CTAs are minnows, not whales; Tall trend-following tales

Mar 7, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

The Financial Times has put together a movie titled “FTX: the legend of Sam Bankman-Fried” that tries to explain the phenomena of SBF and FTX. More importantly, it tries to explain why everyone (but CME’s Terry Duffy) fell for it.

The other day while I was musing (amusing myself) with my greatness after my introduction by DePaul Professor Lamont Black as “The Great John Lothian” I mentioned other “Great” things I liked. One of them was The Great British Bake Off, and you readers clicked on it as one of the most read stories of the day. Well, get ready for more Great British Bake Off. Now in the West End of London, you can go see and hear “The Great British Bake Off Musical.” I will not be starring in it, though if I were I am sure I would be great.

I am not a professional arborist, but I have driven to Florida this same time of year or a little later and I don’t remember seeing so many trees blossoming already in Kentucky and Tennessee. Well, it turns out that a warm winter has caused many trees to start their spring rituals early. The Wall Street Journal has the story with a title of “Trees Across the U.S. Are Sprouting Leaves Earlier Than Usual This Year.” The subheadline is “Spring is arriving almost three weeks ahead of schedule in some areas because of warmer temperatures.”

The Securities Traders Association of New York, Inc. is holding its 87th STANY Annual Conference on March 27. The keynote conversation will be with Virtu CEO Douglas Cifu and President, CIO of Weiss Multi-Strategy Advisors Jordi Visser.

One of my favorite firms has a couple of open positions that would be fun to hold. Geneva Trading is hiring a director of project management and a director of recruitment.

The U.S. Securities and Exchange Commission Division of Examinations is looking to fill two positions for a staff accountant, one in Boston, MA and one in Chicago, IL.

Well, Cheryl and I made it as far as Lake City, Florida last night and will be proceeding on to Sarasota today. Let me state for the record that Georgia is a very long state to drive through.

We have 30 people booked for videos for the FIA Boca Raton conference. I know there is one more I need to fit in and I have a couple of open slots on Tuesday afternoon, but otherwise the JLN video team and I are going to be very busy at Boca.

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


To better understand climate risks and opportunities and inform their strategies, financial institutions have turned toward using climate risk tools. A new report, the 2023 Climate Risk Landscape, explores market trends in physical risk and transition risk tools and provides detailed analysis on dozens of individual tools. A group of 44 banks convened by the UN Environment Program – Finance Initiative (UNEP FI) supported development of the report. Learn more and download the report here. ~SAED


Wall Street Expects to Boost Hiring to Fill Electronic-Trading Roles
Katherine Doherty – Bloomberg
Banks and broker-dealers are planning to add headcount in equities electronic-trading roles, bucking the trend in other Wall Street businesses where workforces are being cut. More than half of US sell-side firms plan to expand their equities electronic desk coverage in the next year and a half, according to a survey of 25 firms by Coalition Greenwich. Almost 30% say they expect to add headcount in execution and analytics consulting, while roughly a quarter report plans to hire in algorithmic sales.

****** And if I were 40 years younger, I would say “ME, ME, ME!!!!”~JJL


Why Toblerone Is Dropping a Famous Swiss Mountain From Its Packaging
Jenny Gross – The New York Times
Toblerone chocolate will no longer feature the distinctive Matterhorn mountain peak on its packaging in order to avoid violating a Swiss law that protects national symbols, as the brand’s owner shifts some production out of Switzerland. Mondelez International, the U.S. maker of Toblerone, said in a statement that it had to adapt its packaging to comply with Swiss law, and that it was making changes to its production to meet increased demand.

****** Kim Taylor, your Giant Toblerone is now going to be worth something. But alas, you gave it away. ~JJL


Dimon Says Ukraine War, China Relations Are His Top Concerns; Ukraine is ‘the thing I worry about most,’ JPMorgan CEO says; He calls potential for artificial intelligence ‘staggering’
Hannah Levitt and Ed Hammond – Bloomberg
The war in Ukraine and relationships with China are among the top concerns facing the economy, Jamie Dimon said. “The thing I worry the most about is Ukraine,” the JPMorgan Chase & Co. chief executive officer said Monday on Bloomberg Television. “It’s oil, gas, the leadership of the world, and our relationship with China – that is much more serious than the economic vibrations that we all have to deal with on a day-to-day basis.”

****** I am just glad Jamie has something to worry about.~JJL


Monday’s Top Three
Our top story Monday was the Financial Times’ How Citadel harnessed the weather to claim hedge fund crown. Second was A 40-year stock trader and mathematician who had a 366% return shares her 4 biggest tips, plus the winning strategy she learned from her worst mistake, from Business Insider. Third was the remembrance of the late Mike Newsham from Dan Keegan of optionthinker.com on LinkedIn.


MarketsWiki Stats
27,226 pages; 243,266 edits
MarketsWiki Statistics


Lead Stories

CTAs are minnows, not whales; Tall trend-following tales
Robert Carver – Financial Times
Since the dawn of finance there have been big traders and small traders, and small traders have fantasised about predicting the intentions of big traders. If you can guess what a George Soros type is about to do (without using inside information) then front-running their trades is a route to easy money. The problem is that big traders aren’t always as predictable as the rest of us would like. Most of the good ones subscribe to Keynes’ motto: “When the facts change, I change my mind.” Potential front-runners would prefer the minds of Soros and other whales to remain firmly unchanged. – it would be easier to predict what they might do next.

******Robert Carver is an independent futures trader and author. He is also a former portfolio manager of a systematic CTA fund at Man AHL.

Sceptical investors worry whether advances in AI will make money; Silicon Valley VCs fearing a repeat of falling crypto values warn against pouring cash into hype-fuelled start-ups
George Hammond – Financial Times
Gordon Ritter, founder of San Francisco-based venture fund Emergence Capital, believes that recent developments in the field of artificial intelligence represents a significant technological advance. He just cannot see a way to make money out of them. “Everyone has stars in their eyes about what could happen,” says Ritter, whose firm was an early investor in successful start ups such as Zoom. “There’s a flow [of opinion that AI] will do everything. We’re going against that flow.”

China overhauls ministries to take on the west in tech; Measures will also tighten financial oversight as Xi Jinping seeks to strengthen control over government
FT reporters
China will overhaul supervision of its financial system and bolster science and technology to try to catch up with the west, as Xi Jinping embarks on a third term as president with one of the biggest reforms of the state apparatus in years. The changes – part of a series of ministerial reforms to China’s state council, the country’s cabinet – include establishing a new financial regulatory commission, reorganising the science and technology ministry and creating a department to oversee China’s vast trove of data.

China to set up new financial regulator in sweeping reform
China will form a new national financial regulatory body, consolidating oversight and replacing its banking and insurance watchdog as part of a wider government overhaul announced on Tuesday that includes plans for a national data bureau. The financial regulation proposal, presented to China’s parliament during its annual meeting, would bring supervision of the industry, excluding the securities sector, into a body directly under the State Council, or cabinet, in an effort to strengthen institutional oversight.

Grayscale-SEC Fight Could Clear the Way for Anybody to Speculate on Bitcoin
Allyson Versprille and Sabrina Willmer – Bloomberg
The risks of creating a new way for retail investors to pour money into cryptocurrency markets are at the heart of a court fight Tuesday between Grayscale Investments LLC and a top US financial regulator.

World’s Riskiest Markets Stumble Into Crisis With Dollars Scarce
Karl Lester M. Yap and Scott Squires – Bloomberg
Hospitals delaying surgery in Sri Lanka. International flights suspended in Nigeria. Car factories shuttered in Pakistan. In some of the world’s most vulnerable developing nations, the situations on the ground are dire. Shortages of dollars are crimping access to everything from raw materials to medicine. Meanwhile governments are struggling with their debts as they chase rescue packages from the International Monetary Fund. It’s forcing a rethink of the bullish emerging-market consensus that swept Wall Street just a few months ago. Granted, few expected the challenges facing certain frontier economies to be remedied this year, but pain has deepened alongside a rebound in the greenback.

Oil companies line up for billions of dollars in subsidies under US climate law; Inflation Reduction Act’s tax credits include technologies favoured by fossil fuel sector
Justin Jacobs – Financial Times
An oil industry that opposed President Joe Biden’s signature climate law is now manoeuvring to claim billions of dollars of US tax credits established by the legislation. The Inflation Reduction Act, passed in 2022, aims to slash greenhouse gas emissions by supercharging clean energy industries. Its $369bn in climate provisions has sparked new investments in renewable power generation and in manufacturing everything from electric vehicle batteries to solar panels.

Black Knight and Intercontinental Exchange Announce Agreement to Sell Black Knight’s Empower LOS Business to Constellation Software Inc. and Revised Terms of Merger Agreement; Divestiture contingent on closing of ICE’s acquisition of Black Knight; Amended transaction terms value Black Knight at $75 per share
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE) and Black Knight, Inc. (NYSE: BKI) today announced that, in connection with their previously announced merger agreement for ICE’s acquisition of Black Knight, they have agreed to sell Black Knight’s Empower loan origination system (LOS) business, including its Exchange, LendingSpace and AIVA solutions, to a subsidiary of Constellation Software Inc. (TSX: CSU). ICE and Black Knight have also amended the terms of their merger agreement.

