David Feltes (and Anonymous)
Hits & Takes
The Boy Scouts of America will be in the news this week as today, Monday, is the deadline for people alleging they were abused to file a claim. More than 70,000 claims are expected to be filed by the time the deadline passes.
We have had two new donations to the JLN MarketsWiki Education GoFundMe campaign. David Feltes and Anonymous gave to the campaign. Dave Feltes is head of financial markets infrastructure at Capco, a global management and technology consultancy dedicated to the financial services and energy industries. He is also a former CME Group executive in London and former CEO of Marquette Partners, among other career stops. He was so incredibly gracious to my son Tim when we came to London for IDX in 2010. Anonymous is a former industry intern who is not in a significant industry position.
The Nodal Exchange’s clearing house, Nodal Clear, LLC, was approved by the CFTC to clear other DCM, or exchanges, products. This puts a new player into clearing for innovative new products.
Jim Cone, a former colleague of the late Peter Wind at CIS, has offered his remembrance of Peter.
I am having a typical medical procedure for a person over 50 today and had to get a COVID-19 test on Friday in preparation for it. I tested NEGATIVE, but had to go into quarantine over the weekend. One of my wife’s co-workers tested positive last week, but she was not in contact with him while he was contagious. A much beloved former high school choir director of mine at Glenbrook South High School is in the hospital with COVID-19.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The STA Foundation Is holding a virtual Evening of Recognition & Education on Tuesday, December 1 from 4:15 p.m. – 6:00 p.m. EDT, honoring the 2020 STA Foundation Awards
Recipients. You can go here to register. A $20 donation is suggested.~SR
An International Chess Federation (FIDE) Master, Alexandra Botez, challenged Ethereum creator Vitalik Buterin to a friendly game of chess on Twitter over the weekend. Botez didn’t specify, but since she’s also a prominent Twitch streamer, presumably the game would be played over the internet. Buterin has not publicly accepted at press time.~MR
Registration is open for FIA’s Asia Derivatives Conference. This year’s virtual conference takes place December 1-3. It will examine the industry’s response to the Covid-19 pandemic and provide insights into what’s on the horizon for the region. For a full list of FIA’s Asia-V conference program and to register, visit FIA.org/asia.~SR
Andy Tan: Open Outcry Traders History Project
Andy Tan is a former floor broker on SIMEX for Merrill Lynch. He was in the SIMEX trading pits with Merrill Lynch for almost 15 years. As SIMEX migrated to the screen, Tan made a successful transition upstairs with Merrill Lynch focusing on index arbitrage across Asian products. Then he decided to trade for himself and made it past the first few difficult months and found success. He joined and is building a successful trading firm today. He told his story over Zoom to John Lothian for the MarketsWiki Education Open Outcry Traders History Project.
The Spread: Edu-tainment
This week on The Spread, FIA’s virtual expo fills in for the physical event, Cboe and ICE launch new products, and more.
The CryptoMarketsWiki Podcast Episode 15: Digitizing the Capital Markets
Carlos Domingo is the founder of Securitize, the aptly-named blockchain company that securitizes assets in the form of digital tokens. The company recently signed a deal with an SEC and FINRA-registered broker-dealer and ATS called Distributed Technology Markets, LLC, and seems on track to become an end-to-end digital securities platform that offers both securities issuance and trading through secondary markets.
Charles Koch Says His Partisanship Was a Mistake; At 85, the libertarian tycoon who spent decades funding conservative causes says he wants a final act building bridges across political divides
Douglas Belkin – WSJ
Four days before this year’s presidential election, Charles Koch—the voluble Kansas billionaire who has spent a fortune injecting his particular brand of prairie libertarianism into the American political debate—pauses at the other end of the line when asked if he will vote for Donald Trump or Joe Biden. “That’s a very divisive question, because however I answer, that’s going to upset a bunch of people,” he says. “That’s why there’s a secret ballot.”
*****I say give Charles a chance. Sometimes when it is your last chance, you have to get it right.~JJL
The Rise and Fall of Martin Lee and His Dream of a Democratic Hong Kong; Beijing’s growing crackdown marks the twilight of the lawyer’s fight for his city’s future
John Lyons – WSJ
On the rainy night in 1997 when the U.K. transferred Hong Kong to China, democracy leader Martin Lee stood on the balcony of the city’s legislature vowing to hold Beijing to its promises. China had agreed in the handover it would let the former colony govern itself under Western-style rule of law, including eventually electing its own leaders. “The flame of democracy has been ignited and is burning in the hearts of our people,” he said in a speech to supporters and journalists shortly after China’s flag was newly raised over Hong Kong. “It will not be extinguished.”
***** Hong Kong needs to be on your radar. Important things are happening there.~JJL
SEC Chairman Jay Clayton Confirms Plans to Conclude Tenure at Year End; Clayton Led Agency Through Period of Historic Productivity and Unprecedented Challenges; Commission Redoubled Focus on Interests of Long-Term Main Street Investors; Ensured Capital Markets Functioned With Increased Efficiency, Resilience and Transparency
Jay Clayton, Chairman of the Securities and Exchange Commission, confirmed today that after serving for more than three and a half years, he will conclude his tenure at the end of this year.
****** When is Heath Tarbert leaving?~JJL
Google Chrome Update Gets Serious: Homeland Security (CISA) Confirms Attacks Underway
Davey Winder – Forbes
Homeland Security cybersecurity agency says update Google Chrome as attackers home in on new security flaws. Within the space of just three short weeks, Google has patched no less than five potentially dangerous vulnerabilities in the Chrome web browser. These are not your common vulnerabilities either, but rather ones known as zero-days. A zero-day being a vulnerability that is being actively exploited by attackers while remaining unknown to the vendor or threat intelligence outfits.
