Crypto’s Hotel California Traps the Winklevoss Twins

Jan 11, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

Yesterday I received this response from a reader to whom I had sent an invoice. As a reminder, we are sending out invoices to firms and individuals who are regular readers of JLN.

“I received a quasi-invoice from you via email – which given the clear, concise prose and thoughtful sentiment – is almost surely (95% confidence interval) from you guys. However, old risk-management habits die hard so my 5% radar has me checking as I don’t recall having the voluntary invoice in the past, and this would be a helluva elegant way to scam a bunch of traders (and probably good for a few laughs).

If you did just send out annual invoices or requests for annual support, please let me know. Happy to pay the full boat for your daily amalgamation of pertinent and interesting articles, and your well written (and timed) comments.”

I did not win the MegaMillions lottery last night, which rolled over after no one matched the numbers. But I did not win because I did not buy a ticket. In order to win, you have to play the game. My odds of winning without a ticket were only a little worse than my chance of winning if I had bought a ticket, but still, you have to play the game to win.

Starting a technology firm in Dublin was always a good idea, but now it might be even better, as there is plenty of office space available. According to a Bloomberg story, so-called “grey-space” or surplus office space that is leased but not used, accounts for about 32% of all available supply and is set to increase further. Overall vacancy rates in Dublin stand about 13%. So it sounds like a good time to get a sublet in Dublin right now.

Of course Dublin is not the only city to feel the sting of tech layoffs. San Francisco has even more empty office space and so does New York City because of layoffs at technology companies, Bloomberg reported.

It is a good thing Tom Brady has a day job, because it appears that his investment in FTX and that of New England Patriot Owner Robert Kraft, and of Brady’s ex-wife Gisel Bundchen, are completely wiped out, according to a Business Insider report. Brady reportedly owned 1.1 million common shares of FTX, while Bundchen owned 700,000.

ABN AMRO is looking for talent and it is opening its “Global Clearing Talent Programme.” ABN AMRO says: “Do you want to be part of an international company, a global leader? Work for a business that plays a vital role in financial markets around the world. Do you want to work with the newest technologies, find new markets, clients or products? Then the ABN AMRO Clearing Global Talent Programme might be just what you are looking for.”

Dorothy DeWitt, the former director of the Division of Market Oversight at CFTC, who joined the Office of Senator Kirsten E. Gillibrand to advise on digital assets, technology, finance, banking, trading and markets, securities, and commodities, is starting a new position as chief finance counsel at the United States Senate.

David Augustsson recently decided to leave Nasdaq. His former role as head of European Communications at Nasdaq is open and you can apply HERE.

It was great to see Alex Teng interview veteran options trader and educator Dan Keegan for the Options Discovery series, which is part of The Spread video series. Dan ran through some great trading examples on the screen, which is something we don’t normally do, but it really helped visualize some of the option strategies the two were discussing.

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

++++

Bringing Efficiency to Index Licensing Pricing is the Goal of BenchMarket and Bruce Traan
JohnLothianNews.com

Bruce Traan is a 15+ year veteran of the Cboe who had jumped into the crypto world, but now has created his own firm to bring fairness in pricing to firms needing the licensing services of an index provider. The uneven pricing of the index provider world is what he seeks to solve with his new enterprise, BenchMarket.

Watch the video »

++++

Options Discovery Episode 12: Spread Trading; Dan Keegan of Optionthinker.com Talks Call and Put Spreads With JLN’s Alex Teng
JohnLothianNews.com

In this episode of Options Discovery, Alex Teng introduces some bearish spread strategies with the bear call spread and the bear put spread. Alex also talks to Dan Keegan, former Cboe trader and lead educator at Optionthinker.com, to dive deeper into these strategies. Dan also delivers insight into his experience as a trader and options educator.

Watch the video »

++++

Italians Flock to London Despite Brexit; The number of Italian-born people living in the UK has doubled from a decade ago, making them the most common foreign nationality in the capital.
Alice Kantor – Bloomberg
A growing number of Italians are moving to the UK, even as citizens of other European countries are driven away by Brexit and a recession that could be the longest on record. There were 280,000 Italian-born people living in the UK in 2021, according to the Office for National Statistics. That’s more than double the number of a decade ago and nearly 40% higher than in 2016, the year Britain voted to leave the European Union.
/jlne.ws/3Zu1HZG

****** Someone has to replace the Russians in London.~JJL

++++

Samurai Swords and Ancient Scrolls Hit by Global Energy Crisis; Tokyo National Museum’s power bill is doubling, director says; Energy is needed to preserve artifacts at right temperature
Shoko Oda – Bloomberg
The energy crisis isn’t just getting expensive for households and businesses in Japan. Surging electricity bills are also weighing on the keepers of the nation’s samurai swords, ancient scrolls and other art treasures. The Tokyo National Museum, considered the oldest and largest such institution in Japan, expects utility costs to more than double this year, according to an article written by museum director Makoto Fujiwara for Bungei Shunju magazine. The expense is crucial for protecting the museum’s 120,000 priceless objects from Japan and other parts of Asia.
/jlne.ws/3kaI9tb

***** No matter how you slice it, there is no way to Kill (the energy) Bill.~JJL

++++

Growing Antisemitism in the US Is Seeping Into the Workplace; It’s not just high-profile incidents. Jewish workers say they’re experiencing more overt discrimination.
Arianne Cohen – Bloomberg
At a recent working lunch, Renee Fellman was told that someone wouldn’t network with her because she’s Jewish. Fellman, who’s a corporate turnaround consultant based in Portland, Oregon was stunned – not by the mere existence of antisemitism, she said, but that her brush with it was so overt.
/jlne.ws/3GswNYO

***** Wrong is wrong. Treat people the way you want to be treated, with respect, equality and justice.~JJL

++++

The EU’s pioneering carbon border tax; Brussels’ levy is a step forward but implementation will be tricky
The editorial board – Financial Times
After a year of intense talks, and a series of marathon negotiations in the lead-up to Christmas, the EU late last year agreed on a carbon border tax – the first of its kind globally. It could be vital for the bloc’s net zero ambitions. If it galvanises other trading partners into pricing their carbon emissions, it could also be a pioneering stride forward in the global fight against climate change. While the levy makes sense in theory, its success will depend on how effectively the EU can navigate the numerous practical challenges of actually implementing it.
/jlne.ws/3D314wD

****** How much do I have to pay for moving my body over the border? I am full of carbon, especially when I breathe out.~JJL

++++

Four US senators question Sullivan & Cromwell’s role in FTX bankruptcy; Lawmakers cite ‘concerns’ about top Wall Street firm’s past work for Sam Bankman-Fried’s crypto exchange
Joshua Oliver and Sujeet Indap – Financial Times
Four US senators have questioned whether top Wall Street law firm Sullivan & Cromwell could properly investigate possible wrongdoing at FTX as its bankruptcy counsel given its past work for the cryptocurrency exchange. The bipartisan group of senators said Sullivan & Cromwell’s legal work for FTX before it filed for bankruptcy meant it should not now be entrusted with scrutinising the events leading up to the collapse of Sam Bankman-Fried’s crypto empire, which includes accusations of fraud and misappropriation of customer money.
/jlne.ws/3ZrKxM8

****** We want lawyers without any conflicts or blemishes and we can wait for them to be born.~JJL

++++

Tuesday’s Top Three
Our most-read story on Tuesday was the Financial Times’ opinion piece, Where regulators could reform Wall Street in 2023. Second was another Financial Times opinion piece, Why everyone should be able to understand code. Third was Bloomberg’s The Top Careers for 2023: These 20 Jobs Are In High Demand.

