Death of Easy Money Creates Financial Upheaval Around the Globe

Jan 10, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

JLN was delayed today because of an outage at a provider upstream from our website provider. We pull all the graphics for this newsletter from our website, which means that the layout of the newsletter will not work without our website being reachable. We apologize for the inconvenience.

According to the New York Post, Goldman Sachs bankers have a name for the layoffs planned by CEO David Solomon; it is “David’s Demolition Day.”

If Coinbase keeps cutting 20% of its staff at a time, how many times until they have depleted their base?

For you wine lovers or oenophiles out there, The Wall Street Journal is offering guidance on the nine best wine coolers and fridges to store your wine.

The MegaMillions lottery has hit over $1 billion again for the drawing tonight. No one has picked the winning numbers in 24 straight drawings, so this may be your lucky day.

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

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Walt Lukken and the FIA have a “2022 Year in Review” on the FIA’s web site which “rounds up some of our most important work on behalf of our member firms, and what our association is doing to support and promote the cleared derivatives industry.” You can read about the FIA’s work in in 2022 in such areas as commodities, clearing and trading, digital assets, sustainability and more here.~SR

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Where regulators could reform Wall Street in 2023; Apart from the CFTC, regulatory agencies have a strong agenda to improve the protection of investors and markets
Dennis Kelleher – Financial Times
This year looks to be both busy and consequential for the development of better protection for investors and markets in the US. The ongoing crypto carnage is the latest reminder of how important that is. In 2022, we saw the best of US financial regulators in tackling that task along with some of the worst. The Securities and Exchange Commission returned to its core mission – to “protect investors; maintain fair, orderly and efficient markets; and facilitate capital formation”. This was despite sustained pressure from entrenched incumbent firms on Wall Street with their lobbyists and allies in Congress. On the other hand, the Commodity Futures Trading Commission seemed more focused on expanding its jurisdiction and becoming a key ally of the cryptocurrency exchange FTX and its former chief Sam Bankman-Fried.
/jlne.ws/3ZhQjjg

******The president of financial reform advocacy group Better Markets is a big SEC fan and just bashes the CFTC for getting too cozy with FTX and its leaders.~JJL

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Why everyone should be able to understand code; Technical literacy is crucial for creating an informed citizenry
Stephen Bush – Financial Times
“You are not expected to understand this.” Those seven words, which appeared in the source code of Unix’s sixth edition in 1975, have since been reproduced by computer geeks on T-shirts, mugs, jumpers and, with the inevitability of an unloved season, tote bags. The phrase’s cultural afterlife, and the reasons it has become a rallying cry for programmers everywhere, inspire the titular essay in a new collection on the most important lines of computer code in human history, and how the assumptions and choices taken by programmers shape our world today.
/jlne.ws/3ID04CJ

***** Does Pig Latin count as code? That was what we used back in the day.~JJL

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The Mark Twain of cartels; Rumours of OPEC’s death have been greatly exaggerated
Robin Wigglesworth – Financial Times
Remember all those RIP OPEC headlines? It turns out the cartel has the staying power of a Middle East autocrat. In fact, Goldman Sachs reckons oil now enjoys a revived and powerful “OPEC put” that will keep prices high. Goldman has gone back through all OPEC meeting announcements since it introduced production quotas back in 1983. As you’d expect, oil prices have tended to move a lot on the day of announcements, and quite a bit in the next two days.
/jlne.ws/3X5hZGD

******I want to hire Robin Wigglesworth’s headline writer.~JJL

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Microsoft Considers $10 Billion Investment in ChatGPT Creator; ChatGPT has crowned a year of advances for AI applications; OpenAI already working on next generation of technology
Dina Bass – Bloomberg
Microsoft Corp. is in discussions to invest as much as $10 billion in OpenAI, the creator of viral artificial intelligence bot ChatGPT, according to people familiar with its plans. The proposal under consideration calls for the Redmond, Washington-based software giant to put the money in over multiple years, though the final terms may change, the people said, asking not to be named discussing a private matter. The two companies have been discussing the deal for months, they added.
/jlne.ws/3WYfHJb

****** Microsoft buying into the idea of ChatGPT being a thing.~JJL

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Finance Meme Account Litquidity Expands Into Wall Street Recruitment; Satirical media company partnering with executive-search firm; Firm sees ‘massive opportunity to leverage it for recruitment’
Gillian Tan – Bloomberg
Litquidity, the digital media company closely followed by Wall Street’s junior bankers, is expanding into their recruitment. The anonymously led startup – known for shedding light on everything from finance-industry salaries to meal stipends – has launched an effort to land its followers roles at private equity firms, hedge funds, venture capital firms and other alternative asset managers.
/jlne.ws/3VYvHcT

****** You fish where the fish are, or in this case where the junior bankers are.~JJL

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Monday’s Top Three
Our top story Monday was Viewpoint – Lessons from the year of crypto by FIA President and CEO Walt Lukken, in FIA’s MarketVoice. Second was The U.S. Is Naive About Russia. Ukraine Can’t Afford to Be. from The Atlantic. Third was The Winklevoss twins are in a big mess-and it has to do with crypto, from Fortune.

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MarketsWiki Stats
27,125 pages; 242,245 edits
MarketsWiki Statistics

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Lead Stories

Death of Easy Money Creates Financial Upheaval Around the Globe; From stocks to bonds and from real estate to crypto, no corner of finance went untouched by 2022’s interest-rate chaos.
Michael P. Regan – Bloomberg
Cheap money-an incredibly popular and influential feature of finance that led to a surge of wealth, speculative trading and booms in ridiculous investments such as meme stocks and digital images of cartoon monkeys-died suddenly in 2022. It was 14 years old. Cheap money is survived by its estranged relative, expensive money. The death has been attributed to a surge in consumer inflation that forced central banks around the world to aggressively lift interest rates to the highest levels in a decade and a half. The end of cheap money has been mourned throughout the financial world, most loudly in the US stock market, which saw its worst decline since 2008 amid the disappearance of what had come to be known as the “Fed put”: the belief that the Federal Reserve would always come to the rescue with a more market-friendly policy if stocks tumbled.
/jlne.ws/3GTA1WD

LME Nickel Review Recommends Tighter Rules on Market Distortions
Jack Farchy and Mark Burton – Bloomberg
The London Metal Exchange should tighten its rules and enforcement processes to prevent risks of market distortions, according to an independent review of the events surrounding March’s nickel crisis. The LME, which is also facing regulatory investigations from the UK’s Bank of England and Financial Conduct Authority, appointed Oliver Wyman to conduct the review last year. It offers the first in-depth independent assessment of the crisis, which shook the global metals world and brought several of the LME’s members to the brink of collapse. Nickel prices spiked by an unprecedented 250% in a little over 24 hours in a massive short squeeze centered on metals giant Tsingshan Holding Group Co., prompting the exchange to close the nickel market for a week and – most controversially – cancel billions of dollars of trades that took place at the highest prices.
/jlne.ws/3GvvvMP

****The Financial Times also has the story here.

Bond Markets Flash Warning About Environmental Catastrophes; Premiums on cat bonds rose after Hurricane Ian, other events; Higher interest rates mean more alternatives to esoteric bonds
Lucca De Paoli and Tasos Vossos – Bloomberg
Investors in the $35 billion catastrophe bond market are demanding the highest premiums in years to cover issuers against disasters, as weather events become more extreme while interest rates rise. Margins on new issuances of catastrophe bonds covering US wind events are now at the highest since 2019, at 5.3%, according to a report from reinsurance broker Gallagher Re. For other risks the premiums offered are at the highest since at least 2017.
/jlne.ws/3CDUn3M

Coinbase cuts jobs in latest repercussion of crypto crisis; Cryptocurrency exchange to lose 25% of staff to ensure it can ‘weather downturns’ in the market
Nikou Asgari – Financial Times
Cryptocurrency exchange Coinbase is cutting 950 jobs as the industry continues to struggle in the wake of the collapse of FTX. Brian Armstrong, Coinbase chief executive, said on Tuesday that it would cut 25 per cent of its employees, to ensure that it could “weather downturns in the crypto market”. Armstrong added that the company would also be shutting down several projects where the company had a “lower probability of success”, without providing further details.
/jlne.ws/3W1a3VE

Gemini’s Winklevoss Demands Removal of DCG CEO Barry Silbert
Olga Kharif – Bloomberg
Gemini crypto exchange co-founder Cameron Winklevoss called for the board of Digital Currency Group to remove Barry Silbert as chief executive officer, in the latest twist of a running dispute with a onetime business partner.
/jlne.ws/3ZqFZ8B

Review urges LME to toughen standards on market distortions; Independent report criticises exchange for lack of circuit breakers in March nickel crisis
Harry Dempsey – Financial Times
The London Metal Exchange should strengthen its rules and oversight to prevent short-term market distortions, according to an independent review of March’s nickel market chaos which found the marketplace had insufficient tools to stop prices spiralling out of control. The report, conducted by consultancy Oliver Wyman, laid out further details on the depth of the crisis in the run-up to a decision by the LME, the world’s largest hub for metals trading, to suspend nickel trading for a week and cancel billions of dollars’ worth of trades.
/jlne.ws/3QwPGP6