******Browsers are like military aircraft, you have to expect some flak now and then.~JJL
It’s Time to Hunker Down; A devastating surge is here. Unless Americans act aggressively, it will get much larger, very quickly.
Aeynep Tufekci – The Atlantic
The end may be near for the pestilence that has haunted the world this year. Good news is arriving on almost every front: treatments, vaccines, and our understanding of this coronavirus. Pfizer and BioNTech have announced a stunning success rate in their early Phase 3 vaccine trials—if it holds up, it will be a game changer. Treatments have gotten better too. A monoclonal antibody drug—similar to what President Donald Trump and former Governor Chris Christie received—just earned emergency-use authorization from the FDA. Dexamethasone—a cheap, generic corticosteroid—cut the death rate by a third for severe COVID-19 cases in a clinical trial.
*****It is time to hunker down. IT IS TIME TO HUNKER DOWN!~JJL
Friday’s Top Three
Our top story on Friday was The Washington Post’s opinion piece, This is a massive failure of character among Republicans — with evangelicals out in front. Second was JLN’s FIA Expo 2020: FIA’s Lurton: “Spoofing Is Something You Should Pay Attention To.” Oyez! Oyez! Third was Bloomberg’s Preet Bharara Is a Candidate to Run SEC, Putting Bankers on Edge. Preet Bharara was also our MarketsWiki Page of the Day on Friday.
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|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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Covid Is Resurging, and This Time It’s Everywhere; Pervasive spread in smaller communities fuels nationwide case record, though mortality rates are lower than in the spring
Betsy McKay and Erin Ailworth – WSJ
With a third surge of the Covid-19 pandemic hitting the U.S., many public-health authorities are warning the coronavirus is now so widespread that it will take pervasive new measures to contain it. New infections surpassed 177,224 on Friday, setting a daily record that eclipsed the highest daily case counts of previous peaks in the spring and summer. The number of new infections was lower Saturday at 166,555, while new deaths numbered nearly 1,300, according to data compiled by Johns Hopkins University. The number of people hospitalized with Covid-19, meanwhile, reached 69,455 on Saturday, according to the Covid Tracking Project.
Australian Bourse Halts Trading in Longest Outage in Decade
Jackie Edwards – Bloomberg
Market to re-open at 10 am Tuesday after resolving issue: ASX; A software issue created ‘inaccurate market data’, bourse says
Australia’s stock exchange opened for less than half an hour before a software issue forced it to close for the rest of Monday’s session, marring the debut day for an updated trading system. ASX Ltd. and its technology provider Nasdaq have identified the cause of the problem and will fix it overnight so the market can re-open at 10 a.m. on Tuesday, the exchange said in a statement.
U.S. Crop Prices Are Rising, and China Is Buying; Investors pile into bullish wagers on agricultural commodities after the coronavirus had cast doubt on demand
Ryan Dezember and Kirk Maltais – WSJ
Dry weather, China’s push to fatten its pigs and the lockdown-induced baking bonanza are lifting prices for U.S. row crops. Futures prices for soybeans, corn and hard red winter wheat—the kind used for baking bread—have risen by about a third since a rally began Aug. 10. Soft red winter wheat, found in animal feed and processed foods, is up about 20%.
Robinhood Army Propels Thematic ETFs to a Record-Setting Year
Kamaron Leach and Claire Ballentine – Bloomberg
Funds taping pandemic trends help boost inflows to $20 billion; Many funds are still ‘too new’ for pros’ due diligence: CFRA
The Robinhood generation of day traders has famously driven scores of sharp stock moves this year, from high-flyers like Tesla Inc. to beaten-down companies such as Hertz Global Holdings Inc. Now, retail investors are propelling growth in a hot corner of the exchange-traded fund universe: Thematics.
Clearing houses face tougher crisis management scrutiny
Huw Jones – Reuters
Global regulators have tightened their scrutiny of whether clearing houses hold enough capital and cash to avoid calling on taxpayers in a crisis, according to new guidelines published on Monday by the Financial Stability Board (FSB). However, a key demand from a group of major global banks and investors that clearing houses themselves should take on more of the financial burden of any market losses has been kicked down the road.
The Pandemic Is Showing Us How Capitalism Is Amazing, and Inadequate; Why big business needs big government and vice versa.
Neil Irwin – NY Times
The bananas news cycle of November 2020 included a fascinating public spat that is essential for understanding modern capitalism. After Pfizer announced highly successful preliminary results for its coronavirus vaccine, Trump administration officials said the good news reflected the success of their Operation Warp Speed program to accelerate vaccine development. Pfizer executives stressed the opposite, noting the company had developed the vaccine with its own resources, not government grants.
American Air Reduces London Flights in December Over Weak Demand
Yueqi Yang – Bloomberg
American Airlines Group Inc. said it’s reducing flights from major U.S. airports to London next month due to low demand, damping hopes that the holiday season would facilitate a recovery in travel.
The Overnight Business Boom That Took a Century; Why a global pandemic transformed videocalling from a technology most people didn’t like to the technology everybody had to have
Jason Zweig – WSJ
To change people’s lives, companies don’t just need disruptive technology. Sometimes they need luck, too. Consider videocalling. It was developed almost a century ago as a solution for a problem that companies identified but customers didn’t: the need for a machine that would permit face-to-face conversation at any distance.
