Countries Starting to Hoard Food, Threatening Global Trade

Mar 25, 2020

First Read

Hits & Takes
By John Lothian and JLN Staff

The World Health Organization says the coronavirus is growing faster in the U.S. than in any other country at 40% and New York’s cases are spiking, growing faster than expected. New York’s Governor Andrew Cuomo is emerging as a national figure and leader in the fight to save lives.

President Trump on the other hand is seeming to favor the health of the economy over the health of its citizens, telling a Fox News “virtual town hall meeting” he wants to restart the economy before Easter. In fact, Trump and Vice President Pence held a call with several billionaire hedge fund managers and private equity executives to discuss this, according to CNBC. Among those consulted reportedly were Paul Tudor Jones of Tudor Investment, Third Point’s Dan Loeb, Blackstone’s Stephen Schwarzman, Vista Equity’s Robert Smith, and Intercontinental Exchange’s Jeffrey Sprecher. Bloomberg reported Citadel’s Ken Griffin and John Paulson were also on the phone.

Bill Gates weighed in on the subject of how long the coronavirus shutdown should last and said 6 to 10 weeks. Since Gates is not running for anything, has all the money in the world and has a foundation whose “global health division seeks innovative, ambitious, and scalable solutions to address health problems that have a major impact in developing countries,” I am going to give him the benefit of the doubt.

In the U.K., cases of coronavirus are also growing rapidly and the government is opening a 4000 bed hospital in London as the ExCel conference center in London’s Docklands district will be converted into the NHS Nightingale hospital. Up to 50% of the UK’s population may have already been infected, a number which now includes Prince Charles.

The Dow had its biggest one day jump percentage-wise since 1933, when on March 15 the Dow was up 8.26 points to close at 62.10, a jump of 15.34 percent. ~JJL


Although FIA Boca did not take place this year, JLN has conducted some of the interviews we had scheduled to take place there in other ways. Our latest is a podcast interview with Larry Tabb taped on Monday, March 9. Tabb talked about the economic impact of the coronavirus, as well as trends in U.S. fixed income, market structure and competition, and MiFID II. Here is the link to all four parts of the podcast.~SR

In its latest COVID-19 update, the FIA offers, among other things, Secretary Steven Mnuchin’s Statement on Essential Financial Services Workers. Here it is, if you’re interested. The FIA’s dedicated coronavirus web page is here. ~SR


The CryptoMarketsWiki Podcast Episode 10: Blowing off Steem

In their last recorded episode in-studio before JLN’s staff switched to work-from-home mode, Matt and Thom sit down to discuss how the epidemic is affecting the crypto markets, India’s lift on cryptocurrency trading, the Steemit/TRON controversy, and more. Topics: 00:42 – Coronavirus causes the stock market to crash; bitcoin’s price plummets. 03:40 – India’s supreme court lifts ban on cryptocurrency. 06:22 – National stablecoins are not necessarily good for crypto adoption. 09:42 – TRON’s hostile takeover of the STEEM blockchain. 15:03 – Libra update: Tagomi joins the Libra Association.

Listen to this podcast »


This pandemic is an ethical challenge; To avert disaster, solidarity between countries must be as strong as within them
Martin Wolf – FT
The coronavirus seeks only to replicate. We seek to halt that replication. Unlike the virus, humans make choices. This pandemic will pass into history. But the way in which it passes will shape the world it leaves behind. It is the first such pandemic for a century. And it comes to a world that — unlike in 1918, when the Spanish flu hit — has been at peace and enjoys unprecedented wealth. We should be able to manage it well. If we do not do so, this will be a turning point for the worse.

******We are all in this together, or the alternative is much uglier.~JJL


ICYMI: Chairman Tarbert in WSJ: Volatility Ain’t What It Used to Be
“[F]ar from amplifying risk throughout the financial system, the derivatives markets have so far acted as shock absorbers. Unlike during the 2008 financial crisis, derivatives have internalized the impact of market swings. And while no one can predict the future, derivatives markets have been resilient in part because the Commodity Futures Trading Commission has deployed tools to help prevent financial contagion.

*****The CFTC is on the job.~JJL


Tuesday’s Top Three
Thom Thompson’s story Trouble at Ronin? was again the top story on Tuesday. Second was the troubling story We’re Looking at a System-Wide Margin Call, from Bloomberg Opinion. Third was another Bloomberg story, The Fastest Quants Are Making Money From the Wall Street Mayhem. Well, somebody had to.


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Lead Stories

Countries Starting to Hoard Food, Threatening Global Trade
Isis Almeida and Agnieszka de Sousa – Bloomberg
Some early bans on exports raise questions about protectionism; ‘Without the food supply, societies just totally break’
It’s not just grocery shoppers who are hoarding pantry staples. Some governments are moving to secure domestic food supplies during the coronavirus pandemic.