China Has Set Its Sights on Cornering Another Green Energy Market: Hydrogen; Policymakers in Europe and the US are racing to counteract early Chinese dominance of electrolyzers, a key piece in the next generation of clean energy.
David R Baker and Will Mathis – Bloomberg
A decade ago, China used low prices to dominate solar manufacturing, wiping out Western competitors just as worldwide demand for panels started to soar. The US and Europe are determined not to let the same thing happen with hydrogen. As the world sprints to decarbonize, the next round of competition revolves around a device called an electrolyzer. Plug these into clean electricity such as solar power, and it’s possible to extract hydrogen from water without producing any planet-warming emissions. That’s a crucial step in creating a green fuel capable of decarbonizing such industries as steel, cement or shipping.
/jlne.ws/3vSxRQJ

UK’s Most Popular Money Manager Vows to Keep ‘Going Through Hell’ as Returns Drop; Smith’s Fundsmith Equity fund lost almost 14% last year; He runs a concentrated strategy and holds around 30 stocks
Loukia Gyftopoulou – Bloomberg
Surrender? Never. The UK’s most popular money manager says he’ll keep “going through hell” after his fund’s first down year in over a decade. Terry Smith, who manages the UK’s largest equity fund, says his firm will press on in the face of challenging performance as he defended last year’s poor returns in a letter to investors published Tuesday. The new economic reality of higher interest rates and inflation “holds few fears” for him, he added.
/jlne.ws/3GuTiwi

CFTC Sues Trader Over Alleged $114 Million Mango Markets Crypto Swaps Scam; Commodity Futures Trading Commission sues Avraham Eisenberg; Eisenberg is already in custody over the Mango Markets exploit
Suvashree Ghosh – Bloomberg
The US Commodity Futures Trading Commission filed a lawsuit against crypto trader Avraham Eisenberg for allegedly manipulating the price of swaps contracts as part of a scam to steal $114 million. Eisenberg perpetrated a “a manipulative and deceptive scheme” in October to inflate the price of swaps offered by decentralized digital-asset exchange Mango Markets, culminating in the misappropriation of the funds, the regulator said in a complaint Monday.
/jlne.ws/3vTFNBe

How Did Binance Come to Dominate Crypto? (Podcast); In the wake of the FTX collapse, Binance is the biggest game in town.
Mohsis Andam – Bloomberg
The bankruptcy of crypto exchange FTX and the indictment of its former CEO Sam Bankman-Fried, who has pleaded not guilty to eight criminal counts, is shining a light on the world’s largest crypto exchange – Binance – and its CEO, Changpeng Zhao, commonly known as “CZ”. The exchange is estimated to be worth around $300 billion and holds nearly 60% of the crypto derivatives market. Binance has managed to eclipse its rivals when it comes to market share and CZ appears confident that the company will successfully navigate the crypto winter.
/jlne.ws/3IyaoMp

Crypto Broker Genesis Eliminates 30% of Staff in Latest Cuts; Genesis has said it needs more time for lending unit solution; Genesis has 145 employees remaining following rounds of cuts
Vildana Hajric and Muyao Shen – Bloomberg
Genesis Global Trading Inc. has laid off more than 60 employees in its latest round of job cuts, amounting to roughly 30% of the troubled crypto-brokerage’s workforce. The dismissals follow a separate round of job eliminations last year that saw a number of key leadership departures, and signal further upheaval at the New York-based firm amid an extended rout in the digital-assets market. The company now has 145 employees remaining, according to a Genesis spokesperson.
/jlne.ws/3ZiMk5W

Coinbase Lays Off Another 20% of its Employees; The cuts at the cryptocurrency exchange come after nearly a fifth of employees were let go in June, as crypto markets teeter and tech companies rethink their growth plans.
Isabella Simonetti – The New York Times
Coinbase, the cryptocurrency trading platform, said on Tuesday that it would lay off about 20 percent of its employees, its latest move to cut costs as crypto markets decline and tech companies lower their expectations for growth.
/jlne.ws/3IzPT1V

‘A fraud and a bubble are two different things’: Crypto is shocking to a financial historian who literally wrote the book on financial bubbles
Will Daniel – Fortune
The crypto space has lost more than $2 trillion in value over the past year. But for crypto loyalists, this is just another Crypto Winter. Remember 2018-when Bitcoin prices dropped 80%, and the media called it “dead” over 90 times? Don’t worry, they say. The Fed is raising interest rates and inflation and recession fears are making investors skittish, so they’re simply pulling back. The meltdown of the world’s second-largest crypto exchange, FTX, the blowup of Luna and its sister algorithmic stablecoin TerraUSD, and the collapse of high-profile crypto lenders like Celsius and BlockFi, are merely bumps in the road, crypto proponents argue.
/jlne.ws/3GU58Bi

Do You Have a ‘Failure Resume’? The Latest Profession Broadcasting Its Misses and Flubs
Eric Sylvers – The Wall Street Journal
For venture capitalists, there are the home runs that make them millions-and the ones that could have made millions, but were passed on. The investments that got away include Meta Platforms Inc.’s Facebook before the thumbs-up became ubiquitous, Alphabet Inc.’s Google before it became a verb and Robinhood Markets Inc. before meme stocks became a thing. John Frankel, a partner at New York-based FF Venture Capital, declined a chance to invest in Robinhood at a $10 million valuation. The online brokerage was worth $32 billion when it started trading on Nasdaq a few years later in 2021.
/jlne.ws/3VThbDv

Former FTX President Hints He’s Cooperating With Crypto Collapse Investigation
PYMNTS
The former president of FTX says he’ll reveal his insights about the firm’s collapse “in time.” During a Twitter exchange late Sunday (Jan. 8), Brett Harrison was asked by a user, “What did you know about @FTX_Official US and when did you know it?” His reply: “I’ll share in time.”
/jlne.ws/3XmljwX

Bitcoin Millionaires Disappear as Scandals Rise and Value Falls; The cryptocurrency collapse has bitcoin millionaires ‘dropping like flies,’ according to a recent report.
Rob Lenihan – TheStreet
They are a vanishing breed. At one time, they roamed the world in great numbers, unstoppable, as their ranks seemed to increase every single day. But then, amost without warning, they started to disappear. No, we’re not talking about the dinosaurs; we talking about a much more recent life form: bitcoin millionaires. The numbers of crypto tycoons have fallen by a stunning 73% at the end of 2022, according to research from CoinJournal.
/jlne.ws/3W7hmv6

Binance Is Bleeding Assets, $12 Billion Gone In Less Than 60 Days
Javier Paz – Forbes
Binance, the world’s largest cryptocurrency exchange, is struggling to hold onto assets. In the wake of the collapse of rival FTX, investors have been pulling their crypto in recent weeks, and despite assurance from CEO Changpeng Zhao that the situation had stabilized, outflows are accelerating. Customers withdrew a net $360 million on Friday, according to data from crypto data firm Defillama.
/jlne.ws/3GRCwZt

Cargill CFO Resigns as Company Reshuffles Leadership; The Minneapolis-based agricultural giant has begun searching for Jamie Miller’s successor. Her departure comes as the company’s new CEO takes up his role
Kristin Broughton – The Wall Street Journal
Cargill Inc. said its chief financial officer, Jamie Miller, is stepping down for another opportunity as the agricultural giant reshuffles its executive leadership. Ms. Miller will leave Cargill on Jan. 13, the Minneapolis-based company said on Monday. She joined Cargill about a year and a half ago from General Electric Co. , where she served as CFO for just over two years. She was the first woman at the industrial conglomerate to hold the top finance role.
/jlne.ws/3GRbce4

Thomas Zeeb resigns from his position as member of the Executive Board of SIX
SIX
After 14 years on the Executive Board of SIX, Thomas Zeeb has decided to leave the company at the end of January 2023. During his tenure, he has made a significant contribution to the further development and realignment of the company in various functions at Executive Board level. The search for a successor has already been initiated. Until the definitive replacement is made, Christoph Landis, currently Head IT and member of the Executive Board of SIX, will lead the Exchanges on an interim basis. Christoph Landis previously led the Swiss Stock Exchange between 2015 and 2018.
/jlne.ws/3W10Tsj

Ant Group Won’t Be Squashed After All; Fintech firm may never regain lofty valuation of late 2020, but that doesn’t mean it and sibling Alibaba can’t resume growing
Jacky Wong – The Wall Street Journal
China’s huge fintech Ant Group seems to be finally crawling out of Beijing’s regulatory purgatory. That will lift sentiment on the Chinese tech sector, though investors still need to grapple with the industry’s changed landscape. More regulation and slower growth than in the pre-crackdown days will still be the norm, but the combination of a less actively hostile central government and a recovering Chinese consumer sector in mid-2023 seem very likely to boost both shares and earnings.
/jlne.ws/3GwvWpU