China’s Foreign Minister Says Ties With U.S. Risk Going Off the Rails; Qin Gang warns Washington against indulging in what he calls new McCarthyism
Brian Spegele – The Wall Street Journal
China’s foreign minister warned that the U.S. strategy toward China risked plunging the countries into conflict and pledged to continue responding strongly to what he viewed as persistent attacks on Beijing by Washington.

Stripe Faces $3.5 Billion Tax Bill as Employees’ Shares Expire; Firm plans to use $600 million for taxes to exercise options; Stripe has discussed $50 billion value, down from $95 billion
Jennifer Surane and Gillian Tan – Bloomberg
Stripe Inc., one of the world’s most valuable startups, told investors it plans to use money it receives in its latest round of fundraising to help cover a roughly $3.5 billion tax bill. Using an illustrative valuation of $55 billion, the payments giant said it is looking to raise about $2.3 billion to cover tax withholdings in the first quarter, according to an investor document seen by Bloomberg News. It plans to withhold an additional $500 million and $700 million in taxes later this year and next year, respectively.

Chronicle of an oil shock foretold; Crude times
Robin Wigglesworth – Bloomberg
Given how surprisingly hot economic data has been lately, China’s reopening and all the sudden chatter of a “no landing” scenario, you’d expect oil prices to also tick up. But no. Brent and WTI both kept sagging since the summer of 2022, and have been ambling around the $85-90 and $75-80 range respectively for most of 2023. What’s up?

Private credit edges out banks to offer Carlyle largest direct loan of its kind; Apollo and Blackstone among those poised to provide $5.5bn of debt to buyout group for purchase of 50% stake in Cotiviti
Eric Platt – Financial Times
Private credit groups including Apollo, Ares and Blackstone are poised to write the largest direct loan on record as they continue to muscle in on a lucrative business traditionally dominated by Wall Street banks. The lenders are increasingly confident they can edge out investment banks including JPMorgan Chase and Goldman Sachs in a deal to fund Carlyle’s acquisition of a 50 per cent stake in healthcare analytics company Cotiviti, according to five people briefed on the transaction.

The Debt Ceiling Is the Risk Wall Street Doesn’t Want to Think About; The consequences of the government defaulting on its bills are so terrible that investors just assume a deal will happen.
Liz McCormick, Erik Wasson, Josh Wingrove and Mike Dorning – Bloomberg
Conventional wisdom says the US will avoid a devastating federal payments default later this year. But conventional wisdom has proved spectacularly wrong months ahead of shocks that upended the world in recent years: the failure of Lehman Brothers, the 2016 US election, the global spread of Covid-19. The source of this potential shock is a procedural quirk of the US government that’s intersected with soaring partisan hostility. The federal debt has hit a legal limit imposed by Congress, and Republicans in the House of Representatives say they want concessions from Democrats and the White House before raising it. Such standoffs aren’t new. But lawmakers have never failed to pass an increase or suspension of the debt ceiling before the Department of the Treasury ran out of cash to make good on US obligations.

UK, EU Regulators Are Shaping Their Own Approach to Crypto; The UK Treasury and European Union are exploring various regulatory frameworks within crypto.
Philip Lagerkranser and Muhammad Farouk Abdulrahman – Bloomberg
Over the past few weeks, we’ve seen US regulators, both federal and state in some cases – take aim at crypto companies with accusations of fraud and unregistered securities offerings. The moves have sent shockwaves through the digital-asset industry and raised concerns about potential over-regulation.

Nigerians’ Rejection of Their CBDC Is a Cautionary Tale for Other Countries
Nicholas Anthony – CoinDesk
In Nigeria, citizens have taken to the streets to protest the nation’s cash shortage, further objecting to their government’s implementation of a central bank digital currency (CBDC). The shortage came about due to cash restrictions aimed at pushing the country into a 100% cashless economy. Yet, instead of adopting the CBDC, Nigerian protesters are demanding paper money be restored.

Australia’s Sovereign Wealth Fund Wary of China-US Fallout
Amy Bainbridge – Bloomberg
The chairman of Australia’s A$243.5 billion ($164 billion) sovereign wealth fund says he’s increasingly wary of being caught in the crosshairs of US-China tensions and the potential for the Biden administration to place investment bans on Chinese companies. Peter Costello said he could “easily see” such bans being introduced, which could lead to the Future Fund having to write down its Chinese assets as it did with Russian investments in the wake of sanctions.

FTX: the legend of Sam Bankman-Fried
Petros Gioumpasis and Gregory Bobillot – Financial Times
FTX, Sam Bankman-Fried’s cryptocurrency exchange, exploded onto the scene in just a few years. Endorsed by celebrities and accepted by the establishment, it attracted big-name investors and was valued at $32bn before it collapsed in a matter of days. Regulators fell for it, venture capitalists fell for it, celebrities fell for it – everyone fell for the legend of Sam.

The SEC’s expiring no-action letter could result in equal treatment for US investors regarding research bundling; Expected to expire on 3 July 2022, the SEC’s no-action letter would allow US investors to benefit from cost transparency and the freedom of broker selection that European investors have achieved through Mifid II.
Wesley Bray – The Trade
Last year, the Securities and Exchange Commission (SEC) revealed that it was going to allow its no-action letter to the Securities Industry and Financial Markets Association (SIFMA), based on enforcements surrounding research services, to expire on 3 July 2022.

What Happened at the Month-End Fix?
Colin Lambert – The FullFX
An occasional question over the data published by The Full FX for every month-end Fix is that the overall savings are often boosted by activity in relatively minor currencies – this is refuted by the latest monthly data where not only were there decent savings across the board, but with the exception of the NZD, the major currencies all offered savings above the median.

Ukraine Invasion

The West Is Losing the Messaging War Over Ukraine
Mihir Sharma – Bloomberg
Here in New Delhi, policy makers are beginning to worry. India’s long-awaited presidency of the G-20 grouping is turning out to be even more difficult than they anticipated. Indian leaders hope the G-20 can effectively replace the various other atrophied organs of multilateralism. But two major summits in recent weeks ended without a joint communique, with countries so sharply divided over the war in Ukraine that they could not even sign up to a common statement on other pressing issues.

Ukraine vows to defend Bakhmut as Russian forces try to storm it
Oleksandr Kozhukhar – Reuters
Ukraine’s top generals have vowed to keep defending the eastern city of Bakhmut, President Volodymyr Zelenskiy said, as Russian forces fought to tighten their siege and secure their first major battlefield gain in more than six months. Russian forces have been trying to take Bakhmut for months and say capturing it would be a step towards its objective of seizing all of the surrounding Donbas region. But Western strategists say it would be more of a pyrrhic victory given the time taken and casualties suffered.

He Heeded Russia’s Call to Enlist. Five Months Later, He Was Dead.
Neil MacFarquhar and Milana Mazaeva – The New York Times
Soon after he deployed to Ukraine last fall, Pvt. Ivan A. Ovlashenko filmed a short video of himself wearing camouflage fatigues and an olive green fleece hat, sitting in a woods flecked with yellowing leaves while fellow soldiers nearby readied an artillery round to fire toward the Ukrainian lines. “I am recording everything right,” he said, grinning before shouting a warning, “Mortar!” The clip was meant to reassure relatives back in Russia that his sudden transition to frontline artilleryman was coming along just fine. Until it wasn’t.

Volodymyr Zelenskyy doubles down on defending city of Bakhmut; Ukraine’s president shrugs off allies’ concerns about merits of holding on to eastern city under Russian assault
Roman Olearchyk – Financial Times
Ukrainian president Volodymyr Zelenskyy has doubled down on defending Bakhmut despite earlier signals of a withdrawal from the eastern city that is almost surrounded by Russian troops. In an overnight video address, Zelenskyy said he had met his top generals who had “unanimously” advised “do not withdraw but reinforce”.

Ukraine Shift on Sunflower-Seed Exports Calms Cooking-Oil Market Rocked by War; Kyiv shipped 190,000 tons of seeds in January, compared with 4,000 tons a year prior
Yusuf Khan – The Wall Street Journal
Much of Ukraine’s sunflower-seed oil exports remain curtailed by the war, but farmers are sending out the raw seeds instead, stabilizing the global market for cooking oil. In January, Ukraine exported 347,000 tons of sunflower-seed oil, down sharply from the 612,000 tons exported in January 2022 before the war, according to data from Black Sea agricultural consulting firm SovEcon. A drop in exports from Ukraine, the world’s second-largest producer after Russia, sent prices for sunflower-seed oil and other cooking oils soaring in the early days of the Russian invasion as buyers scrambled for alternatives.