White House, Senators Strike Deal on Massive Stimulus Package
Josh Wingrove, Laura Litvan, and Steven T. Dennis – Bloomberg
Plan provides aid for businesses, checks for individuals; Senate and House still to vote; lawmakers optimistic
The Trump administration struck a deal with Senate Democrats and Republicans on an historic rescue package that tees up more than $2 trillion in spending and tax breaks to bolster the hobbled U.S. economy and fund a nationwide effort to stem the coronavirus.

Wall Street has best day in over a decade as stimulus deal nears; S&P 500 closes more than 9% higher as investors cheer Fed backstops and political progress
Jennifer Ablan, Hudson Lockett, Leo Lewis and Adam Samson and Philip Georgiadis and Richard Henderson – FT
US stocks had their best day since the financial crisis more than a decade ago on Tuesday, on signs that Congress was closing in on an agreement for a potent fiscal stimulus package to alleviate the economic and financial market effects of the coronavirus.

‘Nationalisation’ of bond markets helps calm nerves; Fed’s promise of unlimited buying will not be enough on its own, say investors
Tommy Stubbington – FT
A fragile sense of calm returned to financial markets on Tuesday following the Federal Reserve’s dramatic intervention a day earlier, with a flurry of big companies taking the opportunity to sell bonds. But investors said they had little confidence that the radical actions of central banks — which analysts said amounted to a “nationalisation” of bond markets — would help stocks find a lasting foothold after weeks of turmoil.

New York cases rising faster than authorities anticipated; White House fearful New Yorkers leaving city could cause a broader outbreak in US
Joshua Chaffin – FT
The coronavirus outbreak is accelerating across New York in spite of dramatic curbs on daily life that were supposed to slow it, the state’s governor announced, as he warned the virus would hit harder and sooner than anticipated.

Japan Trading Giant Warns of Record Loss on $3.3 Billion Charges
Masumi Suga and Grace Huang – Bloomberg
Marubeni says one-time charges include energy, grain segments; Company keeps annual dividend, won’t conduct share buybacks
Marubeni Corp., one of Japan’s top five general trading houses, warned it’s heading for the biggest ever annual loss due to $3.3 billion in impairment charges in its energy and grain operations.

Vietnam’s Rice Trade Thrown Into Turmoil on Export Halt Muddle
Mai Ngoc Chau – Bloomberg
Customs ordered exports to stop on Tuesday to protect supplies; Trade minister has now asked the premier to delay the decision
Vietnam’s rice traders have halted overseas shipments after the customs department ordered a temporary suspension of exports on Tuesday to ensure food security during the coronavirus pandemic. The country is the world’s third-largest exporter, behind India and Thailand.

Wheat prices rise as housebound consumers crave pasta; Virus and fears over restrictions in Russia and Ukraine push up futures
Emiko Terazono – FT
Shoppers’ rush to stock up on non-perishable staples such as pasta and noodles to ride out the coronavirus crisis has boosted demand for wheat, which has risen sharply in futures markets on both sides of the Atlantic.

Carmen Reinhart Says Global Economy in Worst Spot Since 1930s
Ben Bartenstein – Bloomberg
Harvard economist expects negative growth rate in China; Ecuador will probably default on its debt near-term, she says
The global economy hasn’t looked this fragile since the Great Depression of the 1930s, according to Harvard University economist Carmen Reinhart.

Powell’s success at the Fed is a reminder of the importance of expertise
David Ignatius – Washington Post
As the coronavirus crisis has rocked the world, America has been a sluggish and unreliable global leader except in one critical area — the Federal Reserve’s prompt moves to pump cash into traumatized international financial markets.

How the Covid-19 Recession Is Like World War II; In this war, a virus has attacked and a significant portion of the economy has been redirected.
Tyler Cowen – Bloomberg
The Covid-19 collapse of the worldwide economy is prompting comparisons with earlier major economic adjustments. And while there is lot of discussion about the Great Recession of 2008, the current crisis has more in common with World War II.

China’s $13tn bond market shines as Treasuries turn treacherous; Big asset managers say coronavirus is speeding up inflows from foreign investors
Hudson Lockett – FT
Fund managers say China’s $13tn bond market has become an unlikely sanctuary from the volatility that the coronavirus outbreak has let loose in the US and Europe.

The liquidity ‘doom loop’ in bond funds is a threat to the system; Some exchange traded funds are trading at big discounts to their net asset values
Peter Chatwell – FT
When markets blow up, we often hear bankers or fund managers lamenting the extraordinarily rare event which caused them to sustain a material loss. At the moment the stressed environment is full of such breakdowns. One crucial one, happening right under our noses, is in the corporate bond market. Regulators and central banks should take note.