++++

MarketsWiki Stats
27,127 pages; 242,266 edits
MarketsWiki Statistics

++++

Lead Stories

Crypto’s Hotel California Traps the Winklevoss Twins; It’s hard to check out when there’s a $900 million tab.
Lionel Laurent – Bloomberg
You can get into crypto any time you like, but can you ever leave? A fierce $900 million Bitcoin feud between the billionaire Winklevoss twins and Barry Silbert suggests the virtual currency bubble’s main legacy is a version of Hotel California, with clients desperately hoping for fresh money to pick up the tab – or a change in management that will let them check out.
/jlne.ws/3ivOe2J

Cost-of-Living Crisis Is Top Immediate Risk for Davos Elite; Climate is biggest long-term threat but fiscal space narrowing; Countries need to work together to avoid ‘polycrisis’
Philip Aldrick – Bloomberg
The threat of recession, the cost-of-living crisis and mounting debt distress will dominate the global economy in the next two years as it struggles to move on from the pandemic and war in Ukraine, according to a survey by the World Economic Forum. Its Global Risks Report, an annual poll of 1,200 government, business and civil society professionals compiled by the Geneva-based foundation, suggests there will be little respite as countries grapple with “energy, inflation, food and security crises.”
/jlne.ws/3H6to3D

Review of Nickel Blowup Calls for Changes at London Metal Exchange; The LME commissioned the outside review as part of an attempt to revive its credibility
Joe Wallace – The Wall Street Journal
The London Metal Exchange should bolster oversight of trades that take place outside its trading systems to avoid a repeat of last year’s blowup in the nickel market, a review of the event said Tuesday. The suggestion is one of several in the report, carried out by consulting firm Oliver Wyman at the request of the exchange in an attempt to revive its credibility after the meltdown. It is the first detailed outside probe into the March 2022 crisis at the LME, which was a high-profile example of the financial dislocations set in motion by Russia’s invasion of Ukraine. LME nickel prices surged from less than $30,000 a metric ton to more than $100,000 over the course of three trading days. Fearing the collapse of brokers facing huge cash calls, the LME halted trading and canceled trades that took place at the top of the market.
/jlne.ws/3W1YDky

Chief of Digital Currency Group defends record amid call for sacking; Barry Silbert writes to shareholders as Gemini exchange’s Cameron Winklevoss seeks his removal
Nikou Asgari – Financial Times
The chief executive of crypto conglomerate Digital Currency Group has defended his company’s decisions and intragroup borrowings amid calls for him to be sacked, in a growing dispute over debts stemming from last year’s FTX crypto shock. Barry Silbert, head of DCG, wrote to shareholders on Tuesday, defending his decisions and explaining several loans. His letter came several hours after Cameron Winklevoss called for the group’s board to oust him as chief executive.
/jlne.ws/3QtLpvH

China Now Wants the World to Live With the Virus; Ravaged by the virus, Beijing is hitting out at the very countries that could have provided a model for how to exit Covid Zero.
Gearoid Reidy – Bloomberg
In China’s binary view of the pandemic, there can be only zeros and ones – that is, Covid Zero or Covid for Everyone. Having scrapped its pandemic policy in an abrupt about-face that it failed to warn the international community was coming, Beijing has now decided that attempts to limit the spread of the virus are unacceptable – even those over which it has no control. President Xi Jinping’s administration has now stopped issuing visas for South Korean and Japanese travelers, after those countries (among others) put in place new curbs when infections started surging through China. With Lunar New Year fast approaching and Chinese citizens able to leave their country for the first time in years, its neighbors have imposed testing requirements on travelers, with Seoul also halting the issuance of some short-term visas, and Japan looking to limit flights.
/jlne.ws/3k8jrtk

S. African Bourse Seeks to Fine Steinhoff’s Ex-CEO $882,000; Jooste has applied for order suspending JSE’s decisions; JSE will continue to oppose Jooste’s application for review
Janice Kew – Bloomberg
Johannesburg’s stock exchange plans to fine Steinhoff International Holdings NV former Chief Executive Officer Markus Jooste 15 million rand ($882,000) for violating listing rules and submitting false financial statements. South Africa’s main stock exchange also barred Jooste from holding an office in a listed company for 20 years, according to a statement Tuesday. The move comes almost five years after the firm’s near collapse and is the second censure of a director at the company after former Chief Financial Officer Ben la Grange was fined 2 million rand.
/jlne.ws/3X4FsHR

Spain Wants Set Prices for Renewables in Europe’s Market Revamp; Country proposes CfDs, capacity contracts to tame volatility; Current model ‘not suitable for the future energy system’
Thomas Gualtieri – Bloomberg
Spain is sending the European Union a proposal on how to sever the link between gas and power prices as it seeks to influence the outcome of a long-running debate on overhauling energy markets. Currently, the most expensive form of generation – gas – sets the price for all electricity that’s sold into Europe’s market. Spain’s government says that so-called contracts for difference could be used to disentangle the cost of renewable power, including from nuclear and hydro plants.
/jlne.ws/3QyrfjX

Goldman Sachs embarks on biggest cost-cutting drive since financial crisis; Wall Street bank reviews spending on everything from private jets to new consumer and tech unit
Joshua Franklin and Stephen Morris – Financial Times
Goldman Sachs has embarked on its biggest cost-cutting exercise since the financial crisis, with the Wall Street bank reviewing spending on everything from its private jets to expenses at a new technology and consumer unit. The spending review comes as Goldman starts to implement more than 3,000 job cuts, with many employees in London and New York due to learn their fates on Wednesday. Investment bankers are also bracing for a reduction of 40 per cent or more in their annual bonuses.
/jlne.ws/3iufw9A

An Investing Enigma in London Is Helping Direct $3 Trillion in China Reserves; SAFE’s London arm best known for past property deals; UK accounts shed little light on low profile fund’s operations
Bloomberg News
Even by the sometimes opaque standards of Chinese government entities, the inner workings of Gingko Tree Investment are a mystery. From the 15th floor of a skyscraper in the heart of the City of London, some 30 employees carry out investment research for its owner, China’s State Administration of Foreign Exchange. Their advice helps direct how a portion of $3 trillion in Chinese foreign reserves is invested.
/jlne.ws/3GAftkM

Bitcoin CME Futures Draw Premium for the First Time Since FTX’s Collapse; While futures have flipped into premium, the “term structure” remains in backwardation, signaling caution among institutions.
Omkar Godbole – CoinDesk
The market panic that ensued after the collapse of Sam Bankman Fried’s FTX exchange in early November seems to be abating.
The three-month bitcoin (BTC) futures listed on the Chicago Mercantile Exchange (CME), widely considered a proxy for institutional activity, are drawing a premium over the the cryptocurrency’s going spot market price for the first time since FTX went bust.
/jlne.ws/3X6MgoG

Bitcoin futures ETFs retain allure despite crypto winter; Cryptocurrency fell 65% in 2022 but US bitcoin futures ETFs recorded steady net inflows
Brian Ponte – Financial Times
Investors piled money into bitcoin futures ETFs in 2022, even though the price of the cryptocurrency plunged 65 per cent. Investors ploughed $241mn into the six US bitcoin futures ETFs during the first 11 months of 2022, according to data from Morningstar Direct. And most of that money – $198mn – was added after June, which bitcoin payment service provider Bitpay marks as the start of a crypto “deep freeze”.
/jlne.ws/3X1pSwF

Ukraine Latest: Zelenskiy Says Russian War Won’t Become WWIII
Bloomberg News
Ukraine will stop Russian aggression and the conflict won’t turn into World War III, President Volodymyr Zelenskiy said as his forces battled to keep control of Soledar and Bakhmut in the eastern Donetsk region. The Kremlin had positioned the most experienced units from the Wagner military-contracting company near Soledar, according to Ukrainian operational command spokesman Serhiy Cherevatyi.
/jlne.ws/3IGHudc

Mark Cuban to be deposed over his promotion of Voyager crypto ‘Ponzi scheme’ in class action lawsuit
Jennifer Sor – Business Insider
Shark Tank investor Mark Cuban will be deposed next month in connection to his promotion of Voyager, the crypto lender described as a “Ponzi scheme” in a class action lawsuit. The lawsuit, which was originally filed in August, aims to hold Cuban and Voyager CEO Steve Ehrlich responsible for over $5 billion in lost customer funds. Cuban requested to split his deposition in court over two hearings, though that request was denied yesterday, according to court documents, with orders for Cuban to deliver his testimony in one session on February 2.
/jlne.ws/3X1W6YV

Jamie Dimon: ‘Retirees, grandmothers, lower-income folks’ have been hurt by crypto
Alexandra Semenova – Yahoo! Finance
JPMorgan (JPM) Chief Executive Jamie Dimon minces no words when it comes to his views on cryptocurrencies. The Wall Street boss, who in September famously called the digital tokens “decentralized Ponzi schemes” at a regulatory hearing, again reiterated his criticism of crypto assets during an interview with Fox Business Network.
/jlne.ws/3QDiEgc