Made in the U.S.A.: Natural-Gas Prices; Warm weather, ample storage bring prices down to reflect local realities
Jinjoo Lee – The Wall Street Journal
Why was American natural gas so expensive last year? With U.S. and European prices moving in tandem, it was easy to forget that the commodity is largely homebound-produced and consumed domestically. Warm weather and replenished inventories are now shifting the focus back to home dynamics.
/jlne.ws/3Gtut3W

US banks set for bumper lending profits but face end of rate rise cycle; Wall St’s biggest lenders generate interest income for final quarter of 2022 of almost $60bn
Joshua Franklin – Financial Times
America’s biggest banks will report another quarter of bumper profits from lending this week, a windfall investors fear will near its peak this year as the US Federal Reserve’s rate rise cycle draws closer to its end. The Fed’s effort to combat inflation by tightening monetary policy has been a boon for banks, which have been able to charge borrowers more for loans without raising the interest rates they pay depositors by as much.
/jlne.ws/3vTE2nC

Calpers Makes $1 Billion Bet on Small Funds as New CIO Reshapes Pension; Calpers is making a push for newer and diverse managers; CIO Nicole Musicco says this isn’t a ‘diversity play’
Dawn Lim – Bloomberg
The California Public Employees’ Retirement System is making a $1 billion wager that small private equity firms without the heft of the biggest buyout institutions can boost the pension giant’s returns and clout.
/jlne.ws/3ZtJv23

The TRADE Crypto Roundtable: Episode 2 – Institutional involvement; In which we discuss how institutions can get involved, why they are holding back, what they are scared of, and how the current climate is affecting outlook.
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 the second of five video episodes, the panel dives deep into the challenges facing institutions right now – exploring the nitty gritty of counterparty credit risk, the obstacle of pre-funding, the importance of establishing central bank digital currencies, and why consistent tokenisation could change the game.
/jlne.ws/3iqeV93

Bolsa Electronica de Chile upgrades to Nasdaq Marketplace Services Platform; Expected to move operations to the cloud by the end of 2024, BEC said the development will meet the evolving requirements of its growing business and client base.
Wesley Bray – The Trade
Bolsa Electronica de Chile (BEC) will move its operations to the cloud by the end of 2024, initially by upgrading its current on-premise Nasdaq technology to Nasdaq’s SaaS-based Marketplace Services Platform.
/jlne.ws/3W0G3sP

Liquidnet’s global equities head departs for BMLL Americas role; Speaking to The TRADE, incoming head of Americas at BMLL said the firm’s Level 3 data standardisation and democratisation capabilities attracted him to the role.
Annabel Smith – The Trade
Liquidnet’s former global head of equities, Rob Laible, has joined BMLL as its new head of Americas, The TRADE can reveal. Laible joins BMLL based in New York after spending the last eight years at Liquidnet, serving in various senior equities-focused roles.
/jlne.ws/3XljTTf

Ukraine Invasion

U.K. and Allies Weigh Sending Ukraine Heavy Tanks, Pointing to New Phase of the War; London is discussing providing British Challenger 2 tanks to help push back Russian forces
Max Colchester and Drew Hinshaw – The Wall Street Journal
The British government is in talks to send main battle tanks to Ukraine to help its forces roll back Russia’s territorial gains, as other allies consider sending Kyiv their own tanks. The discussions, which have been going on for weeks, concern whether to give Ukraine some of the U.K.’s Challenger 2 tanks, British officials said, although London has yet to reach a final decision. Officials in Poland, Finland and other European nations are also considering supplying tanks.
/jlne.ws/3VZB1wH

Ukraine’s Forces Hold Front-Line City of Bakhmut, Zelensky Says; Kyiv’s military said Russia had attempted new offensives on Bakhmut and two other targets
Jared Malsin and Evan Gershkovich – The Wall Street Journal
Russian forces launched an intense new assault near the front-line city of Bakhmut on Monday, while Ukrainian soldiers resisted a six-month assault on the area, cementing it as a key symbolic prize in the war. “Bakhmut is holding out against all odds. And although most of the city is destroyed by Russian strikes, our warriors repel constant attempts at Russian offensive there,” Ukrainian President Volodymyr Zelensky said in his nightly televised address to the nation on Sunday.
/jlne.ws/3Zj5tVH

Pentagon weighs sending Stryker combat vehicles to Ukraine
Lara Seligman, Lee Hudson and Paul McLeary – Politico
The U.S. is considering sending Stryker armored combat vehicles to Ukraine in an upcoming aid package to help Kyiv fend off an expected Russian spring offensive, according to two people familiar with the discussion. The news follows the Biden administration’s announcement last week that it will send 50 Bradley Fighting Vehicles, a powerful tracked armored vehicle that carries an autocannon, a machine gun and TOW missiles.
/jlne.ws/3GSUOJZ

Scholz says Berlin will not go it alone as pressure mounts to supply Kyiv tanks
Reuters
German Chancellor Olaf Scholz said on Monday he remained convinced of the need to coordinate weapons deliveries to Ukraine with allies as pressure mounts on Berlin to send Kyiv its Leopard 2 battle tanks. Germany announced last week it would provide Ukraine with Marder infantry fighting vehicles to help repel Russian forces. The announcement came on the same day that the United States pledged Bradley Fighting Vehicles, and a day after a similar announcement from France.
/jlne.ws/3jYHLO5

Russia to Start Producing Iranian Shahed Drones Themselves, Ukraine Claims
Jack Dutton – Newsweek
Russia intends to start producing Iranian Shahed drones domestically to use in Ukraine, Kyiv claimed. Russian President Vladimir Putin’s forces have regularly used the Shahed-131/136 kamikaze drones-which they renamed Geran-1 and Geran-2-in Ukraine and the weapons are playing a key role in the war. In an interview with the Kyiv Post, published Monday, Oleksiy Danilov, the secretary of the National Security and Defense Council of Ukraine, said that Russia was planning to make the drones and that his government had already determined where the weapons could be manufactured.
/jlne.ws/3X02QXc

Russia Will Seek to Limit Its Oil Discount on Market Principles; Russia will soon publish regulations to counteract price cap; Flagship Urals grade is currently half of international prices
Bloomberg News
Russia will monitor international prices of its crude and use the results of those observations to limit any possible price discounts that are emerging, the country’s energy ministry said. Monitoring regulations are set to be published soon and will be based on a December presidential decree that aims to counteract a price cap imposed by Group of Seven nations at the beginning of last month, the ministry said in a statement. Any measures will be in line with market-based principles, it said, without elaborating.
/jlne.ws/3QuTpfJ

G-7 Eyes Two Prices Caps for Russian Refined Petroleum Products
Kevin Whitelaw – Bloomberg
Group of Seven nations are aiming to design two price caps for Russian refined petroleum products to account for those that trade at higher prices than crude, as well as those that sell at a discount, according to an official. As part of an effort to sanction Russia for its invasion of Ukraine, the European Union is set to ban the import of refined Russian products on Feb. 5 and to impose price caps on exports to third countries, which would in particular affect diesel, naphtha and fuel oil. The exact mechanisms and the price levels are still being negotiated among G-7 nations and the EU.
/jlne.ws/3Izkwo8

SPAC Math No Longer Adds Up; Also First Boston conflicts, McDonald’s affairs and a JPMorgan news robot.
Matt Levine – Bloomberg
Simplifying a bit, the way a special purpose acquisition company works is that the sponsor of the SPAC raises a pot of money by selling shares to public investors at $10 per share. Say the sponsor offers 20 million shares, so the pot of money has $200 million in it. Then she goes out and looks for a private target company to merge with to take it public. Say she finds a private company that is worth $800 million. (The valuation of a private company will always be uncertain, but let’s assume for now that the valuation of this company is certain, and that it’s $800 million.) If the target company is worth $800 million, and the SPAC is just a pot of money with $200 million in it, then the combined company should be worth $1 billion.
/jlne.ws/3GyvV4K

Russia’s Budget Gap Surges to Record as War Hits Finances; Revenues hit by oil-price limits as spending on invasion grows; Government expects deficit this year of 2% of GDP on $70 oil
Benjamin Harvey – Bloomberg
Russia’s federal budget deficit widened to a record in December as revenues plunged amid restrictions on oil exports and spending on the invasion of Ukraine grew. The fiscal gap reached a record 3.9 trillion rubles ($56 billion) last month, according to Bloomberg calculations based on preliminary government data released Tuesday. That brought the full-year shortfall to about 3.3 trillion rubles, reversing a surplus in the 11 months of the year.
/jlne.ws/3Cz9JXm

The Weaponization of Oil in Numbers; The international response to the drop in Russian supply has been overwhelming, with countries tapping strategic reserves far beyond what’s needed to replace lost barrels.
Javier Blas – Bloomberg
We now have a year’s worth of data to quantify the energy weapons deployed, and the tally is stark: In 2022, barrels from the West outgunned Russia by almost 3-to-1.
/jlne.ws/3vUHXAS

