Crypto lender Genesis latest to file for bankruptcy as crypto contagion continues to spread

Jan 20, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

I am in downtown Chicago today for a video shoot and lunch. It is nice to be here, but it was better when I had an office to go to with all my colleagues there. But times change. Our Head of Videography Patrick Lothian came into town for the video shoot, so it is a special project on which we are working.

Today we published part two of our interview with William Knottenbelt for The History of Financial Futures series that we shot at the FIA EXPO 2022. It was a career retrospective for Knottenbelt and his role in the market through the dynamic growth of the 1980s, the financial crisis of 2008 that saw his bank be taken over by the U.K government and then his jumping to the CME Group. He talks about growing CME Europe and what that meant for the exchange group and how revenues from overseas grew from 20 percent when he joined to 33 percent today.

A fugitive who was charged in the alleged market manipulation scheme in which a small New Jersey deli that was publicly traded all of a sudden had a $100 million valuation was arrested in Thailand, U.S. authorities said and the NY Post reported. My money was on him being arrested in Bologna, Italy for some reason.

Amazon is ending its AmazonSmile charity program, saying it did not have a big enough impact amid cost cutting efforts. The program gave away $400 million in the U.S. and $449 million globally, including to my church and other organizations I am affiliated with. It is a pity they are cutting the program; it was an incentive to use Amazon, knowing you were helping your community organizations, even in a small way. But the small ways added up over time.

The Wall Street Journal wants to know if you are storing your wine correctly and has the answer for you if you aren’t, in a story titled “Are You Storing Your Wine Properly? Here’s What It Can Cost-and Save-You.”

The New York Times asks the question of whether you should drink coffee on an empty stomach, something I do every day other than the pills I have taken. The story is titled “Is It Bad to Drink Coffee on an Empty Stomach? Your gut is adaptable, experts say, but there are a few facts you should keep in mind.”

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

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William Knottenbelt – The History of Financial Futures – Part Two
JohnLothianNews.com

William Knottenbelt was interviewed by John Lothian for The History of Financial Futures video series at the FIA EXPO 2022 as he was preparing to leave the CME Group. He joined the CME Group in 2008 after being approached by then CME Executive Bryan Durkin while Knottenbelt was the head of global futures for the Royal Bank of Scotland, which had been taken over by the U.K. government during the financial crisis that year.

Watch the video »

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Sailor Isabelle Autissier: ‘The ocean is the axis around which my life has turned’; The legendary yachtswoman on sailing the globe single-handed, near-death experiences in the Southern Ocean – and why our approach to the environment is all wrong
Victor Mallet – Financial Times
More than half a century ago on a winter’s day in the English Channel, a 10-year-old French girl stood half-frozen on the deck of a sailing boat, mesmerised by the sight of snow falling into the sea and dissolving in the waves off the coast of Jersey. She had vowed that one day she would sail around the world alone and was braving the cold and the snow to prepare for the icy Southern Ocean.
/jlne.ws/3XnFk6w

****** This is one of those adventures where you either live to tell the story, or you don’t.~JJL

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Tom Brady made $512 million from the NFL before inking that $375 million analyst contract with Fox Sports
Weston Blasi – MarketWatch
When NFL legend Tom Brady left the field at the end of the final game of the 2022 season, he was the league’s career leader in passing yards (89,214) and touchdowns (649). He also left with an estimated net worth of $512 million. Brady made about $332 million playing quarterback for the National Football League’s New England Patriots and Tampa Bay Buccaneers for 23 seasons, the highest career earnings of any football player in history.
/jlne.ws/3XqRnjp

***** I guess we should not feel too bad about the GOAT losing out on his 1 million FTX shares.~JJL

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Elon Musk Sold Tesla Shares Before Company Acknowledged Weakness
Jonathan Weil – The Wall Street Journal
Late last year, after a wave of news reports pointing to sagging demand for his company’s vehicles, Tesla Inc. Chief Executive Elon Musk sold almost $3.6 billion of his shares in the electric-car maker. On Jan. 2, Tesla announced fourth-quarter vehicle deliveries that were significantly below the company’s most recent forecast to investors. The news sent Tesla’s stock price plunging when markets opened the next day. The timing of the stock sales raises a crucial question: Did Mr. Musk know that business had slowed when he sold his shares? Tesla hadn’t updated investors on its outlook in nearly two months.
/jlne.ws/3iThiBu

****** Elon is going to have to keep selling Tesla to meet the needs of his Twitter investment. That is not going to stop until he finally puts Twitter into bankruptcy, and even then he still may need to sell more.~JJL

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The Black Swans Are Coming to Congress to Roost; A Points of Return guide to the US debt ceiling showdown – a crisis you’d rather not know about, but will probably need to.
John Authers – Bloomberg
Will a Black Swan Break the Ceiling? There is nothing markets are worse at than pricing in very low-probability but truly extreme risks. This is the original concept of the “black swan” as laid out in the 19th century by the philosopher John Stuart Mill. Until Europeans went to Australia and found swans that were black, they had been entitled to believe that all swans were white, but couldn’t prove it. The US debt ceiling provides a perfect example; political brinkmanship has never led to an all-out default before, and it’s fair to assume it won’t in future. But we can’t be certain. And the cost could be astronomical.
/jlne.ws/3iLGJFb

****** They never saw it coming!~JJL

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Vladimir Putin is losing the energy war; After weaponising gas supplies, the Russian president is now on the back foot as prices fall
David Sheppard – Financial Times
Vladimir Putin’s energy war is suddenly going about as well as his “special military operation”. That is, to say, not very. After causing fear and chaos by weaponising gas supplies to countries backing Ukraine, the Russian president now finds himself very much on the back foot.
/jlne.ws/3iTpi5u

******* He thought he had a monopoly, but he did not understand how markets work.~JJL

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Thursday’s Top Three
Our top story Thursday was the John Lothian News video William Knottenbelt – The History Of Financial Futures – Part One. Second was The clowns of cryptoland haven’t given up, an opinion piece from the Financial Times. And third, for the third time in the top three, was A millennial founder who sold her company to JP Morgan for $175 million allegedly paid a college professor $18K to fabricate 4 million accounts. Their email exchange is a doozy.

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MarketsWiki Stats
27,134 pages; 242,367 edits
MarketsWiki Statistics

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Lead Stories

Crypto lender Genesis latest to file for bankruptcy as crypto contagion continues to spread
Lukas I. Alpert – MarketWatch
Embattled crypto lender Genesis announced that it had filed for bankruptcy late Thursday, the latest firm to be taken amid a widespread rout among crypto companies driven by plunging prices and charges of fraud at major players like FTX. Genesis, which froze customer withdrawals in November following the collapse of FTX, filed for Chapter 11 bankruptcy protection in federal court in Manhattan for its lending units, saying it was the best way for it to achieve “an optimal outcome for Genesis clients.”
/jlne.ws/3HkaW7F

*****Here is the Financial Times version and The Wall Street Journal version and The New York Times version of this story.

Crypto Lawyers Share Blame for FTX, Other Disasters, CFTC Commissioner Says
Jesse Hamilton – CoinDesk
Lawyers, accountants and other financial professionals should have stepped in to halt the fatal mistakes going on inside crypto firms such as FTX long before they imploded, said Christy Goldsmith Romero, a commissioner with the U.S. Commodity Futures Trading Commission (CFTC). At the risk of offending their crypto employers, Goldsmith Romero said the experienced hands – also including the investment firms backing these companies – “need to step up, and call for compliance, controls and other governance, without allowing the promise of riches and the company’s marketing pitch to silence their objections to obvious deficiencies.”
/jlne.ws/3kuCUEJ

Global Property Market Faces $175 Billion Debt Spiral; A sharp drop in commercial real estate is bleeding into the real economy.
Neil Callanan – Bloomberg
The slump in the world’s biggest asset class has spread from the housing market to commercial real estate, threatening to unleash waves of credit turmoil across the economy. Almost $175 billion of real estate credit is already distressed, according to data compiled by Bloomberg – about four times more than the next biggest industry. As the toll from higher interest rates and the end of easy money mounts, many real estate markets are almost frozen with some lenders telling borrowers to sell assets or risk foreclosure amid demands for additional capital from landlords.
/jlne.ws/3WveKqS

Bankrupt Genesis Owes Its Top 50 Creditors $3.4 Billion; Figure eclipses $3.1 billion owed by FTX to its top creditors; Winklevoss twin’s Gemini Earn customers owed $766 million
Sidhartha Shukla, Joanna Ossinger and Suvashree Ghosh – Bloomberg
The bankruptcy of Barry Silbert’s Genesis Global may not have pummeled crypto markets like the implosion of Sam Bankman-Fried’s FTX did, but it features a list of top creditors with similarly large claims topping $3 billion in total.
/jlne.ws/3wfjMNF

Investors pump trillions of dollars a day into ultra-safe Fed facility; Volatility in debt market prompts US money market funds to park cash in ‘reverse repo’
Kate Duguid and Adam Samson – Financial Times
Trillions of dollars each day are gushing into a Federal Reserve facility designed to mop up excess cash in the financial system, showing how many ultra-safe investment funds are avoiding volatile US government debt markets even as interest rates rise. Investors this month are stashing an average $2.2tn a day in the Fed’s reverse repo facility, where investors can earn a set interest rate for parking funds overnight. That is down from a record $2.6tn on the last trading day of 2022, but above last year’s average of $2tn. Before March 2021, usage was typically just a few billion dollars a day.
/jlne.ws/3HjhEdQ

New FTX Chief Says Crypto Exchange Could Restart; In his first public interview since taking over the failed cryptocurrency exchange, John J. Ray III said that he’s open to the idea of rebooting operations
Alexander Saeedy and Alexander Osipovich – The Wall Street Journal
FTX’s new chief executive, John J. Ray III, said he is looking into the possibility of reviving the bankrupt crypto exchange as he works to return money to the failed company’s customers and creditors. In his first interview since taking over FTX in November, Mr. Ray said that he has set up a task force to explore restarting FTX.com, the company’s main international exchange. Although top FTX executives have been accused of criminal misconduct, some customers have praised its technology and suggested that there would be value in rebooting the platform, he said.
/jlne.ws/3iPQP7V

Crypto Lender Genesis Files for Bankruptcy. It Could Be Far Worse for Bitcoin.
Jack Denton – Barron’s
The lending businesses of Genesis have filed for bankruptcy, making the institutional digital asset powerhouse the latest casualty in a yearlong crash in cryptocurrencies. Genesis Holdco and two subsidiaries-distressed lender Genesis Global Capital and an Asia-Pacific arm-filed for Chapter 11 bankruptcy protection in the Southern District of New York, the group said Friday. Genesis Holdco owes its top 50 creditors some $3.5 billion, according to bankruptcy filings.
/jlne.ws/3J2igG4