Ukraine Shift on Sunflower-Seed Exports Calms Cooking-Oil Market Rocked by War; Kyiv shipped 190,000 tons of seeds in January, compared with 4,000 tons a year prior
Yusuf Khan – The Wall Street Journal
Much of Ukraine’s sunflower-seed oil exports remain curtailed by the war, but farmers are sending out the raw seeds instead, stabilizing the global market for cooking oil. In January, Ukraine exported 347,000 tons of sunflower-seed oil, down sharply from the 612,000 tons exported in January 2022 before the war, according to data from Black Sea agricultural consulting firm SovEcon. A drop in exports from Ukraine, the world’s second-largest producer after Russia, sent prices for sunflower-seed oil and other cooking oils soaring in the early days of the Russian invasion as buyers scrambled for alternatives.

Ukraine’s Soldiers Know That Our Enemy Is in Shock
Yegor Firsov – The New York Times
An infantryman’s least favorite weather is a temperature of 35 degrees Fahrenheit and pouring rain, when the trench floods with knee-deep, near freezing water. Surviving in such conditions is truly an art, and it’s at these moments in particular that a trench has a special energy. Here people fight for their lives, for every manifestation of it. Here communion with God is sincere and more frequent than in any church.

Exchanges, OTC and Clearing

NYSE, Citadel and Schwab Unite Against SEC Market-Rules Revamp
Katherine Doherty and Lydia Beyoud – Bloomberg
Some of the biggest names in Wall Street trading are urging the US Securities and Exchange Commission to pull back on plans to overhaul rules for the stock market. The New York Stock Exchange, Citadel Securities and Charles Schwab & Co. on Monday warned that a suite of proposals the SEC released in December could harm investors. The new regulations, if finalized, could damp liquidity in the market, the firms said.

CME Group to Launch Offshore Renminbi Options on April 3
CME Group
CME Group, the world’s leading derivatives marketplace, today announced that it will launch options on its existing U.S. Dollar / Offshore Chinese Renminbi (USD/CNH) futures on April 3, pending regulatory review. “Offshore Renminbi has become a core part of global FX trading and we’re delighted to offer these options contracts to help clients manage currency risk as China resets its economy during this period of reopening.” said Paul Houston, Global Head of FX Products, CME Group.

Please be Aware of Suspicious Apps and Websites Pretending to be JPX
JPX has become aware of an application and website providing services related to trading of stocks, commodities, crypto assets, and other products that is not provided by JPX Group but uses the name “JPX,” which is a trademark owned by the Group. JPX Group does not currently provide any trading services directly to individuals and has no relationship with this or other such apps or websites. Please note that JPX Group currently provides no smartphone applications other than the Tosho Money-bu and Analyst Report Library apps shown on the below page.

EEX Group Monthly Volumes – February 2023
Power: EEX Group reports its February 2023 volumes with the following highlights:
In February 2023, the European Power Spot Market, operated by EPEX SPOT, saw a 7% increase in trading volume year-on-year, reaching a total of 53.2 TWh. Whilst Day-Ahead trading registered a 3% growth, Intraday Markets trading increased by 19%.

February 2023 figures at Eurex
OTC Clearing and Repo volumes continued their upward trend. Repo Market volumes nearly doubled to EUR 209.8 billion y-o-y. Notional outstanding in OTC clearing up 21 percent. Eurex, Europe’s leading derivatives exchange, reports 146.1 million traded contracts in February in its listed business, 12 percent less compared to February 2022. Interest rate derivatives went down by 7 percent year-on-year in February from 65.6 million to 61.4 million. Index derivatives decreased by 14 percent, from 78.8 million to 67.9 million contracts traded. Trading in equity derivatives fell by 23 percent compared to February 2022, from 21.7 million to 16.7 million contracts.

Creactives Group lists on Euronext Growth Milan Professional Segment
5th listing of 2023 on Euronext Growth Milan; Creactives Group brings the total number of companies listed on Euronext Growth Milan to 195; 8th listing on Euronext in 2023. Total placement volume of the offering equal to euro 1 million. Borsa Italiana, part of the Euronext Group, today congratulates Creactives Group on its listing on the Professional Segment of Euronext Growth Milan. Creactives Group develops Artificial Intelligence technologies for the Supply Chain industry, delivered in “Software as a Service” mode, through which it supports customers in digitising their control and data management activities throughout the supply chain.

MIAX Exchange Group – Options and Equities Markets – Daylight Saving Time – March 2023
Please be advised the MIAX Options, MIAX Pearl Options, MIAX Emerald Options and MIAX Pearl Equities Exchanges are scheduled to begin Daylight Saving Time at 2:00 AM on Sunday, March 12, 2023. The MIAX Exchange Group will adjust the system times ahead 1 hour for trading beginning Monday, March 13, 2023.

Miami International Holdings Reports Trading Results for February 2023; Volume Reaches Record Daily Market Share of 18.13% in Multi-Listed Options and 1.57% in U.S. Equities
Miami International Holdings, Inc. today reported February 2023 trading results for its U.S. exchange subsidiaries – MIAX®, MIAX Pearl® and MIAX Emerald® (together, the MIAX Exchange Group), and Minneapolis Grain Exchange (MGEX™). February 2023 Trading Volume Highlights. Total U.S. multi-listed options market share for the MIAX Exchange Group reached 16.8%, a monthly record and an 18.2% year-over-year (YoY) increase. Total multi-listed monthly volume reached a record 137.1 million contracts, a 27.6% YoY increase.

TMX Group Consolidated Trading Statistics – February 2023
TMX Group
TMX Group Limited today announced February 2023 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha) and Montréal Exchange (MX).

MGEX Reports Trading Results for February 2023; Monthly Volume Increases 52.9% from January 2023
Minneapolis Grain Exchange (MGEX), a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), today reported February 2023 trading volume of 253,274 contracts, representing an 18.8% year-over-year (YoY) decrease from the same period in 2022 and a 52.9% increase from January 2023.

Moscow Exchange expands the list of instruments available at evening trading
On March 9, 2023, the Moscow Exchange will increase the number of securities available for transactions during the evening trading session on the stock market. 11 securities will be added to the list of instruments at the evening trading on the equity market: common shares of Beluga Group, FESCO, Sovcomflot, M.Video, OGK-2, Segezha, Gazprom Neft, Samolet Group, Unipro, common and preferred shares of Mechel.

Replacements in indices
The Index Maintenance Sub-Committee (Equity) of NSE Indices Limited has decided to make replacement of stocks in various indices as listed hereunder. These changes shall become effective from March 31, 2023 (close of March 29, 2023).


TS Imagine to launch real-time risk platform for prime brokers; New SaaS solution RiskSmart X will provide prime brokerage and risk management professionals with a real-time overview of their exposure across asset classes.
Wesley Bray – The Trade
Trading, portfolio and risk management solutions provider TS Imagine has announced the broad availability of RiskSmart X: its newest cross-asset class, real-time risk platform. The Software-as-a-Service (SaaS) solution is designed for prime brokerage and risk management professionals who require a real-time, comprehensive overview of their exposure across asset classes.

SMBC Nikko Securities adopts smartTrade’s FX platform to bolster regional trading capabilities; LiquidityFX platform from smartTrade will offer SMBC Nikko Securities workflows that will help improve trading procedures using APIs.
Wesley Bray – The Trade
Japanese securities firm SMBC Nikko Securities has selected smartTrade Technologies’ fully-hosted and managed FX platform LiquidityFX to enhance its FX trading activities in Japan. End-to-end solution LiquidityFX offers connectivity to more than 130 liquidity providers.

Brazil announces pilot for digital currency seeking to leverage financial services
Brazil’s central bank announced the start of a digital currency pilot project on Monday, aiming to replicate the success of its instant payment system Pix to popularize financial services in the country. According to Fabio Araujo, coordinator of the initiative at the bank, the public use of the digital currency should begin at the end of 2024, after the completion of the testing phase – which will include buying and selling of federal public bonds among individuals – and its subsequent evaluation.

Silicon Valley’s Obsession With Killer Rogue AI Helps Bury Bad Behavior; Sam Bankman-Fried made effective altruism a punchline, but the do-gooding philosophy is part of a powerful tech subculture full of opportunism, money, messiah complexes-and alleged abuse.
Ellen Huet – Bloomberg
Sonia Joseph was 14 years old when she first read Harry Potter and the Methods of Rationality, a mega-popular piece of fan fiction that reimagines the boy wizard as a rigid empiricist. This rational Potter tests his professors’ spells with the scientific method, scoffs at any inconsistencies he finds, and solves all of wizardkind’s problems before he turns 12. “I loved it,” says Joseph, who read HPMOR four times in her teens. She was a neurodivergent, ambitious Indian American who felt out of place in her suburban Massachusetts high school. The story, she says, “very much appeals to smart outsiders.”


Dish Network Sinks After Ransomware Data Breach; Dish says personal data may have been extracted from systems; BofA double-downgraded the stock prior to the disclosure
Ryan Vlastelica and Andrew Martin – Bloomberg
Dish Network Corp. shares slumped to their lowest level in more than a decade after the company said some data had been stolen in a recent ransomware attack. Separately, Bank of America downgraded the stock to underperform. Dish learned on Monday that some data, including potentially personal information, was extracted from its IT systems as part of an earlier cyberattack, according to a company filing.