Exchanges, OTC and Clearing

ASX forced to delay rollout of post-trade blockchain system; The ongoing coronavirus pandemic forced ASX to rethink the launch of its new blockchain-based post-trade settlement system.
Kiays Khalil – The Trade
The Australian Securities Exchange (ASX) has confirmed it will delay and reschedule the rollout of its new blockchain-powered post-trade system due to the ongoing coronavirus pandemic.

SIX Group gains approval in Spain for EUR2.8 billion BME acquisition; Spanish government has authorised SIX Group’s bid for BME, meaning it now needs approval from Spain’s CNMV.
Hayley McDowell – The Trade
SIX Group has been handed approval in Spain for its EUR2.8 billion bid to acquire Spanish stock exchange Bolsas y Mercados Españoles (BME).

ASX consults on timing of CHESS replacement project; ASX consults on timing of CHESS replacement project; Formal consultation in June; meanwhile system development continues
ASX is replanning the CHESS replacement implementation timetable due to the uncertainty created by the unfolding COVID-19 pandemic. It is also in response to user feedback on timing, requested functionality changes, and the need for ASX to complete aspects of its own readiness.

Letter to Shareholders – ASX Interim Dividend

CME Group to Launch New Gold Futures Contract with Expanded, Flexible Delivery in 100-ounce, 400-ounce or 1-kilo Bars
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of a new gold futures contract with expanded delivery options that include 100-troy ounce, 400-troy ounce and 1-kilo gold bars. The new contract is expected to launch with a first expiration of April 2020, pending regulatory approval.

Guidance on safe distancing measures for issuers when conducting meetings; Joint Statement by Accounting and Corporate Regulatory Authority, Monetary Authority of Singapore and Singapore Exchange Regulation
The Accounting and Corporate Regulatory Authority (ACRA), Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX RegCo) expect all issuers to comply with the Ministry of Health’s (MOH) mandatory safe distancing measures.

American Financial Exchange Announces AMERIBOR Benchmark Weekly Volume Record of more than $15B, Surpassing Levels Set in September 2019
Press Release
CHICAGO – March 23, 2020 —The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced a weekly volume record of $15.523 billion for the week of March 16 – 20, traded across all AFX products. This surpasses a previous weekly volume record of $13.017 billion set the week of September 16 – 20, 2019, marking a 19 percent increase from the previous record.


Barclays expands research franchise with ESG division; Barclays Fundamental ESG Research will provide insights into company ESG credentials with new indicators and assessments.
Hayley McDowell – The Trade
UK investment Barclays is expanding its research franchise with the launch of an expanded environmental, social, governance (ESG) division.

Customer advocacy: The secret engagement weapon for fintech firms (VB Live)
VentureBeat Staff
Improving customer perception is good for your brand and bottom line. Join this VB Live webinar and learn to improve customer advocacy with hyper-personalized digital experiences, and more. Guest speaker Alyson Clarke, principal Analyst at Forrester, will highlight key findings from her recent report on customer advocacy in the financial services sector.

Coronavirus: New Challenges and Opportunities for Fintech
Rachel McIntosh – Finance Magnates
Many countries around the world are hitting the 2- or 3- or even 12-week-mark of quarantine, and many are looking at just as many (or more) weeks of quarantine ahead. The virus has brought about a powerful shift in reality; in addition to the effects that the virus has had on our personal lives, companies in every industry are being forced to find new ways of operating on every level.


Crypto Margin Trading Challenged by U.S. Derivatives Regulator
CFTC explains what ‘actual delivery’ of digital currency means; Guidance distinguishes spot trades from futures contracts
The main U.S. derivatives regulator is taking a significant step in defining the sometimes blurry line between cryptocurrency futures and trading in the spot market.

CFTC Issues Final Interpretive Guidance on Actual Delivery for Digital Assets
The Commodity Futures Trading Commission today announced the Commission voted unanimously to approve final interpretive guidance concerning retail commodity transactions involving certain digital assets. Specifically, the guidance clarifies the CFTC’s views regarding the “actual delivery” exception to Section 2(c)(2)(D) of the Commodity Exchange Act (CEA) in the context of digital assets that serve as a medium of exchange, colloquially known as “virtual currencies.”

Fed Digital Dollars Are Part of Debate Over Coronavirus Stimulus; Legislation includes tool some believe could reshape how monetary policy is conducted
Michael S. Derby – WSJ
While it may not make it to the finished coronavirus economic stimulus and support package now being weighed in Congress, there is a push from some legislators to give the Federal Reserve a new tool some believe could radically reshape how it conducts monetary policy.