Now I Know the Cryptocurrency Industry Is Here to Stay
Lee Reniers – CoinDesk
As a long-time crypto skeptic, it may seem odd that I am helping organize a digital assets conference at Duke University on Jan. 20-21. After all, I once wrote a Wall Street Journal op-ed calling for a cryptocurrency ban. While I continue to believe that unbacked cryptocurrencies, like bitcoin, provide no economic utility and impose societal costs that vastly outweigh the benefits, I also recognize that the broader digital asset industry is not going away.
/jlne.ws/3QxR6sh

Europe Still Winning on LNG Imports Even as Prices Slump; Some 68% of LNG exported by US is headed to Europe: Kpler data; China’s uncertain demand is keeping sellers wary of Asia trade
Anna Shiryaevskaya, Thomas Gualtieri, and Vanessa Dezem – Bloomberg
Europe is still awash with liquefied natural gas despite a crash in benchmark prices as demand in Asia remains lackluster. A few weeks ago, it became more profitable to deliver US LNG to Asia than to Europe, but that premium has been insufficient to lure cargoes away from a region that’s been flooded with the fuel in recent months.
/jlne.ws/3GUeGwq

FTX Debacle Impels UAE to Assess Its Crypto Ambitions (Podcast); It is one of the top 10 jurisdictions impacted by the FTX fallout
Janet Babin and Stacy-Marie Ishmael – Bloomberg
Listen to Bloomberg Crypto on the iHeartRadio App, Apple Podcasts or Spotify. The United Arab Emirates has spent a lot of time – and considerable resources – positioning itself as a crypto-friendly hub. Its efforts have attracted some of the top names in crypto to the region. Changpeng Zhao (known as CZ), the CEO of the world’s largest crypto exchange Binance, has a residence in Dubai. It’s also where Su Zhu and Kyle Davies fled to after the collapse of their crypto hedge fund, Three Arrows Capital.
/jlne.ws/3QLQY93

FTX seeks court rulings on asset sales, customer privacy
Dietrich Knauth and Tom Hals – Reuters
Crypto exchange FTX will ask a U.S. bankruptcy court on Wednesday to allow it to auction off pieces of its business and to keep customer names secret for at least six months while it works to recover funds lost in what was allegedly a huge fraud. FTX will ask U.S. Bankruptcy Judge John Dorsey in Delaware to approve procedures for selling affiliates LedgerX, Embed, FTX Japan and FTX Europe as a way of raising funds for customers, who have lost potentially billions of dollars.
/jlne.ws/3CGdUjV

FTX boss invested in Paradigm fund that backed his crypto exchange; Court documents shed light on Sam Bankman-Fried’s circular transactions
Kadhim Shubber and Joshua Oliver – Financial Times
Sam Bankman-Fried invested $20mn in a large venture capital fund that then took a stake in his FTX cryptocurrency exchange group, an arrangement that highlights close links between the fallen billionaire and some of his backers. In late 2021 Bankman-Fried invested in a fund managed by Paradigm, a big backer of crypto start-ups. The same $2.5bn “Paradigm One” fund later invested in his FTX and FTX US exchanges, according to disclosures made this week in bankruptcy court.
/jlne.ws/3vTe9nZ

Elon Musk Might Never Be the World’s Richest Person Again
Tom Maloney and Dana Hull Wealth – Bloomberg
Elon Musk, the “Chief Twit” and Tesla “Technoking,” might never reclaim the title of the world’s richest person. Just how far he has to fall is anyone’s guess. It’s not just that he became the first person in history to have $200 billion erased from their personal fortune. And it’s not only about how he’s spending more time on Twitter these days, striking a conspiratorial tone about everything from politics to vaccines to the very social-media company he purchased for $44 billion in a debt-fueled buyout.
/jlne.ws/3k7yweF

Credit Suisse Mulls 50% Bonus Pool Cut After Losses
Myriam Balezou and Marion Halftermeyer – Bloomberg
Credit Suisse Group AG is considering cutting the bonus pool for 2022 by about half, according to people familiar with the matter, capping a grim year in which the bank was forced to raise $4 billion after a string of losses. The Swiss lender is set to make even more drastic cuts to variable compensation after the 32% decline for 2021, according to people familiar with the matter. A cut by half would make the 2022 bonus pool about 1 billion Swiss francs ($1.1 billion), which compares with 2.9 billion francs two years earlier.
/jlne.ws/3kaLGHX

SPAC-Squared Is Wall Street’s Latest Wheeze; Financial engineering has found a way to keep ailing SPACs afloat.
Chris Bryant – Bloomberg
Just when you think you’ve seen it all in SPAC-land, along comes a money-losing company that only recently went public via a blank-check firm announcing a merger with a second special-purpose acquisition company to save its skin. SPAC-squared, if you like. Wejo Group Ltd., a British connected-vehicle data company, became a public company in November 2021 after combining with Virtuoso Acquisition Corp., a SPAC. On Tuesday, Wejo said it plans to merge with another blank-check firm, TKB Critical Technologies I, to secure up to $100 million in cash.
/jlne.ws/3vYcptP

Falling European SI volumes shows traders’ changing approach to risk during volatility, survey finds; big xyt survey suggests systematic internaliser (SI), continuous and dark trading volumes are all falling at the hands of the off-book negotiated trades segment.
Annabel Smith – The Trade
A drop off in European volumes executed on systematic internalisers (SI) during volatility last year signals a changing approach to risk by traders, a big xyt survey has found. According to big xyt’s findings, the European equities market had a record year in 2022 thanks to sustained volatility, reaching an average daily value of EUR58 billion, up 13.4% in comparison with 2021.
/jlne.ws/3GYi0GW

The Big Interview: Mike Poole; Jupiter’s new head of trading tells Laurie McAughtry why execution trumps automation, why relationships are top priority – and why he minds his Ps and Qs when it comes to trading etiquette.
Laurie McAughtry – The Trade
Jupiter Asset Management, the London-based, LSE-listed investment manager with assets under management of around £47.4 billion, recently promoted former head of fixed income Mike Poole to run its trading desk. He sits down with The TRADE to discuss his career to date, his strong feelings about the future of trading – and the direction in which he’d like to steer the firm he has called home for the past 17.5 years.
/jlne.ws/3X2AITn

Ukraine Invasion

U.S. to Train Ukrainian Troops on Patriot Missile at Oklahoma Base; The troops will begin abbreviated training on the air-defense system as soon as next week
Nancy A. Youssef – The Wall Street Journal
Roughly 100 Ukrainian troops will begin training to use the Patriot missile defense system at a U.S. military base as early as next week, the Pentagon said Tuesday. The Ukrainian troops, who specialize in air defense, will travel to Fort Sill, Okla., for the training, Air Force Brig. Gen. Pat Ryder told reporters Tuesday. A U.S. soldier would usually receive months of training at Fort Sill on how to operate a Patriot, and Gen. Ryder said the training for Ukrainian forces will be shorter.
/jlne.ws/3Qw44qE

Ukraine’s Battlefields Are Freezing. Here’s What That Means for the War; With Soledar under siege, Ukrainian and Russian troops are stretched, facing shortages of reserves, equipment and ammunition. And the weather could quickly turn warmer.
Marc Champion and Alberto Nardelli – Bloomberg
Temperatures in eastern Ukraine have been well below freezing in recent days, hardening the ground and opening a window for potential winter offensives by both sides. But such pushes may not come, either now or during a more sustained cold spell. Military analysts within and outside Ukraine say that while the shift from muddy to frozen terrain is important in enabling the use of wheeled combat and support vehicles, it’s just one of many factors commanders would consider before risking a major new assault.
/jlne.ws/3X4Oip4

The war in Ukraine could be decided this year, former US Army general says, warning of dire consequences if Russia faces defeat
Natalie Musumeci – Insider
Russian President Vladimir Putin’s unprovoked war with Ukraine could come to a conclusion this year, according to a former US Army general who warned that the Kremlin would likely turn to the dire option of nuclear weapons if Moscow faces defeat in the conflict.
/jlne.ws/3X4AP0r