Trudeau orders new probes into alleged election interference by China
Kanishka Singh and Ismail Shakil – Reuters
Canadian Prime Minister Justin Trudeau said on Monday he will appoint an independent special investigator to probe alleged election interference by China and also announced separate new probes into the suspected foreign meddling. Canadian media have recently published detailed reports, citing anonymous intelligence sources, alleging schemes run by China to interfere in Canada’s elections in 2021 and 2019.

Coinbase Tells User Missing $96,000 After Security Breach Is His Problem, Suit Claims; Account holder claims he lost almost all savings from a hack; Ferguson says Coinbase responsible for unauthorized withdrawal
Joel Rosenblatt and Malathi Nayak – Bloomberg
Coinbase Global Inc. says it’s not responsible for losses stemming from a security breach, according to an account holder who sued in an attempt to recover $96,000 that he says was stolen from him. Jared Ferguson of Staten Island, New York, claims he received a text from his mobile carrier in May describing a SIM card change request that he hadn’t made. When he restored service to his iPhone the next day with a new card, Ferguson said he learned that almost his entire life savings was gone from his Coinbase account.

Israel Blames Iran-Backed Hackers for Recent University Breach
Marissa Newman – Bloomberg
Hackers linked to the Iranian government were behind a cyberattack last month that shut down the operating systems of an Israeli university, Israel’s cyber authority said Tuesday. The group responsible for the hack was identified as MuddyWater, which is affiliated with Iran’s Ministry of Intelligence and Security, the National Cyber Directorate said in a statement. The Feb. 12 attack on the Israel Institute of Technology, also known as Technion, used malware to encrypt the operating systems, the Israeli investigation found.


FTX’s trading affiliate Alameda sues Grayscale over crypto investments
Nikou Asgari, Joe Miller and Stephen Gandel – Financial Times
FTX trading affiliate Alameda has sued crypto investment company Grayscale and its owner Digital Currency Group over the structure of their large bitcoin and Ethereum trusts, dealing a further blow to the SoftBank-backed crypto conglomerate. Alameda, which is being run by restructuring expert John Ray alongside other FTX affiliates, accused Grayscale and DCG’s management of being “possessed by self-interest” and enriching themselves “at the expense of trust shareholders”, by refusing to allow redemptions and charging exorbitant fees.

FTX’s Crash Exposed an Insurance Black Hole That Risks Impeding the Crypto Sector Recovery; Digital-asset platforms lack insurance unlike stock brokerages
The total value locked in DeFi insurance is just $300 million
Sidhartha Shukla – Bloomberg
A long road lies ahead to repair confidence in crypto after unprecedented bankruptcies and hacks, including the major challenge of giving investors a way of insuring against such events. Stock brokerage accounts often come with some cover against outcomes like bankruptcy but digital-asset platforms provide few if any shields, a reality underlined by the November collapse of Sam Bankman-Fried’s FTX exchange. Investors seeking such policies face a tough task. Traditional insurers are wary and crypto-native solutions in decentralized finance – or DeFi – account for a fraction of the $1.1 trillion digital-asset sector. For instance, funds locked in DeFi insurance protocols amount to about $300 million, compared with more than $80 billion in DeFi services overall, according to data from DeFiLlama.

Investors Should Have Seen FTX Coming
R. Jeffrey Smith – Barron’s
Everything looked ideal, until it didn’t. A supposed whiz kid with MIT branding who had made a small fortune in currency-price arbitrage invited investors to make much larger fortunes, using a special trading sauce whipped up for a hot new financial arena. He set up a workplace offshore-but wasn’t everyone working remotely anyway? He had a cherub’s face, an earnest demeanor, and an impressive family pedigree.

Justice Department Pushes for Independent Investigation of FTX Collapse
Andre Beganski – Decrypt
The U.S. Trustee in FTX’s bankruptcy case pushed back against a recent court order by Judge John Dorsey Monday, filing an appeal against the judge’s decision not to appoint an independent examiner to look into the bankrupt exchange’s collapse. Previously, a motion made by the U.S. Trustee-who was selected by the Department of Justice to maintain the integrity of FTX’s bankruptcy proceeding-was denied.

Sam Bankman-Fried Wants to Watch Netflix and Read Crypto News While Awaiting Trial
Jason Nelson – Decrypt
While Sam Bankman-Fried awaits his day in federal court, he should be allowed to conduct legal research online, keep up with news and sports, shop on Amazon, and place food delivery orders, according to a letter submitted to the court by U.S. Attorney Damian Williams. A previous request that focused on messaging applications was rejected last month by Federal Judge Lewis Kaplan.

Crypto Market Cycles Are the ‘Main Driver’ of Industry Innovation: Fireblocks Web3 Lead
Jason Nelson – Decrypt
Calling the crypto industry a roller coaster would be an understatement. From unbelievable highs to incredible lows, it takes a strong stomach and thick skin to stay in the game. For Omer Amsel, head of Web3 products at Fireblocks, that rollercoaster is what drives the space forward. “You have your bull markets, and then your bear markets, and then your bull markets,” Amsel told Decrypt at ETH Denver.

Kraken to launch U.S. crypto bank amid regulatory headwinds
Zoltan Vardai – Forkast
U.S.-based cryptocurrency exchange Kraken is working on establishing its own bank, despite the recent regulatory headwinds, said Kraken’s chief legal officer, Marco Santori, on The Scoop podcast. “Kraken bank is very much on track to launch,” said Santori on The Scoop podcast’s latest episode released on March 6.

Silvergate’s Woes Are Latest Blow for Crypto Traders
Misyrlena Egkolfopoulou, Yueqi Yang and Paige Smith – Bloomberg
The average US crypto trader has probably never heard of the Silvergate Exchange Network. But the suspension of SEN by Silvergate Capital Corp., the struggling crypto-exposed bank, is the latest blow for the beleaguered industry. Silvergate has already been hit by a run on deposits, and the discontinuation of its flagship payment network adds to mounting questions over whether it can survive. It also creates potential problems for crypto traders.

The Future of Fiat On-Ramps; Data Debrief: March 6th, 2023
Markets are steady to start the week after a volatile Friday in reaction to the closure of SEN, Silvergate’s instant payment network. In other news, the SEC has its eyes set on Binance.US, the Shanghai upgrade on Goerli testnet got a launch date, and Yuga Labs released an ordinals NFT collection.

FTX’s trading affiliate Alameda sues Grayscale over crypto investments
Nikou Asgari, Joe Miller and Stephen Gandel – Financial Times
FTX trading affiliate Alameda has sued crypto investment company Grayscale and its owner Digital Currency Group over the structure of their large bitcoin and Ethereum trusts, dealing a further blow to the SoftBank-backed crypto conglomerate. Alameda, which is being run by restructuring expert John Ray alongside other FTX affiliates, accused Grayscale and DCG’s management of being “possessed by self-interest” and enriching themselves “at the expense of trust shareholders”, by refusing to allow redemptions and charging exorbitant fees.

South Korea reports US$4.3 billion in illegal foreign transactions involving cryptocurrencies
Danny Park – Forkast
The Korea Customs Service has identified 5.6 trillion Korean won (US$4.3 billion) worth of illegal foreign currency transactions last year involving cryptocurrencies, or trading to take advantage of higher prices for certain tokens in South Korea compared with overseas markets, according to local media reports.

Thailand offers tax breaks for companies issuing investment tokens
Thailand’s cabinet on Tuesday agreed to waive corporate income tax and value-added tax for companies that issue digital tokens for investment, a government spokeswoman said.

NFT Startup Candy Digital Taps Getty Images for ’70s Music and Photos
Andre Beganski – Decrypt
When Candy Digital launched in 2021, the NFT firm came out swinging with its official line of Major League Baseball collectibles. Stepping up to the plate again, this time with Getty Images, the company is now searching for its next potential hit. After sifting through Getty’s expansive archive of stock photos, Candy has curated a collection of photos centered on some of the most influential musicians of the ’70s and the photographers that captured them, including rock icons like Elvis Presley, John Lennon, and James Brown. The collection will launch via an open-edition mint scheduled on March 21. The launch comes after a partnership between Candy and Getty was originally unveiled last May.


US TikTok Ban Shifts to Senate Bill That Biden Team May Support; Senators Warner, Thune to unveil bill Tuesday in Washington; Bill would empower Commerce Department to restrict apps
Daniel Flatley and Jenny Leonard – Bloomberg
The US is moving closer to restricting access to the popular video-sharing app TikTok, with Senate Intelligence Committee Chairman Mark Warner set to unveil a bill Tuesday that the Biden administration is poised to support, according to people familiar with the issue. The measure, one of many being proposed in Congress to restrict Bytedance Ltd.’s TikTok but isn’t expected to pinpoint the company by name, would give the US the power to ban or prohibit foreign technologies or companies when necessary, said one of the people, who asked not to be identified discussing private deliberations.