Crypto lender Genesis files for bankruptcy
Shiona McCallum & Mike Farrell – BBVC
The firm had recently been charged by US regulators Securities and Exchange Commission (SEC) with illegally selling crypto. It is part of the Digital Currency Group (DCG), a conglomerate of more than 200 crypto-focused businesses.
/jlne.ws/3ZQDFId

Cameron Winklevoss Threatens Legal Action Against DCG CEO After Genesis Bankruptcy
Elizabeth Napolitano – CoinDesk
Gemini CEO Cameron Winklevoss threatened to sue Digital Currency Group CEO Barry Silbert over the repayment of a $900 million loan in a tweet published just minutes after Genesis filed for Chapter 11 late Thursday night. The tweet comes after Winklevoss waged a Twitter war against DCG to recover the loan amid his exchange’s own struggles.
/jlne.ws/3wmIoDW

An FTX executive flagged worries about Alameda Research’s use of customer funds to Sam Bankman-Fried as early as 2020, report says
Pete Syme – Business Insider
A senior FTX executive raised concerns to Sam Bankman-Fried about trading firm Alameda misusing funds from FTX customers as early as 2020, The New York Times reported, citing documents shared between US and Bahamian governments. According to the Times’ report, the unnamed executive, who is described as being a “high-level software developer” at the firm, met with Bankman-Fried after looking through a company database and finding that Alameda had a negative balance in its FTX account of “approximately hundreds of millions of dollars.”
/jlne.ws/3WrZprd

UBS to raid boutique banks for M&A dealmakers; Swiss lender’s hiring plans in stark contrast to rivals cutting thousands of jobs
Stephen Morris and Owen Walker – Financial Times
UBS is planning to pick off disgruntled dealmakers from investment banking boutiques, as the Swiss lender looks to bolster its capabilities in mergers and acquisitions while competitors lay off staff. The bank has not hired as aggressively as Wall Street rivals in recent years, but it is preparing to lure strong candidates with attractive packages, according to people with knowledge of the plans.
/jlne.ws/3HfJM0z

Crypto shrugs at US crackdown on illicit activity; Plus, Genesis files for bankruptcy and Dimon weighs in on Bitcoin again
Scott Chipolina – Financial Times
An industry that over the past year has witnessed precipitous price falls, multiple bankruptcies and allegations of fraud would normally pay attention when the US accuses one of its companies of fueling a “high-tech axis of crypto crime”. Yet a broad collective shrug was the response when the US Department of Justice on Wednesday took aim at the founder of a little-known exchange named Bitzlato.
/jlne.ws/3iZkrj3

Trump backer Peter Thiel reportedly made $1.8 billion cashing out an 8-year bet on crypto – when he was still touting a massive bitcoin price surge
George Glover – Business Insider
Peter Thiel’s venture capital firm reportedly made $1.8 billion closing out its crypto positions last year – around the time when the early bitcoin bull was still predicting the token’s price to surge 100 times. Founders Fund had cashed out almost all of its bets on digital assets by March 2022, according to a Financial Times report that cited people familiar with the matter. But Thiel was still backing bitcoin when he spoke at a crypto conference in Miami the following month.
/jlne.ws/3QUkFVl

Treasury Taps Retirement Funds to Avoid Breaching US Debt Limit
Christopher Anstey – Bloomberg
The Treasury Department is beginning the use of special measures to avoid a US payments default, after the federal debt limit was reached Thursday. The department is altering investments in two government-run funds for retirees, in a move that will give the Treasury scope to keep making federal payments while it’s unable to boost the overall level of debt. Treasury Secretary Janet Yellen informed congressional leaders of both parties of the step in a letter on Thursday. She had already notified them of the plan last week, when she flagged that the debt limit would be hit Jan. 19.
/jlne.ws/3GN5qbW

The World Economy No Longer Needs Russia; With alternative sources in place, Putin’s attempt at blackmailing Europe on energy has failed.
Jeffrey Sonnenfeld – Foreign Policy
For much of the past year, and since his invasion of Ukraine last February, Russian President Vladimir Putin has been riding high on his supposed energy omnipotence, holding the global economy hostage to his whims. Since last summer, Putin has choked off natural gas supplies to Europe, hoping that Europeans, shivering and without heat during the winter, would turn on their leaders and make it politically infeasible to continue support for Ukraine.
/jlne.ws/3XBXFwE

Cardano expresses interest in buying CoinDesk from cash-strapped Digital Currency Group
Danny Park – Decrypt
Charles Hoskinson, co-founder of the Cardano blockchain network, said he is considering acquiring CoinDesk, the media arm of the struggling Digital Currency Group, saying journalistic integrity needs to be restored to reporting on cryptocurrencies and blockchain. CoinDesk is reportedly exploring a sale.
/jlne.ws/3XrhJSm

FTX defends choice of law firm to guide it through bankruptcy
Dietrich Knauth and Andrew Goudsward – Reuters
Collapsed crypto exchange FTX will try to convince a judge at a hearing on Friday to sign off on its hiring of lawyers and financial advisers, amid allegations that its chosen law firm’s prior work for FTX creates a conflict of interest. The U.S. Department of Justice’s bankruptcy watchdog has asked U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, not to approve FTX’s hiring of Sullivan & Cromwell, arguing that the elite New York law firm has not disclosed sufficient information about its past ties to FTX, including the fact that FTX’s U.S. general counsel, Ryne Miller, is a former partner at the firm.
/jlne.ws/3Y2he1l

Crypto Lender Genesis Files for Bankruptcy as Crisis Spreads
Kevin Simauchi, Suvashree Ghosh and Joanna Ossinger – Bloomberg
Cryptocurrency lender Genesis Global Holdco LLC filed for bankruptcy, the latest firm to collapse in the aftermath of the FTX exchange’s swift downfall and last year’s rout in digital assets.
/jlne.ws/3ZQZIOX

John Kerry Lays It All Out on Climate Change; Biden’s envoy calls for a World War II-like mobilization.
The Wall Street Journal Opinion
John Kerry is President Biden’s climate envoy to the world, and let it never be said that he lacks enthusiasm for the cause. This week in Davos, in front of the world’s elite climateers, Mr. Kerry gave a speech that everyone should read for its candid declaration of what he thinks it is going to take to save the planet from fossil fuels. To wit, an all-out militarization by government and private industry comparable to fighting the Nazis.
/jlne.ws/3J6P1SN

Davos Has It All Again – Except the World’s Most Powerful Person; Biden administration has light footprint at Swiss retreat; Joe Manchin gets star treatment in absence of Biden, top aides
Saleha Mohsin – Bloomberg
The world’s elite flocked back to the Swiss ski town of Davos this week, celebrating the post-pandemic return of the World Economic Forum. But among the assembled billionaires, bankers, politicians and philanthropists, there was a low-level grumble: Where are the Americans? Among the absentees was President Joe Biden, who presides over the world’s largest economy. Vice President Kamala Harris and Secretary of State Antony Blinken also were no-shows. Nobody from the White House was dispatched to the summit.
/jlne.ws/3wd2Wit

JPMorgan Begins Private Lending Drive With $10 Billion on Table; US lender primed to capture market share lost to Apollo, Ares; On-balance sheet lending is a break away from banking rivals
Silas Brown and Will Louch – Bloomberg
JPMorgan Chase & Co. has set aside at least $10 billion to back its foray into the lucrative world of direct lending, according to people with knowledge of the matter. The sizable bet vaults JPMorgan into competition with established private-credit heavyweights such as Blackstone Inc., Apollo Global Management Inc. and Ares Management. The US bank is prepared to make many more billions of dollars available if it sees the opportunity to deploy more capital, one of the people said.
/jlne.ws/3ZT8JaC

Fugitive wanted for $100M New Jersey deli fraud scheme arrested in Thailand
Thomas Barrabi – NY Post
A fugitive charged over an alleged market manipulation scheme in which a small New Jersey deli mysteriously drew a $100 million valuation was arrested last week in Thailand, the feds confirmed Thursday. Peter Coker Jr., 54, had been on the lam since last September, when prosecutors slapped him, his father, Peter Coker Sr., 80, and associate James Patten, 63, with 12 federal charges.
/jlne.ws/3J42rim

Ukraine Invasion

US Coast Guard says this ship off Hawaii coast is a Russian spy ship
CNN
The US Coast Guard says it is tracking a suspected Russian spy ship in international waters off the coast of Hawaii as tensions between Washington and Moscow remain heightened over Russia’s war in Ukraine. CNN’s Oren Liebermann reports.
/jlne.ws/3HinNXI

Denmark donates artillery to Ukraine
The Danish Ministry of Defence
The defense’s future CEASAR artillery is to be donated to Ukraine. The government has consulted with the Danish Parliament about this at today’s meeting of the Foreign Policy Council. “This is a very large and significant donation. We have been in continuous contact with the Ukrainians about Caesar artillery in particular and I am happy that we have now received broad support from the Danish Parliament to donate it to Ukraine’s freedom struggle. There is no doubt that it is needed, even if there are still technical outstandings with the system,” says Defense Minister Jakob Ellemann-Jensen.
/jlne.ws/3XGZ6d5

Kremlin Threatens ‘Whole New Level’ of War Over Western Weapons
Shannon Vavra – Daily Beast
Russia is on edge as American and European leaders meet in Europe to discuss delivering more weapons and military aid packages to Ukraine, with the Kremlin warning that more deliveries of weaponry to Kyiv will bring the conflict to a “new level.” “This will mean taking the conflict to a whole new level, which certainly will not bode well in terms of global European security,” Kremlin spokesperson Dmitry Peskov said, according to TASS. “Naturally, the very discussion of the acceptability of supplying Ukraine with arms which would allow strikes to be delivered on Russian soil… is potentially extremely dangerous.”
/jlne.ws/3XFjzyU

Pentagon looks to shift dynamic in Ukraine war, without Abrams tanks
Phil Stewart – Reuters
The United States aims to break the dynamic of grinding warfare and near-frozen front lines in Ukraine with newly announced military capabilities that it hopes will breath fresh momentum into Kyiv’s battle against Russian forces, a senior Pentagon official said on Wednesday. But Colin Kahl, the Pentagon’s top policy adviser, said the Pentagon still wasn’t prepared to meet Kyiv’s calls for gas-guzzling M1 Abrams main battle tanks.
/jlne.ws/3XKuabP

US Is Sending Ukraine Armored Vehicles in $2.5 Billion Package; Pentagon makes announcement on eve of key allied meeting; Stryker, Bradley vehicles, missile systems are part of package
John Harney – Bloomberg
The Biden administration announced a major new package of military hardware for Ukraine, sending 90 Stryker armored personnel carriers, 59 Bradley fighting vehicles and an array of other gear as western allies look to give the country a boost before Russia launches a new ground campaign expected this spring. The $2.5 billion package includes millions of rounds of ammunition, tens of thousands of artillery rounds, night vision gear and other equipment, the Pentagon said. It marks the 30th drawdown from Defense Department stocks since the war began.
/jlne.ws/3ko2MBX

