Hits & Takes
By John Lothian
The number of cases of coronavirus doubled in the US. in two days. And worldwide cases doubled in the last twelve days, from 100,000 to 200,000. In the US, they are spiking and in New York City alone there are now 4000 cases. The number of unemployment claims is growing even faster, though the White House does not want states to reveal their numbers. And the calls for Sen. Richard Burr from North Carolina to resign are growing even more. He might be the least popular Burr since his relative Aaron, who as we know had a run in with treason himself.
Major hospitals are reported to be running short of supplies, medical professionals are starting to improvise and more car companies are saying, “Heck yes, we can make ventilators.” That great big sucking sound you hear should be new ventilators being made, but it is instead the sound of a cratering economy.
In California, the Governor said normal unemployment claims are 2000 a day; then three days ago there were 40,000 and the next day 80,000. I have two offspring whose jobs are on hold as their schools closed. I have another son coming home from college as it moved online and he is being kicked out of the dorms.
And how bad is it in California? The Governor says he expects half of the state to get the virus in the next eight weeks. And he is shutting down the state and telling everyone to stay at home.
Cboe Global Markets, Inc. launched a webpage with their business continuity plans amid the developing novel coronavirus (COVID-19) situation. It is a popular thing to do, as everything right now is centered around flattening the curve and surviving the impact of the virus.
The CTAExpo/Emerging Manager Forum New York to be held on April 22-23, 2020 at the Stewart Hotel has been cancelled. Many hotels across the country are closing, which is impacting events (duh!) and even necessary travel for those trying to get back home (Hi Mom!). Even the G7 meeting scheduled for April was cancelled when Camp David put out the “Closed for the Virus” sign.
Richard Burr, the chairman of the Senate Intelligence Committee, is accused of telling a gathering of big wig business leaders from North Carolina the dire predictions about the impact of the virus and selling $1.7 million in stock while downplaying the virus to the public. ProPublica, a non-profit newsroom broke the story. The sales of stock came on February 13, at a time when he was receiving briefings on the virus. Monday would be a good time for him to resign.
I leave you with a quote from Ronald Reagan, courtesy of OCC’s David Prosperi: “No crisis is beyond the capacity of our people to solve, no challenge too great.”
Dan Keegan – Open Outcry Traders History Project
Dan Keegan is a former trader on the CBOE. He started as a runner with AG Becker, who had very ugly plaid trading jackets. Keegan always leased seats and was happier to pay more rather than less, because more meant there was more market opportunity. His best day was the stock market crash of 1987. He sat for an interview with John Lothian News for the MarketsWiki Education Open Outcry Traders History Project.
Nasdaq CEO: “The plumbing of the markets are working very, very well”
Kai Ryssdal and Andie Corban – MarketPlace.org
As of Thursday’s close, the Nasdaq composite, one of the three most-followed stock indexes in U.S. markets, has dropped almost 30% since February. “Marketplace” host Kai Ryssdal spoke with Adena Friedman, president and CEO of Nasdaq, about whether the markets are functioning properly.
*****My admiration for Adena Friedman continues to grow as her leadership is evident and persistent.~JJL
Just Looking Out for No. 1 Is Wrong Way to Defeat the Virus; The post-crisis landscape will look much better with collective action.
Mohamed A. El-Erian – Bloomberg
Extremely stressed markets and investors rushing to exit through an increasingly smaller door have contributed mightily to the recent wild swings in stocks worldwide. It’s a highly disruptive phase that will pass, though not without collateral damage. But it is being underpinned by an underlying dynamic that is more critical both in the immediate and longer term. It involves a race between, in one lane, the coronavirus shutting down the global economy while also spreading fear and uncertainty and, in the other lane, the economic and financial policy responses. Policies will ultimately prevail, but the means and the timing will determine what the subsequent landscape looks like. Everyone, from governments to companies to households to investors, can do their part to achieve a better outcome.