‘Digital dollar’ proposal stripped from latest Congressional coronavirus stimulus bill
Michael McSweeney – The Block
A review of the latest version of House Democrats’ coronavirus economic stimulus bill shows that language around a proposed “digital dollar” has been removed. As The Block reported on Monday, a version of the bill circulating this weekend included the noteworthy proposal, which would have – if passed – created a system of digital dollar wallets maintained and operated by Federal Reserve system banks. The purpose: to serve as the infrastructure for delivering stimulus payments to American consumers as they weather the economic storm triggered by the spread of COVID-19, the disease caused by the coronavirus pandemic.

Bitcoin Halving, Explained
Alyssa Hertig – Coindesk
The Bitcoin halving will take place sometime in May 2020. What is the halving, how will it affect the price, and what does it mean for miners and the cryptocurrency’s long-term prospects? Here’s everything you need to know. “The halvening” sounds like a horror movie about an ax murderer. But it’s actually the nickname for one of the most hotly anticipated events in Bitcoin’s history.

BitMEX Open Interest Collapses After Controversial Long Squeeze
Omkar Godbole – Coindesk
While bitcoin’s (BTC) price is rallying, traders have scaled back their open interest positions in bitcoin perpetual contracts listed on the crypto derivatives exchange BitMEX. The world’s largest cryptocurrency by market capitalization rose to $6,863 early Tuesday, representing a 77 percent gain on the recent low of $3,867 registered on March 12, according to CoinDesk’s Bitcoin Price Index. Meanwhile, open interest, or outstanding positions, in XBT/USD (bitcoin) perpetual contracts fell to 55,000 BTC. That’s the lowest figure in at least 18 months, which is when crypto derivatives research firm Skew began tracking BitMEX’s data.

Square says bitcoin ‘engagement’ on its Cash App has grown in recent weeks amid market volatility
Ryan Todd And Michael McSweeney – The Block
Square held an investor presentation and call on Tuesday. CFO Amrita Ahuja remarked that “Adoption and engagement of fractional equity investing in Bitcoin has accelerated in recent weeks given recent market interest and volatility.” The comments come almost a month after Square announced more than $178 million in bitcoin purchase volumes in the fourth quarter of 2019.

Crypto Exchange Bitfinex Unveils Anti-Manipulation Tool ‘Shimmer’
Adrian Zmudzinski – Cointelegraph
Cryptocurrency exchange Bitfinex deployed its proprietary market surveillance tool to combat market abuse on the platform called “Shimmer.” According to an announcement shared with Cointelegraph on March 24, Shimmer is meant to identify and investigate possible manipulative behaviours and suspicious trading on Bitfinex. The exchange expects that the integration of the tool with its matching engine will improve market integrity and visibility.

SEC Gets Win in Test of Authority to Regulate Cryptocurrency Sales
Dave Michaels – The Wall Street Journal
The Securities and Exchange Commission prevailed Tuesday in a key stage of its cryptocurrency enforcement crackdown, as a federal judge issued an injunction halting Telegram Group Inc. from distributing its digital coins. U.S. District Judge P. Kevin Castel wrote the SEC had shown a “substantial likelihood of success” in prevailing against Telegram, which was accused of breaking investor protection laws when it sold $1.7 billion in cryptocurrency. Dubai-based Telegram and other startups pushed forward with lucrative, unregulated fundraisings despite the SEC’s warnings in 2017 that they were subject to rules restricting how companies raise capital.

Silvergate says issues with inbound wire transfers tied to Fedwire payments processor have been resolved
Yilun Cheng – The Block
Silvergate says that its system is now fully operational after reports of further client issues on Monday. The La Jolla, California-based bank had been experiencing problems with some wire transfers due to an outrage by its payment processor Finastra, as The Block previously reported. Silvergate CEO Alan Lane confirmed last week that inbound payments from clients were having difficulties going through the system, while outbound payments were being processed manually via the system’s backup infrastructure.

Court in Telegram case blocks gram token issuance, says token distribution likely violates securities law
Stephen Palley – The Block
The $1.7 billion 2018 fundraising effort by Telegram hit a major snag today when a Federal Judge in New York issued a preliminary injunction ruling finding that distribution of the “GRAM” token would violate U.S. securities laws. In particular, the Court ruled that “considering the economic realities under the Howey test, the Court finds that, in the context of that scheme, the resale of Grams into the secondary public market would be an integral part of the sale of securities without a required registration statement.”

Brave partners with Binance to let you trade crypto assets from your browser
Romain Dillet – Tech Crunch
Web browser Brave is expanding its cryptocurrency features with an integration with cryptocurrency exchange Binance. Brave users will be able to buy, trade and receive crypto assets directly on the new tab page. In addition to a particular focus on privacy, Brave has been playing around with cryptocurrencies for a while. The company launched its own cryptocurrency, the Basic Attention Token (BAT). Partner websites receive BAT every month based on the amount of time you spend browsing those websites. Users can also receive BAT if you choose to view Brave ads on the new tab page or in your notifications.