Putin’s retaliation against sanctions has backfired and could cost Russia $150 billion this year, RBC analyst says
Jennifer Sor – Business Insider
Putin’s backlash against European sanctions has backfired, and it could cost Russia $150 billion this year, according to RBC strategist Timothy Ash. “The dilemma that Putin caused Europe was this: the continent was asked whether, given its need for gas to heat homes and power industry, it cared more about continuing this relatively cheap and critical supply, or whether it cared more about Ukraine,” Ash said in an op-ed for the Center for European Policy Analysis on Tuesday, referring to Russia’s reprisal against European sanctions. The nation slashed pipeline gas supplies headed to Europe this summer in retaliation for western trade restrictions, causing gas and electricity prices to skyrocket.
/jlne.ws/3R8MtFL

The US is surpassing Russia as Europe’s top energy supplier
Nate DiCamillo – Quartz
Since the European Union banned purchasing seaborne Russian crude oil in December, Russia’s exports have fallen by 9%. That’s a big drop, mitigated only somewhat by increased exports to Asian countries not party to the ban.
/jlne.ws/3QSlMoi

Germany Says It Could Move Quickly to Send Tanks to Ukraine; Defense ministers met in Ramstein, Germany, to discuss Ukraine; Pressure is building on Germany to supply Kyiv with Leopards
Arne Delfs – Bloomberg
Germany’s new defense minister, Boris Pistorius, said his government is evaluating options to supply its Leopard battle tanks to Ukraine and could move quickly if an agreement is reached.
/jlne.ws/3H2gEtA

Exchanges, OTC and Clearing

Davos 2023: LME CEO says nickel reforms to be implemented ‘relatively quickly’
Divya Chowdhury – Reuters
The London Metal Exchange (LME) will implement recommendations on accountability and position limits “relatively quickly” from an independent review of last year’s nickel crisis to prevent market distortions and improve risk monitoring, its chief executive officer said on Wednesday. “The recommendations around accountability levels and position limits are particularly important, are broadly rules-based, so could be brought about quite quickly,” LME CEO Matthew Chamberlain said on the sidelines of the World Economic Forum’s annual meeting in Davos, Switzerland.
/jlne.ws/3WoDCk6

LuxSE becomes first European exchange to sign Abu Dhabi Sustainable Finance Declaration
Luxembourg Stock Exchange
Ahead of its hosting of COP28 in December, the United Arab Emirates (UAE) zoomed in on sustainable finance this week and welcomed the Luxembourg Stock Exchange and other companies as new signatories to the Abu Dhabi Sustainable Finance Declaration. During the Abu Dhabi Sustainable Finance Forum hosted by Abu Dhabi Global Market which took place today, the Luxembourg Stock Exchange (LuxSE) signed the Abu Dhabi Sustainable Finance Declaration. LuxSE is the first European exchange to officially join the mission of contributing to the growth of sustainable finance and sustainable development in the region.
/jlne.ws/3D1YiYj

CME Group Announces Record Copper Options Open Interest As Participation Grows Across Base Metals
CME Group
CME Group, the world’s leading derivatives marketplace, today announced that open interest in Copper Options (HX) has reached multiple, back-to-back records, reaching 137,574 contracts on January 18, 2023. Average daily volume (ADV) across the company’s Copper Futures and Options complex is at 131,466 contracts month-to-date, up 42% from full-year 2022 ADV. Copper Options ADV is at 12,513 contracts month-to-date, up 410% over last year. “As market participants navigate ongoing recession risk and China’s easing of COVID-19 restrictions, they are increasingly using our Copper Options products to manage potential price moves,” said Jin Chang, Global Head of Metals at CME Group. “The base metals industry is increasingly choosing to transact with CME Group for the transparent on-screen liquidity and around the clock access that our markets provide, and we are pleased with the growth we continue to see across our aluminum, copper and battery metals complex.”
/jlne.ws/3iQzYli

Information regarding the deletion of Linde from the DAX
Deutsche Boerse Group
STOXX Ltd., the global index provider of financial services provider Qontigo, announces that Linde plc will be removed from the DAX Index as of February 27, 2023. The reason is the delisting of the ordinary shares from the Frankfurt Stock Exchange, as communicated by the company. Linde will be deleted in accordance with Section 5.1.2. “Breach of the Basic Criteria” of the Guide to the DAX Equity Indices , but with an adjusted timeline. According to Chapter 9 “Limitations” of the rules, STOXX Ltd. in accordance with internal governance, decided to remove Linde from the DAX index before the last trading day on the Frankfurt Stock Exchange. This is done with the aim of ensuring the replicability and stability of the DAX Index.
/jlne.ws/3Xq7UEt

Euronext Brussels Awards 2022
Euronext
Euronext Brussels awarded the best performing listed companies and market members during its New Year’s event. This year’s winners are:
/jlne.ws/3Woleba

No End in Sight for South Africa’s Delisting Trend, Says A2X CEO; JSE has 136 listed companies, down from 143 last year; A2X Stock exchange targets 150 listings by end of 2024
Khuleko Siwele and Adelaide Changole – Bloomberg
South Africa’s main stock exchange will probably continue hemorrhaging listings over the next year as companies grapple with onerous regulatory and funding conditions, making it less attractive to raise capital through initial public offerings. “The macro-economic environment is not particularly conducive to raising capital in South Africa,” Kevin Brady, the chief executive officer of A2X, one of the top stock exchanges in the country said in an interview on Wednesday.
/jlne.ws/3XFmesZ

JPX Publishes “Survey of TCFD Disclosure in Japan (FY2022)”
Japan Exchange Group Inc.
Japan Exchange Group, Inc. (JPX) has today published the “Survey of TCFD Disclosure in Japan (FY2022),” covering the constituent companies of the JPX-Nikkei Index 400. Japan’s Corporate Governance Code, which was revised in 2021, asks listed companies (on a comply-or-explain basis) to address sustainability issues, including climate change and other global environmental issues, positively and proactively. Alongside this, it states that companies listed on the Prime Market in particular should collect and analyze the necessary data on the impact of climate change-related risks and earning opportunities on their business activities and profits, and enhance the quality and quantity of disclosure based on the TCFD Recommendations or an equivalent framework.
/jlne.ws/3GV3w9w

TechNet Appoints New Executive Council Leadership; Nasdaq Executive Vice Chairman Ed Knight named Chairman and Zoom COO Aparna Bawa named Vice Chair
Nasdaq
TechNet, the national, bipartisan network of technology CEOs and senior executives, today announced Ed Knight, Executive Vice Chairman of Nasdaq, has been named Chairman of TechNet and Aparna Bawa, Zoom’s Chief Operating Officer, has been named Vice Chair. Both will serve for two years. Knight replaces Greg Becker, President and CEO of SVB, who served as TechNet Chairman since 2020. Becker will remain on TechNet’s Executive Council. Knight has served on TechNet’s Executive Council since 2016. Bawa joined in 2020.
/jlne.ws/3iSEhMZ

NSE Indices launches two new target maturity indices
NSE
NSE’s index services subsidiary, NSE Indices Limited today launched two new target maturity indices namely, Nifty SDL Plus G-Sec Sep 2027 50:50 Index and Nifty SDL Plus AAA PSU Bond Apr 2026 75:25 Index.
/jlne.ws/3ZOQaUQ

Fintech

Fintech firm completes move to Bermuda domicile
Duncan Hall – The Royal Gazette
A Dutch fintech firm with global ambitions has completed the set-up of a top holding company in Bermuda after 96 per cent of its shareholders voted in favour of the move. Formerly Flow Traders NV, the top holding company of the global financial technology-enabled liquidity provider is now Flow Traders Ltd. The announcement follows receipt of shareholder approval and the fulfilment of all regulatory and other customary closing conditions, the company said.
/jlne.ws/3iKNdUN

2022 CCP Volumes and Market Share in IRD
Amir Khwaja – Clarus Financial Technology
2022 volumes and market share for OTC Derivatives in Interest Rates reported by Clearing Houses. Clarus CCPView has daily volume and open interest data published by each CCP, which is filtered, normalised and aggregated to allow meaningful analysis and comparisons.
/jlne.ws/3HjWXi2

Google parent Alphabet to axe 12,000 jobs worldwide; Silicon Valley giant is latest to announce staff cuts as tech sector sheds more than 200,000 posts
Madhumita Murgia and Tim Bradshaw – Financial Times
Google’s parent company has announced it will axe 12,000 staff, pushing total tech job losses above 200,000 since the start of last year, as industry bosses concede they overextended during the pandemic’s digital boom. The latest cuts will affect about 6 per cent of the total workforce at Alphabet, which also owns autonomous car company Waymo, healthcare venture Verily and artificial intelligence researchers DeepMind.
/jlne.ws/3QRpXRx

Sam Bankman-Fried championed Solana. Now, execs are trying to break the connection as FTX’s implosion weighs on the blockchain’s reputation.
Morgan Chittum – Business Insider
Sam Bankman-Fried was one of Solana’s most high-profile supporters before his once $32 billion crypto empire imploded, leaving industry onlookers to scrutinize the ties between the blockchain and the disgraced founder. Now, executives at the Solana Foundation, the non-profit which supports Solana’s network, say they’re trying to move on, putting the fiasco behind them, refocusing on new projects, and shedding their connections to Bankman-Fried and his firms.
/jlne.ws/3ZSUbaH

National Australia Bank Mints Stablecoin in Blockchain Push
Harry Brumpton – Bloomberg
National Australia Bank Ltd. has created its own stablecoin pegged to the Australian dollar, a move it says will help large institutional customers with transactions that use blockchain technology. The Melbourne-based lender will start testing the token – named AUDN – before expanding its use cases and getting feedback on the needs of corporate clients, National Australia said in a LinkedIn post. It follows the unveiling of a stablecoin last year by Australia & New Zealand Banking Group Ltd.
/jlne.ws/3WrdncT

OSTTRA to provide real-time visibility of Eurex ETD trade status
Jenna Lomax – Securities Finance Times
Post-trade solutions company OSTTRA is enhancing its network to give market participants a real-time view into the status of exchange-traded derivative trades being cleared through Eurex. The connectivity will enable Eurex to send investment managers booking confirmations for their allocations via OSTTRA ClientLink for exchange-traded derivatives (ETD), delivering live status updates on which trades have been given up, claimed and cleared. This will provide trade certainty in fast-moving markets, OSTTRA says.
/jlne.ws/3CXe6LJ