Kremlin says it hasn’t seen cases of oil price caps
Reuters
The Kremlin said on Wednesday it had not yet seen any cases of price caps on Russian oil imposed by the West last month, in comments about possible losses from such measures. Some analysts have previously said that the caps will have little immediate impact on the oil revenues that Moscow is currently earning.
/jlne.ws/3CHF0qS

U.S. Patriot training confirms participation in Ukraine conflict-Russian ambassador
Reuters Staff
U.S. plans to train Ukrainian servicemen in the use of Patriot missiles provides further proof of Washington’s participation in the Ukraine conflict, Russia’s ambassador to the United States said on Tuesday. “The decision of the U.S. defence department to organise a training course at Fort Sill in Oklahoma is yet another confirmation of Washington’s de facto participation in the Ukrainian conflict on the side of Kyiv’s Nazi criminals,” Anatoly Antonov said in a statement posted by his embassy.
/jlne.ws/3ivNkTT

The West’s oil war against Russia is starting to take its toll – sparking calls for tougher measures
Sam Meredith – CNBC
Russia’s revenue from fossil fuel exports collapsed in December, according to a new report, significantly hampering President Vladimir Putin’s ability to finance the war in Ukraine. The findings, Ukrainian officials and campaigners say, illustrate the effectiveness of targeting Russia’s oil revenue and underscore the urgent need for Western policymakers to ratchet up the financial pressure on Moscow in order to help Kyiv prevail.
/jlne.ws/3W3N7F5

Exchanges, OTC and Clearing

CME Group Achieves Record International Average Daily Volume of 6.3 Million Contracts in 2022, Up 15% from 2021
CME Group
CME Group, the world’s leading derivatives marketplace, today announced that it achieved record international average daily volume (ADV) of 6.3 million contracts in 2022, up 15% from 2021. This record, reflecting all trading done outside the United States, was driven largely by growth in Equity Index and Foreign Exchange products, up 26% and 22% respectively.
/jlne.ws/3X1nI01

JPX Monthly Headlines – December 2022
JPX Group
JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users.
Every month, we showcase the highlights of these efforts in short and concise summaries just for you.
/jlne.ws/3GvIy0x

LME Mumbai Forum 2023 – Sponsorship Opportunities
LME
Summary. 1. The purpose of this notice is to inform Members and other interested parties of the LME Mumbai Forum 2023 taking place on 9 February 2023 2. This Notice also advises of the sponsorship and exhibition opportunities associated with the event that will be hosted by The London Metal Exchange (“LME).
/jlne.ws/3vimcfa

Exchange Highlights: Year-end Summary and Comments on Proposed Market Structure Reforms
Members Exchange
In 2022, MEMX grew and diversified the liquidity on the equities platform by partnering with our members and adding features. Some highlights from the last year includes: Retail volume grew 154% year over year to $193 billion, with firms benefiting from high fill rates on non-marketable limit orders. Midpoint volume grew 201% year over year to $165 billion, with high levels of midpoint liquidity available in thousands of symbols throughout the trading day. NBBO price setting instances increased 257% year over year with NBBO-setter market share ranging from 11.2% to 14.1% in the second half of the year. The SEC approved MEMX’s rule filing to launch an options exchange and the build is well underway. MEMX became the exchange technology provider for EDX and Dream Exchange.
/jlne.ws/3CEvOn4

Closing speech by Tan Boon Gin, CEO of SGX RegCo, at the Audit and Risk Committee Seminar 2023
SGX Group
Good morning everyone. As June mentioned earlier, we are introducing as part of the Listing Rules, a requirement that directors can no longer be deemed independent when their tenure is 9 years or more as well as greater detail of how directors and CEOs are rewarded. I have been told that the changes we are introducing to the 9-year rule are going to result in the next Great Resignation. My response was that it is okay. Provided, at the same time, we also see the great recruitment and many new joiners to the board.
/jlne.ws/3Zq2daW

Berenberg trader moves to Monaco Asset Management; The hire was formerly also with Credit Suisse, and will focus on macro equity themes in his new role.
Laurie McAughtry – The Trade
Former Berenberg equity sales trader Matt Beswick has taken on a new position as equity and macro trader with Monaco Asset Management (IO hedge fund), The TRADE can reveal. An independent wealth management company based in Monaco with assets under management of around $4 billion, Monaco Asset Management is made up of a shareholder base of local Monaco entrepreneurs, and since 2021 has shared a four-year agreement with Swiss wealth management firm Chenton SA to operate jointly.
/jlne.ws/3W5pj3L

Fintech

A Third of Dublin’s Office Space Lies Dormant as Tech Giants Cut Jobs; Technology job cuts and hybrid working leave desks unfilled; Smaller firms may move into unused space, estate agent says
Olivia Fletcher – Bloomberg
Spare office space is rising in Dublin as some of the world’s biggest technology firms grapple with post-pandemic working practices and global industry uncertainty. So-called ‘grey space,’ – surplus office accommodation that is leased but not being used – currently accounts for about 32% of all available supply and is set to increase further, according to estate agents Lisney. The overall vacancy rate in Dublin now stands at around 13%.
/jlne.ws/3GWg1CG

Tech Layoffs Mean Even More Empty Offices in NYC, San Francisco; A pullback by tech tenants means trouble for landlords already struggling with empty buildings.
Natalie Wong – Bloomberg
Salesforce Inc. is paring its real estate as part of sweeping cost cuts. Compass Inc., reeling from a housing slowdown, has put its New York headquarters up for sublease. Meta Platforms Inc. is giving up Manhattan offices that it recently built out.
/jlne.ws/3X1pRZz

Goldman Sachs’ Tokenization Platform GS DAP, Leveraging Daml, Goes Live
The Tokenizer
GS DAPTM is developed on top of Digital Asset’s Daml smart contract language and Canton, its privacy-enabled blockchain. Daml-based tokenization platforms, such as GS DAPTM, capture the full complexity of rights, obligations, and cash flows throughout the lifecycles of assets. They can also make the digital representation and workflow accessible and fully automatable across distributed interconnected ecosystems of participants. Additionally, Digital Asset ensures that data is only shared with entitled stakeholders with its privacy protocols while supporting the scalability necessary to connect assets globally.
/jlne.ws/3X1XlHz

Cybersecurity

UK’s Morgan Advanced Materials Probes Cybersecurity Incident; UK-based manufacturer detected unauthorized network activity; Company has started investigation, incident response plan
Ryan Gallagher – Bloomberg
UK-based manufacturer Morgan Advanced Materials Plc disclosed on Tuesday that it has been affected by a cybersecurity incident after detecting unauthorized activity on its networks. In a statement released to the London Stock Exchange, the company said it had launched an investigation and implemented an incident response plan.
/jlne.ws/3GwzZ5S

Suspected State Hackers Stole Military Data From Asian Countries; Philippines, Malaysia among targets, cybersecurity firm says; Hackers used phishing emails and advanced malware: Group-IB
Sarah Zheng and Jamie Tarabay – Bloomberg
A hacking campaign suspected to be linked to an Asian government breached seven high-profile targets in Southeast Asia and Europe, including government and military agencies, according to the cybersecurity firm Group-IB.
/jlne.ws/3k7eX66

Darktrace shares fall below IPO price as new client sign-ups slow
Mark Sweney – The Guardian
The market value of Darktrace has fallen to the lowest level since floating almost two years ago after the British cybersecurity company warned about slowing numbers of customers signing up for products. The warning prompted a drop in the share price of the company, based in Cambridge, which positions itself as a potential European superpower in the US-dominated cybersecurity space but had its business model criticised last year.
/jlne.ws/3kctvSc

Four Cyber Risk Trends To Watch In 2023 And How Businesses Can Mitigate Them
Steve Durbin – Forbes
The year 2022 was when the world largely emerged from the pandemic and woke up to a number of changes in the overall business landscape. Commerce had become more digital. Working from home had been normalized. A number of physical assets had merged with digital, artificial intelligence had made its inroads into businesses, and cyber risks stemmed from the Russia-Ukraine war.
/jlne.ws/3vT8kXF