How Covid-19 Will Change Aging and Retirement; Among other things, expect more aging in place and a wave of innovation to help make that happen
Anne Tergesen – WSJ
As the pandemic wreaks havoc on our mental and physical health, it is also quietly reshaping how Americans will face retirement and old age in the years to come. The virus is bringing sweeping change, mainly by “accelerating developments already under way,” says physician and entrepreneur Bill Thomas. For example, “isolation of older people has long been a problem, but Covid is focusing attention on the issue and adding urgency” to address it.
Moderna says its coronavirus vaccine is 94.5% effective against COVID-19, a crucial victory in the fight against the pandemic
Andrew Dunn – Business Insider
A second experimental coronavirus vaccine has succeeded at preventing COVID-19 in the final stage of clinical research, marking a victory in the fight against the pandemic.
Meat Giant Tyson Girds for Virus Surge, Tracking Covid-19 With Algorithms; Biggest U.S. meat company monitors infection rates through employee testing; ‘We’re much more prepared’ than in spring, CEO says
Jacob Bunge – WSJ
Tyson Foods Inc. TSN 2.50% is using infection-tracking algorithms and ongoing employee testing to shield workers at the biggest U.S. meatpacker from a fresh surge in coronavirus cases and keep grocery stores stocked, its chief executive said.
As Covid-19 Surges, the Big Unknown Is Where People Are Getting Infected; The U.S. and Europe struggle to identify where coronavirus infections are occurring, making it hard to impose targeted restrictions
Ruth Bender and Matthew Dalton – WSJ
Western nations face a big challenge in fighting the Covid-19 pandemic: Ten months into the health crisis, they still know little about where people are catching the virus.
Weekly U.S. Infections Surpass One Million
The country had more than 133,000 new infections and had a record number of hospitalizations, as the total cases surpassed 11 million.
To Survive the Pandemic, Savile Row Cuts a Bespoke Strategy
With formal events and travel canceled, the tradition-bound tailors are gently embracing technology — and finding leverage on their landlords.
David Segal – NY Times
One morning in early November, a tailor on Savile Row took the measurements of a client 5,500 miles away with the help of a robot. The tailor, Dario Carnera, sat on the second floor of Huntsman, one of the street’s most venerable houses, and used the trackpad on his laptop to guide the robot around a client who stood before mirrors in a clothing store in Seoul. Mr. Carnera was visible and audible to the client through an iPad-like panel that doubled as the robot’s face.
Coronavirus Surge Tests the Smallest Companies; Business owners face questions about whether to reopen the lunchroom or do their own contract tracing
Ruth Simon and Renata Geraldo – WSJ
Small-business owners are grappling with how to manage their workers as the numbers of new coronavirus cases in the U.S. surge. The questions include everything from reopening the office lunchroom to policing employees’ personal lives.
The Hot New Covid Tech Is Wearable and Constantly Tracks You; Sports leagues, large employers and colleges are turning to devices that could usher in more invasive forms of surveillance.
Natasha Singer – NY Times
In Rochester, Mich., Oakland University is preparing to hand out wearable devices to students that log skin temperature once a minute — or more than 1,400 times per day — in the hopes of pinpointing early signs of the coronavirus.
U.S. COVID-19 cases cross 11 million as pandemic intensifies
Roshan Abraham, Seerat Gupta – Reuters
The number of coronavirus cases in the United States crossed the 11-million mark on Sunday reaching yet another grim milestone, according to a Reuters tally, as the third wave of COVID-19 infections surged across the country.
Doctors Are Calling It Quits Under Stress of the Pandemic; Thousands of medical practices are closing, as doctors and nurses decide to retire early or shift to less intense jobs.
Reed Abelson – NY Times
Two years ago, Dr. Kelly McGregory opened her own pediatric practice just outside Minneapolis, where she could spend as much time as she wanted with patients and parents could get all of their questions answered.
Covid-19 Vaccines Could Depend on the Strength of This Vial; Novel container from Corning set to play important role in protecting vaccines from broken glass, impurities and cracks
Jared S. Hopkins – WSJ
Near the back of a Corning Inc. glassmaking plant here, a robot picked up a cage packed with hundreds of tiny vials and plunged it into a salt bath bubbling at more than 500 degrees Fahrenheit.
Rice University’s Secret for Containing the Coronavirus: A Student-Run Court That Prosecutes Rule Breakers; The COVID Community Court has helped enforce social distancing and wearing of masks. But some undergrads say the feeling of being watched has become another cost of the pandemic.
Peter Holley – Texas Monthly
The two undergraduates had been accused of a bold infraction of the rules: sneaking a friend from across campus into their dorm room for some late-night socializing. As recently as last spring, nobody would’ve cared. But this semester, with Rice University officials determined to prevent a coronavirus outbreak that might shut down the school, students are not only forbidden from entering a dorm they don’t live in; they’re not allowed to move between floors in their own residential building. After a tipster turned them in, the two alleged offenders were forced to appear before the student-run COVID Community Court (CCC) that the school launched this semester to adjudicate public health violations on campus.
The Dakotas are ‘as bad as it gets anywhere in the world’ for COVID-19
Joel Shannon – USA TODAY
South Dakota welcomed hundreds of thousands of visitors to a massive motorcycle rally this summer, declined to cancel the state fair and still doesn’t require masks. Now its hospitals are filling up and the state’s COVID-19 death rate is among the worst in the world.
