons.
FDA Authorizes Convalescent Plasma for Covid-19 Use; The emergency-use authorization comes after preliminary studies supported the benefits of the antibody-rich plasma taken from recovered Covid-19 patients
Thomas M. Burton and Amy Dockser Marcus – WSJ
The Food and Drug Administration authorized use of convalescent plasma, the antibody-rich blood component taken from recovered Covid-19 patients, for the treatment of serious coronavirus cases. The agency’s action Sunday, called an emergency-use authorization, permits use of the treatment on hospitalized Covid-19 patients. The Wall Street Journal reported last month the move was coming.
Colleges Worried About Covid-19 Cases Tell Students to Stop Partying; Colleges are starting to suspend students in effort to halt partying being traced to coronavirus outbreaks
Douglas Belkin – WSJ
Leaders of colleges and universities are issuing desperate demands to students to help curtail the spread of the coronavirus on campus: Wear masks and rein in your back-to-school partying—or go home. The messaging accompanies new outbreaks at schools around the country as students return to campus, leading several this week to halt on-campus instruction and punish some rule breakers.
Time for action on America’s Darwinian debt struggle; A credit crisis among small businesses risks creating an even more lopsided US economy
Robin Wigglesworth – FT
Mango’s, a tropical-themed nightclub in Orlando that boasts the city’s “sexiest beats”, was recently saved from Covid-19-induced bankruptcy by the Federal Reserve. A business loan supported by the US central bank’s emergency Main Street Lending Programme will help keep the hotspot alive until dancers and drinkers eventually twirl back to its venues. “We shall reopen to sing, dance, dine and entertain again when it is safe to do so,” the company promises visitors on its website.
A poorer retirement is pandemic’s hidden legacy; Workers will need to live with lower returns from their pensions
The editorial board – FT
Job security is the immediate concern for workers everywhere as they worry whether they will still be in employment in the post-Covid world. The health and economic crisis has sent unemployment soaring as employers have cut costs and jobs. Yet the pandemic has also brought a nasty hidden legacy for millions: the retirement many had been saving for will be far less comfortable than they thought.
MUFG Plans to Offer Covid-19 Bonds to Individual Investors
Ayai Tomisawa – Bloomberg
Bank plans to issue notes to help with pandemic response; Covid-19 crisis is boosting sales of debt to help society
Japan’s biggest lender is planning to raise funds from individual investors to help smaller companies and hospitals tackle the Covid-19 pandemic. Mitsubishi UFJ Financial Group Inc. intends to issue sustainability bonds totaling as much as 150 billion yen ($1.42 billion) in September, after receiving requests from retail buyers following a sale of such notes to institutional investors in June, according to Isamu Murofushi, a bank spokesman.
America’s College Towns Are Facing an Economic Reckoning; Communities that rely on student spending and higher education jobs are struggling with fiscal woes and Covid-19 fears as the school year begins.
Kara Harris – Bloomberg
Curtis Shulman is the director of operations for Hotel State College, a hospitality company that runs a group of six bar-restaurants in State College, Pennsylvania. Home to Penn State’s University Park campus, the town depends heavily on the 45,000-student campus, largest of Penn State’s 24 outposts.
China’s Vaccine Front-Runner Aims to Beat Covid the Old-Fashioned Way; Sinovac Biotech in Beijing is taking a brute-force approach to developing an inoculation for the coronavirus.
Many of the 200-plus Covid-19 vaccine projects under way around the world are focused on new technologies—inoculations based on messenger RNA, for example, or genetically modified cold viruses. The company developing one of China’s leading vaccine candidates, by contrast, is betting that humanity’s best chance may lie with a shot not too different from the kind that’s been in use for hundreds of years.
New U.S. Coronavirus Cases Stay Below 50,000; FDA authorizes convalescent plasma for serious Covid-19 cases
Joanne Chiu and Jennifer Calfas – WSJ
New Covid-19 cases in the U.S. continued to drift lower Saturday, staying below 50,000 for the eighth consecutive day as the Food and Drug Administration authorized convalescent plasma as a treatment for serious coronavirus cases.