China Launches Smart-Contract Functionality on Digital Yuan Through E-Commerce App Meituan
Eliza Gkritsi – CoinDesk
China has enabled smart-contract functionality for its central bank digital currency (CBDC), the digital yuan, through the e-commerce app Meituan, one of China’s largest food delivery and lifestyle apps. China has been at the forefront of CBDC development among major countries, as it started to test the digital currency as early as 2020. The currency has been used in retail transactions and to buy securities, but smart-contract functionality on a mass retail scale has yet to be tested.
/jlne.ws/3WnqdJa

National Australia Bank Becomes Second Australian Bank to Build Stablecoin: Report
Amitoj Singh – CoinDesk
The National Australia Bank (NAB), one of the four biggest Australian banks, has created a stablecoin called AUDN which it aims to launch in the middle of 2023, according to the Australian Financial Review (AFR) report. The purpose of AUDN would be to allow its customers to settle transactions on blockchain technology in real-time using Australian dollars, NAB said. AUDN could also be used for several other purposes including “carbon credit trading, overseas money transfers and repurchase agreements,” NAB’s Chief Innovation officer Howard Silby told AFR.
/jlne.ws/3J64278

Cybersecurity

T-Mobile Says Hackers Stole Data on About 37 Million Customers; Carrier says addresses, birth dates and other personal records were exposed, but not financial records
Will Feuer – The Wall Street Journal
T-Mobile US Inc. said hackers accessed data, including birth dates and billing addresses, for about 37 million of its customers, the second major security lapse at the wireless company in two years. The company said in a regulatory filing Thursday that it discovered the problem on Jan. 5 and was working with law-enforcement officials and cybersecurity consultants. T-Mobile said it believes the hackers had access to its data since Nov. 25 but that it has since been able to stop the malicious activity.
/jlne.ws/3wiNZv4

Davos 2023: Global bank chiefs get FBI cybersecurity update
Reuters
Global bank and exchange chiefs got insight on cybersecurity and resilience from the U.S. Federal Bureau of Investigation’s director during a private session in Davos this week. Christopher Wray addressed top bankers at the meeting at the World Economic Forum (WEF) annual gathering of industry leaders, five sources who attended the meeting said.
/jlne.ws/3XvHelF

How Much is the U.S. Investing in Cyber (And is it Enough?)
Mark Stone – SecurityIntelligence
It’s no secret that cyberattacks in the U.S. are increasing in frequency and sophistication. Since cyber crime impacts millions of businesses and individuals, many look to the government to see what it’s doing to anticipate, prevent and deal with these crimes. To gain perspective on what’s happening in this area, the U.S. government’s budget and spending plans for cyber is a great place to start. This article will explore how much the government is spending, where that money is going and how its budget compares to previous years.
/jlne.ws/3H2hIh4

Cybersecurity In 2023: What’s In The Cards?
Caroline Wong – Forbes
The beginning of the year is a time to reflect on successes and challenges of the previous year. Last year, layoffs, cyberattacks and data breaches were rampant among tech companies. Before diving into how the cybersecurity industry evolved, however, let’s take a closer look at what has remained the same. When comparing the first OWASP top 10 list of common web vulnerabilities from 2003 to the findings in 2021, they are alarmingly similar. The information outlined in the OWASP Top 10 has stayed fairly consistent for nearly two decades, because fixing security vulnerabilities can be expensive and time-consuming.
/jlne.ws/3iSM7Go

NIST Releases Potential Updates to Its Cybersecurity Framework
Alexandra Kelley – Nextgov
The National Institute of Standards and Technology announced its intent to make new revisions to its Cybersecurity Framework document, with an emphasis on cyberdefense inclusivity across all economic sectors. Announced by the regulatory agency on Thursday, the updates to the voluntary guidance are informed by responses received from a previous workshop on the forthcoming CSF 2.0 and a corresponding Request for Information published in early 2022.
/jlne.ws/3iLjVp2

Insurers in talks on adding state-backed cyber to UK reinsurance scheme; A surge in online attacks on companies has sparked concern that the threat will become ‘uninsurable’
Ian Smith – Financial Times
Insurers have held discussions with the UK government over whether its terrorism reinsurance scheme should cover state-backed cyber attacks, amid growing concern over holes in the safety net provided by the private sector.
/jlne.ws/3Hj3VDS

Cryptocurrencies

New FTX chief says bankrupt crypto exchange could restart – WSJ
Niket Nishant – Reuters
Bankrupt crypto exchange FTX is looking into the possibility of reviving its business, Chief Executive Officer John Ray told the Wall Street Journal on Thursday. Ray, who took over the reins in November, has set up a task force to explore restarting FTX.com, the company’s main international exchange, he said in an interview with the WSJ. The CEO also told the Journal that he would look into whether reviving FTX’s international exchange would recover more value for the company’s customers than his team could get from simply liquidating assets or selling the platform.
/jlne.ws/3XKtbZb

A tiny rural bank which Alameda bought an $11.5 million stake in is giving up its crypto and weed ambitions to return to its community roots
Pete Syme – Business Insider
The tiny rural bank, which the now-bankrupt Alameda Research bought a controversial stake in, has given up its crypto and cannabis ambitions and will return to being a community bank. The New York Times reported last November that Sam Bankman-Fried’s Alameda had bought an $11.5 million share in Farmington State Bank. That raised eyebrows because it was the 26th-smallest bank out of America’s 4,800, and had just three employees until 2022.
/jlne.ws/3CZ024I

Genesis Files for Bankruptcy, Has $150 Million In the Bank
Ryan Ozawa – Decrypt
Digital currency brokerage Genesis announced that it filed for Chapter 11 bankruptcy late Thursday. “An in-court restructuring presents the most effective avenue through which to preserve assets and create the best possible outcome for all Genesis stakeholders,” said Genesis’ interim CEO Derar Islim in a prepared statement. The company, which is a subsidiary of Digital Currency Group (DCG), says that it has more than $150 million in cash on hand, which it describes as “ample liquidity” to fund operations during the restructuring process.
/jlne.ws/3GU0d2c

Gemini, Hedge Funds, and a DeFi App: Bankrupt Genesis Reveals List of Creditors
Will McCurdy – Decrypt
Defunct crypto broker Genesis has revealed the largest creditors in its recent Chapter 11 bankruptcy filing, with crypto exchange Gemini taking the top spot, with a disputed debt of roughly $765.9 million. The filing, made in the Southern District of New York revealed over $3.6 billion of debt to its largest creditors. Roughly half of the debtors were not named.
/jlne.ws/3QR5Jat

Sam Bankman-Fried’s $10 million in investment in Semafor will be held in custody until authorities decide its fate
Brian Evans – Business Insider
Semafor wants to repurchase Sam Bankman-Fried’s investment in the media startup that the New York Times said amounts to $10 million. The disgraced FTX founder had been known to be Semafor’s biggest outside investor, and TheWrap reported earlier this month that Semafor has been planning to give it back. But the scale of Bankman-Fried’s investment was unknown until Wednesday’s New York Times report. His $10 million investment was part of an initial funding round that raised a total of $25 million. Now Semafor is exploring ways to buy out that stake.
/jlne.ws/3wfdldh

CleanSpark Builds Additional Mining Capacity; Could FTX Be Revived?
CoinDesk
Bitcoin miner CleanSpark (CLSK) started the construction of 50 megawatts (MW) of infrastructure, which could increase its computing power by 25% to 34%. Separately, FTX new head John J. Ray III, is exploring the possibility of restarting the bankrupt crypto exchange, according to an interview with the Wall Street Journal.
/jlne.ws/3J6OfVT

New FTX Chief Says Crypto Exchange Could Restart
Alexander Saeedy and Alexander Osipovich – The Wall Street Journal
FTX’s new chief executive, John J. Ray III, said he is looking into the possibility of reviving the bankrupt crypto exchange as he works to return money to the failed company’s customers and creditors. In his first interview since taking over FTX in November, Mr. Ray said that he has set up a task force to explore restarting FTX.com, the company’s main international exchange. Although top FTX executives have been accused of criminal misconduct, some customers have praised its technology and suggested that there would be value in rebooting the platform, he said.
/jlne.ws/3iV4FFZ

CoinDesk Broke Big News About FTX. Now the News Is Closer to Home.
Isabella Simonetti – The New York Times
On Nov. 2, the cryptocurrency exchange FTX was worth tens of billions of dollars. Its chief executive, Sam Bankman-Fried, was a billionaire and one of the most prominent people in the crypto world. But that morning, CoinDesk, an online publication that covers cryptocurrencies, published a scoop suggesting that FTX’s sister company, Alameda Research, was on a shaky financial foundation. A cascade of problems for FTX and Mr. Bankman-Fried followed: A little over a week after the scoop, FTX and Alameda filed for bankruptcy. Mr. Bankman-Fried now faces federal fraud charges.
/jlne.ws/3IXj2Ep

Bankman-Fried Says Car Drove into Barricade at Parent’s Home; Lawyers say incident shows sureties identities must be secret; Judge considering media request to release people’s names
Joe Schneider and Robert Burnson – Bloomberg
Three men in a car recently drove into a metal barricade outside of the house of FTX co-founder Samuel Bankman-Fried’s parents, according to court papers filed by his lawyers. “When the security guard on duty confronted them, the men said something to the effect of: ‘You won’t be able to keep us out,”‘ the lawyers wrote. They drove away before the security guard could get the license plate, they said.
/jlne.ws/3Wtuuuq

Crypto Exchange BitMart to Join Custodian Copper’s ClearLoop Network
Will Canny – CoinDesk
Crypto exchange BitMart is set to offer its institutional clients off-exchange settlement by partnering with digital assets custody firm Copper, the company said in a statement on Thursday. BitMart will be joining Copper’s ClearLoop network subject to contracts and the completion of technical integration. Once completed, its institutional clients will be able to trade on the BitMart exchange while their digital assets remain safeguarded in Copper’s custody.
/jlne.ws/3D2cO27

The Crypt, updated; There but for the grace of common sense go we
FT Alphaville
The grim reaper is stalking crypto markets. No degen is safe. These unfortunate souls have already heard knocks on their door. Who will be next?
/jlne.ws/3Wk84fe

Trump NFTs Back From the Dead: Daily Sales Surge by 800%
Andrew Hayward – Decrypt
Donald Trump’s NFT collection has condensed much of the wild volatility of the NFT space into its first five weeks of existence: it faced widespread ridicule but ultimately sold out, then saw prices and sales surge before quickly crashing. Now, sales are suddenly skyrocketing again. Total daily sales volume for the official Trump Digital Trading Cards collection rose nearly 800% from Tuesday to Wednesday, jumping from about $34,000 worth on Tuesday to over $306,000 worth yesterday.
/jlne.ws/3J1HPHn