How the Swiss Cheese Model Can Help Us Beat Covid-19; No single solution will stop the virus’s spread, but combining different layers of public measures and personal actions can make a big difference.
Nicholas Christakis – WSJ
In hopeful news this week, Pfizer and its partner, BioNTech, released interim results from an ongoing trial of their candidate coronavirus vaccine. The study involved 43,538 volunteers who were randomly assigned either the vaccine or a placebo. The rates of infection were small for both groups, but those who got the placebo were substantially more likely to get Covid-19 (85 or more cases) than those who got the treatment (just 9 cases or fewer). This is a terrific development, but it should be noted that even among those who got the vaccine, the infection rate was not zero.
Exchanges, OTC and Clearing
ICE Reports Record Activity Across Its Environmental Complex as Participants Price Climate Risk
ICE press release via Businesswire
Intercontinental Exchange, Inc. (ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today reported record open interest across its environmental complex as participants price climate risk.
Message from ASX about ASX Trade outage 16 November 2020
ASX sincerely apologises and deeply regrets the disruption to the market caused by the outage of the ASX
Trade system today. The market will remain closed today, Monday 16 November. It will reopen at the normal time (10am) tomorrow, Tuesday 17 November.
NYSE Arca Options: Reduction of Minimum Allowable Parameter for Transaction-Based Risk Mitigation on Orders
On Monday, November 16, 2020, NYSE Arca Options will be modifying the minimum allowable parameter for Transaction-based Risk Mitigation for orders, per Rule6.40-O, Commentary .03. The minimum allowable parameter will be reduced to 1 transaction, from the current minimum of 3 transactions.
HKEX Seeks Views on New Proposal to Modernise Hong Kong IPO Settlement Process
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Monday) pleased to publish a Concept Paper seeking market feedback on its proposal to comprehensively modernise and digitalise Hong Kong’s IPO settlement process.
Reminder – Monday November 23: Strike Price Format Change for Eurodollar and SOFR Options in SPAN and Settlement Price Files
Please be reminded that effective Monday, November 23, 2020, CME will begin listing strikes for options on Three-Month Eurodollars and Three-Month SOFR at intervals of 6.25 basis points (0.0625 index points), and hence strike price formats for these options in daily SPAN and settlement price files will be modified so that they are all consistent, with four implied decimal places and without any usage of assumed trailing digits.
CloudMargin Appoints Mario Platt Vice President, Head of Information Security
CloudMargin, creator of the world’s first and only collateral and margin management solution native to the cloud, announced today that Mario Platt has joined the firm as Vice President, Head of Information Security. Platt has 17 years of experience in technology, information security and operations.
Eris Innovations Closes Strategic Investment Round Tied to Eris SOFR Product Launch at CME Group; Eris SOFR Swap Futures show strong early volume as firms prepare to migrate from Libor to SOFR
Eris Innovations, an intellectual property licensing company that partners with global financial exchanges to develop futures products, today announced the successful closing of a $2 million investment round. The announcement follows CME Group’s October 5 launch of Eris SOFR Swap Futures (Eris SOFR), which have averaged more than 3,900 contracts traded per day in November.
A Little-Known Payments Provider Grows Into One of Europe’s Most Valuable Finance Firms; Dutch firm Adyen’s stock has rocketed amid a surge in online payments during the pandemic
Ben Dummett – WSJ
Few companies have benefited more from the e-commerce shopping boom sparked by the pandemic than Dutch payments firm Adyen ADYEN -1.96% NV. The best-performing large stock in Europe this year, Adyen is up almost 120%, vaulting its market value to nearly $60 billion, bigger than some of the region’s top banks, including Swiss giant UBS Group AG . Adyen’s stock performance has even outpaced PayPal Holdings Inc., another beneficiary of the move toward digital payments, which is up about 70%.
Bitcoin Cash Has Split Into Two New Blockchains, Again
Muyao Shen – CoinDesk
The Bitcoin Cash network, a result of a hard fork from Bitcoin, has split into two new blockchains, again. At press time, Bitcoin Cash ABC (BCH ABC) has received no hashpower, meaning that it is possible Bitcoin Cash Node (BCHN) will become the dominant software of the Bitcoin Cash network, according to data from Coin.Dance.
Bakkt Opens its Bitcoin and Crypto App for Early Testers
Ali Raza – Inside Bitcoins
After announcing the launch of the Bakkt Bitcoin and crypto app earlier this year, the Bakkt mobile app is now ready for testing. The company sent an email on November 11 expressing its readiness to launch the mobile app.
Even Wild Crypto Can Temper Volatile Stocks, Cornerstone Says
Joanna Ossinger – Bloomberg
In the latest twist to a roller-coaster year for traders, investors looking to counter the wild volatility of the stock market can now consider the stabilizing influence of cryptocurrencies, according to Cornerstone Macro LLC. Strategists including Roberto Perli and Benson Durham used estimates of volatilities and correlations among the S&P 500 and five digital coins, including Bitcoin and Ether, to work out the optimal amount to reduce volatility in portfolios. They found a share of crypto that ranged between 0% and 64% in data back to September 2015, with the average at 6.4%, would help produce such a minimum variance portfolio.
New MIT Paper Roundly Rejects Blockchain Voting as Solution to Election Woes
Benjamin Powers – Coindesk
As media outlets waited to announce a winner until the Saturday following the election day, calls for how blockchains would have made this process easier emerged, most prominently perhaps by Changpeng Zhao, CEO of Binance, as well as Vitalik Buterin, who added that, though there are technical challenges, the call for a blockchain-based, mobile voting app “is directionally 100% correct.”