Antibody Drugs Advancing to Fill Covid-19 Treatment Gap; Companies including Regeneron and Eli Lilly are testing drugs to help protect people infected with the virus from developing serious cases
Joseph Walker – WSJ
A kind of drug that takes a page from a body’s natural antibody defenses may be able to give many people early protection against the coronavirus, ahead of vaccines. Few treatments so far have been shown to be effective against Covid-19, and even then, only in hospitalized patients. Potential vaccines, meanwhile, are probably months away from completing testing and becoming available to the general public.
U. of I. expects COVID-19 cases to multiply as students return but says it can stop the spread with new saliva test
Elyssa Cherney – Chicago Tribune
COVID-19 cases in the Urbana-Champaign area will rise as college students flock back to campus for the fall semester, but the University of Illinois says it’s prepared to handle the influx with quick saliva-based tests and quarantining procedures.
Miami ICU nurse: I have never in my life seen so many deaths
Kelli Kennedy – Associated Press
ICU unit to limit their exposure to the deadly virus, Ruiz has asked to stay permanently. (AP Photo/Lynne Sladky)
FORT LAUDERDALE, Fla. (AP) — Their final breaths are tormented. Rublas Ruiz has seen too many of them — the last gasps of 17 men and women who died of the coronavirus. A 41-year-old ICU nurse in Miami’s Kendall Regional Medical Center, Ruiz has witnessed the desperate, pleading, wide-eyed, barely there gasps.
Exchanges, OTC and Clearing
SGX finds new index partner in FTSE Russell as battle for index business heats up
Angela Tan – Business Times
JUST barely three months after long-term partner MSCI Inc said it would migrate from Singapore to Hong Kong licensing for derivatives products on a host of gauges, Singapore Exchange (SGX) has found a new beau in rival index provider, FTSE Russell, to deliver new Asian multi-asset solutions.
Kotak-Backed MCX Plans More Index Futures After Bullion
Swansy Afonso – Bloomberg
Trading in base metal index futures likely in month: MD Reddy; Bourse exploring plans of India good delivery, recycled lead
Multi Commodity Exchange of India Ltd. plans to launch a slew of index-based futures to widen its offerings to local investors, after starting a bullion index. The Kotak Mahindra Bank Ltd.-backed exchange, the nation’s biggest venue for commodities, began a cash-settled bullion index futures on Monday and plans to start a similar product for base metals in a month followed by energy and farm commodities, Managing Director P.S. Reddy said in an interview.
Update on ISX Litigation
ASX notes the second further amended statement of claim against ASX (the claim) filed in the Federal Court of
Australia by an ASX-listed entity, iSignthis Limited (ISX).
Pushing liquidity in options products – Eurex’s Passive Liquidity Protection
Eurex launched its Passive Liquidity Protection (PLP) back in June 2019 to strengthen order book liquidity. After a successful pilot phase with German and French equity options, on 24 August 2020 Eurex is rolling this out to the remaining equity options segments, as well as its flagship index product, the DAX Equity Options.
Nasdaq CSD Finalizes Migration Of Securities Settlement Platform To Icelandic Securities Market – International Securities Settlement Platform Creates Business Opportunities For Customers
Nasdaq (Nasdaq: NDAQ) announces that the final step in the merger of Nasdaq CSD Iceland with Nasdaq CSD SE (Nasdaq CSD) took place today with the successful technical migration of the Icelandic securities market to the Nasdaq CSD SE (Nasdaq CSD) securities settlement platform. The Icelandic branch will now be positioned to leverage the full potential of Nasdaq CSD’s securities settlement platform and links to create new opportunities for domestic and international clients. Nasdaq CSD announced the merger with Nasdaq CSD Iceland on May 25.
Moscow Exchange Trading In Futures Contract On Norisk Nickel Ordinary Share
On 25 August 2020, the Exchange will introduce the Norilsk Nickel ordinary share futures contract with a smaller lot size.