Private Equity Slows China Investments as Biden Prepares Curbs; White House readying executive order to scrutinize investments; Policy uncertainty has led PE firms to pull back from China
Dawn Lim, Jenny Leonard and Sarah McBride – Bloomberg
Money managers on Wall Street and in Silicon Valley are learning once again that investing in China can be fraught. The Biden administration is close to completing an executive order that would curb US investment in China’s tech industry, foreshadowing a further slowdown in bets on the world’s second-largest economy.

New York to investors: drop dead; Bombshell bills
Jay Newman – Financial Times
William S. Burroughs could have been thinking of sovereign debt investors when he quipped that “sometimes paranoia’s just having all the facts.” The antics of the New York State legislature are a case in point. Out of nowhere, a package of proposed bills that would dramatically undermine the enforceability of sovereign debt contracts governed by New York law are wending their way through the New York State Assembly and Senate.

Push to give Biden new powers to ban TikTok moves ahead in Congress
David Shepardson – Reuters
Two U.S. senators said on Monday their efforts to tackle foreign technology threats were advancing and they will on Tuesday unveil legislation aimed at granting President Joe Biden’s administration new powers to ban Chinese-owned video app TikTok and other apps that could pose security risks. A White House spokeswoman told Reuters the administration is “working with Congress” but declined to say if it would endorse the Senate legislation.

White House Is ‘Aware of’ Silvergate Situation, Spokeswoman Says
Nikhilesh De – CoinDesk
White House press secretary Karine Jean-Pierre said the Biden administration is monitoring Silvergate Bank’s (SI)) situation, comparing it with those at other crypto companies and saying President Joe Biden has called on Congress to take action in this area. During her White House press briefing Monday, Jean-Pierre said she couldn’t speak to Silvergate specifically, but noted that a number of crypto companies have “experience[d] significant issues” in recent weeks and pointed to statements from federal bank regulators warning of the risk cryptocurrencies could pose to banks and other financial institutions.

EX-UK leader Boris Johnson nominates father for knighthood – report
Former British prime minister Boris Johnson has nominated his father Stanley for a knighthood in the list of honours he can grant as an outgoing leader, the Times newspaper reported on Monday, drawing accusations of cronyism. The Times said Johnson had put forward as many as 100 names for awards. His predecessors Theresa May and David Cameron nominated roughly 60 each. The newspaper did not specify what service Stanley Johnson’s nomination was in acknowledgement of.

Don’t just blame the regulator for London’s failed American dreams
Helen Thomas – Financial Times
When the UK suggested making board directors responsible for signing off internal controls over financial reporting, the reaction was furious. This was business unfriendly, City grandees thundered, it would deter good people from joining boards and bog down directors in bureaucracy. The proposal was modelled on the US Sarbanes-Oxley rules, which function perfectly well in the land of the free. But the British government backed off from the idea.

The U.S. Is Not Yet Ready for the Era of ‘Great Power’ Conflict
Michael R. Gordon – The Wall Street Journal
Clint Hinote returned from a deployment in Baghdad in the spring of 2018 to a new assignment and a staggering realization. A classified Pentagon wargame simulated a Chinese push to take control of the South China Sea. The Air Force officer, charged with plotting the service’s future, learned that China’s well-stocked missile force had rained down on the bases and ports the U.S. relied on in the region, turning American combat aircraft and munitions into smoldering ruins in a matter of days.

Gunvor chief says loss of Russian gas will cement US export role
Derek Brower, Myles McCormick, Justin Jacobs and David Sheppard – Financial Times
The collapse of Russian natural gas flows to Europe has given US fuel exports pivotal new importance in the global economy, the head of one of the world’s largest commodities traders has said, signalling a permanent change in the structure of global energy markets. Torbjörn Törnqvist, chief executive of Gunvor, spoke on Monday just over a year after Russia’s full-scale invasion of Ukraine. Russia has since cut gas exports to the EU by about 80 per cent.

Hong Kong Is Shutting the Last of Its Covid Quarantine Camps. Now What?
Kristine Servando – Bloomberg
In the almost three years that Hong Kong shut itself off to the world during Covid, hundreds of thousands of people were sent to isolate in vast quarantine camps built from scratch. As the city reopens, there is no plan yet on what to do with these metal containers that were emblematic of some of the city’s most extreme pandemic rules.

JPMorgan Expects Another Busy Year for Dealmakers in India; Geopolitical tensions could see firms diversify to India; Health care, energy, tech among active M&A sectors in 2023
Preeti Singh and Baiju Kalesh – Bloomberg
Dealmakers in India should expect another strong year for mergers and acquisitions as geopolitical tensions could propel companies to diversify into the South Asian nation, according to JPMorgan Chase & Co. India sealed its busiest M&A year ever with about $191 billion worth of transactions in 2022, bucking a global slump in deal activity, according to data compiled by Bloomberg.

China warns of potential conflict with US over containment strategy; Foreign minister Qin Gang calls on Washington to commit to ‘guardrails’ around Taiwan
Kathrin Hille – Financial Times
China’s foreign minister has warned of a clash with the US unless Washington ceases its attempts to contain Beijing, highlighting the Chinese Communist party’s concerns over escalating tension between the rival superpowers. “If the US doesn’t hit the brakes and continues to barrel down the wrong track, no amount of guardrails can prevent the carriage from derailing and crashing, and there will surely be conflict and confrontation,” Qin Gang said on Tuesday.


BaFin investigates operators of website buchecoinvestments.com
BaFin suspects the operators of the website buchecoinvestment.com of offering consumers financial and investment services without the required authorisation. The unknown operators do not have authorisation under the German Banking Act (Kreditwesengesetz – KWG) or the German Investment Firm Act (Wertpapierinstitutsgesetz – WpIG) to offer these services.

EU banking regulator urges crackdown on flouting of gender diversity rules; EBA review finds some big banks are aiming for less than 25% female representation on boards
Laura Noonan – Financial Times
The European Banking Authority wants supervisors across the EU to crack down on banks and investment companies that flout rules on promoting diversity after its research showed more than a quarter of groups are still ignoring requirements introduced in 2014.

CFTC’s PredictIt Claims Focus on Relationship Between Aristotle and New Zealand University
Steve Bittenbender – Casino.org
Nearly nine years ago, when the US Commodity Futures Trading Commission granted a New Zealand university a no-action letter to establish what’s known as PredictIt, an online political futures exchange, the federal regulatory agency set some ground rules for the site. The CFTC’s requirements included that Victoria University of Wellington operate the exchange as a nonprofit venture.

SEC Charges Rio Tinto plc with Bribery Controls Failures
The Securities and Exchange Commission today announced charges against global mining and metals company, Rio Tinto plc, for violations of the Foreign Corrupt Practices Act (FCPA) arising out of a bribery scheme involving a consultant in Guinea. The company has agreed to pay a $15 million civil penalty to settle the SEC’s charges.

SEC Files Emergency Action Against Miami Investment Adviser BKCoin and Principal Kevin Kang for Orchestrating $100 Million Crypto Fraud Scheme
The Securities and Exchange Commission today announced that it filed an emergency action in which it successfully obtained an asset freeze, appointment of a receiver, and other emergency relief against Miami-based investment adviser BKCoin Management LLC and one of its principals, Kevin Kang, in connection with a crypto asset fraud scheme.

SEC Files Emergency Action Against Miami Investment Adviser Bkcoin and Principal Kevin Kang for Orchestrating $100 Million Crypto Fraud Scheme
The Securities and Exchange Commission today announced that it filed an emergency action in which it successfully obtained an asset freeze, appointment of a receiver, and other emergency relief against Miami-based investment adviser BKCoin Management LLC and one of its principals, Kevin Kang, in connection with a crypto asset fraud scheme. From at least October 2018 through September 2022, BKCoin raised approximately $100 million from at least 55 investors to invest in crypto assets, but BKCoin and Kang instead used some of the money to make Ponzi-like payments and for personal use.

SEC Shuts Down ‘$100 Million Crypto Fraud’ in Miami
Mathew Di Salvo – Decrypt
Another day, another SEC crypto crackdown case. Today, the U.S. regulator announced emergency action against investment adviser BKCoin Management in connection with an alleged fraud scheme. The SEC alleged on Monday that Miami-based BKCoin Management raised $100 million from at least 55 investors to plug into cryptocurrency-but instead used it to splash on luxury items and make “Ponzi-like payments.”

Voyager Bankruptcy Judge Has Harsh Words for SEC’s Objection to Binance Deal
Stacy Elliott – Decrypt
The judge overseeing crypto broker Voyager Digital’s bankruptcy proceedings had harsh words for an objection from the Securities and Exchange Commission during a court hearing Monday. Without certain protections for “persons” involved in Voyager’s restructuring plan, which includes selling its distressed assets to Binance US, there would be “a sword hanging over the heads of anybody who’s going to do this transaction,” Judge Michael Wiles said during the hearing.