The SEC Is Still Working Out What ‘Qualified Custodian’ Means for Crypto
Nikhilesh De – Coindesk
The U.S. Securities and Exchange Commission (SEC) is once again asking about qualified custodians and how crypto custody fits into this regulatory framework. Last month, the Wyoming Division of Banking granted a no-action letter to Two Ocean, a wealth management firm hoping to offer custodial services for digital assets (which include virtual currencies) and call itself a qualified custodian.
Binance is discontinuing its GBP stablecoin
Yogita Khatri – The Block
Crypto exchange Binance is sunsetting its GBP stablecoin, BGBP, which is tied 1:1 to the British pound. The discontinuation takes place tomorrow, more than a year after Binance first listed the stablecoin in July 2019. The exchange is also delisting its last trading pair for BGBP — BGBP/USDC. A Binance spokesperson told The Block that BGBP was the exchange’s “first experiment” with a fiat-backed stablecoin and was “more of a proof-of-concept.” “It worked, but the issuance/redemption process was not the most friendly for users,” said the spokesperson. “As such, to offer our users with better services, we have discontinued BGBP and will direct users to our other available fiat on-ramps that offer GBP.”
Belarus Launches Crypto Exchange As Tech Industry Collapses
Ekin Genç – Decrypt
The state-owned bank of Belarus has reportedly launched a crypto exchange, letting customers buy Bitcoin. The crypto exchange may be part of a wider government aim to boost the country’s tech sector. Despite sustained growth over the recent years, the tech sector now flees the country following a summer of violent anti-government protests.
More than 1 billion DAI, the stablecoin of lending protocol Maker, has been created
Michael McSweeney – The Block
The amount of available DAI — the stablecoin tied to the Ethereum-based lending protocol Maker — has surpassed $1 billion, according to available data. DaiStats reports that a total of 1,001,031,052.54 DAI has now been issued. DAI is created when collateral, such as ETH, is locked into a smart contract called a Vault. That DAI may later be redeemed and the collateral removed from the smart contract. The milestone was first noted by Maker founder Rune Christensen in a tweet on November 13.
Trump’s refusal to concede creates tricky messaging issue for Ga. Republicans
David Weigel – Washington Post
As Republicans crowded into the Black Diamond Grill for a Friday afternoon rally, Georgia and its 16 electoral votes were called for Joe Biden. Minutes later, Sen. Rick Scott of Florida walked onstage with good news: The race wasn’t over yet.
Donald Trump’s refusal to concede is no joke – it’s a dangerous precedent
Nesrine Malik – The Guardian
What started on a golden escalator five years ago ended in the parking lot of a garden design company next to a sex shop and across the street from a crematorium. The Four Seasons Total Landscaping incident – someone appeared to have booked a gardening services’ purveyor instead of the luxury Four Seasons hotel – was heavy with symbolism, and perfectly timed.
Trump Family Business Faces Post-Election Reckoning; Property sales may shrink the Trump Organization as debts come due and legal woes persist
Brian Spegele and Caitlin Ostroff – WSJ
When President Trump leaves the White House in January, he will face some of the deepest financial and legal challenges in his family business empire in decades. No matter what he focuses on after the presidency, the businesses will require his attention. Two New York investigations will continue after he leaves office and the Trump Organization will need to avert a potential cash crunch caused by looming debt maturities at the firm’s real estate holdings. Personal guarantees Mr. Trump made on some of the organization’s debt add urgency to shoring up its financial position.
Trump Allies Explored Buyout of Newsmax TV as Fox News Alternative; Hicks Equity Partners, a firm with ties to a co-chair of the Republican National Committee, is pitching investors on a new conservative news channel
Benjamin Mullin, Juliet Chung, Keach Hagey and Rebecca Ballhaus – WSJ
For nearly two years, allies of President Trump have been exploring ways to build up a formidable competitor to Fox News. One target they recently zeroed in on: the fledgling pro-Trump cable channel Newsmax TV.
Biden’s Transition Teams Suggest Tougher Wall Street Oversight; The president-elect has chosen proponents of stronger regulation to begin reviewing financial agencies.
Alan Rappeport and Jeanna Smialek – NY Times
For four years, Wall Street has benefited from the Trump administration’s push to loosen bank rules and weaken post-crisis financial regulations. President-elect Joseph R. Biden Jr. appears ready to shift things in the opposite direction, bringing back stricter oversight of the financial industry.
Time to Take a Pledge: No Stocks if You’re a Member of Congress; Owning actively traded shares can create conflicts of interest. Georgia’s Senate candidates agree. Will others? Mutual funds could be good for them.
Ron Lieber – NY Times
The nation’s balance of power is at stake as both senators from Georgia face runoff elections in early January. The campaigns have been bitter, and they stand to get more so.
UN Chief Sees Biden Election Aiding Climate Goals: NEF Update
The four-day Bloomberg New Economy Forum kicked off on Monday morning with business and political leaders taking on issues from the economic fallout of the coronavirus pandemic to the future of global trade and climate change.
Joint Statement Of Intent On Data Connectivity Between Bangko Sentral Ng Pilipinas And The Monetary Authority Of Singapore
In recognition of the importance of data connectivity in financial services, Bangko Sentral ng Pilipinas (“BSP”) and The Monetary Authority of Singapore (“MAS”) have agreed on and jointly issue the following statement of intent:
ASIC statement on ASX equity market outage
The ASX cash equity market trading platform did not reopen for trading today Monday, 16 November 2020, after an outage occurred during the opening auction. ASIC remains in regular communication with ASX, market participants, and members of the Australian Council of Financial Regulators. We are focussed on ensuring that ASX reopens in an orderly manner on Tuesday 17 November, and that market integrity is not compromised. ASIC will also monitor for any impacts resulting from the failure of ASX Trade to open for most of the day.