Moscow Exchange launches trading in foreign stocks
On 24 August 2020, Moscow Exchange began trading in foreign equities. MOEX admitted 20 stocks from the S&P 500 Index. On 24 August, 19 stocks were made available for trading in the main and after-hours trading sessions, with Apple stock to be added on 7 September. The delayed launch is due to the upcoming Apple stock split. During the next stage of this project (expected in 4Q 2020), the list of stocks will be expanded to 50 names. MOEX will add more new instruments in future.
What Is Ant, the Chinese Fintech Giant With Big IPO Plans?
The Chinese fintech titan Ant Group—co-founded by Alibaba billionaire Jack Ma—is set to go public in what could be one of the largest listings ever. WSJ explains how Ant’s backbone service, Alipay, has revolutionized payments and investing in the world’s most populous country.
Monzo: Leaked messages show non-executive staff off Covid pay freeze
Callum Burroughs – Business Insider
Internal slack messages from UK challenger bank Monzo, seen by Business Insider, show the startup is ending a pay freeze brought in during the coronavirus pandemic.
The pay freeze will end on September 1.
Monzo did not immediately respond to requests for comment.
Visa wins approval for $5.3bn takeover of US fintech firm Plaid
Mark Cobley – Finance News
The UK’s Competition and Markets Authority has given the green light to Visa’s $5.3bn takeover of fintech data-sharing firm Plaid — after judging that London’s vibrant fintech scene would provide plenty of further competition, even once the pair join forces.
Former Nordea Asset Management trading head readies launch of ‘revolutionary’ bond execution system; After building the system for the past two years, Miles Kumaresan aims to solve issues traders face when trading bonds that other EMS platforms have failed to address.
Hayley McDowell – The Trade
Nordea Asset Management’s former global head of trading is looking to revolutionise institutional bond trading as he prepares to launch a bond execution system via his start-up.
Ping An’s OneConnect fintech arm expects flurry of deals in Southeast Asia as Covid-19 spurs shift to digital banking
Daniel Ren – Yahoo Finance
OneConnect Financial Technology, a cloud-based fintech platform controlled by Ping An Insurance (Group), expects to see “accelerated growth” in Southeast Asia as the Covid-19 pandemic spurs demand for digital banking services among regulators and institutions for its products and services.
Fintechs form coalition to fight racial inequality
Some of fintech’s biggest names – including Credit Karma, Monzo and Varo – have joined a new coalition to fight racial inequality in the industry. With the Black Lives Matter movement gathering momentum in the wake of George Floyd’s killing in May, the fintech sector, like many others, has been reflecting on its own failings when it comes to race.
Crypto Yuan Will Meet the Dollar — in Hong Kong
Andy Mukherjee – Bloomberg
Money is whatever people will use to swap, store and measure value. Since 1846, Hong Kong residents have relied on notes issued by commercial banks. And for almost four decades, they have been safe in the knowledge that 78 units of local currency would always fetch 10 U.S. dollars. That certainty has spawned a globally competitive financial center. But change is on its way. The people of Hong Kong may be asked to try out a new kind of money. Whether they bite could decide the outcome of a great superpower rivalry.
Istanbul or ‘Coinstantinople’? Inside Turkey’s Bitcoin Bull Market
Leigh Cuen – Coindesk
Turkish bitcoin users are already waist-deep in a bull run, as partially illustrated by growing exchange volumes. BTCTurk CEO Ozgur Güneri, head of the largest crypto exchange in Istanbul, with the most Turkish banking access of any exchange in the region, said volumes roughly quadrupled over the past year, attracting roughly 100,000 active monthly users by July 2020 out of nearly 1 million accounts. “August might be the highest volume ever and the highest level of registrations in any month this year,” he said. “This also correlates to the volatility in prices.”
BitMEX to block Ontario users from next month to avoid securities laws
Yogita Khatri – The Block
Crypto derivatives exchange BitMEX is set to block all Ontario-based users from its platform starting next month. A BitMEX spokesperson told The Block that the restrictions have been “mandated” by the Ontario Securities Commission (OSC), which “recently clarified the application of its regulatory regime to cryptocurrencies.”