Rarible Expands NFT Marketplace Builder to Polygon-Based Collections
Cam Thompson – CoinDesk
Non-fungible token (NFT) marketplace Rarible is expanding its white-label marketplace building tool for Polygon-based collections, the company said Wednesday. Creators who mint NFTs on Polygon can now create their own collection-specific storefront for free using Rarible’s infrastructure. Utilizing the platform’s native aggregation tool, creators can also include tokens listed across other secondary marketplaces.
/jlne.ws/3GYpsAz

Politics

McCarthy tries to get out of his box on debt ceiling
Aris Folley – The Hill
House Speaker Kevin McCarthy (R-Calif.) is pressing for Democrats to come to the bargaining table and begin negotiations to address the nation’s debt limit, as he faces pressures within his party to make good on significant fiscal reform.
/jlne.ws/3XLt9QU

How Sam Bankman-Fried’s ties with the Clintons helped him dupe investors
Lydia Moynihan – NY Post
Sam Bankman-Fried cultivated ties with A-list celebrities, politicians and investors alike – but one power couple in particular was key to boosting his profile in influential and moneyed circles. Bill Clinton was paid north of $250,000 when he spoke at the disgraced FTX CEO’s Crypto Bahamas Conference in April, sources told The Post. At the over-the-top tropical shindig, the ex-US president along with former UK Prime Minister Tony Blair were famously photographed onstage next to Bankman-Fried, who appeared wearing shorts and a T-shirt.
/jlne.ws/3XtEN32

The US just hit the debt limit. What happens now?
Madeleine Ngo – Vox
The United States hit the debt ceiling – the total amount of money the federal government can legally borrow – on Thursday as lawmakers continued to clash over negotiations to raise the limit. The Treasury Department is now deploying what it calls “extraordinary measures” to make sure the country can keep paying its bills.
/jlne.ws/3kwo9RT

Jamie Dimon warns Beltway hardliners not to play chicken when it comes to America’s $31 trillion debt ceiling
Christiaan Hetzner – Fortune
Jamie Dimon is worried-not so much about where interest rates are heading or even the economic outlook, but rather Washington’s impending standoff over the debt ceiling. The head of the world’s most valuable lender, J.P. Morgan Chase, fears Beltway hardliners in Congress may risk a Defcon 1-style crisis in financial markets by bringing the country to the very brink of default on the $31 trillion it owes creditors. “I don’t care who blames who,” he told CNBC’s SquawkBox in Davos, where he was attending the World Economic Forum. “Even questioning [the government’s ability to pay its bills] is the wrong thing to do.”
/jlne.ws/3HliN4V

McConnell Assures Against Financial Crisis With Debt-Limit Vow
Laura Litvan – Bloomberg
Senate Republican leader Mitch McConnell dismissed concerns about the US government defaulting on its obligations later this year, when the Treasury Department risks running out of money. “Periodically the debt ceiling has to be lifted and it’s always a rather contentious effort,” McConnell told reporters at an unrelated event in his home state of Kentucky on Thursday. “In the end, I think the important thing to remember is America must never default on its debt. It never has and never will.”
/jlne.ws/3HkTGze

Yellen’s Treasury Dept. halts two federal retirement funds after government hits debt limit
Alessandra Malito – MarketWatch
The Treasury Department is halting investments into two federal retirement funds – the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund – after the U.S. hit its debt ceiling, Treasury Secretary Janet Yellen said in a letter to U.S. lawmakers on Thursday. In her letter, Yellen said she had previously written the week before that the government was expected to hit the debt limit on Jan. 19. As a result, the department was taking “extraordinary measures.”
/jlne.ws/3IXhPgl

U.S. Nears Debt Ceiling, Begins Extraordinary Measures to Avoid Default; Maneuvers give Congress five months to pass legislation raising or suspending the debt limit
Andrew Duehren – The Wall Street Journal
The Treasury Department began taking special measures to keep paying the government’s bills on Thursday as the U.S. bumped up against its borrowing limit, kicking off a potentially lengthy and difficult debate in Congress over raising the debt ceiling. With the federal government constrained by the roughly $31.4 trillion debt limit, the Treasury Department began deploying so-called extraordinary measures.
/jlne.ws/3Wq6FUj

Martin Wolf: in defence of democratic capitalism; The marriage of liberal economics and democracy has brought immense benefits to the world, but faces its toughest test in decades. What needs to be done?
Martin Wolf -Financial Times
In May 1940, as the Nazis invaded the Netherlands, my mother, then 21 years old, escaped from the country in a trawler hijacked by her father, a self-made fish merchant. Her father, one of nine, asked all his wider family to join them on the journey to England. None did: they were all slaughtered in the Holocaust.
/jlne.ws/3J2Ogdb

Despite talk of a ‘vast exodus,’ many Western firms still operating in Russia, Swiss researchers say
James Rogers – MarketWatch
A large number of companies headquartered in the European Union and G7 nations are still operating and investing in Russia, according to research from Switzerland’s University of St. Gallen and International Institute for Management Development. The study by University of St. Gallen professor Simon Evenett and IMD professor Niccolò Pisani reveals “a very limited retreat of EU and G7 firms,” challenging the narrative of a “vast exodus” of Western firms leaving the Russian market after Russia’s invasion of Ukraine.
/jlne.ws/3XnGyi1

Japan’s Chip Czar Backs US Push to Contain Chinese ‘Hegemony’
Takashi Mochizuki, Yuki Furukawa and Yuki Hagiwara – Bloomberg
An influential Japanese politician has thrown his weight behind Washington’s widening campaign to contain China’s chip ambitions, warning that Beijing is part of a group of nations seeking global hegemony and must be curbed.
/jlne.ws/3wfE21y

China Wants to Be the OPEC of Renewables, but There’s Competition
Avi Salzman – Barron’s
Europe just announced plans for a new surge of government spending to subsidize the manufacturing of solar panels, wind turbines, and other kinds of renewable-energy equipment. The new spending will be a boon for industrial companies, and it could also help firms that install renewables bring their supply chains closer to home.
/jlne.ws/3QWPSHC

Regulation

Crypto Lender Nexo Agrees to Pay $45 Million to Settle Regulatory Investigations
Dave Michaels – The Wall Street Journal
Crypto lender Nexo Capital Inc. agreed to pay $45 million to settle claims that its product violated investor-protection laws, becoming the second digital-asset lender in a week to face a major enforcement action. The Securities and Exchange Commission said Nexo’s Earn Interest Product was the type of investment that should have been registered with regulators before being sold to the public. Crypto middlemen such as Nexo recruited huge numbers of customers over the past several years by offering interest rates in excess of 10% to people who would loan out their crypto.
/jlne.ws/3J1zZgM

Commissioner Pham Announces CFTC Global Markets Advisory Committee Meeting and Leadership
CFTC
CFTC Commissioner Caroline D. Pham, sponsor of the Global Markets Advisory Committee (GMAC), announced that the GMAC will hold a public meeting on Monday, February 13, from 9:30 a.m. (EST) to 3:00 p.m. (EST) at the CFTC’s Washington, D.C. headquarters. Commissioner Pham also announced Tom Wipf, Vice Chairman, Morgan Stanley, will serve as the GMAC Chair, and Darcy Bradbury, Managing Director and Head of Public Policy, D. E. Shaw & Co., will serve as Vice Chair.
/jlne.ws/3kqMgBk

Keynote Address by Commissioner Christy Goldsmith Romero at The Wharton School and the University of Pennsylvania Carey Law School
CFTC
It’s great to be back at school. I served as an adjunct professor at Georgetown Law, teaching an advanced securities law and SEC class. Over time, the focus of the class involved more cryptocurrency issues. I then developed and taught a cryptocurrency regulation class at the University of Virginia Law School.
/jlne.ws/400s75w

U.S. CFTC commissioner warns of risks if crypto firms self-certify
Chris Prentice and Hannah Lang – Reuters
A top official with the U.S. Commodity Futures Trading Commission (CFTC) on Wednesday plans to warn lawmakers against allowing cryptocurrency exchanges to self-certify with the agency to list products for trading. The CFTC already allows self-certification for exchanges to list contracts for other products, such as commodities. Lawmakers were considering a similar process as part of proposed crypto legislation being hammered out last year.
/jlne.ws/3ZMh3Zw

‘They’re boiling the frog’: SEC’s new crypto crackdown roils industry
Declan Harty – Politico
Gary Gensler, Washington’s chief cryptocurrency critic, has long been fed up with what he views as the market’s rule-breaking middlemen. Now, his agency is cracking down on the industry. The Securities and Exchange Commission’s move last week to charge two digital asset giants – Gemini Trust and Genesis Global Capital – with selling unregistered products to individual investors was a stark warning to crypto exchanges, lenders and other platforms that they need to follow U.S. securities laws.
/jlne.ws/3GWTZyr

The SEC Seeks to Supplant the Market; Its mandate doesn’t include telling CEOs how to run their companies and investors how to invest.
Phil Gramm and Hester Peirce – The Wall Street Journal Opinion
When the financial crisis ended in the summer of 2009, economic prognosticators were virtually unanimous in predicting a strong, sustained recovery. But Obama-era regulatory policy smothered that recovery and made it the weakest since the Great Depression. Now, with the economy expected to slip into recession, the coming regulatory tsunami far exceeds the excesses of the post-financial-crisis period. Nowhere are the current regulatory excesses more evident than at the Securities and Exchange Commission.
/jlne.ws/3J2aI69

A Proposed SEC Rule is Roiling the VC World
Lizette Chapman – Bloomberg
A potential new rule from the US Securities and Exchange Commission is unsettling the venture capital class. The change would make it easier to sue investors for negligence, and could make VCs more culpable for failures at the startups they back. The rule, designed to address “lack of transparency, conflicts of interest” and other problems in the private markets, could be particularly impactful in a turbulent market environment.
/jlne.ws/3Xqu4WW

Nexo Agrees to Pay $45 Million in Penalties and Cease Unregistered Offering of Crypto Asset Lending Product
SEC
The Securities and Exchange Commission today charged Nexo Capital Inc. with failing to register the offer and sale of its retail crypto asset lending product, the Earn Interest Product (EIP). To settle the SEC’s charges, Nexo agreed to pay a $22.5 million penalty and cease its unregistered offer and sale of the EIP to U.S. investors. In parallel actions announced today, Nexo agreed to pay an additional $22.5 million in fines to settle similar charges by state regulatory authorities.
/jlne.ws/3ZSEr7C

SEC Awards Approximately $18 Million to Three Whistleblowers
SEC
The Securities and Exchange Commission today announced three awards totaling approximately $18 million to three whistleblowers whose information and assistance led to a successful enforcement action.
/jlne.ws/3D1xpDM

SEC Charges Four Individuals for Their Roles in a Prime Bank Fraud
SEC
The Securities and Exchange Commission today announced charges against disbarred attorney and convicted felon John Mark Marino of Delray Beach, Florida, and three other individuals-Jason “Jai” Johnson, Anthony Brown, and Abraham Borenstein-for their involvement in defrauding a senior citizen couple of their retirement funds.
/jlne.ws/3J3XBSe

SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX
SEC
The Securities and Exchange Commission charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd. (FTX), the crypto trading platform of which he was the CEO and co-founder. Investigations as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.
/jlne.ws/3D1BMyT

SEC Charges Caroline Ellison and Gary Wang with Defrauding Investors in Crypto Asset Trading Platform Ftx
SEC
The Securities and Exchange Commission charged Caroline Ellison, the former CEO of Alameda Research, and Zixiao (Gary) Wang, the former Chief Technology Officer of FTX Trading Ltd. (FTX), for their roles in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform co-founded by Samuel Bankman-Fried and Wang. Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.
/jlne.ws/3iOixSy

Investing and Trading

Ultra-Rich Flip Palm Beach Homes to Score as Much as 86% Returns; Buyers are paying up to land one of the scarce move-in-ready properties in the ritzy South Florida town.
Jennifer Epstein – Bloomberg
Palm Beach’s wealthy home-sellers are scoring major profits, with some properties changing hands in recent weeks for nearly double what they went for just a year or two ago. A five-bedroom beachfront house at 6 Via Los Incas sold for $66 million last month, an 86% gain from the $35.4 million an entity tied to billionaire Josh Harris paid for it in June 2021. Earlier in December, designer Tom Ford bought the modern 241 Jungle Road for $51 million, 42% more than Motive Partners founder Rob Heyvaert’s $35.8 million purchase price in August 2021.
/jlne.ws/3GQMvNH

US Investor Memes Don’t Have the Same Currency in China
Vlad Savov – Bloomberg
We woke to the news this morning that Ryan Cohen, one of the pied pipers of the meme stock frenzy in recent years, had accumulated a sizable stake in Alibaba Group Holding Ltd. He wants China’s biggest e-commerce operator to buy back more of its shares, and the news might have been expected to deliver a seismic impact.
/jlne.ws/3D3mWaZ

Smart beta rewards discerning devotees in 2022; Momentum, value and ‘low investment’ rack up returns of 11-15% while broad markets lost a fifth of their value
Emma Boyde – Financial Times
Smart beta strategies, which aim to outperform traditional broad market capitalisation-weighted indices by filtering them according to certain factors, delivered returns as high as 15 per cent last year even as major markets fell by a fifth.
/jlne.ws/3XoAC8t

Hargreaves Lansdown launches digital voting service; Platform follows rivals in allowing its customers to vote as shareholders
Rafe Uddin – Financial Times
Hargreaves Lansdown has launched a digital service to make it easier for customers to cast their votes as shareholders, following moves by its competitors to boost participation among individual investors. Clients of the UK’s largest retail investment platform can now vote and request to attend meetings online. The new system replaces a manual one which relied on emails, webchat or a phone call to the platform’s help desk.
/jlne.ws/3XrmeMY

Super passive goes ballistic; active is atrocious; We’re sure next year will be different though
Robin Wigglesworth – Financial Times
With apologies to Mary Poppins, the Scottish Sun sub-editor Paul Hickson, and all the people who suggested the above headline would be the best title to a book on index funds. Here is the final result of the asset management’s fund flow contest in 2022, from EPFR data.
/jlne.ws/3iXk2O3

SPAC Deals Shrink After Speculation Wanes; Small mergers to take startups public are replacing the splashy deals of 2021
Amrith Ramkumar – The Wall Street Journal
Some of Wall Street’s most speculative investors are scaling back their ambitions, doing deals that are a 10th the size of their flashy, top-of-market acquisitions.
/jlne.ws/3D0pg2k

Sustained Demand for New CD Issuance Drives Year-over-Year Increase in U.S. Corporate CUSIP Request Volume in 2022
Municipal Volumes Sink as Interest Rates Rise
CUSIP Global Services
CUSIP Global Services (CGS) today announced the release of its CUSIP Issuance Trends Report for December 2022. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity over the next quarter, found monthly decreases in request volume for new corporate and municipal identifiers, while year-over-year volumes for U.S. corporate securities increased.
/jlne.ws/3wfP0UM

Environmental, Social and Corporate Governance

Fed releases pilot climate scenario analysis details
Todd Phillips – Green Central Banking
The Federal Reserve has released the scenarios that the largest US banks will have to consider to determine their resilience to climate change. The pilot climate scenario analysis, as the Fed has called it, includes both qualitative and quantitative considerations covering governance and risk management practices, measurement methodologies, risk metrics, data challenges, and lessons learned. However, only six banks are being asked to take part. The banks will be evaluated on their resilience to physical risk and transition risk. Physical risks will be considered under six scenarios: three of which include severe hurricanes hitting the north-eastern US in 2050, and three of which consider shocks for their real estate portfolios in another region of the country of the bank’s choosing. Transition risks will be considered under two scenarios from the third phase of scenarios developed by the Network for Greening the Financial System.
/jlne.ws/3GYjteU

Philanthropy Asia Alliance Joins World Economic Forum In ‘Giving To Amplify Earth Action’ (Gaea) Initiative
Temasek Trust
Combating climate change is a race against time and Asian countries are much more vulnerable to natural disasters induced by climate change; GAEA aims to close US$100+ trillion gap for equitable climate and nature solutions by forging new, diverse public-private-philanthropic partnerships; PAA will scale impact of its existing climate initiatives and deepen strategic partnership with WEF to accelerate climate and nature action in Asia by joining GAEA; GAEA’s first Asia-focused key deliverable is a climate philanthropy report to be launched later this year by PAA in partnership with WEF. The Philanthropy Asia Alliance (PAA), a Temasek Trust initiative focused on collaborative philanthropy, has joined the Giving to Amplify Earth Action (GAEA) initiative by the World Economic Forum (WEF), its strategic partner, which aims to close the US$100+ trillion gap for equitable climate and nature solutions by forging new, diverse public-private-philanthropic partnerships.
/jlne.ws/3J19mZu

New Initiative to Help Unlock $3 Trillion Needed a Year for Climate and Nature
weforum.org
Philanthropic giving totalled $810 billion in 2021, but just 2% went towards reducing emissions; New initiative, Giving to Amplify Earth Action (GAEA), will leverage philanthropic capital to help generate the $3 trillion needed each year from public and private sources to tackle climate change and nature loss; GAEA is a ground-breaking initiative supported by more than 45 major philanthropic, public and private sector partners. The World Economic Forum, supported by more than 45 partners today launched the Giving to Amplify Earth Action (GAEA), a global initiative to fund and grow new and existing public, private and philanthropic partnerships (PPPPs) to help unlock the $3 trillion of financing needed each year to reach net zero, reverse nature loss and restore biodiversity by 2050.
/jlne.ws/3ZJw8et

Op-Ed: If you bank with the Big 4, your money has an alarming carbon footprint
Kat Taylor And Bill Mckibben – Los Angeles Times
As the world warms, expect a lot more heat aimed at global banks, in particular at the biggest American ones. That’s because they’ve allowed themselves to become the ultimate and most powerful enablers of the fossil fuel industry – and because, in recent weeks, some of their peers in the rest of the world have begun to move in the right direction. It’s easy to see that Exxon has been on the wrong side of the climate equation, but you have to dig deeper to see why JP Morgan Chase or Bank of America or Wells Fargo or Citi share a similar responsibility. Basically, it’s because the money in their charge – your money if you’re a customer – is lent to the oil and gas industry, and because these banks, with assets of about $10 trillion, use their underwriting capabilities to issue corporate debt to these companies. Sustainability and energy-finance scholars in the United Kingdom and Ireland calculate that 90% of new capital for fossil fuel companies derives from debt finance – bank loans and bond issuances.
/jlne.ws/3XLyvM4

How to navigate the new energy security world
Lisa Fischer, Maria Pastukhova – E3G
Prioritising fossil fuel supply is no longer an effective way of managing energy security. In this new energy context, energy security will be determined first and foremost by the ability of countries to rapidly dial down fossil fuel demand and to avoid making growth trajectories dependent on fossil fuels. Energy security management at global or national level needs to gear up for this shift. Here is how. Energy security is a function of supply and demand – it requires managing both together. This is not a new insight. In fact, the energy efficiency measures in response to the 1970s oil crises curbed global energy consumption. But they did not prevent the current energy crisis.
/jlne.ws/3Hmbytv

BMW Aims to Speed Solid-State Batteries in Solid Power Deal; Carmaker to produce prototype battery cells with Solid Power; Cell manufacturing to begin in first half of year in Munich
Gabrielle Coppola – Bloomberg
BMW AG is trying to speed development of solid-state batteries by manufacturing prototype cells in partnership with Solid Power Inc. at its research and development facility in Munich. The carmaker will begin producing cells in the first half of this year, with a goal to develop battery cells large enough to test in a vehicle before 2025, Peter Lamp, BMW’s head of battery R&D, said in an interview.
/jlne.ws/3GXKGhJ

Basel Committee issues clarifications on climate-related financial risks
Todd Phillips – Green Central Banking
The Basel Committee for Banking Supervision (BCBS) has explained in more detail how climate risks may be captured in the existing Basel framework. The clarifications, published in December, were released to facilitate consistent interpretation of existing Pillar 1, or capital adequacy, standards. The BCBS noted that the clarifications are not a change in standards, as climate-related risks fall into the traditional risk categories covered by the Basel framework. The clarifications explain that banks should include climate risk in credit and market risk assessments, monitor climate risks on an ongoing basis, and use a conservative approach to assessing climate risks. They also instruct national regulators to consider jurisdiction-specific factors in several areas. Data limitations are explicitly acknowledged and institutions are encouraged to improve their capacity to assess risks when more data becomes available.
/jlne.ws/3Xnzp1i

Asset owners widely adopting sustainable investment; 2022 global survey findings from asset owners
FTSE Russell
Our 2022 global asset owner survey findings; Each year we conduct a survey to better understand asset owners’ attitudes, priorities and decisions around sustainable investment. This year’s report compares and contrasts the findings from 2021 to 2022. With many changes taking place around the world, we wanted to highlight the shift in asset owners’ decision-making in line with sustainability. As sustainable investing is the future of investing, take a look at the priorities for asset owners overall, and by region.
/jlne.ws/3ZNpJ1R