Andrew Cuomo thrives on the front lines of US coronavirus crisis; New York governor deploys calm to reassure the public in contrast with chaotic White House
Joshua Chaffin – FT
The US was under attack by an unfamiliar foe. Washington was in disarray. A strong-willed New York politician stood up and stiffened the spine of a fearful nation.

Coronavirus in N.Y.: ‘Astronomical’ Surge Leads to Quarantine Warning
The White House advised people who have passed through or left New York City that they should place themselves in a 14-day quarantine; New York is projected to need up to 140,000 hospital beds when only about 53,000 are now available for use, the governor said.
Alan Feuer and Brian M. Rosenthal – NY Times
Federal and state officials expressed growing alarm on Tuesday about the coronavirus outbreak in New York City, warning that it could reach its peak much sooner than expected and advising people who have passed through or left the city that they should place themselves in a 14-day quarantine.

Trump Would Hurt Economy by Trying to Restart It; Relaxing lockdowns prematurely would bring chaos that would only delay a rebound.
Michael R. Strain – Bloomberg
President Donald Trump seems to think he can restart the U.S. economy by scaling back some of the restrictions on work, commerce and social interaction that have been put in place to slow the spread of the coronavirus.

Trump’s Back-to-Work Push Pits Billionaires Against the Doctors
Kevin Miller, Mark Niquette, and Drew Armstrong – Bloomberg
Blankfein, airline industry’s Neeleman fear shutdown’s impact; ‘It’s the worst of all worlds,’ Neeleman says of idled economy
Business leaders in the U.S. are getting impatient with the national economic shutdown caused by coronavirus and are increasingly echoing President Donald Trump, who says he doesn’t want “the cure to be worse than the problem.”

How to Get Money to Small Businesses, Fast; The single best thing Congress can do to stanch economic bleeding is to enact a temporary national moratorium on small business debt collections.
Adam J. Levitin and Satyam Khanna – NY Times
Small businesses are already laying off employees in response to the drop in demand because of the coronavirus. These layoffs risk sending the economy into a downward spiral of decreased demand, defaults and further layoffs within weeks or even days. To limit the damage, small businesses need help now.

Insider trading is business as usual for our politicians
John Crudele – NY Post
Members of Congress have a long history of trading stock on confidential information. In fact, up until just a few years ago it was legal and perhaps the best perk of their jobs as “public servants.”

Trump’s About to Make a Huge Coronavirus Mistake; Reopening the economy too soon would devastate both public health and the economy.
Mark Gongloff – Bloomberg
President Donald Trump apparently wants to be a wartime president without asking for wartime sacrifices. It’s a good way to lose the war. For days, Trump has openly itched to forget all of this coronavirus stuff and get everything back to normal, and today he said he hoped to end social distancing by Easter. Welcome to the club, Mr. President; nobody enjoys hunkering down in their house while the economy collapses and incomes and retirement savings vanish. But the math is not as simple as coronavirus = x deaths and terrible recession = y deaths, as Trump frames it. As Michael R. Strain notes, letting the virus run wild will only hurt the economy more, driving up illnesses and leading to unnecessary deaths, including of people who don’t have Covid-19 but can’t get proper care in a decimated health system.


Federal Reserve taps BlackRock to manage bond purchases; US central bank uses world’s largest asset manager in effort to limit coronavirus damage
Jennifer Ablan, Brendan Greeley and Richard Henderson – FT
The US Federal Reserve on Tuesday tapped a division of BlackRock, the world’s largest asset manager, to manage billions of dollars in bond and mortgage-backed security purchases as the US central bank works to cushion the economic and financial fallout from the coronavirus pandemic.

Against Coronavirus, the Fed’s Banking Stress Test Doesn’t Look So Bad; Bankers wonder if regulatory exams are even worth it this year as coronavirus decimates the economy
David Benoit – WSJ
Specialized teams inside the nation’s biggest banks are hunkered down, working out how they would handle a nightmare economic scenario the Federal Reserve dreamed up. Turns out, reality is worse.

ASIC bans Western Australian adviser for four years
ASIC has banned Kelmscott-based financial adviser Mr Anthony Hilsley from providing financial services for four years.

FINRA Provides Temporary Extension of Time for Submission of Fingerprint Information Under Rule 1010(d)
On March 20, 2020, the Securities and Exchange Commission (the Commission) issued an order that, among other things, provides a temporary exemption until May 30, 2020 from the fingerprinting requirements of Securities Exchange Act Rule 17f-2 for FINRA members and their employees. As a condition of the relief, the Order requires written notification to the Commission by May 30, 2020, that a person will rely on the exemption. FINRA has provided that notification on behalf of all of its members and their employees. As set forth in that notification, a FINRA member firm seeking to avail itself of this temporary exemptive relief must comply with FINRA’s guidance with respect to FINRA Rule 1010, which is set forth below.