Leveraged Funds Take Record Bearish Positions in Bitcoin Futures
Omkar Godbole – Coindesk
Bearish bets in bitcoin futures from leveraged funds recently rose to record highs on the Chicago Mercantile Exchange (CME) – though that doesn’t necessarily imply a fresh sell-off is coming. In the week ended Aug. 18, leveraged funds – hedge funds and various types of money managers that, in effect, borrow money to trade – increased their short positions by 110% to a record high of 14,100 contracts.
Huobi Strengthens Ties to Russian Cryptocurrency Market
Aziz Abdel-Qader – Finance Magnates
Cryptocurrency exchange Huobi, a former ‘big three’ platform, is expanding the scope of its partnership with its Russian arm, which claims it has been operating independently since 2018. The exchange has also named Vladimir Demin, the CEO of Huobi Russia, as the chief advisor of Huobi Global to help fill a void in Russia’s cryptocurrency industry. Huobi was the first major crypto platform to have a physical presence in the country after it opened an office in Moscow two years ago to train local blockchain talent.
CBDCs need the private sector to be competitive, says Ukrainian central bank official
Michael McSweeney – The Block
In 2018, Ukraine’s central bank conducted a pilot program focused on digitizing the hryvnia, the country’s national currency. Results of that pilot were shared with the public in early 2020, according to The Block’s new central bank digital currency report. And according to one of the officials involved in that effort, central bank digital currencies (CBDCs) are best served — particularly from a competitive standpoint — when the private sector is involved.
No Collateral Required: How Aave Brought Unsecured Borrowing to DeFi
Brady Dale – Coindesk
Unsecured borrowing has come to decentralized finance (DeFi). Aave, a DeFi money market that allows users to earn interest on cryptocurrency and borrow against it, introduced credit delegation in early July. This service allows someone with a lot of collateral deposited on Aave and no desire to borrow against it to delegate their credit line to a third party they trust. In return for essentially co-signing a loan to the trusted third party, the delegator gets a cut of the interest, juicing the return on their deposit.
The Bahamas’s central bank put its digital currency on its official balance sheet in April
Michael McSweeney – The Block
In a financial statement published in late April, the Central Bank of The Bahamas achieved a little-known milestone — including its brand-new digital currency on its balance sheet. First included on page forty-seven of its annual report, the central bank noted that it had put $48,000 worth of the Sand Dollar into circulation. The document later notes that: “The Bank made a pilot testing of the Sand Dollar in Exuma and has issued Sand Dollars in circulation valued at $48,000 to various retailers.”
Cryptocurrency Market Risks 10% Retracement After Breakout Rally
Amena Saad – Bloomberg
The crypto market could be facing a significant hurdle after its most recent rally. Following a volatile push higher over the past few weeks, the Bloomberg Galaxy Crypto Index, which measures the performance of many of the most popular coins, is butting up against 600 — a level that’s acted as resistance dating back to mid-2019. For the index to see further increases this year, it may need to consistently trade above that level, technical analysis suggests.
Bitcoin Mining Facility With Room for 50,000 Rigs Set to Launch in Kazakhstan
Paddy Baker – Coindesk
One of the largest mining facilities in the world – with output to rival a small power station – is set to open for business in the mining-friendly country of Kazakhstan in September. Mining facility operator Enegix told CoinDesk Friday it will be ready to open its 180 megawatt (MW) data center to mining pools at the start of September. Based in Ekibastuz, near the Russian border, the facility can host up to 50,000 mining rigs, according to sales director Dmitriy Ivanov.
Johnson urges parents to send children back to school; Ministers keen to make success of getting pupils into classrooms after results fiasco
Sebastian Payne – FT
Boris Johnson has appealed to parents in England to send their children back to school next week, warning that pupils’ life chances will be harmed if they stay at home from fear of the coronavirus.
Trump considers fast-tracking UK Covid-19 vaccine before US election; Move comes as FDA gives emergency authorisation for use of plasma from recovered patients
David Crow, Demetri Sevastopulo, Hannah Kuchler and Andrew Edgecliffe-Johnson – FT
The Trump administration is considering bypassing normal US regulatory standards to fast-track an experimental coronavirus vaccine from the UK for use in America ahead of the presidential election, according to three people briefed on the plan.