UK regulator’s ESG boss says greenwashing fines ‘will come’
David Ricketts – Financial News
The Financial Conduct Authority’s environment, social and governance director has said that the regulator will eventually start fining greenwashers, but only after it has finished putting in “guardrails” for the funds sector. Sacha Sadan, who was appointed to the new role at the FCA in April 2021, told Financial News that the watchdog did not “want to go straight for the stick” by handing out hefty penalties for firms overstating their ESG credentials.
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Greta Thunberg: It’s ‘absurd’ that we think the oil companies causing the climate crisis have a solution to it
Rachel Koning Beals – MarketWatch
Swedish climate campaigner Greta Thunberg, age 20 and arguably the face of a generation that wants to roll back decades of reliance on oil and gas by means of alternative energy sources, had a message Thursday as she mingled with the corporate and political bigwigs meeting in Davos, Switzerland: Stop listening to the companies responsible for “fueling the destruction of the planet.”
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CEOs Who Are All Talk and No Action on Inclusion Still Benefit; So-called diversity-washing attracts investors to companies even when hiring results lag, study shows.
Jeff Green – Bloomberg
Corporate leaders who talk the most about diversity may benefit from greater investment in their companies by socially conscious funds, even if hiring and promotion efforts are lackluster. The biggest braggarts may benefit the most from what researchers call “diversity-washing.” Those are the conclusions of a study of almost all US public companies from 2008 to 2021 by researchers at Stanford University and three other universities.
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Investing in ESG-friendly banks; Lenders are promising to limit their fossil fuel lending and focus on green financing – if we can trust them
Alice Ross – Financial Times
If you’re a sustainable investor, can you own any banks? They’re not the first thing that comes to mind. Environmentally, they are big lenders to the fossil fuel industry. Socially, they played a large role, to put it mildly, in the financial crisis by taking on too much risk. Governance-wise, they have been fined again and again by regulators for money laundering, trading scandals, you name it. But with the bleak landscape for investment returns that is 2023 now upon us, some fund managers think that they can justify including some banks in their sustainable funds.
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Take Back That Empty Plastic Bottle. Collect Cash.; From 2025, consumers who return their empty drinks bottles and cans in England will be able to recoup some of their money.
Olivia Rudgard – Bloomberg
Finished with that soft drink? From 2025, consumers in England will be able to claim some of their money back if they return the empty plastic bottle or can for recycling. The deposit return scheme, as it’s known, aims to reduce littering of drinks containers by 85% in England, Wales and Northern Ireland three years after launch. Similar programs have been in operation for decades in countries including Norway and Sweden, where they’ve helped to boost recycling and cut waste. In Norway, the recycling rate for plastic bottles is 97%. In the US, “bottle bills” in several states including California and Iowa make comparable provisions, offering refunds of between 5 and 15 cents. A return scheme goes into effect in Scotland as soon as August.
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Fed scenario analysis, World Bank reform push and ECB deadline: 2023 in green central banking
David Clarke – Green Central Banking
The year ahead is likely to bring a plethora of new announcements and initiatives as climate action by central banks continues to gather pace. Although this will inevitably include some surprises, certain key events have already been set in train. The Federal Reserve’s first foray into climate scenario analysis, a battle over the future of the World Bank and a European Central Bank (ECB) deadline regarding banks’ climate risk management are among the upcoming milestones. Fed to conduct climate stress scenario pilot; Early in 2023, the Fed will commence an inaugural climate scenario analysis exercise aimed at assessing long-term, climate-related financial risks to the largest banks in the US. Details of the scenarios to be used have recently been released.
/jlne.ws/3iVBAdG

UK Offshore Wind Push at Risk of Stalling Without Higher Prices; Prices must increase to keep UK wind growth on track; Wind power is central to UK climate and energy policies
Rachel Morison and Will Mathis – Bloomberg
The UK’s next auction of renewable-energy contracts will be make or break for the country’s burgeoning offshore wind industry. Wind power has been getting cheaper for years, but that may have to change as the industry copes with rising manufacturing and financing costs. Unless prices increase from last year’s record low, developers may be reluctant to accept the long-term agreements, said Anna Borg, chief executive officer of Swedish utility Vattenfall AB, a major player in UK offshore wind farms.
/jlne.ws/3wfH1Hi

Investor Jeff Ubben questions ESG funds in second act as activist; ValueAct founder launches campaign for changes at Bayer while claiming environmental aims
Patrick Temple-West and Ortenca Aliaj – Financial Times
Jeff Ubben founded ValueAct Capital, one of the best-known activist investors on Wall Street. When he left it in 2020 he declared that “finance is, like, done”. Yet he has now returned to activism in a big way. Last week he disclosed a EUR400mn stake in Germany’s Bayer and called for a new chief executive from outside the company.
/jlne.ws/3D3YCpw

Institutions

The Bank of Japan’s policy predicament; Kuroda, or his successor, must solve challenges around yield curve control
Financial Times
If Haruhiko Kuroda hoped to engineer a smooth handover to his successor as governor of the Bank of Japan then he has blown it already. Kuroda’s decision in December to relax, but not abandon, his policy of capping the yield on Japanese 10-year bonds at zero per cent has given markets what they love best: a vulnerable, official peg against which to speculate. This half-pregnant policy – reaffirmed at Wednesday’s meeting of the central bank’s policy board – will be a vexed legacy for whoever comes next.
/jlne.ws/3QSHaKg

JPMorgan CEO Jamie Dimon Gets $34.5 Million for 2022
David Benoit – The Wall Street Journal
JPMorgan Chase & Co. awarded Jamie Dimon $34.5 million for his 2022 compensation, the bank disclosed Thursday. Mr. Dimon had received $34.5 million for his 2021 work, along with a $50 million retention bonus that he could earn for staying in his seat at the head of the nation’s biggest bank. Mr. Dimon, 66 years old, has led the bank since 2005 and is widely expected to stay for at least the roughly four more years that would earn him the bonus.
/jlne.ws/3ZT7s3k

UBS Braces for Hard Landing in US Credit, Favors European Debt; Riskier parts of US debt markets are showing warning signals; Favors bonds from sectors more insulated from default risks
David Caleb Mutua – Bloomberg
UBS Group AG is recommending investors to buy European credit over US debt amid signs of distress in the US loan markets, cracks emerging in private credit and a potentially severe downside risk in US high-yield debt. “We acknowledge US high yield is better positioned – mainly on the shift in credit quality,” UBS analysts led by Matthew Mish wrote in a note on Wednesday. “However, we still believe credit is heading for a hard landing.”
/jlne.ws/3kwRHPn

Asia Hedge Funds Avert Disaster on Scale of Financial Crisis With China’s Reopening; Percentage of funds ending 2022 positive more than doubled; Funds were heading for their second-worst year until October
Bei Hu and Nishant Kumar – Bloomberg
Asia hedge funds narrowly averted their first year of double-digit losses since the 2008 financial crisis after China’s sudden easing of Covid restrictions spurred a late market rally. Funds including those run by Aspex Management, Triata Capital, Yunqi Capital and Brilliance Asset Management pared a significant portion, if not all, of their 2022 losses during the final two months of last year. A Eurekahedge Pte gauge of regional hedge fund returns finished the year down 8.4%, after losses exceeding 13% through the end of October put it on course for the second-ever annual double-digit decline.
/jlne.ws/3J1XxlL

JPMorgan rules out more special pay awards for CEO Jamie Dimon; Longest-serving boss of Wall Street bank earned $34.5mn for 2022
Joshua Franklin – Financial Times
JPMorgan Chase said it would not give longtime chief executive Jamie Dimon special awards “in the future” following investor pushback to a $50mn award last year. The bank made the commitment in a regulatory filing on Thursday, which also showed the Wall Street giant paid Dimon $34.5mn for his work in 2022. This was unchanged from the prior year despite the company suffering its steepest decline in profits in more than a decade.
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Billionaire Chris Hohn’s 13-Year Winning Streak at TCI Ends With Fund Slumping 18%; Sell off in equities hurt bets such as Alphabet and Microsoft; Last year’s loss was the second since the fund started in 2004
Nishant Kumar – Bloomberg
Famed activist investor and philanthropist Chris Hohn’s fund lost money last year, breaking its streak of 13 straight profitable years as stocks tumbled. His TCI Fund declined by 18%, according to a person with knowledge of the matter. It was the fund’s second annual loss since it launched in 2004, said the person, who asked not to be identified because the details are private. The loss was caused by the firm’s top bets such as Alphabet Inc and Microsoft Corp., which plunged as growth stocks sold off amid rising interest rates last year.
/jlne.ws/3Wve70u

Northern Trust sees net income drop 13%; The bank saw profits decline 62% for Q4 compared to the same period the previous year, although net interest income rose on the back of higher rates.
Laurie McAughtry – The Trade
Northern Trust reported its Q4 results for 2022 this week, and the bank has followed the prevailing Wall Street trend of depressed performance, albeit with a few bright spots. Net interest income rose by 5% to $550 million compared to the previous quarter, largely due to higher rates. However, revenues declined by 13% compared to the previous quarter, and 8% compared to the previous year, falling to $1.53 billion.
/jlne.ws/3ZNHWMK

Fireside Friday… with RBC’s Hayley McDowell; The TRADE sits down with EU equity electronic sales trader and market structure consultant at RBC Capital Markets, Hayley McDowell, to discuss the state of play of the Czech Mifid II compromise approved at the end of last year.
Annabel Smith – The Trade
Would you consider the recent Mifid compromise that was approved a success? The European Council’s agreement on its approach is certainly a breakthrough in the Mifir Review process. It marks another step towards regulatory certainty for market participants after a prolonged period of uncertainty post-Brexit.
/jlne.ws/3IZl9HO

Work & Management

Pivoting into tech seemed thrilling in 2018. Here’s what has taken its place
George Anders – LinkedIn
Kendra Sinclair has a lot to savor from her 13-year career at Meta’s Facebook unit, where she was part of a thriving social-impact team that worked with nonprofit organizations around the world. But when that role vanished last November – as part of a massive company layoff – it didn’t take long for her to find an exciting new path. Today Sinclair owns and runs a charmingly renovated motel about two hours north of New York City. She and her husband have packed the property with hand-restored vintage furniture – plus all kinds of 1970s memorabilia. (Fleetwood Mac albums, anyone?)
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CEO of ChatGPT maker responds to schools’ plagiarism concerns: ‘We adapted to calculators and changed what we tested in math class’
Aaron Mok – Business Insider
Sam Altman – the CEO of OpenAI, which is behind the buzzy AI chat bot ChatGPT – said that the company will develop ways to help schools discover AI plagiarism, but he warned that full detection isn’t guaranteed. “We’re going to try and do some things in the short term,” Altman said during an interview with StrictlyVC’s Connie Loizos. “There may be ways we can help teachers be a little more likely to detect output of a GPT-like system. But honestly, a determined person will get around them.”
/jlne.ws/3JjHZu3

For CEOs at Davos, Efficient, Profitable Operations Take Center Stage
Chip Cutter – The Wall Street Journal
Results. It is the outcome executives say they are seeking, demanding-and selling. Companies say they are giving priority to profitability and efficiency amid concerns about macroeconomic conditions, whether it is to reach their strategic goals, slim down their workforces or streamline operations. In many cases, executives say they are looking to deploy new technology to help cut costs, offering a potential boon for sellers of such software.
/jlne.ws/3wAn4vb