Voyager Denies SEC Claims VGX Token Is a Security as Binance.US Decision Looms
Jack Schickler – CoinDesk
Bankrupt crypto lender Voyager Digital has denied claims by the U.S. Securities and Exchange Commission that its VGX token is a security as it seeks court approval for a $1.02 billion buyout offer from Binance.US. Delays to the deal are costing the company $10 million per month, a filing Sunday with the U.S. Bankruptcy Court for the Southern District of New York on behalf of Voyager said. The firm expressed surprise at the delays and evolutions in the SEC’s position on the matter and urged a speedy resolution to its bankruptcy case. Voyager filed for Chapter 11 bankruptcy protection in July.

SEC Gets Emergency Asset Freeze and Receiver, Alleging $100M Crypto Scheme
The Securities and Exchange Commission filed an emergency action against investment advisor BKCoin Management and one of its principals in connection with an alleged $100 million crypto fraud scheme. The SEC said it successfully obtained an asset freeze, appointment of a receiver and other emergency relief against the Miami-based company and Kevin Kang.

Wall Street pushes back against SEC stock market reforms
John McCrank – Reuters
The New York Stock Exchange teamed up with retail broker Charles Schwab Corp and market maker Citadel Securities on Monday to ask the U.S. Securities and Exchange Commission to withdraw two recently proposed rules aimed at revamping how stocks trade. The move represents a coordinated industry push back against what are potentially the most impactful proposals in the SEC’s biggest attempt to reform stock market rules in nearly 20 years.

SEC Accuses Utah-Based Green United of Running $18M Crypto Mining Scam
Cheyenne Ligon – CoinDesk
The U.S. Securities and Exchange Commission (SEC) has filed suit against Green United, alleging the Utah-based company violated federal securities laws by selling $18 million worth of phony crypto mining equipment. According to the SEC’s complaint, Green United and two individuals – the company’s founder, 46-year-old Utah resident Wright Thurston, and its main promoter, 43-year-old Utah resident Kristoffer Krohn – offered investments in $3,000 “Green Boxes,” specialized crypto mining machines that purported to mine GREEN tokens on the Green Blockchain.

Rio Tinto to Pay SEC $15 Million Over Foreign Bribery Charges
Mengqi Sun – The Wall Street Journal
Mining and metals company Rio Tinto PLC agreed to pay a $15 million civil penalty to settle a yearslong probe into allegations it violated U.S. foreign bribery law, the Securities and Exchange Commission said Monday. The payments allegedly made by Rio Tinto have prompted multiple corruption investigations in the U.S., U.K. and Australia.

Investing and Trading

Fast-Money Quants Are Buying Stocks as Human Traders Stay Put; So-called Commodity Trading Advisors increase stock purchases; Discretionary investors, by contrast, are sitting on sidelines
Denitsa Tsekova and Lu Wang – Bloomberg
While stock-picking investors wait around trying to decide their next market move, their computer-driven counterparts have no such luxury. The quants’ taskmasters – trend lines on charts and volatility targets – are forcing them into a concerted buying spree, just as the bond market creates fresh headaches for traditional money managers.

Changes In Operating Principles Of Derivatives Market
Borsa Istanbul
The following changes will be valid as of March 10, 2023: Brokers will be authorized to create flexible contracts and enter trade reporting; The constant parameters (k) used to calculate daily price limits of Intermonth Strategy Orders for BIST 30 Index futures contract will be updated to 75; Trade reporting minimum and maximum quantity and minimum and maximum order quantities for single stock futures and options contracts will be updated…

Expiry of Vanguard ETF patent could spark run of copycats; There is already one filing to use ETF-as-a-share-class structure when exclusive rights expire in May
Steve Johnson – Financial Times
When Vanguard’s patented exchange traded fund structure expires in May it could open the floodgates for other asset managers to copy it, if the first filing to do so is approved. The world’s second-largest asset manager currently has the exclusive right to use the “ETF-as-a-share-class” structure it patented in 2001. The unique design allows Vanguard to operate a mutual fund and a sister ETF as essentially the same vehicle, generating superior tax efficiency and economies of scale.

Club rules? How German retail trading venues shut out PTFs
Samuel Wilkes – Risk.net
Most weekends in Berlin, dance devotees flock from near and far to Berghain – a former soviet-era heating plant that is a mecca for techno fans. But many fail to get across the threshold – thanks to its infamously harsh door policy, which club-goers suspect is really at the whim of staff.

US-listed tech companies face cash crunch after burning through billions from IPOs
Only 17 of 91 recently listed groups have reported a profit this year
Nicholas Megaw – Financial Times
Technology groups that have recently listed in the US burnt through more than $12bn of cash in 2022, with dozens of companies now facing difficult questions over how to raise more funds after their share prices tumbled. High-growth, lossmaking groups dominated the market for initial public offerings in 2020 and 2021, with 150 tech groups raising at least $100mn each in the period, according to Dealogic data.

Environmental, Social and Corporate Governance

High seas treaty: historic deal to protect international waters finally reached at UN; After almost 20 years of talks, United Nations member states agree on legal framework for parts of the ocean outside national boundaries; ‘The most important talks no one has heard of’: why the high seas treaty matters
Karen McVeigh – The Guardian
It has been almost two decades in the making, but late on Saturday night in New York, after days of gruelling round-the-clock talks, UN member states finally agreed on a treaty to protect the high seas. A full day after the deadline for talks had officially passed, the conference president, Rena Lee of Singapore, took to the floor of room 2 of the UN headquarters in New York and announced that the treaty had been agreed. At a later date, the delegates will meet for half a day to formally adopt the text. She made it clear the text would not be reopened.

Following California, Washington Launches Cap and Trade Market; The state is the latest to force businesses to buy permits for each ton of greenhouse gases they produce.
David R Baker – Bloomberg
Washington State will report the results of its first cap-and-trade auction for fighting climate change, as carbon markets gain renewed interest among US policy makers trying to slash greenhouse gas emissions. The state’s new system, authorized by the 2021 Climate Commitment Act, sets a declining annual limit on Washington’s emissions and forces businesses to buy permits for each ton of greenhouse gases they produce. They can either buy those permits, called allowances, in quarterly auctions held by the state or from each other. The system’s first auction was held Feb. 28, and the results – including the number of allowances sold and the final price – are scheduled to be released at noon local time today. Analysts will be looking to see if all the allowances sell and whether the closing price is near to the floor price of $22.20 per ton.

EU to propose new rules, support for certain green industries – document
Joanna Plucinska – Reuters
The European Union’s executive body is set to provide permits, regulatory support and easier access to public and private funding for certain strategic green technologies, according to a draft document seen by Reuters. The draft regulation is designed to ensure “the net-zero technology manufacturing capacity in the Union is sufficient to meet at least 40% of the Union’s annual deployment needs,” the document says.

Bosses Call for a British Inflation Reduction Act to Rival Biden’s Green Subsidies
Todd Gillespie – Bloomberg
Britain risks being left behind unless it significantly ramps up support for green industries, an association of business leaders said Tuesday. The Institute of Directors said US President Joe Biden’s Inflation Reduction Act was a “game changer” that incentivizes companies to pick the US over the UK for green investments.

Minderoo Foundation invests USD $5 Million in innovative Global Coral Reefs Fund
Pegasus Capital Advisors via Cision
Pegasus announces Minderoo Foundation invests USD $5 million into the Global Coral Reefs Fund, growing the initiative for investing in climate adaptation and oceans to over USD $200 million. Pegasus Capital Advisors, the Stamford-based impact investment pioneer that manages the private equity fund within the UN-backed Global Fund for Coral Reefs (GFCR) coalition, today announced a new source of private capital from the Australia-based Minderoo Foundation. The investment by Minderoo Foundation’s Flourishing Oceans initiative and its Strategic Impact Fund is an important step towards mobilizing further capital from other investors, including additional commitments from the Green Climate Fund.

Nuveen Holds 80% of Rare Blue Bond Linked to Debt-Swap Deal
Barbados debt relief is in exchange for marine protection
Blue bonds have drawn scrutiny amid use-of-proceeds questions
Ocean Life
Natasha White – Bloomberg
Nuveen LLC has bought 80% of a rare blue bond designed to help finance debt relief for Barbados and protect its marine environment. The investment firm, which is a unit of TIAA, has taken on an anchor role in the transaction, investing almost $60 million in the bond, it said on Tuesday. It’s the first time Nuveen has allocated capital to a bond that’s tied to a so-called debt-for-nature swap. The announcement comes as investors try to get a sense of how safe the market is, amid worries its complexity isn’t matched by adequate transparency or regulatory oversight.

How Floating Solar Panels Are Being Used to Power Electric Grids; Solar panels that float on water are becoming a popular clean-energy option for island nations and those with limited land. These photos reveal the possibilities.
Carly Wanna – Bloomberg
In a world of finite land, solar farms can take up a lot of space. But there’s a solution for that scarcity: panels that float. In nearly a dozen countries around the world, floating solar farms are providing a welcome alternative to ground-mounted modules, with the potential to significantly boost clean power as the world races to cut carbon emissions. Massive solar farms can now be found atop bodies of water in China, South Korea, Japan, Thailand, Portugal, Singapore and Switzerland. Nations that include India and Indonesia are developing such projects, and the world’s largest man-made lake – on the border of Zambia and Zimbabwe – may also get floating solar panels to supplement local hydropower.