Small Gain in Russian Oil Sales Can’t Reverse Grinding Downtrend; Combined flows to China, India, Turkey hit lowest since October
Julian Lee – Bloomberg
Russia’s oil exports made a small gain last week, but not by enough to prevent what appears for now to be a downtrend in the nation’s shipments to a diminished group of buyers. Aggregate flows of Russian crude rose by 197,000 barrels a day, or 8%, in the seven days to Jan. 6. Pacific shipments were up by 200,000 barrels a day from the previous week, while those from the Arctic gained by 143,000 barrels a day, more than offsetting a decline in volumes leaving the Black Sea.
/jlne.ws/3Wfqu0N

Exchanges, OTC and Clearing

Taiwan Futures Exchange to launch FLEX Options, expand ‘kill switch’ in 2023
Sophia Yang – Taiwan News
The Taiwan Futures Exchange (TAIFEX) reported another good year on Monday (Jan. 9) and announced a plan to launch flexible exchange options to keep its growth momentum as well as to make the “kill switch” applicable to brokers, in addition to futures dealers, to avoid future trading debacles. In Monday’s press conference, TAIFEX Chairman Wu Tzu-hsin (吳自心) said the exchange executed 384 million contracts in 2022, representing a 2% drop from the previous record year despite a struggling stock market. He expected another positive year in 2023 as more new services are introduced.
/jlne.ws/3Qp9Avj

Investing ourselves out of the energy crisis with market-oriented solutions Recommendations for a sound long-term EU Electricity Market Design reform
EEX
Today’s EU energy crisis is caused by the underlying gas supply shock. The current energy market design, the product of more than twenty years of careful liberalization, is functioning in the sense that it has reflected the emergency. It is important that governments continue to address the root causes via emergency measures but separate the discussion from the structural long-term reform.
/jlne.ws/3XgFFYg

LME Group Response To Oliver Wyman Independent Review – Notice And Report
Mondovisione
The LME Group welcomes the report (the “Report”) of the Independent Review (the “Review”) conducted by Oliver Wyman Limited and its sister company NERA UK Limited (together, “Oliver Wyman”). This Notice sets out the LME and LME Clear’s (together, the “LME Group”) initial response to the Review. 2. The LME Group would like to thank both its membership and wider market participants for their cooperation, time and insight in facilitating the Review.
/jlne.ws/3ZmNUnw

SET Unveils 2023-2025 Strategic Plan, Bolstering The Thai Capital Market With New Economy Companies And Bridging Today & Tomorrow Investments
Mondovisione
The Stock Exchange of Thailand (SET) unveils a three-year strategic plan (2023-2025) that steers towards mutual growth for businesses, industries, the capital market, society and the country for the greater opportunity for all (Growth for Business, Industry, Society). The plan focuses on developing a central platform, bridging the ecosystems of today’s and tomorrow’s investments, and making fund raising and investment simple for entrepreneurs and investors.
/jlne.ws/3GyjhD5

INE Releases an Announcement on Requesting Public Comments on the Revised Trading Rules of the Shanghai International Energy Exchange
SHFE
Shanghai International Energy Exchange (INE) releases a notice on requesting public comments on the Revised Trading Rules of the Shanghai International Energy Exchange, as shown below: According to the Futures and Derivatives Law, Regulation on the Administration of Futures Trading, Measures for the Administration of Futures Exchanges, and other applicable rules and regulations, Shanghai International Energy Exchange (INE) proposes to revise the Trading Rules of the Shanghai International Energy Exchange and is requesting public comments on these rules.
/jlne.ws/3IF6rWo

Shanghai Futures Exchange and Shanghai International Energy Exchange Release Trading Volume Statistics for 2022
Shanghai Futures Exchange – PR Newswire
On January 6, 2023, Shanghai Futures Exchange (SHFE) and its subsidiary Shanghai International Energy Exchange (INE) released trading volume statistics for 2022. Total trading volume for SHFE reached 1,823,278 thousand lots in 2022. Total trading days stood at 242.
/jlne.ws/3ZinlQt

SGX Group reports market statistics for December 2022; DDAV rises in December, record volumes across multiple products in 2022; SDAV up in December as STI led advanced economy benchmarks in 2022
SGX Group
Singapore Exchange (SGX Group) today released its market statistics for December 2022. Continued rise in risk management activities drove derivatives volume growth in FX and Commodities, as global markets responded to another round of rate hikes by major central banks and China’s surprise reopening. Derivatives daily average volume (DDAV) in December rose 8% year-on-year (y-o-y), capping the October-to-December quarter with a 19% rise to 1.1 million contracts. Total derivatives traded volume for the quarter across equity, foreign exchange and commodities grew 18% y-o-y to 65.5 million contracts.
/jlne.ws/3vPgvUW

TMX Group Equity Financing Statistics – December 2022
TMX Group
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for December 2022. TSX welcomed two new issuers in December 2022, compared with 12 in the previous month and nine in December 2021. The new listings were one financial services company and one mining company. Total financings raised in December 2022 increased 521% compared to the previous month, and were up 27% compared to December 2021. The total number of financings in December 2022 was 25, compared with 36 the previous month and 56 in December 2021.
/jlne.ws/3W2hagt

Name Change Of An Approved Participant Abn Amro Clearing Chicago Llc
TMX
Please be advised of the name change of ABN AMRO Clearing Chicago LLC to ABN AMRO Clearing USA LLC which came into effect on January 1, 2023.
/jlne.ws/3X005oN

More than 6 million people opened brokerage accounts on the Moscow Exchange in 2022
MOEX
The number of individuals with brokerage accounts on the Moscow Exchange increased by 6.1 million in 2022 and reached 22.9 million, they opened more than 38.3 million accounts (+10.7 million in 2022). Top 10 regions by the number of individuals with brokerage accounts on the stock exchange: Moscow (2.10 million), Moscow region (1.30 million), St. Petersburg (1.01 million), Krasnodar Territory (0.83 million), Bashkortostan (0.77 million), Sverdlovsk region (0.75 million), Tatarstan (0.71 million), Rostov region (0.65 million), Chelyabinsk region (0.59 million), Samara region (0.55 million ).
/jlne.ws/3CC1Zn8

Fintech

BMLL Eyes Expansion with Rob Laible Onboard as Americas Head; Tuesday, 10/01/2023 | 02:00 GMT by Arnab Shome; Laible will oversee the company’s geographical expansion goals; He previously worked at Liquidnet, Macquarie Securities, Nomura, and a few other firms.
Finance Magnates
BMLL, an independent provider of historical Level 3 data and analytics for global equity and futures markets, announced on Tuesday the appointment of industry veteran Rob Laible as the Head of Americas. In addition, the company has plans to open a New York area-based office.
/jlne.ws/3XhI0SW

London School Of Economics And Political Science Launches £50m Accelerator For “Social Unicorns”; 100x Impact Accelerator forms a new ecosystem of finance, talent, and access that enables scale-up social enterprises and non-profits to significantly grow their impact; Impact areas for applications include climate and environment, health and social care, education, refugees, and democracy
Mondovisione
100x Impact Accelerator, a new £50m global initiative dedicated to shaping a new generation of “social unicorns”, today launches its first call for applications. Based at the London School of Economics and Political Science (LSE), 100x aims to nurture high-potential social enterprises, enabling them to achieve positive impact on the scale of billions.
/jlne.ws/3CBPKHA

A.I. Is Becoming More Conversant. But Will It Get More Honest? At a new website called Character.AI, you can chat with a reasonable facsimile of almost anyone, live or dead, real or (especially) imagined.
Cade Metz – The New York Times
On a recent afternoon Jonas Thiel, a socioeconomics major at a college in northern Germany, spent more than an hour chatting online with some of the left-wing political philosophers he had been studying. These were not the actual philosophers but virtual recreations, brought to conversation, if not quite life, by sophisticated chatbots on a website called Character.AI.
/jlne.ws/3vPRCsr

Hype around quantum computing recedes over lack of practical uses; China claims to have made a major breakthrough but western experts say any commercial benefits are still years away
Richard Waters – Financial Times
Are today’s rudimentary quantum computers already on the verge of significant feats beyond the reach of traditional computers? Or have their capabilities been exaggerated, as practical uses for the technology recede into the future? These questions have been thrown into sharp relief in recent days by a claim from a group of Chinese researchers to have come up with a way to break the RSA encryption that underpins much of today’s online communications.
/jlne.ws/3k6aock

Broadridge Leverages Glue42 Capabilities to Deliver a Seamless Trading Interface
Broadridge
To provide an integrated framework that links user interfaces across products, global Fintech leader, Broadridge Financial Solutions, Inc. (NYSE:BR), today announced it will use Glue42, a software provider that delivers integrated desktop experiences to financial institutions globally, to deliver a seamless trading experience. This move brings clients of Broadridge and Glue42 an integrated framework across products, creating a single workspace for banks and broker-dealers.
/jlne.ws/3WYQcrr