Cryptocurrencies

Ex-Coinbase manager’s brother sentenced to 10 months in insider trading case
Luc Cohen – Reuters
The brother of a former Coinbase Global Inc product manager was sentenced on Tuesday to 10 months in prison after pleading guilty in what U.S. prosecutors have called the first insider trading case involving cryptocurrency. Nikhil Wahi admitted to making trades based on confidential information from Coinbase, one of the world’s largest cryptocurrency exchanges, when he pleaded guilty in September to a wire fraud conspiracy charge.
/jlne.ws/3iwXaVA

FTX bankruptcy documents show list of investors set to be completely wiped out, including Tom Brady and Robert Kraft
Matthew Fox – Business Insider
The spectacular implosion of FTX has led to big investment losses for the football star Tom Brady, the New England Patriots owner Robert Kraft, and the fashion model Gisele Bündchen. As part of its bankruptcy process, FTX Monday released a list of its top equity holders, detailing just how many investors were set to be wiped out from the downfall of the crypto exchange. The document showed Brady, who was a brand ambassador for FTX and appeared in a commercial for the company, owned just over 1.1 million common shares of FTX. Meanwhile, Bündchen, Brady’s ex-wife, owns just under 700,000 common shares of FTX.
/jlne.ws/3IFWXtW

Crypto Meltdown Leaves Winklevoss Twins’ Gemini ‘Severely Tarnished’
Olga Kharif – Bloomberg
The signs of a full-blown crisis were everywhere. Bitcoin was in free fall, hedge fund Three Arrows was blowing up and the fates of several high-profile crypto lenders were suddenly in doubt. Yet as panic spread like wildfire last June, the Winklevoss twins, founders of the Gemini crypto exchange, hit the road with their rock band, Mars Junction. With Tyler on vocals and Cameron on guitar, they belted out hits like Don’t Stop Believin,’ appearing untroubled as other firms – propped up by easy money, rampant speculation and possibly even fraud – crumpled one after the next.
/jlne.ws/3GWaBrv

A Binance Stablecoin Wasn’t Always Fully Backed: Bloomberg
Nelson Wang – CoinDesk
Binance acknowledged that its Binance-peg BUSD stablecoin hasn’t always been backed fully with reserves, but said it’s now fixed the problem, according to a report from Bloomberg. The token was at times undercollateralized in 2020 and 2021, Bloomberg reported, citing an analysis by Jonathan Reiter of blockchain analytics company ChainArgos. “The process of maintaining the peg involves many teams and has not always been flawless, which may have resulted in operational delays in the past,” a Binance spokesperson told Bloomberg. “Recently, the process has been much improved with enhanced discrepancy checks to ensure it’s always 1-1 pegged.”
/jlne.ws/3ZpLIeZ

The Winklevoss’ Gemini terminates its yield product as dispute between the crypto exchange and DCG escalates
Morgan Chittum – Business Insider
Gemini, the cryptocurrency exchange started by the Winklevoss twins, is terminating its interest-bearing product, the company told clients on Tuesday. The firm ended its master loan agreement and partnership between Gemini and crypto brokerage Genesis. “This officially terminates the Earn Program and requires Genesis to return all assets outstanding in the program,” according to Gemini’s email, which was first reported by Coindesk. “Existing redemption requests are not impacted and continue to await fulfillment by Genesis.”
/jlne.ws/3vU0fC9

Thailand Probes Embattled Crypto Exchange Zipmex on Rule Breach; Firm may have needed permit as digital asset fund manager; Zipmex is in the midst of $100 million venture capital buyout
Suvashree Ghosh – Bloomberg
Thailand’s securities regulator is probing whether embattled crypto exchange Zipmex, which is in the midst of being taken over, breached local rules in its offer of certain digital-asset products. The nation’s Securities and Exchange Commission wrote to Zipmex Thailand’s Chief Executive Officer Akalarp Yimwilai on Dec. 28 noting that some of the firm’s activities may be in violation of digital-asset business rules, according to a letter seen by Bloomberg News.
/jlne.ws/3iCqsSy

DCG Bites Back at Winklevoss as Barry Silbert Distances Company From FTX and SBF
Mathew Di Salvo – Decrypt
Digital Currency Group (DCG) has blasted Cameron Winklevoss for “malicious attacks” and defamation after the crypto mogul publicly accused the firm of fraud. In a Tuesday Twitter response, DCG said a statement by Winkelvoss was “another desperate and unconstructive publicity stunt” and that the company was “preserving all legal remedies in response to these malicious, fake, and defamatory attacks.” Earlier today, Winklevoss accused DCG of misrepresentation and accounting fraud. He also called for DCG CEO Barry Silbert to step down.
/jlne.ws/3QvrXP0

Crypto.com Will Delist Tether in Canada to Comply With Ontario Regulator
Andr̩ Beganski РDecrypt
Cryptocurrency exchange Crypto.com will no longer facilitate transactions involving Tether in Canada and plans to delist the largest stablecoin by market capitalization for customers in the region. “Crypto.com has delisted USDT for users in Canada in accordance with instructions from the Ontario Securities Commission (OSC) as part of our pre-registration undertaking for a restricted dealer license,” a spokesperson for Crypto.com told Decrypt. Canadian users of the exchange were notified about the company’s change in policy on Tuesday via email, as images of the delisting notice began to crop on both Reddit and Twitter.
/jlne.ws/3GT4Wm3

The TRADE Crypto Roundtable: Episode 3 – Separation, differentiation, regulation; In which we explore what needs to change to facilitate institutional involvement, where the roadblocks are, and how we can overcome these challenges to build an efficient infrastructure: with a focus on regulation and standards.
Laurie McAughtry – The Trade
In December, The TRADE brought key stakeholders together for an in-depth discussion of the barriers to institutional involvement in digital assets. In our third of five video episodes, the panel explores the tricky question of regulation, the crucial importance of consistent standards, how to balance the needs of all stakeholders, the fundamental pillar of risk metrics, and why it’s essential to start separating the different elements of service (e.g. custody, brokerage, exchanges) to ensure robust protection with a focus on progress rather than just profits.
/jlne.ws/3WZgoCa

Politics

Critic of fossil fuels to lead key offshore oil agency for Biden
Timothy Puko – The Washington Post
The Biden administration is using a new opening at a powerful offshore energy agency to elevate a critic of fossil fuels who previously was blocked from a top Interior Department job because of opposition from oil industry allies in the Senate. Amanda Lefton, director of Interior’s Bureau of Ocean Energy Management, or BOEM, will leave her post Jan. 19 after nearly two years in charge. The BOEM oversees leasing for offshore oil, gas, minerals and wind-power development, and Lefton has led a Biden administration shift to emphasize wind, leading to record-large lease sales supporting the nascent U.S. industry.
/jlne.ws/3X5U6ic

IRS Guidance on 1% Excise Tax Helpful for De-SPAC Transactions With Private Targets
Sidley Austin LLP
On December 27, 2022, the Internal Revenue Service and U.S. Treasury issued Notice 2023-2 (the Notice), which provides interim guidance addressing the 1% excise tax on stock repurchases (the Excise Tax) by certain publicly traded corporations (covered corporations) under Code Section 4501.1 The Excise Tax was enacted into law in the Inflation Reduction Act on August 12, 2022.
/jlne.ws/3vV4EF6

Germany’s Oil Import Plan Won’t Break Putin’s Grip; The Kremlin controls the pipeline to Germany, no matter whose crude is in it.
Julian Lee – Bloomberg
German plans to import crude from Kazakhstan through the giant Druzhba pipeline system will do little to end the European nation’s dependence on Russia for energy.
/jlne.ws/3Zqh2u5

Regulation

Statement of Commissioner Caroline D. Pham Regarding Complaint Charging Swaps Manipulation and Fraud on a Decentralized Digital Asset Exchange
CFTC
Commodity Futures Trading Commission (CFTC) Commissioner Caroline D. Pham released the following statement regarding yesterday’s civil enforcement action filed in the U.S. District Court for the Southern District of New York charging Avraham Eisenberg with a fraudulent and manipulative scheme to unlawfully obtain over $110 million in digital assets (including bitcoin, ether, and Tether) from a purported decentralized digital asset exchange.
/jlne.ws/3vSh1S6