Australia’s Albanese Says Natural Gas Investment Shouldn’t Be Curbed; Government faces criticism for proposal to curb gas exports; Country also seeking to cut emissions from largest polluters
Harry Brumpton – Bloomberg
Australia’s natural gas industry should be permitted to follow the most promising returns on capital, Prime Minister Anthony Albanese said in his first defense of the industry since his government proposed tightening export rules. Natural gas will need to play a bridging role as intermittent renewable generation increasingly replaces the nation’s aging coal plants, and more of the fossil fuel will be needed, Albanese said Tuesday at the Australian Financial Review Business Summit 2023.

Investor Group Warns Funds to Ramp Up Climate Risk Checks; Survey shows only 25% of portfolios assessed for physical risk; Need to improve access to data and analytics tools on climate
Amy Bainbridge – Bloomberg
Australian money managers need to better measure the physical impact of climate change across their portfolios to avoid “catastrophic” long-term risks, according to a new survey. An analysis of 53 funds with more than A$30 trillion ($20.2 trillion) under management globally showed just under a quarter have assessed their portfolio for these risks. Only 9% have implemented responses to mitigate the potential problems, the Investor Group on Climate Change report showed Tuesday.

Representatives of the ISSB and the Sustainability Standards Board of Japan hold inaugural bilateral meeting in Japan
Representatives of the International Sustainability Standards Board (ISSB) and the Sustainability Standards Board of Japan (SSBJ) held a bilateral meeting on 1 March 2023 in Tokyo, Japan. At this meeting, representatives of the ISSB and the SSBJ provided updates on their respective activities and discussed agenda items such as issues related to the implementation of IFRS Sustainability Disclosure Standards (ISSB Standards).

Canada and the United Kingdom Sign Critical Minerals Supply Chain Dialogue to Strengthen Collaboration
Yahoo Finance
There is no global energy transition without accelerated activity along the critical minerals value chain. Critical minerals are not just the building blocks of clean technology like solar panels and electric vehicle batteries – they are also a key ingredient for creating middle-class jobs and growing a strong, globally competitive Canadian economy. The move toward a global net-zero economy is generating a significant increase in demand for critical minerals and the clean technologies they enable around the world, creating a generational opportunity for Canadian workers and Canadian businesses. Concurrent geopolitical dynamics have caused like-minded countries to reflect on the need to have stable and secure supplies of these resources and technologies – produced in a way that is compatible with science-driven climate and nature goals.

Sustainable Funds Dodged Outflows in 2022 Market Rout; Bond funds that invest based on factors such as companies’ carbon footprints and workforce diversity led the gains
Shane Shifflett – The Wall Street Journal
Sustainable funds that invest based on factors such as companies’ carbon footprints and workforce diversity attracted new investment in 2022, despite a broad market selloff that punished many sectors. Investments into U.S. sustainable funds including stocks, bonds and other categories fell to $3.1 billion in 2022 from $69.2 billion a year earlier, according to Morningstar. Conventional funds that don’t consider environmental, social or governance factors, also known as ESG, suffered more than $370 billion in withdrawals last year.


SoFi Bank Sues to Stop Biden’s Student Loan Repayment Pause
Peter Hayes – Bloomberg
SoFi Bank NA is asking a federal court to strike down the Biden Administration’s eighth extension of a moratorium on student loan repayment. In the alternative, SoFi said, the court should order repayment by borrowers who aren’t eligible for student-debt cancellation under the terms of the Education Department’s debt-forgiveness plan, according to the complaint filed in the US District Court for the District of Columbia March 3.

JPMorgan Is Growing in Florida and Texas, States That ‘Like Business,’ Dimon Says
Ed Hammond and Felipe Marques – Bloomberg
JPMorgan Chase & Co. is expanding in Florida, opening branches in a state that’s seen an increased influx of Wall Street firms since the pandemic. “We love Florida, we’re growing in Florida left and right,” the bank’s Chief Executive Officer Jamie Dimon told Bloomberg Television Monday in an interview from Miami. Firms like JPMorgan and Goldman Sachs Group Inc. are bulking up their Florida presence, as employees and some of their wealthiest clients have gravitated toward its low taxes, warm weather and the perceived pro-business stance of its Republican Governor Ron DeSantis.

US Banks Are Finally Being Forced to Raise Rates on Deposits; Deposits declined last year for first time since 1948; Rising funding costs for banks seen weighing on profit growth
Alex Harris, David Caleb Mutua and Paige Smith – Bloomberg
US banks are being forced to do something they haven’t done for 15 years: fight for deposits. After years of earning next to nothing, depositors are discovering a trove of higher-yielding options like Treasury bills and money market funds as the Federal Reserve ratchets up benchmark interest rates. The shift has been so pronounced that commercial bank deposits fell last year for the first time since 1948 as net withdrawals hit $278 billion, according to Federal Deposit Insurance Corp. data.

Hedge Fund Feud Over China Quant Trader Shows Growing Talent War; Shanghai Ruitian is suing Zhejiang High-Flyer Asset Management; Case centers on alleged “infringement on technology secrets”
Two of China’s best-known quantitative hedge funds are embroiled in a court dispute that centers on the hiring of a trading strategist to a rival firm, a sign of intensifying competition for the industry’s top talent. Shanghai Ruitian Investment LLC is suing Zhejiang High-Flyer Asset Management and its associated companies over a potential “infringement on technology secrets,” according to court documents.

A Nation’s Heavily Indebted Consumers Face a Painful Margin Call; Canadians’ ability to adjust to higher rates could be instructive for other countries.
Ari Altstedter – Bloomberg
At the height of the Covid-19 pandemic, with his job as a delivery driver bringing plenty of overtime and the cost to borrow at record lows, James Kebe went on a spending spree. He leased a boat and an all-terrain vehicle, and when his bank offered him a bigger line of credit, he maxed it out. Then interest rates started rising at their fastest pace in generations. And because Kebe’s line of credit had a floating rate, his monthly payments soared, too.

Top Goldman Sachs trader Joe Montesano to exit bank; Resignation of rainmaker whose pay rivalled CEO’s is latest in string of high-profile departures
Joshua Franklin – Financial Times
One of Goldman Sachs’ biggest rainmakers at its equity trading business is leaving the Wall Street bank after more than two decades. Joe Montesano, 46, Goldman’s head of equity trading for the Americas, is retiring from the bank, the group told employees on Monday in a memo, which was seen by the Financial Times.

Asset Management: Citadel’s bold bet; Plus, dispatch from Argentina, fears for London’s future, and Donatello at the V&A
Harriet Agnew – Financial Times
GAM is scrambling to find a buyer ahead of results it has delayed by two months, five years after a scandal over private debt holdings that led to fines, the resignation of the investment firm’s chief executive and a collapse in its share price. Multi-manager hedge funds have been one of the standout winners of recent years, but one firm’s performance has stood out more than most.

Acting Comptroller Discusses Trust in Global Banking, Lessons for Crypto
Office of the Comptroller of the Currency
Acting Comptroller of the Currency Michael J. Hsu today discussed building and maintaining trust in global banking in remarks at the Institute for International Bankers. The Acting Comptroller discussed how the failure of the Bank of Credit and Commerce International (BCCI) in 1991 led to significant changes in how global banks are supervised. He highlighted similarities between BCCI and cryptocurrency exchange FTX and offered thoughts on what lessons this may hold for crypto advocates and policymakers.

JPMorgan Spells Out ‘Volmageddon’ Risk on Zero-Day Option Craze
Lu Wang – Bloomberg
JPMorgan Chase & Co. strategists are throwing fresh light on their contentious warning that the craze for zero-day options raises the risk of a market-wide “Volmageddon 2.0.” In a new study, a 5% drop in the S&P 500 is seen snowballing another 20% in the worst-case scenario of thin trading, in the extreme event all traders offload their holdings of zero-day-to-expiration options, known as 0DTE.

FTX bankruptcy estate says Grayscale owes creditors ‘at least $550 million’
David Hollerith – Yahoo! Finance
Bankrupt crypto exchange FTX is suing Grayscale Investments through affiliate hedge fund Alameda Research to recoup losses realized from its investment in Grayscale’s Bitcoin Trust, the company said Monday in a press release. “Our goal is to unlock value that we believe is currently being suppressed by Grayscale’s self-dealing and improper redemption ban,” FTX’s interim CEO John J. Ray III said in the release.

IMF Temporarily Boosts Fund Limits to Help Members Beat Crisis; Quota under GRA raised to 200% from 145% for 12-month period; Change allows higher fund access without tougher conditions
Karthikeyan Sundaram – Bloomberg
The International Monetary Fund will temporarily increase funding limits for member nations to help them overcome current economic challenges. The annual limit under the fund’s General Resources Account will be raised to 200% of quota for a period of 12 months from the current 145%, the IMF said in a statement. Access to cumulative limits was revised to 600% from 435% now.