Cybersecurity

The dark web’s criminal minds see Internet of Things as next big hacking prize
Elizabeth MacBride – CNBC
John Hultquist, vice president of intelligence analysis at Google-owned cybersecurity firm Mandiant, likens his job to studying criminal minds through a soda straw. He monitors cyberthreat groups in real time on the dark web, watching what amounts to a free market of criminal innovation ebb and flow. Groups buy and sell services, and one hot idea – a business model for a crime – can take off quickly when people realize that it works to do damage or to get people to pay. Last year, it was ransomware, as criminal hacking groups figured out how to shut down servers through what’s called directed denial of service attacks. But 2022, say experts, may have marked an inflection point due to the rapid proliferation of IoT (Internet of Things) devices.
/jlne.ws/3QrlF2O

Germany: Regulator warns of ‘Godfather’ banking malware
DW News
German financial authorities on Monday warned consumers that the malware known as “Godfather” has been attacking some 400 banking and cryptocurrency apps worldwide, “including those of providers within Germany.” The Federal Financial Supervisory Authority (BaFin) said in a statement on Monday that it was unclear how the malware infected consumers’ devices, but it was currently recording user input on banking and crypto apps.
/jlne.ws/3QulBQb

Severe Security Flaw Found in “jsonwebtoken” Library Used by 22,000+ Projects
Ravie Lakshmanan – The Hacker News
A high-severity security flaw has been disclosed in the open source jsonwebtoken (JWT) library that, if successfully exploited, could lead to remote code execution on a target server. “By exploiting this vulnerability, attackers could achieve remote code execution (RCE) on a server verifying a maliciously crafted JSON web token (JWT) request,” Palo Alto Networks Unit 42 researcher Artur Oleyarsh said in a Monday report.
/jlne.ws/3GUcpkM

DHS, CISA plan AI-based cybersecurity analytics sandbox
Jeff Burt – The Register
Two of the US government’s leading security agencies are building a machine learning-based analytics environment to defend against rapidly evolving threats and create more resilient infrastructures for both government entities and private organizations. The Department of Homeland Security (DHS) – in particular its Science and Technology Directorate research arm – and Cybersecurity and Infrastructure Security Agency (CISA) picture a multicloud collaborative sandbox that will become a training ground for government boffins to test analytic methods and technologies that rely heavily on artificial intelligence and machine learning techniques.
/jlne.ws/3W8dYQE

Cryptocurrencies

Who is DCG’s Barry Silbert, the crypto baron in the crosshairs of the Winklevoss twins over ‘bad faith’ business practices?
Morgan Chittum – Business Insider
Barry Silbert’s Digital Currency Group looks like one of the last crypto empires still standing after FTX’s collapse last year. In 2015, the 46 year old started Digital Currency Group (DCG), the $10 billion parent company that controls industry giants like crypto brokerage Genesis and digital asset manager Grayscale. The conglomerate also owns trade publication Coindesk, crypto mining firm Foundry Services, crypto index provider TradeBlock, and digital asset platform Luno Global. Through its various subsidiaries, DCG has invested in more than 200 crypto startups.
/jlne.ws/3Xk7A9L

Crypto’s wild ride gives investors major tax headaches
Rebecca Chen – Yahoo!Finance
Crypto investors who reaped hefty profits in 2021 – along with a sizable tax bill – may be surprised to find out the tax limitations of their massive losses from last year. For instance, those losses can’t be used to offset prior capital gains for individuals, and taxpayers can only deduct up to $3,000 in capital losses per tax year against ordinary income, a deduction that remains unadjusted for inflation. Losses on crypto coins that lost nearly all their value can’t be deemed “worthless” to take advantage of a tax break for securities.
/jlne.ws/3QwuLLN

Grayscale owner’s woes could ‘severely impact’ crypto markets, report claims
Brian McGleenon – Yahoo! Finance
Investors are watching the movements of the Digital Currency Group with trepidation, with one report warning that if the firm slides into further financial distress it “could severely impact crypto markets”. The US-based Digital Currency Group (DCG) is a centre piece of the crypto jigsaw and is the parent of the Grayscale Bitcoin Trust, which owns 653,633 bitcoins (BTC-USD). DCG is a venture capital outfit that focuses on the digital currency market with subsidiaries such as CoinDesk, Genesis and Grayscale Investments (GBTC).
/jlne.ws/3vOTrG3

BlockFi says it repaid investor $15 mln to settle over crypto crash
Dietrich Knauth – Reuters
Executives of bankrupt crypto lender BlockFi Inc have repaid an investor $15 million to settle a threatened lawsuit over the company’s cratering equity value in summer 2022, the company’s attorneys said Monday in bankruptcy court. The settlement resolved claims by the investor, identified only as “Counterparty A,” who had purchased equity shares that were issued as part of executive compensation packages, BlockFi attorney Joshua Sussberg said at a bankruptcy court hearing in Trenton, New Jersey.
/jlne.ws/3vRbLhF

Bob Diamond says digital currencies to have ‘very important place’ in finance; Former Barclays boss expects stablecoins to flourish in the future
Laura Noonan – Financial Times
Digital currencies will have a “very important place” in finance, according to veteran banker Bob Diamond, even as last year’s market carnage thwarted his plan to take stablecoin group Circle public.
/jlne.ws/3W0KV0Y

FTX’s Former Engineering Chief Nishad Singh Looking for Deal From Feds: Report
Sam Reynolds – CoinDesk
Another one of Sam Bankman-Fried’s former confidants and roommates is said to be engaging with the U.S. Attorney’s Office in the Southern District of New York with the hope of getting a plea agreement, according to a report from Bloomberg.
/jlne.ws/3WXXifV

Politics

Classified documents found at Penn Biden Center in Washington are under DOJ review
Dustin Jones – NPR
President Biden’s personal attorneys have discovered classified documents among what appear to be Obama-era records when the current president was vice president, according to a statement from Richard Sauber, the special counsel to the president.
/jlne.ws/3jZGfeB

A wind farm in Lake Michigan? A bill in Springfield proposes it.
Greg Hinz – Crain’s Chicago Business
Legislation to create a 10- to 12-turbine wind farm in Lake Michigan off the Southeast Side has suddenly surfaced in Springfield, with its chief sponsor hoping for a vote by week’s end. Under the measure sponsored by Sen. Robert Peters, D-Chicago, the state would authorize construction of a pilot wind farm several miles from shore that would be capable of producing 150 megawatts of electricity, enough to power about 75,000 homes. The House sponsor of the bill is Rep. Marcus Evans, D-Chicago.
/jlne.ws/3Qpxjvj

House Republicans use first vote to gut IRS funding boost; But the legislation is doomed in the Senate, where Democrats are sure to kill it.
Benjamin Guggenheim – Politico
The House voted 221-210 to claw back more than $70 billion – or nearly 90 percent – of new funding for the IRS, underscoring Republicans’ opposition to the agency expansion and a desire to keep tax enforcement issues in the public eye. The legislation will certainly die in the Senate over staunch opposition from Democrats. But debate over the bill gives the GOP an opportunity to relitigate what the party views as one of the most unpopular provisions in Democrats’ Inflation Reduction Act, which provided $80 billion in new funding to the IRS over 10 years to bolster a wide range of agency functions, including customer service, taxpayer assistance and criminal investigations.
/jlne.ws/3ZgSCmG

Estonia to Move Ahead of EU With Plans to Seize Russian Assets
Ott Tammik – Bloomberg
Estonia plans to introduce a legal blueprint for seizing Russian assets this month as the Baltic nation moves ahead with a bid to deliver funds frozen under European Union sanctions to Ukraine. The legal framework will come by the end of January after the government in Tallinn tasked ministries in late December to come up with a plan for asset seizures, Mihkel Tamm, a spokesman for the foreign ministry, said on Monday.
/jlne.ws/3CwWlmf

Regulation

CFTC Charges Former New York City Commodity Pool Operator with Fraud
CFTC
The Commodity Futures Trading Commission today announced it filed a civil enforcement action in the U.S. District Court for the Eastern District of New York against Mark A. Ramkishun, a former resident of New York City. The complaint alleges that Ramkishun fraudulently induced individuals in the U.S. to participate in a purported commodity pool called Leo Growl LLC. In its continuing litigation, the CFTC seeks full restitution to defrauded fund participants, disgorgement of any ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
/jlne.ws/3vX76dT

Dissenting Statement of Commissioner Summer K. Mersinger Regarding CFTC’s Regulatory Agenda
CFTC
The Fall 2022 regulatory agenda (the Agenda) of the Commodity Futures Trading Commission (CFTC or Commission) was recently published as part of the government-wide Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda).[1] These semiannual submissions set out the CFTC’s Agenda of rulemaking matters that it expects to propose or finalize over the next year.
/jlne.ws/3ZsAC9g