SEC Chairman Jay Clayton to Leave Agency at End of 2020; The political independent nominated by President Trump to step down after 3 1/2 years
Paul Kiernan – WSJ
The head of the Securities and Exchange Commission will step down at the end of the year, the agency said Monday, the latest in a wave of planned departures as power changes hands in Washington.
Wells Fargo Ex-CEO Settles SEC Claims, Former Consumer-Unit Head Faces Fraud Case; John Stumpf settles civil claims over his role in the bank’s fake accounts scandal
PHOTO: GARY CAMERON/REUTERS
Dave Michaels and Ben Eisen – WSJ
Former Wells Fargo WFC 1.09% & Co. chief executive John Stumpf agreed Friday to pay $2.5 million to settle civil claims over his role in the bank’s fake accounts scandal, while regulators sued another departed Wells executive over fraud allegations.
Mike Willis Named Associate Director in Division of Economic and Risk Analysis
The Securities and Exchange Commission today announced that it has named Mike Willis as an Associate Director in the Division of Economic and Risk Analysis (DERA). Mr. Willis will lead DERA’s newly created Office of Data Science and Innovation, which provides the Commission and its staff with expertise on data analytics, risk assessment, and structured disclosure. He will oversee the development of data analytics tools to enhance program data quality and information. Mr. Willis will coordinate with other offices and divisions to address structured machine-readable open data in rulemaking, analytics, dissemination and other areas. He will also oversee data ingestion and work with the SEC’s Chief Data Officer and others within the agency to develop a unified vision of data ingestion, analysis, visualization and use.
SEC Charges Investment Advisory Firms and Broker-Dealers in Connection with Sales of Complex Exchange-Traded Products; More than $3 Million to be Returned to Harmed Retail Investors as Part of Ongoing Risk-Based Initiative
The Securities and Exchange Commission today filed settled actions against three investment advisory firms and two dually-registered broker-dealer and advisory firms for violations that related to unsuitable sales of complex exchange-traded products to retail investors. The sales occurred between January 2016 and April 2020. These actions are the first arising from investigations generated by the Division of Enforcement’s Exchange-Traded Products Initiative, which utilized trading data analytics to uncover potential unsuitable sales.
SEC Awards Over $1.1 Million to Whistleblower for Independent Analysis
The Securities and Exchange Commission today announced an award of over $1.1 million to a whistleblower whose independent analysis led the staff to look at new conduct during an ongoing investigation. The whistleblower’s information and exemplary assistance helped the agency bring an emergency action preventing further investor harm. This whistleblower examined publicly available materials and conducted an analysis that revealed important new insights into the securities law violations, which helped the SEC protect investor assets from dissipation by the wrongdoer.
SEC Charges Former Wells Fargo Executives for Misleading Investors About Key Performance Metric
The Securities and Exchange Commission today charged former Wells Fargo & Co. CEO and Chairman John G. Stumpf and former head of Wells Fargo’s Community Bank Carrie L. Tolstedt for their roles in allegedly misleading investors about the success of the Community Bank, Wells Fargo’s core business. The SEC’s filings include settled charges against Stumpf, who agreed to pay a $2.5 million penalty, and a litigated action alleging Tolstedt committed fraud. The SEC previously filed settled charges against Wells Fargo for engaging in the misconduct.
EU derivative clearing showed strong growth in 2019
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes its third Annual Statistical Report (Report) analysing the European Union’s (EU) derivatives markets. It provides a comprehensive market-level view of the EU’s derivatives markets in 2019, which had a total size of EUR681tn gross notional amount outstanding, a decrease of 5% on 2018. The Report is based on data submitted under the European Markets and Infrastructure Regulation (EMIR).
CFTC Staff Extends No-Action Relief from Certain Audit Trail Requirements Related to Post-Execution Allocation Information
The Commodity Futures Trading Commission’s Division of Market Oversight (DMO) today extended no-action relief to swap execution facilities (SEFs) from the requirement to capture post-execution allocation information in their audit trail data.
CFTC Staff Extends Relief for SEFs from Certain Block Trade Requirements
The Commodity Futures Trading Commission’s Division of Market Oversight (DMO) today extended temporary no-action relief to swap execution facilities (SEFs) and other market participants originally provided in 2017 by CFTC Staff Letter No. 17-60. Under the approved extension, the relief is now set to expire on the compliance date of the Part 43 Real-time Public Reporting Requirements final rule.
CFTC Approves Nodal Clear, LLC to Clear for Other Designated Contract Markets
The Commodity Futures Trading Commission today announced it has approved an Amended Order of Registration for Nodal Clear, LLC, removing a previous requirement limiting its activities as a registered derivatives clearing organization (DCO) to clearing contracts executed on or through its affiliated designated contract market (DCM), Nodal Exchange, LLC. The amended order permits Nodal Clear to clear for other DCMs in addition to Nodal Exchange.
Joint statement on the implementation of prudential reforms in the Financial Services Bill
Joint statement from HM Treasury, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) on the implementation of prudential reforms contained in the Financial Services Bill.