Frequently Asked Questions Related to Regulatory Relief Due to the Coronavirus Pandemic
Due to the coronavirus pandemic (COVID-19), FINRA is providing temporary relief for member firms from rules and requirements in the Frequently Asked Questions below. The relief provided does not extend beyond the identified rules and requirements. FINRA will continue to monitor the situation to determine whether additional guidance and relief may be appropriate. As coronavirus-related risks decrease, member firms should expect to return to meeting any regulatory obligations for which relief has been provided. When appropriate, FINRA will publish a Regulatory Notice announcing a termination date for the regulatory relief that will provide member firms with time to make necessary operational adjustments.

SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements for Public Companies, Funds, and Investment Advisers Affected By Coronavirus Disease 2019 (COVID-19); Division of Corporation Finance Issues Related Disclosure and Other Guidance. … SEC Continues to Closely Monitor Impact of Coronavirus on Investors and Capital Markets
Today, the Securities and Exchange Commission announced that it is extending the filing periods covered by its previously enacted conditional reporting relief for certain public company filing obligations under the federal securities laws, and that it is also extending regulatory relief previously provided to funds and investment advisers whose operations may be affected by COVID-19. In addition, the SEC’s Division of Corporation Finance issued today its current views regarding disclosure considerations and other securities law matters related to COVID-19.

Statement of Chairman Heath P. Tarbert in Support of Interpretive Guidance on Actual Delivery for Digital Assets
I am pleased to support the CFTC’s final interpretive guidance on actual delivery for digital assets used as a medium of exchange. These digital assets are colloquially known as “virtual currencies” or “cryptocurrencies.” Our action provides long-awaited guidance to trading platforms, custodians, and other key market infrastructures and participants regarding those digital assets that are both “commodities” under U.S. law and traded via leverage provided by the counterparty or trading platform. This action also reflects the CFTC’s growing expertise in this space as well as my commitment to continued U.S. fintech leadership and providing our market participants with clarity.

Statement of Commissioner Brian Quintenz in Support of Final Interpretive Guidance: Retail Commodity Transactions Involving Certain Digital Assets
I support today’s final interpretive guidance regarding when “actual delivery” has occurred in the context of transactions with retail customers entered into on a leveraged, financed, or margined basis involving digital assets that are, or can be, used as a medium of exchange. In the past, the Commission has seen platforms offering retail customers the ability to enter into margined or financed transactions on all manner of commodities – foreign currencies, precious metals, for example – that are repeatedly rolled, offset against, or cashed out. Platforms offering digital assets to retail customers on a margined basis are the latest iteration of this activity.

Statement of Commissioner Rostin Behnam Regarding COVID-19 and CFTC Digital Assets Rulemaking
We are collectively facing uncertainty in all aspects of our personal and professional lives as a result of COVID-19, and I am confident we will get through these trying times. While I voted to approve today’s action in connection with digital assets, as a financial leader, I believe the Commodity Futures Trading Commission (“CFTC”) should instead solely focus on mission critical matters that address the real and rapidly developing challenges that our financial markets, the economy, and the American public are now facing on a daily basis.

Statement of Chairman Heath P. Tarbert Before the Energy and Environmental Markets Advisory Committee Meeting
I first want to recognize the hard work of our staff and market participants in the face of immense economic and personal difficulties around the country. Each of us recognizes that we have responsibilities based on our positions, including the responsibility to help the American economy continue to operate. The firms that use U.S. derivatives markets are drivers of the American and global economy. Only with functioning derivatives markets can our country overcome the challenges we are facing and jump start an economic recovery.

Impact of the coronavirus on firms’ LIBOR transition plans
The FCA, Bank of England and members of the Working Group on Sterling Risk-Free Reference Rates have discussed the impact of the coronavirus on firms’ LIBOR transition plans over the coming months.

Temporary ban on net short positions by Austrian FMA
The Financial Conduct Authority (“FCA”) would like to draw the industry’s attention to the announcement by the Austrian Financial Market Authority (Austrian FMA) which restricts transactions under Article 20 of Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012.

Investing and Trading

Goldman Sachs tells clients it is time to buy gold; Central bank emergency measures push traders towards ‘currency of last resort’
Neil Hume and Henry Sanderson – FT
Gold continued to push higher on Tuesday as a recent wave of selling dried up and Goldman Sachs told its clients the time had come to buy the “currency of last resort”.