Statement of Commissioner Kristin N. Johnson Regarding CFTC Action Against Market Manipulation Scheme in the Digital Assets Markets
CFTC
The Commodity Futures Trading Commission (CFTC) today filed a complaint against Avraham Eisenberg (Defendant), in the U.S. District Court for the Southern District of New York. The CFTC alleges that Eisenberg devised and carried out a scheme to manipulate the price of a thinly-traded digital asset-the Mango token (MNGO)-in order to benefit swaps positions he opened on Mango Markets, a decentralized digital asset exchange. As a result of his manipulative scheme, Eisenberg was able to misappropriate more than $100 million from Mango Markets, essentially bankrupting the platform and harming other users.
/jlne.ws/3GSbvVM

CFTC Charges Avraham Eisenberg with Manipulative and Deceptive Scheme to Misappropriate Over $110 million from Mango Markets, a Digital Asset Exchange
CFTC
The Commodity Futures Trading Commission today filed a civil enforcement action 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 from a purported decentralized digital asset exchange. This is the CFTC’s first enforcement action for a fraudulent or manipulative scheme involving trading on a supposed decentralized digital asset platform, and its first involving a scheme that is sometimes called “oracle manipulation.”
/jlne.ws/3Gqyje5

CFTC Charges Mango Markets Hacker With Fraud
Jason Nelson – Decrypt
The Commodity Futures Trading Commission filed charges against Avraham Eisenberg on Monday, accusing him of manipulating the Mango Markets decentralized exchange and stealing over $110 million in digital assets. The news comes a week after the Department of Justice charged Eisenberg with the October 11, 2022 hack. “The goal of Defendant’s scheme was straightforward: to artificially inflate the value of his swap contract holdings on Mango Markets through price manipulation so that he could ‘borrow’ a significant amount of digital assets that he had no intention to repay,” the CTFC wrote in its filing.
/jlne.ws/3VY0Mxx

DOJ, SEC Reportedly Probe Crypto Conglomerate DCG; Jefferies Downgrades Marathon Digital
CoinDesk
Officials with the U.S. Department of Justice’s Eastern District of New York and the SEC are examining transfers between Digital Currency Group (DCG) and the conglomerate’s Genesis subsidiary, according to Bloomberg. DCG is the parent company of CoinDesk. Plus, Jefferies downgraded its rating for bitcoin miner Marathon Digital Holdings (MARA) from “buy” to “hold” due to construction delays.
/jlne.ws/3k5Qv59

SEC Charges McDonald’s Former CEO for Misrepresentations About His Termination
SEC
The Securities and Exchange Commission today charged Stephen J. Easterbrook, former CEO of McDonald’s Corporation, with making false and misleading statements to investors about the circumstances leading to his termination in November 2019. McDonald’s also was charged for shortcomings in its public disclosures related to Easterbrook’s separation agreement.
According to the SEC’s order, McDonald’s terminated Easterbrook for exercising poor judgment and engaging in an inappropriate personal relationship with a McDonald’s employee in violation of company policy. However, McDonald’s and Easterbrook entered into a separation agreement that concluded his termination was without cause, which allowed him to retain substantial equity compensation that otherwise would have been forfeited. In making this conclusion, McDonald’s exercised discretion that was not disclosed to investors.
/jlne.ws/3IDp7Ws

Statement Regarding In the Matter of Stephen J. Easterbrook and McDonald’s Corporation
Commissioner Hester M. Peirce and Commissioner Mark T. Uyeda
SEC
We are unable to support the charges against McDonald’s Corporation (“McDonald’s”) for failing to disclose sufficient information regarding the termination of its former CEO, Stephen Easterbrook, in its 2020 proxy statement. The Order[1] casts McDonald’s, the victim of Mr. Easterbrook’s deception, as a securities law violator through a novel interpretation of the Commission’s expansive executive compensation disclosure requirements.
/jlne.ws/3QveVRv

FCA fines Guaranty Trust Bank (UK) Limited £7.6 million for further failures in its anti-money laundering systems and controls
UK FCA
The Financial Conduct Authority (FCA) has fined Guaranty Trust Bank (UK) Limited (GT Bank) £7,671,800 for serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019.
/jlne.ws/3ZqFyer

Indigo Michael Limited (trading as Tappily and SafetyNet) enters administration
UK FCA
On 9 January 2023, Indigo Michael Limited, trading as Tappily and SafetyNet, went into administration. Joseph O’Connor, Clare Kennedy and Simon Appell of AlixPartners UK LLP were appointed Joint Administrators.
/jlne.ws/3CDFGOd

Interim stop order placed on the Pivotal Diversified Fund
ASIC
ASIC has issued an interim stop order preventing Vasco Responsible Entity Services Limited (Vasco) from offering or distributing the Pivotal Diversified Fund to retail investors because of deficiencies in the target market determination (TMD).
The interim order stops Vasco from issuing interests in, giving a product disclosure statement for or providing general advice to retail clients recommending an investment in the fund. The order is valid for 21 days unless revoked earlier.
/jlne.ws/3vT98vS

Investing and Trading

Tight Money Will Pressure Startups to Sell in 2023
Katie Roof – Bloomberg
The conventional goal for startup founders is to take their company public, with a top consolation prize being a lucrative sale to a larger company. A prime example is the $20 billion deal announced in September under which software design startup Figma Inc. would be acquired by Adobe Inc. The transaction, which is awaiting regulatory approval, values Figma at more than twice its final private valuation, securing a hefty payout for early investors. Figma founder Dylan Field is set to make $2 billion.
/jlne.ws/3ZoGZKA

SIFMA Fixed Income Market Close Recommendation In The U.S., the U.K., And Japan For The U.S. Martin Luther King Day
Mondo Visione
SIFMA has confirmed its previous recommendation for a full market close on Monday, January 16 for the trading of U.S. dollar-denominated fixed income securities in the U.S., U.K., and Japan in observance of the U.S. Martin Luther King Day Holiday. This recommendation applies to trading of U.S. dollar-denominated government securities, mortgage- and asset-backed securities, over-the-counter investment-grade and high-yield corporate bonds, municipal bonds and secondary money market trading in bankers’ acceptances, commercial paper and Yankee and Euro certificates of deposit.
/jlne.ws/3ICrN6s

Unmarried Women No Longer Pay a Financial Penalty in Retirement; Younger female boomers are doing better than their predecessors, but there’s a catch.
Alexis Leondis – Bloomberg
On the retirement front, a new study has some good news for unmarried women: They’re no longer falling behind their married peers. Still, it’s tough to celebrate equality when it seems to be driven mostly by the falling fortunes of men.
/jlne.ws/3vUGc6K

Environmental, Social and Corporate Governance

Biden-Harris Administration Releases First-Ever Blueprint To Decarbonize America’s Transportation Sector; Landmark Blueprint Will Advance the President’s Clean Transportation Agenda, Slashing Consumer Costs, Improving Public Health, and Increasing the Nation’s Energy Security
U.S. Department of Transportation
The Biden-Harris Administration today released the U.S. National Blueprint for Transportation Decarbonization. Developed by the Departments of Energy, Transportation, Housing and Urban Development, and the Environmental Protection Agency, the Blueprint is a landmark strategy for cutting all greenhouse emissions from the transportation sector by 2050. It exemplifies the Biden-Harris Administration’s whole-of-government approach to addressing the climate crisis and meeting President Biden’s goals of securing a 100% clean electrical grid by 2035 and reaching net-zero carbon emissions by 2050. The Blueprint builds on President Biden’s Bipartisan Infrastructure Law and Inflation Reduction Act, which together represent historic investments in the future of our nation that will transform how we move and live while we build the backbone of a safer and more sustainable transportation system.
/jlne.ws/3jZPifD

The EPA Is Helping School Districts Purchase Clean-Energy School Buses, But Some Districts Have Been Blocked From Participating; Low-income districts that use contractors for busing students say an EPA requirement that they scrap old buses keeps them from getting funds.
Christina van Waasbergen – Inside Climate News
The Environmental Protection Agency’s Clean School Bus Program has hit a speed bump. Part of the bipartisan infrastructure law passed last year, the program will provide $5 billion over the next five years to help school districts switch to clean energy school buses. However, some districts are blocked from participating due to the EPA’s requirement that they scrap their old buses.
/jlne.ws/3Gv5XPJ

Earth’s Ozone Layer Is Recovering as Damaging Chemicals Phased Out; An international agreement to ban ozone-depleting chemicals is helping to rebuild the planet’s protective layer and shield humans from harmful solar rays, according to UN-backed scientists.
Olivia Rudgard – Bloomberg
The Earth’s protective layer is on track to recover within four decades as damaging airborne chemicals are phased out, helping to shield humans from the sun’s rays and limit global warming, a UN-backed scientific panel said. Scientists first identified a hole in the ozone layer, which helps filter out ultraviolet rays from the sun, in 1985. A rare international agreement was reached in 1987 to phase out gases including chlorofluorocarbons (CFCs), which were used in products such as air conditioners, refrigerators and deodorants but were breaking down ozone in the upper atmosphere. A 2016 update to the so-called Montreal Protocol also phased out hydrofluorocarbons (HFCs), which do not directly deplete ozone but have a strong climate change effect.
/jlne.ws/3Gxt1gD