Commissioner Goldsmith Romero to Participate in a Fireside Chat at the Commodity Markets Council’s State of the Industry Conference 2023
CFTC
Commissioner Christy Goldsmith Romero will participate in a fireside chat on CFTC Commissioner Priorities.
/jlne.ws/3vZiS7y

SEC Announces Appointment of Cristina Martin Firvida as Investor Advocate
SEC
The Securities and Exchange Commission today announced the appointment of Cristina Martin Firvida as Director of the Office of the Investor Advocate, effective Jan. 17, 2023. Ms. Martin Firvida was most recently the Vice President of Financial Security and Livable Communities for Government Affairs at AARP.
/jlne.ws/3GXjy3O

FCA penalises Al Rayan Bank PLC for anti-money laundering failuresâEUR¯
FCA
Between 1 April 2015 and 30 November 2017, Al Rayan allowed money to pass through the bank and be used within the UK without carrying out appropriate checks. The firm failed to adequately check its customers’ Source of Wealth and Source of Funds when it was required to make sure the money was not connected to financial crime.âEUR¯âEUR¯
The failings were made worse by the lack of proper training provided to staff about how to handle large deposits, which further heightened the risk of money laundering and financial crime.âEUR¯âEUR¯
/jlne.ws/3vT2fdJ

Financial regulation in the UK is ripe for a serious rethink; Reasonable rules are too often enforced in an excessively rigid and bureaucratic way
Norman Blackwell – Financial Times
With the latest financial services and markets bill starting its passage through the House of Lords, the doomsayers will be lining up to claim that these post-Brexit reforms to the UK financial markets will weaken regulatory safeguards, risking a repeat of the 2008 financial crisis. In reality, however, much bolder reforms are needed to clear away the unproductive regulatory overhead that has accumulated over the past decade and allow the UK’s global financial services sector to flourish.
/jlne.ws/3CFdHxq

Investing and Trading

The Bond Market Is Already Worrying About a Debt-Ceiling Debacle; “US default threat is higher than in past years,” says Bank of America.
Tracy Alloway – Bloomberg
“REPUBLICANS CAN GET ALMOST EVERYTHING BACK … BY SIMPLY PLAYING TOUGH IN THE UPCOMING DEBT CEILING NEGOTIATIONS,” declared former President Donald Trump in a social-media post on Monday. “Oh no,” sighed bond traders, wearily, in response. After one of the worst years on record for bond market returns following a sharp rise in interest rates and inflation, investors are kicking off 2023 with fresh concerns over the possibility of another debt ceiling debacle following a drawn-out fight to elect the new House Speaker Kevin McCarthy. Hardline Republicans who blocked McCarthy’s speakership now appear to be tying his future to a reduction in government spending that risks pushing the US government into yet another deficit stalemate.
/jlne.ws/3X3Hh8a

Inflation Peaking Is Great for Us, Terrible for Grocery Stores; Christmas 2022 was a cracker for the food retailers. The next festive season could be very different.
Andrea Felsted – Bloomberg
Inflation isn’t killing food retail. But prices peaking this year might prove to be the bigger challenge. J Sainsbury Plc on Wednesday confirmed that the food retailers were the big winners this Christmas, with third-quarter same-store sales excluding fuel up 5.9%. They enjoyed a boost from the World Cup and then a run into the holidays whereby consumers were more likely to eat at home given the cost-of-living crisis and rail strikes.
/jlne.ws/3CFwQPL

Soaring Used-Car Prices Are Finally Dropping
Craig Trudell – Bloomberg
Right before the global financial crisis, former Citigroup Inc. Chief Executive Officer Chuck Prince famously said that as long as the music is playing, you’ve got to get up and dance. During the pandemic-era car-buying frenzy, no business spent more time on the dance floor than the global auto industry, which had never before enjoyed so much pricing power.
/jlne.ws/3WZ780S

Super-Prime Real Estate in New York and Florida Has Hit a Wall; A new report analyzing $10 million-plus sales in New York and South Florida showed signed contracts plummeting in 2022.
James Tarmy – Bloomberg
In the last half of 2022 the market for homes priced at $10 million and more fell precipitously in New York and South Florida, according to a new report from the brokerage Serhant. “The second half of the year was more affected at the super-prime level than most people initially believed,” says Garrett Derderian, Serhant’s director of market intelligence. “The big takeaway is that this year the market is going to slow considerably, and it could be one of the slowest years in the super-prime market in the last decade.”
/jlne.ws/3ZwI9nw

Battered 60-40 portfolios face another challenging year; Investors using the traditional equity-bond allocations took a 17 per cent hit last year
Adrienne Klasa – Financial Times
Tough malesliecroeconomic conditions will continue to put pressure on traditional equity-bond portfolios this year, some investors have warned, after last year’s gruelling market ride in which both asset classes plunged in tandem. Portfolios which comprise 60 per cent stocks and 40 per cent bonds lost 17 per cent in 2022, according to BlackRock, their worst performance since at least 1999. That undermined a formula at the cornerstone of asset allocation for more than 30 years.
/jlne.ws/3vYfOsB

Shareholder participation on the rise in the UK; Investment platform records a 30 per cent increase in votes on company matters
Rafe Uddin – Financial Times
UK retail investors are taking a more active role in their holdings, according to data showing a surge in voting participation among shareholders. Some 210,000 shareholder votes were processed by fund supermarket Interactive Investor in 2022, a 30 per cent increase on the previous year. The boost came in the first full year since the platform required its clients to opt out of receiving notifications about upcoming votes.
/jlne.ws/3itgeUJ

Forget Core CPI, Market Pros Are Searching for Supercore Inflation; More investors are paying greater attention to services inflation and labor-market data
Sam Goldfarb – The Wall Street Journal
Prices of services are rising quickly. Prices of goods are falling. Energy is all over the map. Policy makers and market watchers already strip out volatile components of price indexes to understand “core” inflation. These days, many are on the hunt for an even narrower measure: a supercore.
/jlne.ws/3X1sKtn

Investors Should Keep an Eye on Japan’s Kinky Yield Curve; Japanese yields matter partly because it is a very large market and partly because the cap has attracted a lot of foreign speculators
James Mackintosh – The Wall Street Journal
Sometimes central banks trade on their credibility, as when Mario Draghi’s promise to do “whatever it takes” to save the euro was so widely believed that the European Central Bank ended up having to spend nothing.
/jlne.ws/3IBmmox

Environmental, Social and Corporate Governance

There Are Fortunes to Be Made in the Carbon Capture Gold Rush; Tax incentives in the IRA have set oil majors and manufacturers rushing to break ground on new projects.
Leslie Kaufman and Kevin Crowley – Bloomberg
Past efforts to capture carbon dioxide so it doesn’t worsen climate change have been small-scale and littered with expensive failures. But supporters say the new tax incentives in the US Inflation Reduction Act (IRA) are transformative enough that, combined with the lessons of the past 20 years, the technology is finally ready to take off. Lehigh Hanson Inc., one of the largest concrete makers in the US, says early this year it will start running a new cement plant in Mitchell, Indiana, that could capture 95% of its carbon dioxide emissions by 2028. If successful, the project would demonstrate that one of the world’s most polluting industries can go almost carbon neutral.
/jlne.ws/3isNkEf

Biden Is Coming for Your Gas Stove; The Consumer Product Safety Commission enlists in the crusade to ban fossil fuels from the kitchen.
The Editorial Board – The Wall Street Journal (opinion)
Coercion in the cause of banning fossil fuels is no vice for the Biden Administration, which is now coming after cooks. The Consumer Product Safety Commission (CPSC) could soon ban gas stoves. CPSC Commissioner Richard Trumka Jr. teased in an interview with Bloomberg News this week that the agency plans to propose new regulations for gas stoves, which could include a ban. “This is a hidden hazard,” Mr. Trumka said. “Any option is on the table. Products that can’t be made safe can be banned.”
/jlne.ws/3W1U4qq