Investing and Trading
Big Gains From Small Stocks Power Russell 2000 Surge; Investors bet rebounding economy will boost profits at smaller companies
Paul Vigna – WSJ
Shares of small companies are posting outsize gains, driven by investors’ bets that a rebounding economy and expected Biden administration policies will boost profits at smaller U.S. companies. The Russell 2000 index of small-company stocks rose 6.1% last week, hitting its first record close since 2018 and extending a recent race ahead of other major indexes. It finished the first two weeks of November up 13%, its best 10-session start to a month on record, according to Dow Jones Market Data. The broader S&P 500 gained roughly 9.6% in that period.
Governments Set to Show More Patience in Tackling Pandemic Debts; Key lesson from aftermath of financial crisis is that trying to cut debts before economies have healed can do more harm than good
Paul Hannon – WSJ
Government debts are piling ever higher as the coronavirus pandemic heads toward its second year, with many businesses and households in parts of the world still reliant on the public purse to stay afloat.
Bond Investors Win Big Betting on U.S. Consumer; Complex bonds tied to consumer loans, buoyed by a savings surge, are one of the year’s top-performing investments
Matt Wirz – WSJ
Investors who bet U.S. consumers would keep paying debts this year are reaping a windfall as households spend less and save more against the backdrop of a still-ailing national economy. Bonds backed by consumer loans returned about 10% through October, according to data from Citigroup Inc., making them one of the top-performing investments of 2020. Prices for the so-called asset-backed securities have soared as consumers bucked expectations and responded to the coronavirus pandemic by paying down debt at a rapid clip.
Pandemic Speeds Americans’ Embrace of Digital Commerce; Consumers try new ways to get health care, buy vehicles, eat and work out as the pandemic shakes up habits
Harriet Torry – WSJ
Brooke Mallers recently bought a used car online, she uses food and grocery delivery services more and she makes telehealth appointments—new habits that she expects to last long after the coronavirus pandemic is over. “I’m not sure I’ll ever go into a car dealership again,” said the 58-year-old retired investor in Boulder, Colo. “It was fun to have an experience that’s new and the internet enables.”
Freddie Mac CEO Quits as Prospects Dim for Exit From Government Control; The mortgage giant was taken over during the 2008 financial crisis along with Fannie Mae
Andrew Ackerman – WSJ
The chief executive of mortgage-finance company Freddie Mac plans to step down in January, the company said in a securities filing Friday, a surprise move that comes as prospects dim for an exit from government control for the firm and its larger sister, Fannie Mae.
Warren Buffett’s Berkshire Is Becoming Its Own Elephant Investment; Biggest recent purchase that the conglomerate has made is buyback of its own stock
Jenna Telesca – WSJ
Warren Buffett has been quietly making a huge bet on a well-known conglomerate with thousands of employees around the world: Berkshire Hathaway Inc. BRK.B 1.20% While Mr. Buffett has increasingly faced pressure this year to use his nearly $150 billion cash pile to purchase significant stakes in or the entire business of a company, the world’s most famous investor has seemingly made few acquisitions. Among the few deals he did make are Berkshire’s purchase of Dominion Energy Inc.’s midstream energy business and its investment of $6 billion in five Japanese companies.
Environmental, Social and Corporate Governance
Labor vs. the ESG Racket
The Editorial Board – WSJ
One of the stakes in who controls the Senate in 2021 is the fate of the Trump Administration’s deregulation project. A GOP Senate could block Democrats from using of the Congressional Review Act to overturn important rules. A valuable case in point is the new Labor Department rule requiring that retirement plan managers invest in the best financial interest of their beneficiaries.
China Urges Steps to Reduce Emissions as Cities See Pollution
China’s environmental regulator has asked authorities in some northern provinces to take measures to reduce emissions, as air pollution is expected to continue next week. Northern provinces including Hebei, Shanxi, Shandong and Henan are required to take actions based on local air quality forecasts, according to a statement from the Ministry of Ecology and Environment on Friday, which didn’t specify what the measures will be.
‘Hurricanes on Steroids’: Storms’ Explosive Growth Sows New Risks; Nine Atlantic storms have gained power before landfall in 2020
Brian K Sullivan – Bloomberg
When Hurricane Laura battered Louisiana in August, becoming the most powerful storm to ever make landfall in the U.S., forecasters were confounded by its behavior.
S&P Dow Jones Indices Announce Changes to Dow Jones Sustainability World Index
Stephen Nakrosis – WSJ
S&P Dow Jones Indices on Friday said following an annual rebalancing and reconstitution of the Dow Jones Sustainability Indices, three companies would be deleted from the Dow Jones Sustainability World Index and replaced.
Capitalism must be saved by capitalists, argue these pioneering ESG investors
Katherine Dunn – Fortune
When Michael O’Leary and Warren Valdmanis first met at Bain Capital’s offices in Asia, both were more or less conventional members of the finance profession. And yet, years later, they would become the coauthors of a book arguing that American-style capitalism—including a “meatheaded” obsession with short-term profits—is doing dire damage. Our economic system, they argue, urgently needs a reboot.
The Secret Club for Billionaires Who Care About Climate Change; Creo Syndicate helps the world’s richest families invest in businesses fighting global warming.
Ben Steverman – Bloomberg
A few years ago, the hundreds of members of France’s Mulliez family, with a global retail empire worth more than $38 billion, decided they should take climate change more seriously—or rather, their investment portfolio should.
Spain’s BBVA to sell U.S. banking arm to PNC for $11.6 billion
Greg Roumeliotis, David French, Jesús Aguado – Reuters
Spain’s BBVA BBVA.MC is to sell its U.S. business to PNC Financial Services Group Inc PNC.N for $11.6 billion in cash, in one of the biggest global banking deals this year.