Biden Nears Now-or-Never Point for Cementing New Climate Rules; The pressure is on agencies to craft regulations in time to buttress the president’s climate agenda against GOP opposition and legal challenges.
Jennifer A Dlouhy – Bloomberg
It’s a pivotal moment for President Joe Biden’s climate agenda as he reaches the halfway point in his first term, with his administration planning to impose major climate policies touching everything from the cars Americans drive to the electricity they use. Biden campaigned on promises to combat climate change, accelerate renewable fuels and decarbonize the nation’s power grids by 2035. As president, he’s pledged the US will at least halve its greenhouse gas emissions by the end of the decade. The sweeping climate law known as the Inflation Reduction Act is set to massively help the US reach that goal, policy analysts say, but success also depends on a host of other policies to force emission cuts and spur efficiency.
/jlne.ws/3X0GdBW

Net zero possible in 2040s, says outgoing UK climate business expert; Countries that fear losing competitive edge could benefit from bolder climate policies, says Nigel Topping
Fiona Harvey – The Guardian
The world could reach net zero greenhouse gas emissions in the early 2040s, substantially ahead of the mid-century climate target, if governments set more stretching goals and make bold policy decisions, the UK’s outgoing climate business expert has said.
/jlne.ws/3XmRADM

G-20 Central Bankers Confront Limits of Mandates on Climate; There’s ‘very heavy task on our shoulder,’ PBOC’s Yi says; Schnabel, Kuroda, Macklem speak at Riksbank conference
Craig Stirling, Alexander Weber, Love Liman, and Niclas Rolander – Bloomberg
Combating climate change while setting interest rates is now a permanent tension for global monetary officials as they tackle rampant inflation, top central bankers from across the Group of 20 said. Confronting how green concerns impact their independence, policymakers from Bank of Japan Governor Haruhiko Kuroda to Isabel Schnabel from the European Central Bank acknowledged that there’s no easy solution while sticking to their individual missions of achieving price stability.
/jlne.ws/3k9KPqA

Investor Climate Action Plans; A single and comprehensive framework
The Investor Agenda
The Investor Climate Action Plans (ICAPs) Expectations Ladder and Guidance provides investors with clear expectations for issuing and implementing comprehensive climate action plans, including steps investors can take to support the goal of a net-zero emissions economy by 2050 or sooner. The framework aims to help investors navigate existing expectations and initiatives on climate change. It is inclusive and unique in that it sets out expectations for investors wherever they may be on their climate journey.
/jlne.ws/3GR5VTQ

The Great American EV Battery Revolution Might Finally Be Here; Companies plan dozens of factories in hopes of building a domestic supply chain from scratch.
Mark Bergen and Gabrielle Coppola – Bloomberg
If President Joe Biden gets his way, this year will kick off a bonanza of battery manufacturing across the US. Dozens of companies have announced plans to open factories devoted to electric vehicle battery production, spurred by federal incentives and a growing market for cleaner cars. Under the Inflation Reduction Act, Biden’s signature climate policy, Uncle Sam will start giving new tax credits in January for making critical technologies in the country. That’s many extra carrots for carmakers already plotting ways to “onshore” more of their supply chain after being hobbled by the pandemic and the trade war with China.
/jlne.ws/3vP1F0G

California Town That’s Home to Oprah and Prince Harry Is Evacuated; Former talk show host Ellen DeGeneres tweets video of flooding; Town had average median home sale price of $4.22 million
Sarah McGregor and John Gittelsohn – Bloomberg
The Southern California coastal town of Montecito – a seaside haven for celebrities and billionaires – is under an evacuation order after the latest torrential downpour that’s drenched the state. The area is forecast to receive more heavy rainfall later on Monday after being dumped with five inches from the early morning, the Montecito Fire Department said in a Twitter post.
/jlne.ws/3Gn4laM

The Year That Seared Europe Ends as 5th Warmest on Record; From droughts and fires to floods, storms and record-high temperatures, climate change made 2022 a year of extremes, says the EU’s Earth observation agency.
Laura Millan Lombrana – Bloomberg
From drought in Europe to floods in Pakistan and melting polar ice, a rapidly-changing climate made 2022 a year of new extremes fueled by a relentless increase in the concentration of heat-trapping gases, according to the EU agency that tracks changes to Earth’s atmosphere. The year ended as the world’s fifth-warmest on record, with Europe heating up faster than anywhere else, it said in new research published Tuesday. The continent experienced its second-warmest year on record and its hottest summer ever, fueling wildfires, ruining crops, hampering trade and leading to higher than normal deaths even in some of the world’s wealthiest nations.
/jlne.ws/3itKxKM

As the biggest lender to poor nations, wealthy China can do more for climate finance; As the largest bilateral creditor to the world’s poorest states, China can prioritise climate concerns in debt relief; It can also support reforms and expansion at multilateral development banks so they can lend more to low-carbon projects and phase out fossil fuel financing
Byford Tsang and Juan Pablo Osornio – South China Morning News (opinion)
China has argued that rich nations should shoulder more of the burden in cutting planet-warming greenhouse gases. This “common but differentiated responsibility” principle, already enshrined in global climate agreements such as the Paris accord, is strongly backed by China and other developing countries in holding developed nations accountable for their historical emissions. But as China’s wealth and emissions grow, so does its climate responsibility. Richer nations have built their prosperity upon the pollution that continues to destabilise the earth’s climate. Historically, the United States, 27 member states of the European Union and Britain are the largest emitters of greenhouse gases since the start of the industrial revolution.
/jlne.ws/3vOueLQ

French Food Giant Danone Sued Over Plastic Use Under Landmark Law; Environmental groups are relying on a law in France requiring large companies to address their environmental footprint.
Constant Meheut and Catherine Porter – The New York Times
Danone, the French dairy giant, is being taken to court by three environmental groups who say it has failed to reduce its plastic footprint sufficiently, in a lawsuit challenging corporate social responsibility in the face of the climate crisis. The groups accuse Danone – one of the world’s top 10 plastic polluters, according to a recent study – of “failing to live up to its duties” under a groundbreaking French law that requires large companies to address their environmental impact and has opened ways to sue them should they fail to do so.
/jlne.ws/3k2oR9h

Insured Losses Hit $120 Billion as Extreme Weather Upends Norms; Hurricane Ian was costliest event of 2022: Munich Re study; Before 2005, industry losses never topped $50 billion a year
Stephan Kahl – Bloomberg
The insurance industry is struggling to adapt to a new normal in which losses fueled by climate change are now regularly exceeding $100 billion a year. Insured losses from natural disasters hit about $120 billion in 2022, most of which was weather related, according to data compiled by Munich Re. Hurricane Ian, which devastated Florida in September, was responsible for about half that. Including uninsured losses, the total cost of storms, droughts, earthquakes and fires last year was $270 billion.
/jlne.ws/3GtUqAm

The pursuit of profit with purpose requires patience; Students should accept that the way in which their career aligns with their values may well be a process of evolution
George Serafeim – Financial Times Opinion
The writer is the author of ‘Purpose + Profit’ and Charles M Williams professor of business administration at Harvard Business School. An increasing number of business school students are interested in pursuing a career that combines purpose and profit. They understand that they can make a difference in the world while also becoming financially successful entrepreneurs, managers, consultants or investors. This view overturns two myths about business. First, that business is just about making money, while purpose is found by joining a non-governmental organisation, a social enterprise or, perhaps, the public sector. Such careers can be enormously rewarding. But do we think the leaders of Moderna or Zoom – companies that have changed countless lives over the past three years – have had less impact than anyone else? Or that people such as Microsoft chief Satya Nadella or Tesla boss Elon Musk have had less impact than others outside business?
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US greenhouse gas emissions rose again in 2022 despite climate goals; Buildings, industry and transport drive estimated 1.3% increase, in conflict with Paris targets
Derek Brower – Financial Times
US greenhouse gas emissions rose again in 2022, putting the country further behind its targets under the Paris climate agreement despite the passage of sweeping clean energy legislation last year.
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US Climate Emissions Rose 1.3% in 2022 But Trailed Economic Growth; Greenhouse gas emissions climbed in the US last year but not by as much as in 2021, suggesting the carbon intensity of the economy is declining, says the Rhodium Group.
Leslie Kaufman – Bloomberg
Emissions from heat-trapping greenhouses gases in the US inched up in 2022, but at a rate slower than overall economic growth, according to a new report by an independent energy research firm. The fact that emissions climbed only 1.3% over 2021, compared to economic growth of 1.9% in the same period, suggests that the carbon intensity of the economy is declining, the Rhodium Group said in its annual sector-by-sector report of emissions. The report is based on preliminary economic and energy data from the US government that will be finalized later this year.
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Scientists study how wavy jet stream plus ‘extra warmth’ fuels extreme weather; Relentless parade of cyclones forecast to hit US west coast as wild conditions mark start to 2023
Camilla Hodgson and Steven Bernard – Financial Times
Scientists are battling to understand the effects of climate change on the wavy jet stream that has fuelled record warmth in Europe and torrential rain and snow in the western US, as extreme weather globally marks the start of 2023. The fast moving band of air is behind many of the weather extremes experienced in recent weeks around the northern hemisphere, according to scientists.
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India Makes Power Plants Import Coal to Avert Looming Crunch; Generators must bring in 6% of their demand through September; Country sees 24 million ton deficit in six months from April
Rajesh Kumar Singh – Bloomberg
India has brought back requirements for power plants to import some of the coal they are using as it seeks to build stockpiles and avert electricity blackouts over summer. Generators will have to import 6% of their coal demand by weight through September to maintain “smooth operations,” the power ministry said in a note on its website. India is facing a deficit of 24 million tons of the fuel in the six months starting April, it said.
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6 trends that will shape sustainability in 2023; From Asia becoming a key fossil fuel provider to high-tech agriculture, these are the trends that could reshape society and business as the world navigates global uncertainty borne out of the Russian-led conflict in Ukraine.
Hannah Alcoseba Fernandez – Eco-business
For the past two years, the Covid-19 pandemic was what drove the projections and expectations for society and business. Now, the Russian-led war in Ukraine has become the force shaping our immediate future, with multiple knock-on effects on global energy markets, gas prices and food supplies. The conflict has ushered countries to exploit domestic fossil fuel resources as a means of reducing reliance on Russian exports. At the same time, the war has also helped to ramp up the shift towards more efficient and cleaner energy supplies in order to move away from fossil fuels altogether.
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Goldman Draws Over $1.6 Billion to Strictest ESG Fund Class; Follows launch by Trium of long-short Article 9 fund; Article 9 has been at center of wave of ESG fund downgrades
Alastair Marsh – Bloomberg
The asset management unit of Goldman Sachs Group Inc. has drawn in over $1.6 billion in client cash for a fund registered under the European Union’s toughest ESG rules.
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Institutions