Tech Workers Talk About Getting Laid Off; A surge in job cuts has upended the lives of many people who thought their careers were headed in the right direction.
Michael Tobin and Jo Constantz – Bloomberg
I was on the trust and safety team for Messenger and Instagram at Meta. It was my dream company. Our managers and people we worked with told us not to worry about layoffs, because we’re an important team. And because I was a new grad, I was one of the lowest-paid employees at the company. I thought that if they had to let people go, it wouldn’t be me.
/jlne.ws/3Hj0OMj

Laid-Off Tech Workers Are Just What the Auto Industry Needs; New vehicles are so software-centric that Detroit could become the biggest winner as Silicon Valley sheds jobs.
Gabrielle Coppola – Bloomberg
While the Consumer Electronics Show in Las Vegas is best known as an annual excuse to marvel at outlandish gadgets, Dirk Hilgenberg, head of Volkswagen AG’s software unit, came to this year’s show in early January looking for a different kind of tech product: software engineers. The 58-year-old German auto executive turned his CES booth, a colorful stack of shipping containers, into a makeshift hiring hall with the words “JOIN US” emblazoned across the side.
/jlne.ws/3ko3kYx

Capital One Cuts More Than 1,100 Tech Jobs; Credit-card firm has seen an ‘overall tech transformation’; Affected employees can apply for other roles across company
Jennifer Surane – Bloomberg
Capital One Financial Corp. eliminated hundreds of technology positions this week, the result of the credit-card giant spending years investing in systems meant to improve its efficiency. More than 1,100 workers were affected, according to a person familiar with the matter who asked not to be identified discussing a private matter. Those employees have been invited to apply for other roles in the bank, with hundreds of open positions across the company, Capital One said in an emailed statement Thursday.
/jlne.ws/3whp8YA

Mass Tech Layoffs Unwind Only About a Year of Pandemic Hiring
Brody Ford – Bloomberg
Every week seems to bring more mass layoffs in the technology industry to the point that it’s hard to remember how we got here. The recent job cuts are large and should cause some necessary self-reflection among tech executives. There’s quite a bit of that happening in front of audiences this week at the World Economic Forum in Davos, Switzerland. But the cuts pale in comparison to the frenzied hiring that took place for most of the Covid-19 pandemic. In many cases, the layoffs will rewind the clock only about a year.
/jlne.ws/3DoYGjZ

ChatGPT Sounds Exactly Like Us. How Is That a Good Thing?
Stephen Mihm – Bloomberg
In 1950, Alan Turing, the British computer scientist who developed techniques for cracking the Enigma code during World War II, wrote an article in which he posed a seemingly absurd question: “Can machines think?” The debut late last year of the eerily lifelike ChatGPT appeared to move us closer to an answer. Overnight, a fully formed silicon-based chatbot stepped from the digital shadows. It can craft jokes, write ad copy, debug computer code, and converse about anything and everything. This unsettling new reality is already being described as one of those “tipping points” in the history of artificial intelligence.
/jlne.ws/3CYeYA4

Ex-Credit Suisse Bankers Weigh Legal Fights Over Bonus Clawbacks; Some bankers may try to fight three-year commitment for awards; Credit Suisse this week announced fresh upfront cash awards
Hugo Miller, Chanyaporn Chanjaroen and Marion Halftermeyer – Bloomberg
A year ago, Credit Suisse Group AG handed its bankers about $870 million of cash bonuses with the caveat that they had to stay for three years or pay some of it back. That second part might be trickier than the bank’s leaders hoped.
/jlne.ws/3Xo4TVh

Dimon Says Remote Work ‘Doesn’t Work’ for Younger Staff, Management; The JPMorgan chief said at Davos that working from home reduces “spontaneity,” even as Wall Street leaders acknowledge that full-time office attendance is a thing of the past
Matthew Boyle – Bloomberg
Jamie Dimon said working from home “doesn’t work” for younger staff or bosses, the Wall Street titan’s latest salvo against remote work. “It doesn’t work for young kids or spontaneity or management,” JPMorgan Chase & Co.’s chief executive said in an interview with CNBC Thursday at the World Economic Forum in Davos, citing researching and coding as fields that can be done remotely. “There are jobs where it is reasonable.”
/jlne.ws/3kpYYAh

Four-Day Week May Be the Recipe to Avoid Burnout and Boost Productivity; Study shows four-day week reduces burnout, improves sleep; Randstad CEO says flexibility at work is a business imperative
James Regan – Bloomberg
Boosting flexibility at work through changes such as a four-day week may both raise productivity and reverse the growing trend toward burnout, according to a panel of experts at the World Economic Forum in Davos.
/jlne.ws/3GREmZn

Wellness Exchange

More Young Americans Are Dying, But Not From Vaccines; The increase started well before Covid-19 shots arrived, according to mortality data, and has plateaued since.
Justin Fox – Bloomberg
For most people, the on-field cardiac arrest of Buffalo Bills safety Damar Hamlin during the Jan. 2 Monday Night Football game was a frightening potential tragedy followed by what is now looking like a happy ending. A vocal minority, though, seized on it as purported evidence of the terrible toll mRNA Covid-19 vaccines have exacted on otherwise healthy young Americans.
/jlne.ws/3Hj1xgv

China plays down COVID outbreak with holiday rush at full tilt
Liz Lee and Alessandro Diviggiano – Reuters
People across China crowded into trains and buses for one of its busiest days of travel in years on Friday, feeding fears of new surges in a raging COVID-19 outbreak that officials say has hit its peak. In comments reported by state media late Thursday, Vice Premier Sun Chunlan said the virus was at a “relatively low” level, while health officials said the number of COVID patients in hospital and with critical conditions was on the decline.
/jlne.ws/3ZSCV5q

Covid Catastrophe Looms for China’s New Year Travelers
Bloomberg News
The sudden dismantling of China’s Covid Zero restrictions in December means hundreds of millions of people are headed home for the Lunar New Year holiday for the first time since 2019. The crush of travel risks supercharging the world’s biggest Covid outbreak, spreading it to every corner of the country.
/jlne.ws/3iPLMnZ

Here’s How Long You’re Contagious With The Latest COVID Variant; It can be hard to know if you’re putting others at risk, but there are rules you can follow to help protect those around you. Jillian Wilson – Huffpost
Nobody wants to give COVID-19 to a loved one (or anyone). But determining just how long you’re contagious isn’t an exact science, as it can vary from person to person. So you may have a hard time figuring out whether you’re putting others at risk. However, there are rules you can follow and things you can know to help protect those around you – and to ease other concerns about your infection, too.
/jlne.ws/3ZTYO4C

Regions

Coffee Prices Poised to Climb With Bean Shortfall Nearing Third Year; Volcafe says Brazil’s arabica crop won’t reach potential; Indonesia is expected to see worst robusta crop in decade
Marvin G Perez, Dayanne Martins Sousa and Isis Almeida – Bloomberg
The world will face coffee shortages for an “unprecedented” third year in a row due to lower-than-expected harvest from top grower Brazil, according to coffee trader Volcafe. Global supply will trail demand by 3.8 million bags in the next season, with robusta beans hitting a record shortfall amid surging demand for the variety used in instant coffee and as a blend in espressos, the ED&F Man division said in a January report. The shortfall comes after demand in the current season is seen as outstripping supply by 4.5 million bags, according to the firm.
/jlne.ws/3D1kXnG

Secret Police Probe Nigerian Central Bank Boss Amid Standoff; Allegations against Godwin Emefiele include money laundering; Defenders say politicans targeting governor over cash policy
William Clowes – Bloomberg
Nigeria’s secret police are investigating central bank Governor Godwin Emefiele for alleged financial crimes related to the nation’s multibillion-dollar public lending programs, according to a court affidavit. The banker’s defenders say politicians opposed to recent currency reforms are behind the probe.
/jlne.ws/3ky0OPu

Denmark Picks Kettel Thomsen as Governor to Defend Krone Peg; Kettel Thomsen of European Investment Bank replaces Rohde; Central bank’s main mandate is to protect krone’s peg to euro
Christian Wienberg – Bloomberg
Denmark has picked Christian Kettel Thomsen, 63, as its new central bank governor to defend the strengthening Danish krone’s peg to the euro. The economist, currently a vice president at the European Investment Bank, will start Feb. 1 and oversee the central bank’s main policy mandate of upholding the peg through monetary-policy tightening by the European Central Bank.
/jlne.ws/3XqlZlg

After coating Midwest with snow, large storm aims for Northeast; 4-8 inches expected in parts of New England
John Bacon, Marina Pitofsky and Jorge L. Ortiz – USA Today
Millions of Americans were under a winter weather warnings or advisories Thursday as a storm that hammered Denver with the biggest two-day January snowfall in more than 30 years blanketed the Midwest before heading for the Northeast. Freezing rain and heavy snow are forecast for the Northeast, with the region from Vermont to southern Maine expected to receive 4 to 8 inches of snow by the end of Friday.
/jlne.ws/3iUCKGf

Byron Leftwich Officially Fired as Bucs OC; Several Coaching Changes Expected
Rob Goldberg – Bleacher Report
The Tampa Bay Buccaneers have fired offensive coordinator Byron Leftwich after their 31-14 playoff loss to the Dallas Cowboys, the team announced. Rick Stroud of the Tampa Bay Times first reported the news. Ian Rapoport and Mike Garafolo of NFL Network reported Georgia offensive coordinator and former Buccaneers OC Todd Monken could be a target to replace Leftwich in Tampa.
/jlne.ws/3weoCuq

Airlines Are Bumping a Lot More Passengers Lately; Fuller flights and late switches to smaller planes are among the culprits
Allison Pohle – The Wall Street Journal
More U.S. passengers are being bumped from their flights, reversing steady industrywide improvement and adding to the broader frustrations many have with airlines. The Wall Street Journal’s annual airline scorecard found that airlines have been bumping fliers more often than the previous year, and the comparable prepandemic period. This happens when more people are scheduled to fly than there are available seats.
/jlne.ws/3WqrIWI

Miscellaneous

Are You Storing Your Wine Properly? Here’s What It Can Cost-and Save-You
Lettie Teague – The Wall Street Journal
January is the month most commonly devoted to the making-and breaking-of resolutions. Mine was to improve my wine storage. My current storage conditions consist of two large wine racks for everyday wines in a (perpetually cool) basement and a large wine refrigerator for the fancier stuff. Wine-storage professionals refer to that fridge as a “free-standing cellar”-one of many facts I learned recently in conversations with pros as well as impassioned amateurs who had built their own cellars.
/jlne.ws/3QWDZRJ

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First Read Hits & Takes John Lothian & JLN Staff Yesterday morning I checked the status of my investment accounts after the market opening as I often do and I was like, "WOW!" But then I saw there were problems with some of the opening auctions at the NYSE and...

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