Democrats cannot rule out Trump victory; Pinning hopes on positives polls puts party in danger of ignoring the lessons of 2016
Gideon Rachman – FT
There was an undercurrent of fear at last week’s Democratic convention. But the anxiety gnawing at the party was not focused on worries that Republican incumbent Donald Trump would actually win the US presidential election. It was that the president would steal it — by sabotaging the vote or refusing to concede defeat. The comedian, Sarah Cooper, summed up the prevailing view when she said “Donald Trump knows he can’t win fair and square.”
Lifestyles of the Rich and Populist; Steve Bannon’s indictment is a puzzle: Why would he take such risks for a few hundred thousand dollars?
Benjamin Raphael Teitelbaum – WSJ
I was with Steve Bannon on July 25, 2019, when he unveiled a stretch of wall lining the U.S.-Mexico border just west of El Paso, Texas, an impressive high-security structure funded by private donations. I had been following Mr. Bannon for more than a year, interviewing him and those around him for my book “War for Eternity.” Amid a series of high-profile setbacks, the border wall appeared a rare success for the beleaguered former Trump campaign manager and White House staffer.
*****Steve Bannon is a former Goldman Sachs banker.~JJL
Mnuchin Paved Way for Postal Service Shake-Up; At President Trump’s behest, the Treasury Secretary sought out appointees who would restructure the United States Postal Service.
Kenneth P. Vogel, Jessica Silver-Greenberg, Alan Rappeport and Hailey Fuchs – NY Times
In early February, Treasury Secretary Steven Mnuchin invited two Republican members of the Postal Service’s board of governors to his office to update him on a matter in which he had taken a particular interest — the search for a new postmaster general.
ASIC update on compensation for financial advice related misconduct
Six of Australia’s largest banking and financial services institutions have paid or offered a total of $1.05 billion in compensation, as at 30 June 2020, to customers who suffered loss or detriment because of fees for no service (FFNS) misconduct or non-compliant advice.
Three Resources for Senior Investors
In case you missed it, Senior Citizen’s Day was August 21. Designated by President Ronald Reagan in 1988, the day offers a time to pay tribute to the many contributions seniors make to their communities, and to bring awareness to issues of particular importance to America’s older citizens.
Additional Weekend Testing Opportunity – Long Term Stock Exchange – August 22, 2020
The Long Term Stock Exchange (“LTSE”) is providing a second testing opportunity this weekend in preparation for their August 28, 2020 launch. Firms participating in the August 22, 2020 test may send OATS data related to those orders to the OATS Certification Testing environment before the following Monday’s OATS reporting deadline. OATS will then attempt to match to LTSE test data. Matching statistics for the weekend test will be provided to firms upon request and will not be published to OATS CT Website.
SEC Proposes Data Security Enhancements to the CAT NMS Plan
The Securities and Exchange Commission today proposed amendments to the national market system plan governing the Consolidated Audit Trail (the “CAT NMS Plan”) to bolster the Consolidated Audit Trail’s (“CAT”) data security. While the CAT NMS Plan currently sets forth a number of requirements regarding the security and confidentiality of CAT data, the proposed amendments to the CAT NMS Plan are the latest SEC action to limit the scope of sensitive information required to be collected by CAT and enhance the security of the CAT and the protections afforded to CAT data.
CFTC Orders Toronto-Based Firm to Pay $500,000 for Violating Capital, Reporting, and Supervision Rules
The Commodity Futures Trading Commission today issued an order filing and settling charges against OANDA Corporation, a futures commission merchant (FCM) and retail foreign exchange dealer (RFED) headquartered in Toronto, Canada, for violating certain capital, reporting, and supervision rules.
FinCEN issues additional FAQs to address questions regarding customer due diligence requirements for covered financial institutions
On August 3, 2020, the Financial Crimes Enforcement Network (FinCEN), in consultation with the federal functional regulators, published new Frequently Asked Questions (FAQs) on its website regarding customer due diligence (CDD) requirements for covered financial institutions. These FAQs clarify the regulatory requirements related to obtaining customer information, establishing a customer risk profile, and performing ongoing monitoring of the customer relationship in order to assist covered financial institutions with their compliance obligations. These FAQs are in addition to those FinCEN previously published on July 19, 2016 and April 3, 2018.