Jefferies Profit Tumbles as Deal Slump Persists
Paige Smith – Bloomberg
Jefferies Financial Group Inc. said profit fell 57% in the fiscal fourth quarter, amid a persistent deal slump that looks poised to crimp a key profit engine across Wall Street. Total investment banking revenue declined about 52% to $568.5 million in the period ended Nov. 30, the New York-based firm said Monday in a statement. That exceeded the $550.4 million average estimate of analysts in a Bloomberg survey. Jefferies’ earnings offer an early snapshot of how Wall Street’s biggest banks may fare as they report earnings from Friday this week.
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Morgan Stanley CEO Contender Jonathan Pruzan to Retire; Bank says the chief operating officer’s departure will be effective at month’s end
AnnaMaria Andriotis – The Wall Street Journal
Morgan Stanley Chief Operating Officer Jonathan Pruzan is retiring after 29 years at the bank, narrowing a race to succeed Chief Executive James Gorman. Mr. Pruzan, 54, will step down on Jan. 31, the Wall Street firm said in a Securities and Exchange Commission filing Monday. Morgan Stanley named Mr. Pruzan operations chief in May 2021 as part of a broader executive reordering meant to “reflect the next generation of leadership at Morgan Stanley,” Mr. Gorman said at the time.
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Hedge fund firm Rokos posts loss after bond market turmoil; Fall into red in results to March 2022 has been followed by a rebound on surge in inflation and bets on rising rates
Laurence Fletcher – Financial Times
The hedge fund management firm of billionaire trader Chris Rokos plunged to a loss in its most recent financial results after its fund was hit by a sharp sell-off in government bonds, even though its traders have since been able to profit handsomely from a surge in inflation.
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Fund manager Terry Smith blames central banks for poor performance; One of the UK’s best known stockpickers says end of ‘easy money’ hurt flagship fund
Emma Dunkley – Financial Times
UK investment manager Terry Smith has blamed his £22.5bn fund’s underperformance on the end of “easy money” and warned that central banks could tip the economy into recession through too much monetary tightening. In his annual letter to shareholders, Smith said the 14 per cent drop in the value of his flagship Fundsmith Equity fund in 2022 was the result of moves by central banks, from scaling back quantitative easing to raising interest rates.
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Wellness Exchange

Want to be healthier? Hang out with your friends.; For better health, tending to your friendships is as important as getting to bed early or eating well
Teddy Amenabar – The Washington Post
One of the more surprising findings in the science of relationships is that both romance and friendship often start the same way – with a spark. But, what happens next? Often, we place our romantic partners above all else and ask our friends to wait in the wings, say relationship experts. Yet, a growing body of research shows friends are essential to a healthy life – and they are just as important for our well-being as healthy eating habits or a good night’s sleep.
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Moderna meets forecast with $18.4 billion in COVID vaccine sales in 2022
Leroy Leo – Reuters
Moderna Inc (MRNA.O) said on Monday it generated about $18.4 billion in COVID-19 vaccine sales in 2022, meeting its forecast of $18 billion-$19 billion for the year. The company also forecast minimum COVID-19 vaccine sales of about $5 billion in 2023, compared with its previous forecast of $4.5 billion to $5.5 billion in November. The COVID vaccine maker continues to expect additional contracts for 2023, it said.
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Coronavirus FAQ: How do I avoid catching COVID while flying in 2023?
Fran Kritz – NPR
It’s been nearly three years since the COVID-19 pandemic was declared, but if you head to some airports right now you might think you’ve returned to the early days of the outreak. A surge of cases in China has prompted the U.S. to require a negative COVID test for travelers flying in from the Peoples’ Republic of China, Hong Kong and Macau. That went into effect on Jan. 5. The European Union recommends the same measures for its member states.
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Chinese bank tries to entice wealthy customers with mRNA vaccines; Hong Kong-based lender seeks to cater to mainlanders’ demand for western jabs
Primrose Riordan, Chan Ho-him and Gloria Li – Financial Times
A Chinese state-owned bank in Hong Kong is offering customers one shot of an mRNA vaccine if they make a deposit of HK$4mn (US$512,277), as it seeks to entice mainland clients who have until now only had access to locally produced jabs. The BioNTech/Pfizer mRNA vaccine is not widely available on the mainland but has long been available for free to permanent residents of Hong Kong and Macau as Beijing allowed the two territories to pursue a different vaccination strategy.
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Regions

Bird Flu Outbreak Sparks Record Slaughter of 10 Million Animals in Japan
Keira Wright and Shoko Oda – Bloomberg
Japan has culled close to 10 million birds in a record outbreak of avian influenza, as authorities struggle to tamp down the disease that has already devastated poultry flocks worldwide. The agriculture ministry said on Monday that 9.98 million birds have been culled this season, surpassing a previous record in fiscal 2020. On Tuesday, it confirmed the disease at an egg farm in Miyazaki prefecture that housed about 100,000 hens.
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China suspends issuing visas in Japan, S.Korea to retaliate for COVID curbs
Martin Quin Pollard and Eduardo Baptista – Reuters
China suspended issuing short-term visas in South Korea and Japan on Tuesday, after announcing it would retaliate against countries that required negative COVID-19 tests from Chinese travellers.
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Ghost Banks Limp Along in Argentina, Staying Open as Costly ATMs; Argentine banks lag peers in shutting branches to cut costs
Ignacio Olivera Doll – Bloomberg
On a weekday afternoon in Buenos Aires, a guard stands watch outside an empty bank. It’s not just devoid of customers: Though the lights are on and Banco Santander’s signature red-and-white decor remains, there isn’t a single employee inside.
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Streak of brutal weather continues in California with more storms this week
Juliana Kim and James Doubek – NPR
Another powerful winter storm system is causing flooding, snow and mudslides in areas of California, where intense downpours have already wreaked havoc on communities earlier this month. The National Weather Service says California is in the middle of two major episodes of rain taking place “in quick succession” on Monday and Tuesday. The first downpour hit the central California coast, which saw 3 to 5 inches of rain fall within 24 hours by Monday afternoon. Some areas saw 10 inches, according to the NWS.
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Miscellaneous

Top Office Owners Don’t Want to Own Only Office Buildings Anymore; Apartment-building acquisitions spur quick returns, require ‘minimal capital expenditure’
Peter Grant – The Wall Street Journal
Many of the most prominent office developers in the U.S. are shifting gears, looking to buy or build real estate that isn’t office. Boston Properties Inc. is planning to develop 2,000 residential units up and down the East Coast. The firm, which owns more U.S. office space than any other publicly traded company, also is developing millions of square feet of lab and life-science space.
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The Top Careers for 2023: These 20 Jobs Are In High Demand; Software developer tops the list according to US News, despite mass layoffs at companies like Meta, Salesforce and Amazon. For those looking for job security, consider health care.
Jo Constantz – Bloomberg
Software developer clinched the top spot of US News & World Report list of the best jobs of 2023, up from the number five spot last year – despite high-profile layoffs at major tech players like Meta Platforms Inc., Salesforce Inc. and Amazon.com Inc. US News analyzed data from the Bureau of Labor Statistics to rank jobs by hiring demand, growth, median salary, employment rate, future job prospects, stress level and work-life balance.
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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...

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