Louis Dreyfus annual profit drops 25%; Agricultural commodity trader hit by US-China trade war, pig flu in China and erratic weather
Neil Hume – FT
Louis Dreyfus Company, one of the world’s biggest traders of agricultural commodities, was hit by a 25 per cent drop in profit last year, a sign of pressure on the sector even before the coronavirus pandemic upended global markets.

World’s Miners Slowly Grind to a Halt on Virus Restrictions
Krystal Chia – Bloomberg
Production of metals from copper to aluminum affected; South Africa ordered mines to close in unprecedented move
An increasing number of miners are being forced to halt or curtail production and processing as governments worldwide implement emergency measures to stem the spread of the coronavirus.

Another 11% Swing in the Dow Average Shows Value Still a Mystery
Elena Popina – Bloomberg
Boeing’s market value is bouncing around like a penny stock; Strategists around Wall Street are suspending their forecasts
As Wall Street celebrates the Dow Jones Industrial Average’s biggest surge in nine decades, spare a thought for the people paid to figure out value in the stock market.

Nouriel Roubini warns there’s a risk of a ‘Greater Depression’ as coronavirus spreads
Julia La Roche -Yahoo Finance
The coronavirus pandemic is pushing the U.S. toward recession that’s increasingly at risk of morphing into something far more serious, economist Nouriel Roubini told Yahoo Finance on Tuesday, which he said could easily become a “Greater Depression.”

Covid-19 is a litmus test for stakeholder capitalism; Companies which focused on the short-term have been the first to suffer
Klaus Schwab – FT
As the global Covid-19 health emergency continues, the economic fallout is mounting as well. Global economic growth has gone into reverse, businesses have started cancelling service to customers, and millions of workers are technically unemployed or fired. It raises the question: what happened to “stakeholder capitalism”, the enlightened economic model many companies embraced just months ago? How can it be squared with what we’re seeing today?


Fed leans on community banks for virus relief; US central bank promises trillions for markets, but helping small business is harder
Brendan Greeley in Washington – FT
While the Federal Reserve has promised to pump trillions of dollars through large banks to keep financial markets moving, and rolled out support for large company debt, perhaps the most serious economic aspect of the coronavirus crisis is yet to be solved: how to get funds all the way to families and small businesses bearing the brunt of the shutdowns across America.

Glitchy coronavirus markets cause quant funds to misfire; Renaissance, Two Sigma and DE Shaw suffer unusual setbacks
Robin Wigglesworth and Ortenca Aliaj – FT
Some of the best-known computer-powered hedge funds have struggled to adjust to the chaotic markets rocked by the coronavirus, with Renaissance Technologies, Two Sigma and DE Shaw seeing some of their biggest funds hurt this month.

UK investment trusts at steepest discounts since financial crisis; Share prices an average of 22% below value of underlying assets
Madison Darbyshire – FT
Share prices of UK investment trusts have fallen to their steepest discount to underlying asset values since the financial crisis after a bruising market sell off.

Vince McMahon to Sell WWE Shares Through Morgan Stanley
Drew Singer – Bloomberg
Vince McMahon is selling part of his stake in World Wrestling Entertainment Inc. through Morgan Stanley, people familiar with the matter said. The shares fell 5% in extended trading.

Credit Suisse Suspends $1.5 Billion Share Buyback Plan on Virus
Patrick Winters – Bloomberg
Board will wait for greater certainty before reviewing plan; Virus disruption prompting debate over dividends, buybacks
Credit Suisse Group AG froze its plan to buy back as much as 1.5 billion francs ($1.53 billion) of shares this year due to economic uncertainty caused by the coronavirus.

Money Manager Exane Joins Peers in Freezing Fund Withdrawals
Nishant Kumar – Bloomberg
France’s Exane Asset Management suspends its Integrale Fund; Firms across region are freezing funds in response to virus
Exane Asset Management has suspended dealing in one of its funds, citing fallout from the spread of the deadly coronavirus. The French boutique money manager said the valuation of a number of derivatives traded over the counter and held in its Exane Integrale Fund has “shifted significantly from their theoretical value,” leading it to freeze the money pool, according to a statement on its website on Wednesday.

Germany Sees Beginning of Virus Epidemic as Cases Increase
Naomi Kresge – Bloomberg
Germany is just starting its fight against the new coronavirus as it tightens measures to contain the epidemic, the country’s public health authority said.

Banks enjoy trading bonanza as markets churn; Revenues from equities and fixed income activity could be up by more than a fifth
Laura Noonan and David Crow – FT
Frenzied trading around the coronavirus crisis helped the world’s biggest investment banks boost markets revenues by as much as 30 per cent in the first quarter, insiders and analysts told the Financial Times.

Credit Suisse cuts ex-chief Tidjane Thiam’s bonus after spying scandal; Short-term incentive for 2019 cut by a third, bank’s annual report reveals
Stephen Morris – FT
Credit Suisse has slashed the bonus of its former chief executive Tidjane Thiam for his role in a corporate spying scandal that damaged the Swiss lender’s reputation.