FCA investigates over 150 Covid-19 related scams
The Financial Conduct Authority (FCA) is investigating more than 150 Coronavirus-related scams since the outbreak began, according to official figures. The data, obtained under the Freedom of Information (FOI) Act by the Parliament Street think tank’s cyber research team, reveals the extent to which financial services organisations and banks have been targeted by financial criminals during the pandemic.
Investing and Trading
The Median S&P Stock Has Never Been More Expensive; The S&P’s latest record has reignited a longstanding debate about how much attention investors should pay to valuations
Paul Vigna – WSJ
The record close that the S&P 500 hit last Tuesday, its first since February, has reignited the longstanding debate over whether high valuations are setting stocks up for a fall. The index is now up more than 50% from its low this spring, erasing all the losses it suffered during the coronavirus pandemic. Despite a bruising recession, many investors appear to be betting the worst of the economic pain is past and that corporate earnings, the most reliable driver of stock prices, will begin climbing again next year.
Bets against US stocks drop to 15-year low as market rallies; Short-sellers left nursing heavy losses from jump in tech share prices
Richard Henderson – FT
Short positions in US stocks have dropped to their lowest level in more than a decade, as this year’s record-breaking rally inflicts big losses on investors seeking to profit from declining share prices.
‘K-shaped’ stock recovery widens gap between winners and losers; Index smashes record highs but average stock in S&P 500 is 28% below its peak
Richard Henderson and Eric Platt – FT
US stocks this week hit a record high, clawing back the losses inflicted by the coronavirus pandemic. But most of the companies in the benchmark S&P 500 index had nothing much to celebrate.
‘Divided’ investors caught in inflation confusion; Deflation and inflation are both on fund managers’ worry lists
Tommy Stubbington – FT
Investors are worried about deflation. That might sound odd, given that the opposite fear — of rising consumer prices — has grabbed attention and fired up assets such as gold.
Apple’s Great at $2 Trillion. Its Stock May Not Be; Excellent companies can make abominable investments if the price is too high.
John Authers – FT
There’s Always a Sequel
Way back in 1999, cable audiences could thrill to Pirates of Silicon Valley, a made-for-TV movie of the battle between Steve Jobs’s Apple Inc. and Bill Gates’s Microsoft Corp. It ends with Jobs back at Apple and having to swallow his pride by announcing an alliance with Microsoft, the obvious victor.
Environmental, Social and Corporate Governance
Cazenove wins ESG investing Olympics; Wealth management arm of Schroders to launch new fund after public battle for £33.5m charities mandate
Attracta Mooney – FT
Cazenove, the wealth management arm of Schroders, has won a high-profile “ESG investing Olympics” event that aimed to find top sustainable fund managers, picking up a £33.5m mandate as its prize.
Rio cuts executive bonuses over destruction of Aboriginal site; Investors say measures after levelling of 46,000-year-old shelter in Western Australia are insufficient
Jamie Smyth – FT
Rio Tinto will cut the bonuses of its chief executive and other leaders following an internal review of the miner’s destruction this year of a 46,000-year-old Aboriginal site.
The dubious appeal of ESG investing is for dupes only; Stakeholder capitalism should also be viewed suspiciously by anyone seeking real change
Robert Armstrong – FT
Environmental, social and governance investing is ascendant. Its mirror image, stakeholder capitalism, is now the standard mantra on boards and in executive suites. This is not cause for celebration. Both rest on weak conceptual foundations and should be viewed suspiciously by investors who seek adequate returns, and by citizens who want real rather than cosmetic change.
ESG Price Myth Soon to Be Debunked in Danish Bond Experiment
Frances Schwartzkopff and Morten Buttler – Bloomberg
The world’s least corrupt country plans to bring some clarity to the opaque universe of ethical investing. Denmark, which topped Transparency International’s latest ranking, wants to win over investors with something it says other sovereign ESG issuers don’t always offer: a real price.