With stroke of his pen, Gov. Mike DeWine defines natural gas as green energy
Jake Zuckerman – Cleveland.com
Gov. Mike DeWine signed legislation that broadly expands the ability to drill for oil and gas in state parks and also legally redefines natural gas as a source of “green energy.” A 2011 state law gave state agencies the authority, if they choose, to lease out state lands for oil and gas exploration and production. The bill signed by DeWine on Friday would change that language to say a state agency “shall” accept a lease that meets certain conditions, instead of saying it “may” do so. In other words, it forces an agency to grant the lease application from oil and gas drillers.
/jlne.ws/3iyPF0j

The New Soldiers in Propane’s Fight Against Climate Action: Television Stars; An industry group is spending millions of dollars to push back against efforts to move heating away from oil and gas.
Hiroko Tabuchi – The New York Times
For D.I.Y. enthusiasts, Matt Blashaw is a familiar face, judging bathroom remodels or planning surprise home makeovers on popular cable television shows. Mr. Blashaw also has an unusually strong opinion about how Americans should heat their homes: by burning propane, or liquid petroleum gas. “When I think of winter, I think of being inside. I think of cooking with the family, of being by a roaring fire – and with propane, that is all possible,” he said on a segment of the CBS affiliate WCIA, calling in from his bright kitchen. “That’s why we call it an energy source for everyone.” Less well known is the fact that Mr. Blashaw is paid by a fossil fuel industry group that has been running a furtive campaign against government efforts to move heating away from oil and gas toward electricity made from wind, solar and other cleaner sources.
/jlne.ws/3IFv31d

New Year Brings Flurry of Fund Launches; DWS, RBC GAM among companies with new impact and ESG-linked strategies
Banking Exchange staff
Several asset managers have kicked off 2023 with new strategies aimed at making a positive impact or with a focus on environmental, social, and governance-related issues. DWS’s Xtrackers exchange-traded fund (ETF) unit is set to launch its 14th ESG-themed fund in March, according to documents filed with the Securities and Exchange Commission (SEC) late last month. The new fund is the Xtrackers MSCI USA Climate Action Equity ETF, which will track an MSCI index of companies assessed as leaders in addressing climate change within their business models.
/jlne.ws/3kaF78h

Gulf Exchanges Announce Unified ESG Metrics
Emirates247
The GCC Exchanges Committee today released a unified set of ESG Disclosure Metrics that includes 29 standards aligned with the World Federation of Exchanges and the Sustainable Stock Exchanges Initiative. These standards include categories across greenhouse gas emissions, energy usage, water usage, gender pay, employee turnover, gender diversity, data privacy, ethics and more. It should be noted that these metrics are voluntary, and they do not replace existing ESG disclosure guidelines for GCC stock exchanges.
/jlne.ws/3GY9wPK

What will the increased financialization of carbon do for decarbonization?
Grant Harrison – GreenFin Weekly
If the North Star of sustainability strategy in finance is (buzzwords aside) catalyzing decarbonization in the real economy, then what do developments like the London Stock Exchange Group’s (LSEG’s) launch of a new offering on the London Stock Exchange for carbon credits portend for the path ahead? Voluntary carbon markets epitomize a strand of business-think that, as far as the climate is concerned, has not delivered the desired results. And in such a pivotal moment for climate action, the efficacy of offsets has proven consistently questionable. The voluntary carbon market was worth $2 billion in 2021, and the value is estimated at north of $50 billion by 2030. What does the increased financialization of carbon, as epitomized by LSEG’s new offering, mean for decarbonization – particularly in a world where public policy will be more determined to curb emissions?
/jlne.ws/3vUSID3

BP Signs Deal to Sell Solar Power to Meta From Ohio Farm: Energy will be used to help Meta decarbonize its data centers BP aims to scale up renewables, cut emissions in coming years
Will Mathis – Bloomberg
BP Plc will sell power to Meta Platforms Inc. from a solar farm under construction in Ohio. The deal is part of the British oil major’s push to diversify away from fossil fuels and slash carbon emissions this decade. It’s an effort made easier by earnings from the past year’s soaring energy prices.
/jlne.ws/3CFwOr7

Effective risk management means depoliticizing ESG; ‘Woke’ debate distracts from fiduciary duties to investors and society
GRI (Global Reporting Initiative)
The backlash in the USA against ESG (Environmental, Social and Governance), such as legal moves in the State of Texas to restrict financial institutions from using ESG investing criteria, raise questions about the relevance of sustainability data. Yet as set out in the latest edition of The GRI Perspective, polarizing ESG into left-wing ‘woke’ versus conservative ‘anti-woke’ terms is counter-productive. When a balanced viewpoint is taken, it’s clear that ESG considerations are a key aspect of how asset managers fulfil their fiduciary duties towards investors and other stakeholders.
/jlne.ws/3iyFl8I

The System Map: A high-level visual of the available resources for managing sustainability impacts
The Impact Management Platform – UNEP FI
The System Map provides a high-level visual of the currently available resources for organisations, investors and financial institutions to manage their sustainability impacts. The map was co-developed by the Partners to help: enterprises, investors, financial institutions and policymakers understand which resources are available to them and how they interrelate; and the Partners and other organisations to identify areas of potential harmonisation and gap-filling among their existing and pipeline content. The map itself is a live product and will change according to the evolving landscape of international resources.
/jlne.ws/3CEhj2R

Low Salt Marsh Habitats Release More Carbon in Response to Warming, a New Study Finds; This complicates their role as carbon sinks as temperatures, and the sea level rises.
Hannah Loss – Inside Climate News
Salt marshes, excellent reservoirs of carbon, are living ecosystems with vegetation and microscopic organisms that live, breathe, poop and die in the marsh mud. “This is a place where you could get the biggest bang for your buck, if you will, if you’re interested in trying to invest some resources in sequestering carbon using biological systems,” said Serena Moseman-Valtierra, an associate professor of biological science at the University of Rhode Island.
/jlne.ws/3IHPQkC

Dozens of companies ejected from FTSE4Good indices; Failure to satisfy index provider on new climate rules excludes 34 groups from widely tracked benchmarks
Steve Johnson – Financial Times
FTSE Russell has ejected dozens of companies from a family of stock indices for failing to meet more stringent environmental standards, the first time it has taken such a step. The index provider has removed 34 groups from its FTSE4Good All-World benchmark after deciding they failed to meet its newly introduced Climate Change Score.
/jlne.ws/3irfI9R

Institutions

Schwarz to Leave FXSpotStream
Colin Lambert – The Full FX
Alan Schwarz, CEO and co-founder of FXSpotStream, is to leave the firm on 1 February, The Full FX understands the move was not part of a planned changeover. Schwarz, who has led the company for over 11 years, is leaving the firm for unspecified reasons, in a message he says he is keeping the drivers of his departure to himself, and sources say that COO Tom San Pietro will take control in the immediate interim.
/jlne.ws/3k5BY9x

London Quant Pioneer David Harding Gains on Road Back From $27 Billion Plunge; The Winton fund soared 17% in best year since financial crisis; Firm-wide assets have risen to $10 billion after crashing 80%
Nishant Kumar – Bloomberg
The resurgence in volatility that sent markets into a tailspin could not have come soon enough for quant fund pioneer David Harding. Reeling from losses and an exodus of clients that reached a nadir in 2020, Harding’s hedge funds rode the ferocious macro-driven price trends in global markets last year to emerge as one of the industry’s biggest winners. The multi-strategy Winton fund rose 17% for its best year since 2008, while another fund chasing broader market trends returned 18.7%. Peers tracked by Bloomberg gained 5.5%.
/jlne.ws/3iyBlVK

BlueCrest’s 153% Surge Makes Platt a Bigger Billionaire; Biggest gain since he returned outside capital in 2016; Platt is one of the wealthiest individuals in the UK
Nishant Kumar – Bloomberg
Even by his recent lofty standards, last year was extraordinary for billionaire Michael Platt. His private investment firm BlueCrest Capital Management surged 153%, becoming one of 2022’s most successful investors, according to a person with knowledge of the matter who asked not to be identified because the details are private. It’s Platt’s biggest gain by far since he returned outside capital in 2016 to focus on managing his own wealth and that of his partners.
/jlne.ws/3QyrDPN