More Reits warn they are unable to meet cash calls; Invesco and MFA mortgage-backed funds suffer rapid decline in values
Eric Platt and Robert Armstrong and Robert Smith and Joe Rennison – FT
Upheaval in the US mortgage market ricocheted through the investment world on Tuesday, with two more real estate investment trusts warning that they could not meet margin calls from their lenders.

Schroders chief says ‘arms-length’ algorithmic management won’t provide answers to coronavirus; Peter Harrison has urged asset managers to open dialogue with struggling companies, as ‘creative’ solutions to coronavirus events will only be found through human interaction.
Hayley McDowell – The Trade
As the coronavirus pandemic threatens the survival of businesses globally, solutions for the buy-side will not be found in passive or algorithmic investment management, the group chief executive of Schroders has said.


U.K. Plans Temporary 4,000-Bed Hospital to Fight Coronavirus
Suzi Ring – Bloomberg
Hancock says Nightingale hospital to open in London next week; U.K. health chiefs warn pandemic could overwhelm ICU wards
The U.K. government said it will open a temporary hospital with space for 4,000 patients in east London next week as health chiefs across England warned that the coronavirus outbreak could overwhelm intensive care capacity by then.

After 350% Jobless Jump, Norway Unemployment Is Worst Since WWII
Mikael Holter – Bloomberg
Norway’s unemployment rate shot up to the highest level since World War II, as the economic shutdown brought on by the coronavirus sends the richest Nordic economy into shock.

New Zealand Says Sizable QE Was Necessary, Won’t Impede Market Function
Matthew Brockett – Bloomberg
‘Our scenarios indicated that significant support is needed’; Central bank responds to questions from Bloomberg News
New Zealand’s central bank said it was necessary to respond to the economic crisis with a sizable bond-purchase program and it doesn’t believe the scale of its intervention will disrupt market functioning.

Jobless Claims Near 1 Million in Canada, Crushing Weekly Record
Erik Hertzberg and Shelly Hagan
New numbers represent about 5% of country’s labor force; Data show speed and extent of economic deterioration
Nearly one million Canadians applied for jobless claims last week, representing almost 5% of the labor force, according to a senior government official with knowledge of the data.

Germany Closes In on Historic Bailout to Counter Virus Blow
Birgit Jennen, Arne Delfs, and Piotr Skolimowski – Bloomberg
Lawmakers set to vote on unprecedented 750 billion-euro plan; There’s ‘no blueprint’ for this crisis, finance minister says
Germany took a step toward declaring a state of emergency to unlock a historic rescue package aimed at cushioning the blow of the coronavirus pandemic.

Sweden Faces More Devastating Recession Than in 2008 Crisis
Rafaela Lindeberg – Bloomberg
The biggest Nordic economy may be about to sink into its worst recession in living memory, with the fallout of the coronavirus likely to do more damage than the financial crisis of 2008.

Trudeau Wins Opposition Backing for $57 Billion Virus Aid Package
Kait Bolongaro – Bloomberg
Stimulus plan offers tax relief, aid for consumers, companies; Parliament approves plan after late-night debate in Ottawa
Canadian Prime Minister Justin Trudeau won parliamentary support for his C$82 billion ($57 billion) stimulus package to bolster an economy ravaged by the coronavirus.


Coronavirus crisis demands extended Brexit transition
Tony Barber – FT
Officially, Prime Minister Boris Johnson and his government have no plans to ask the EU for an extension beyond December 31 of the transition period governing EU-UK relations under Brexit. Unofficially, such plans do exist, for it is clear that the coronavirus pandemic is consuming all government attention and making it impossible to conduct proper, detailed discussions on the long-term EU-UK relationship. Face-to-face negotiations were suspended last week after just one round, whose chief outcome was to demonstrate that the two sides were far apart on issues such as fisheries, financial services and business regulation in general.

Coronavirus: Welsh Government calls for longer Brexit transition
BBC News
The Brexit transition period should be extended as the UK tackles the coronavirus outbreak, the Welsh Government has said. A letter from Mark Drakeford to the prime minister says not doing so could cause a further “economic shock”. The UK plans to negotiate a deal with the European Union by the end of the transition, in December. Conservative assembly member Andrew RT Davies said Mr Drakeford’s intervention was “bizarre”.


Canceled Events Hope for a Second Chance in Fall, Creating Jammed Schedule; Rush of sports, music and other festivities hoping to rise again in autumn stuns even promoters
By Neil Shah – WSJ
For weeks, Americans have watched an unprecedented number of cultural institutions cancel or postpone events due to the coronavirus pandemic.

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