Ex-Deutsche Bank Employee Pulls Appeal in Sexual Harassment Suit
Steven Arons – Bloomberg
An ex-Deutsche Bank AG employee withdrew her appeal of a German unfair dismissal suit that alleged that she was sexually exploited by a senior executive at the lender. Deutsche Bank agreed to pay EUR30,000 ($31,987) severance to settle the case, according to a decision on Tuesday. The judge indicated that she was unlikely to overturn an earlier ruling. The judge also said she didn’t believe that the staff actions underlying the sexual harassment allegations were frequent enough to establish that Deutsche Bank as her employer held any responsibility for them and, therefore, shouldn’t be made to pay any damages to her.

Work & Management

‘Work to Do’ on ChatGPT, Banking Tech, Says BofA’s Moynihan; Digital technology has to be applied correctly, bank CEO says; Moynihan in virtual speech to AFR Business Summit in Sydney
Nabila Ahmed – Bloomberg
Wall Street has “some work to do” before using popular technology such as ChatGPT, Bank of America Corp. Chief Executive Officer Brian Moynihan warned, saying that inaccuracy and lack of data-based responses make the popular text-generator a challenge. Digital technology for banking may be powerful, Moynihan said in a virtual appearance at the AFR Business Summit in Sydney on Tuesday, “but we have to make sure it’s applied correctly.”

Microsoft’s Latest AI Assistant Is Meant for Marketers, Customer Reps and Work Apps
Dina Bass – Bloomberg
Microsoft Corp., having brought artificial intelligence to its battle with Google over search, is now turning to the latest AI technology to catch up with rivals in the corporate applications market such as Oracle Corp., Salesforce Inc. and SAP SE. The software giant is introducing an AI assistant-called Dynamics 365 Copilot – for applications that handle tasks such as sales, marketing and customer service. Based on technology from OpenAI, the software can draft contextual chat and email answers to customer-service queries.

Singapore Tech Salaries Rise at Slower Pace as Industry Cools; Software engineers’ pay trails rent hikes in city state; Tech companies including Sea have slashed thousands of jobs
Olivia Poh – Bloomberg
Salaries for software engineers in Singapore rose by an average of 7.6% last year, with pay increases falling short of rent hikes after technology companies worldwide slashed jobs. Even as the increase slowed from a 22% surge a year earlier, the city-state’s tech salaries stand out among countries in South and Southeast Asia, according to a report published Tuesday by hiring service NodeFlair and startup accelerator Iterative. Software engineers in Singapore command thousands of dollars more each month than their counterparts in nearby countries.

Work Phones Make a Comeback as Offices Ban WhatsApp, TikTok; Companies worried about security hand staffers second phones; Mobile carriers ride a sales surge in company-issued devices
Scott Moritz – Bloomberg
There may be a new ringtone in your life – the urgent chime of a company-issued cell phone. In a throwback to the BlackBerry era, telecom-service providers are seeing strong growth from companies handing out phones to employees. The phenomenon, which started during the pandemic, picked up recently thanks to new compliance policies around the use of WhatsApp and TikTok.

Remote Work Threatens Business Hotels’ Recovery, Boosting Default Risks
Akiko Matsuda – The Wall Street Journal
Some hotel owners that rode out the coronavirus pandemic are finding the recent travel rebound might not be enough to persuade lenders to extend new credit when their debts mature in the coming months or years. Leisure travel has rebounded since the second half of last year, but the recovery has been much weaker for facilities with large meeting rooms that rely on business trips and conferences, partly because many meetings are now held remotely.

Meta Plans Thousands More Layoffs as Soon as This Week; Second round of cuts in four months driven by efficiency push; Social networking giant may finalize plans in the next week
Sarah Frier, Edward Ludlow and Kurt Wagner – Bloomberg
Meta Platforms Inc., the owner of Facebook and Instagram, is planning a fresh round of layoffs and will cut thousands of employees as soon as this week, according to people familiar with the matter. The world’s largest social networking company is eliminating more jobs, on top of a 13% reduction in November, in a bid to become a more efficient organization.

More Americans Are Self-Employed Than You Think; Independent contractors estimated at 15% of all workers: paper; New study finds many more than expected have side jobs
Alexandre Tanzi – Bloomberg
Millions more Americans may be self-employed than previously estimated, a research paper found, and these workers are more likely to be minorities and younger. The share of independent contractors in the labor force may be about 15% of all workers, according to the study. That’s roughly twice the typical 7% estimate from the Bureau of Labor Statistics.

Wellness Exchange

New Covid Boosters’ Protection Waned After Two Months, Study Says; Bivalent shots lowered hospitalizations, deaths among elderly; For chronically ill adults, boosters made little difference
Madison Muller – Bloomberg
Covid-19 bivalent boosters’ protection against death and hospitalization in elderly people began waning as soon as two months after vaccination, according to a preprint study. The findings build on previous reports about the effectiveness of updated boosters from Moderna Inc. and Pfizer Inc., which showed the shots sharply reduced risks of severe Covid in older adults, but didn’t assess how long protection lasted.

Less Than 1% of Earth Has Safe Levels of Air Pollution, Study Finds; Around the world, daily concentrations of fine particulate matter in the air exceed recommended limits most of the time, scientists say.
Coco Liu – Bloomberg
It’s no secret that air pollution is a serious problem facing the world today. Just how serious? A new study on global daily levels of air pollution shows that hardly anywhere on Earth is safe from unhealthy air. About 99.82% of the global land area is exposed to levels of particulate matter 2.5 (PM2.5) – tiny particles in the air that scientists have linked to lung cancer and heart disease – above the safety limit recommended by the Word Health Organization, according to the peer-reviewed study published Monday in Lancet Planetary Health.


Australian officials warn of bushfire threat as heatwave grips Sydney
Australian officials on Tuesday warned of rising risks of bushfires in the east after about two years of frequent flooding and rain, as a severe heatwave pushed temperatures in several regions, including Sydney, to their highest in two years. A total of 33 fires are burning across New South Wales (NSW), Australia’s most populous state of which Sydney is the capital, with 12 not contained yet. Five public schools have been shut amid a total fire ban across large parts of the state.

Chinese companies choose Switzerland over US and UK to raise money overseas; Political tensions with Washington and tougher accountancy standards in London discourage listings in larger markets
Daniel Thomas and Nikou Asgari – Financial Times
Chinese companies are flocking to Switzerland to raise capital after being discouraged from listing in the US by geopolitical tensions and in Britain by tougher audit standards. Nine Chinese companies floated in Zurich last year, raising $3.2bn in the European country, according to SIX, the operator of the Swiss stock market. That far outstrips the $470mn they raised in New York, data from Dealogic stated.

ETFs help drive huge growth in India’s investment market; Launch of new passive equity-linked savings schemes expected to further boost industry, Cerulli says
Julienne Raven Lingat – Financial Times
India’s mutual fund industry is shifting gradually towards more passive investing, with local regulators relaxing guidelines for firms looking to offer such vehicles, according to consultancy Cerulli Associates. Net new flows to India-domiciled funds in December jumped to $1.4bn from $500mn during the previous month.

Rio Tinto Settles US Bribery Case Linked to Simandou Mine; Firm’s consultant allegedly tried to pay bribes in Guinea; World’s No. 2 miner didn’t admit or deny claims of wrongdoing
Tom Schoenberg and James Fernyhough – Bloomberg
Rio Tinto Group has agreed to pay a $15 million penalty to settle US claims of bribery in Guinea, more than six years after a payment connected to a vast iron ore deposit in the West African nation prompted the mining giant to fire two of its top executives. The Securities and Exchange Commission said a political consultant working for Rio had tried to bribe a Guinean government official. Additionally, the miner didn’t properly record its payments to the person, the SEC said on Monday, adding that the company had inadequate accounting controls.

U.S. to Challenge Mexican Ban on Genetically Modified Corn; The Biden administration said it would request talks with Mexico over a brewing trade fight.
Ana Swanson and Linda Qiu – The New York Times
The Biden administration said on Monday that it would take initial steps toward challenging a ban that Mexico has placed on shipments of genetically modified corn from the United States, restrictions that have rankled farmers and threatened a profitable export. Mexico has planned to phase out the use of genetically modified corn, as well as an herbicide called glyphosate, by 2024. About 90 percent of corn grown in the United States is genetically modified.


Marlboro Maker Ditches Juul and Buys NJOY
Jennifer Maloney and Robb M. Stewart – The Wall Street Journal
Marlboro maker Altria Group Inc. agreed to buy vaping pioneer NJOY Holdings Inc. for at least $2.75 billion, after closing the chapter on its disastrous investment in e-cigarette maker Juul Labs Inc. The deal for NJOY, one of the few e-cigarette makers whose products have clearance from federal regulators, includes an additional $500 million if the Food and Drug Administration authorizes additional NJOY products.

[et_social_follow icon_style="slide" icon_shape="circle" icons_location="top" col_number="4" counts="true" counts_num="0" total="true" outer_color="dark"]

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

The Spread

Past JLN Newsletters