BNP Paribas Expands to South Florida With Its First Miami Office; Bank joins finance firms seeking new business from the growing number of potential clients in the area.
Natalie Wong – Bloomberg
A unit of BNP Paribas SA is opening an office in Miami, its first foray into South Florida, to focus on expanding its global markets business in the US. BNP Paribas Securities Corp. signed a 7 ½-year lease for space at 801 Brickell Ave., in Miami’s financial hub, that could accommodate nearly 50 employees across credit, equities and macro products, according to a statement Wednesday. The office will open in the fourth quarter and enable the bank to cater to an increasing number of potential clients in the region.
/jlne.ws/3vXHZbc

Pierre Andurand’s Hedge Fund Slumps 19% in a Week as Oil Prices Retreat; The fund surged 59% last year following gains of 87% in 2021; Andurand says oil prices may exceed $140 a barrel this year
Nishant Kumar and Saijel Kishan – Bloomberg
It has been a rocky start to the year for famed oil trader Pierre Andurand. His main Andurand Commodities Discretionary Enhanced hedge fund slumped 19% last week, according to an investor letter seen by Bloomberg. It was one of the best performing hedge funds in the world last year.
/jlne.ws/3GWGSi9

Banks’ Revenue Bonanza Seen Under Threat From Looming US Recession; Fourth-quarter results overshadowed by threat of a downturn; ‘Everyone is scared of their shadow’ as 2023 gets under way
Katherine Doherty – Bloomberg
The market volatility and interest-rate hikes that gave US banks their biggest windfall last year may prove to be their biggest headache in 2023. When Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. kick off the industry’s fourth-quarter earnings on Friday, investors will be less interested in seeing how robust profits were in the final three months of last year and more focused on signs the nation’s biggest banks are girding for a major downturn as rate increases crimp economic activity.
/jlne.ws/3IH058W

Wellness Exchange

France’s health system under pressure of increasing demands
Lucy Williamson – BBC
The UK’s health system is buckling under the weight of staff shortages and a lack of beds. In France, meanwhile, there are more doctors and many more nurses, yet its healthcare system is still in crisis. President Emmanuel Macron has promised to change the way its hospitals are funded, and to free doctors from time-consuming administration, in a bid to break what he called a “sense of endless crisis” in its health service.
/jlne.ws/3ZuaL0E

Social media’s effects on teen mental health comes into focus
Jennifer A. Kingson – Axios
Experts are increasingly warning of a connection between heavy social media use and mental health issues in children – a hot topic now driving major lawsuits against tech giants. Why it matters: Seattle Public Schools’ recently filed lawsuit against TikTok, Meta, Snap and others – which accuses the social media giants of contributing to a youth mental health crisis – is one of hundreds of similar cases. Driving the news: Some scientists who study technology’s effects on children say the negatives far outweigh any positives.
/jlne.ws/3ivZSL4

Regions

China Trauma Proves Too Much for US Funds to Trust Xi Just Yet; No evidence long-term China risks have fallen: Zevin Asset; GAM says investing in China remains problematic for many funds
Sofia Horta e Costa – Bloomberg
As recently as October some of the world’s money managers were lamenting the loss of China as an attractive investment destination under President Xi Jinping. A lot has happened since then. A series of market-friendly pivots on most of Xi’s landmark policies have seen the country’s assets become the world’s top performers. The MSCI China Index has gained about 50% since October, outpacing every major stock gauge. The nation’s junk dollar debt has returned more than 40% and the yuan has posted a record two-month gain.
/jlne.ws/3iwhyGo

Copper Tops $9,000 as China Reopening Boosts Outlook for Demand; Metal trading at highest since June after two-month rebound; China’s property stimulus brightens commodity demand outlook
Bloomberg News
Copper rose above $9,000 a ton for the first time since June, fueled by optimism that China’s reopening will spur demand in the world’s top consumer. The key industrial metal has bounced back following a 14% decline in 2022, when tough coronavirus restrictions hampered the Chinese economy. The country’s shift away from Covid Zero policies has sparked a rebound, while expectations for less aggressive rate hikes by the Federal Reserve have added support.
/jlne.ws/3VWxGyA

Europe had second-warmest year on record in 2022, EU scientists say
Kate Abnett – Reuters
Europe experienced its second-warmest year on record in 2022, European Union scientists said on Tuesday, as climate change unleashed record-breaking weather extremes that slashed crop yields, dried up rivers and led to thousands of deaths. The EU’s Copernicus Climate Change Service (C3S) said 2022 was also the world’s fifth-warmest year, by a small margin. C3S records date back to 1950, but other, longer datasets confirm 2022 was the world’s fifth-warmest year since at least 1850.
/jlne.ws/3Qy0hJB

Egypt’s pound plunges to new low as authorities try to stem currency crisis; Country has shifted to more flexible exchange rate as part of $3bn IMF rescue deal
Andrew England and Tommy Stubbington – Financial Times
Egypt allowed its pound to tumble to a new low on Wednesday as the country struggles with a foreign currency crisis that is choking businesses. The pound plunged as much as 14 per cent to trade at 32.2 to the US dollar. The slump in the currency comes after Egypt has agreed to move to a flexible currency regime as part of an IMF $3bn bailout intended to help relieve a nearly year-long foreign currency shortage.
/jlne.ws/3k2Xuvz

Soaring US egg prices put pressure on consumers, businesses
Josh Funk – Associated Press
Chickens may not be able to fly very far, but the price of eggs is soaring. A lingering bird flu outbreak, combined with soaring feed, fuel and labor costs, has led to U.S. egg prices more than doubling over the past year, and hatched a lot of sticker shock on grocery aisles. The national average price for a dozen eggs hit $3.59 in November, up from $1.72 a year earlier, according to the latest government data. That’s putting stress on consumer budgets and the bottom lines of restaurants, bakeries and other food producers that rely heavily on eggs.
/jlne.ws/3ZunO1M

Miscellaneous

Will AI Make Creative Workers Redundant?
Christopher Reid – The Wall Street Journal
ChatGPT has some wondering if artificial intelligence will make human creativity obsolete. Released in November by Open AI, the chatbot can quickly write readable prose in response to natural-language prompts better than most people can. When one of my colleagues asked ChatGPT for a 250-word summary of Umberto Eco’s philosophy of translation, it produced a text that would put many educated adults to shame-and it did so within seconds. Reactions to this new AI have ranged from panic to wonder.
/jlne.ws/3GWrtyj

Workplace Friendships Are Worth the Awkwardness; Research suggests forging personal connections matters more than financial success.
Sarah Green Carmichael – Bloomberg
Which is more important to your overall well-being: the work you do, or the people you work with? Today, we tend to focus a lot on the work itself. For years, young people have been told to “follow your passion” and “do what you love.” Companies of all stripes have lured talent by promising that together, they and their employees can change the world. And although companies also brag about their company cultures, often this is a code for perks like flexibility.
/jlne.ws/3ir7zSP

Your Fancy New Manager Title Might Be Your Boss’s Way to Avoid Paying You Overtime; Study found increasing use of dubious titles like ‘price scanning coordinator’ for salaried workers.
Matthew Boyle – Bloomberg
Companies avoid paying about $4 billion in overtime wages by inventing dubious titles for US employees such as “director of first impressions” and “lead shower door installer,” according to new research on a common practice that skirts federal labor law. The practice, often deployed by retail and restaurant companies, takes advantage of the Fair Labor Standards Act (FLSA), which exempts firms from paying overtime wages if the employee is a manager and gets paid a salary above a certain threshold. From 2010 to 2018, the researchers found a 485% increase in job postings for salaried employees in dodgy managerial roles where duties rarely included any actual management. Companies avoided paying overtime on more than 151 million work hours via this practice, the study found, costing workers an estimated $4 billion in pay.
/jlne.ws/3CGccza

What the FTC’s Noncompete Agreement Ban Could Mean for You; A ban on noncompete agreements could go into effect this year. Here’s what to expect.
Ella Ceron and Jo Constantz – Bloomberg
Noncompete agreements bar about 30 million American workers from quitting their jobs to work for rival companies or start their own businesses, a practice that the Federal Trade Commission calls exploitative and wants to ban.
/jlne.ws/3VWC1lm

We visit more than 100 financial news websites daily (Would YOU do that?)

The Spread

Past JLN Newsletters

Music financing boom reverberates to markets

Music financing boom reverberates to markets

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...

Pin It on Pinterest

Share This Story