JPMorgan Says FX, Oil Among Few Assets Cheap on Long-Term Basis
Joanna Ossinger – Bloomberg
Developed-market debt and gold are expensive by long-term measures while oil and agriculture are relative bargains, according to JPMorgan Chase & Co. Using metrics like one-year forward price-to-earnings ratio for equities and spreads for developed- and emerging-market credit, only a handful of assets including some currencies and EM bonds are currently inexpensive, according to John Normand, head of cross-asset fundamental strategy.
BTIG appoints new director of outsourced trading division; Buy-side trading veteran Michael Conze joins BTIG as director of outsourced trading as the broker aims to expand its reach.
Annabel Smith – The Trade
Agency broker BTIG has confirmed the appointment of a new director for its outsourced trading division in New York, as it looks to further expand the reach of the business.
Hedge fund Gammon gains 600% with well-timed bets on volatility; New York-based firm outperforms massively during a year when returns were on average down 0.3%
Laurence Fletcher – FT
Hedge fund Gammon Capital has chalked up a 600 per cent gain so far this year, ranking it as one of the world’s best performers, thanks to well-timed bets on volatility during the coronavirus-driven market ructions. The New York-based firm, headed by Michael Mescher, a former Barclays trader, correctly wagered on soaring volatility in early March as risky assets slumped. The $25m-in-assets firm also took options positions that rose sharply as markets rebounded in the second half of the month.
Bank of America Says Black Advisers Make Up 4.5% of Merrill Wealth Managers
Lananh Nguyen – Bloomberg
Bank of America Corp. released data on the racial and gender makeup of its Merrill Lynch Wealth Management unit that shows diversity has increased from five years ago.
Jack Ma’s Ant Group Pushes Ahead With ‘Project Star’ Listing Plans; Investors See Big IPO Gains; In the coming days, Ant could shed light on what has been a secret for years: how it makes money
Jing Yang – WSJ
When Ant Group Co. goes public later this year, the Chinese financial-technology behemoth will likely earn a stratospheric market valuation that would place it at the top of companies listing globally for the first time.
UK cannabis groups push government to ease trade restrictions; Companies warn current regulations will encourage investment to shift elsewhere in Europe
Patricia Nilsson – FT
British medical cannabis companies are lobbying the government to ease restrictions around importing and exporting the drug, warning that they hinder growth and will force them to shift investment outside the UK.
Italy’s Unloved Banks Move Closer to Credit-Market Redemption
Alice Gledhill, Sonia Sirletti, and Laura Joffre – Bloomberg
Lenders spent years cutting bad loans and building up capital; Intesa’s takeover of Ubi fuels hope for more consolidation
Investors who until recently saw Italy’s banks as potential triggers of the next global financial crisis are now betting on their recovery. Bonds issued by the country’s largest lenders Intesa Sanpaolo SpA and UniCredit SpA, as well as smaller rivals such as Banco BPM SpA, have rallied as investors rewarded progress in overhauling their balance sheets. Where once they were widely regarded as overburdened with toxic debt left over from previous recessions, they’re now seen as a buying opportunity.
The risk of a no-deal Brexit is rising, and that’s no bad thing; The EU cannot deny the UK the same discretionary approach of its own competition policy
Wolfgang Münchau – FT
It is pointless trying to predict whether or not there will be a deal between the EU and the UK about their future relationship. The EU is an accomplished dealmaking machine, but with only two months to go and nothing concrete agreed, there is surely a non-trivial possibility of failure. The two sides are hopelessly stuck, and there is no sign of movement on either side.
Brexit trade talks are ‘going backwards’ as the UK edges closer towards a chaotic exit from the EU
Adam Payne – Business Insider
UK and EU negotiators failed to make a breakthrough in the latest round of Brexit trade talks. The EU’s chief negotiator Michel Barnier said striking a deal this year was “unlikely.” The two sides have just weeks to negotiate an agreement to avoid a chaotic no-deal scenario in January. But the UK businesses and borders are set for disruption in four months’ time — even if there is a deal.