AllianceBernstein applies to set up China mutual fund unit
U.S.-based asset manager AllianceBernstein’s Hong Kong unit has applied to set up a mutual fund in China, the Chinese securities regulator’s website showed.
HSBC Has Big Ambitions in China. Westerners Still Dominate Its Board; The British bank has scaled back in Europe and the U.S. and doubled down on Asia but that isn’t reflected in its senior ranks
Simon Clark – WSJ
Global banking giant HSBC HSBC 1.11% Holdings PLC has made clear that its business destiny is in China. Its board, however, remains an Anglo-American affair. The London-based, Asia-focused bank appointed three board members along with a chief legal officer and a chief operating officer in the past 12 months. All are American. Just two out of 14 board members are Chinese.
PNC Finds a Use for BlackRock Cash With $11.6 Billion BBVA Deal
Scott Deveau, Hannah Levitt, and Charlie Devereux – Bloomberg
Deal fuels expansion in California, Texas as PNC eyes growth; BBVA shares surge as Spanish bank may use cash to pursue deals
PNC Financial Services Group Inc. agreed to buy Banco Bilbao Vizcaya Argentaria SA’s banking operations in the U.S. for $11.6 billion, vaulting past rivals to become the country’s largest regional bank.
Deutsche Bank CEO Urges Regulators to Use Room for More Relief
Nicholas Comfort and Steven Arons – Bloomberg
Deutsche Bank AG Chief Executive Officer Christian Sewing urged regulators to provide more relief to Europe’s banks to keep loans flowing as the pandemic’s second wave engulfs the region.
Mexico’s Assault on Energy Investors; AMLO tries to treat the North American trade pact like a smorgasbord.
Mary Anastasia O’Grady – WSJ
When U.S. ratification of President Trump’s reformulated North American Free Trade Agreement was still in doubt, Mexican President Andrés Manuel López Obrador put in a good word for it. In November 2019 he boasted that he had sent a letter to House Speaker Nancy Pelosi explaining that approval of the United-States-Mexico-Canada Agreement was “in the interest of the three peoples, the three nations.”
Japan’s Economy Surges, but the Comeback May Not Last; Activity has jumped as pandemic limits have eased, in a positive sign for global growth, but damage may be deeper than the initial numbers showed.
Ben Dooley and Hisako Ueno – WSJ
Japan became the latest major economy to bounce back from the devastation of the coronavirus, as lockdowns eased and pent-up demand led to surging domestic consumption and a rebound in exports.
Asia’s Massive New Trade Deal Is No Big Victory for Beijing; RCEP is less ambitious in most ways than the more groundbreaking trans-Pacific trade pact that came into force last year
Mike Bird – WSJ
A mammoth Asian trade deal covering about a third of global GDP was signed on Sunday, nearly a decade after it was first mooted. The deal is being presented as a win for the Chinese government—but its weaknesses leave Beijing far short of a leadership position on regional trade.
China Economy Gathers Steam, Setting Stage for a Strong End to the Year; Investment and consumer spending grew faster year-over-year in October, while industrial production held firm
Jonathan Cheng – WSJ
China’s economic activity posted a broad-based recovery in October, paving the way for a faster economic rebound in the final quarter of the year. Both investment and consumer spending grew at faster year-over-year rates in October than the month before, while industrial production, the first sector to emerge from this year’s coronavirus-induced slump, remained solid.
Emerging Markets Defy Risks With Turkey Taking Center Stage
Netty Idayu Ismail, Simon Flint, and Sydney Maki – Bloomberg
EM recovery is just getting started, Bank of America says; Turkey’s rate decision under new chief will be in spotlight
Even with the U.S. election out of the way, investors could be forgiven for taking a cautious view of emerging markets, given the wall of risks ahead for the world’s developing economies.
‘The Zoom Boom’: Asia Leads the World in Covid-19 Economic Recovery; Successful pandemic responses and Western demand for goods are helping power rebounds in China, Taiwan and South Korea
Eun-Young Jeong – WSJ
Asian economies are emerging as clear winners in the race to a full recovery, aided by demand from Western shoppers and success in containing Covid-19, which has helped the region keep its factories humming.
Boris Johnson has secured a questionable legacy; The UK prime minister will be remembered for ‘getting Brexit done’ and his mismanagement of Covid
Martin Wolf – FT
Historians will view Boris Johnson as one of the UK’s more significant politicians. In terms of his impact on his country, for good or ill, he may rank not far behind Clement Attlee and Margaret Thatcher among postwar politicians.
U.K. Hints Brexit Talks Could Be Extended as Disagreements Remain
David Goodman – Bloomberg
Negotiator Frost warns ‘we may not succeed’ as talks resume; Eustice says possible to squeeze out more time if deal close
The U.K. hinted that Brexit talks could stretch out beyond this week as the two sides struggle to overcome the key barriers to reaching a trade deal. While officials from both sides of the Brexit divide agree the coming week is crucial, negotiations over a trade agreement have already passed a number of informal deadlines. Environment Secretary George Eustice said Sunday it would be possible to “squeeze out extra time” if the two sides were close to an agreement.
If only there were also a vaccine to protect Britain from Brexit
William Keegan – The Guardian
Ever since the end of the second world war, British governments of both major parties have aimed, in their own way, to improve the standard of living of the people. This apology for a Tory government, headed by Boris Johnson, is the first to make it an object of economic policy to make the country poorer.