******It takes a village and world to survive a pandemic.~JJL
Investor Highlight: Min Teo, ConsenSys Labs
“Blockchain technology is a huge design space. It’s a big, permissionless whiteboard where people have the ability to build tech legos and new networks, and it puts the user first,” said Min Teo, Partner at ConsenSys Labs. “This is one of the few technologies without constraints and when you give developers the freedom to create, society benefits. We all move forward.”
*****Just because we need something not about coronavirus.~JJL
Younger adults are large percentage of coronavirus hospitalizations in United States, according to new CDC data
The Washington Post
Stark new data from the U.S. and Europe suggests people younger than 50 have a higher risk from coronavirus complications than many realize.
The deadly coronavirus has been met with a bit of a shrug among some in the under-50 set in the United States. Even as public health officials repeatedly urged social distancing, the young and hip spilled out of bars on Bourbon Street in New Orleans. They gleefully hopped on flights, tweeting about the rock-bottom airfares. And they gathered in packs on beaches.
GameStop Clerks Should Tell Police the Store Can Remain Open as It’s ‘Essential Retail,’ Company Says
Aila Slisco – Newsweek
Video game retailer GameStop is reportedly urging store employees to keep stores open in defiance of any orders to close in light of the ongoing COVID-19 pandemic. Employees at all thousands of GameStop stores were sent a memo Thursday insisting that the company provides and “essential retail” service because it helps people “work from home,” according to a report from Kotaku. Essential retail is generally defined to include businesses like grocery stores and pharmacies.
******GameStop is a good name for things as they are today.~JJL
Americans Are Crossing into Mexico To Buy Toilet Paper
Chantal Da Silva – Newsweek
Americans are reportedly crossing into Mexico to buy toilet paper and other household items as stores in the U.S. continue to struggle to meet demand from shoppers stocking up on supplies amid the coronavirus outbreak.
On Tuesday, local news broadcaster WKBN 27 News reported that Californians had been “flooding” into Northern Baja looking to buy toilet paper, water, and other items.
***Maybe Trump was right and Mexico will end up paying for a wall….to keep Americans out.~SR
CryptoMarketsWiki Coin of the Week: Bitcoin (BTC)
Bitcoin cratered last week – it dragged down every other cryptocoin in the market, caused an explosion in bitcoin options trading volume on Deribit and OKEx, and cast serious doubts about its efficacy as a “safe haven” asset during times of severe market downturn. This week it made an extremely unlikely recovery, its price increasing by over 14 percent since Thursday.
Thursday’s Top Three
Our most clicked item on Thursday was a tweet from Jesse Lee titled, “Watch this, you won’t see a more vivid illustration of what was happening while Trump was doddling and dismissing the crisis as a “hoax” showing a chart comparing South Korea’s quick testing for the coronavirus with the US’s much slower response. (I assume Lee meant “dawdling,” but given Trump, who knows?) Second was a story the Washington Post made available for free even to non-subscribers, Why outbreaks like coronavirus spread exponentially, and how to “flatten the curve.” An important story and a good choice for WaPo to make available. Third was the Crain’s story Chicago trading firms seek more capital, about firms urging banks to make more capital available for clearing trades in order to stabilize the markets.
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|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Disease Doubling Faster Now; Deaths Top 10,000: Virus Update
The coronavirus pandemic has killed more than 10,000 people, according to data from Johns Hopkins University, and the World Health Organization said the disease is now infecting people at a faster pace. It took three months for the first 100,000 cases, but only 12 days for the next 100,000.
Trump Administration Asks States to Keep Quiet About Jobless Figures; Coronavirus crisis spurs a spike in unemployment claims as industries are forced to shut down
Sarah Chaney – WSJ
The Trump administration asked states to abstain from releasing unemployment-claims figures prior to the publication of a national compilation of weekly U.S. jobless claims, according to a state labor department official.
*****This is a good example of people who don’t know how markets work. You can’t lie to the markets and expect them to take it well.~JJL
U.S. Senators Sold Stock After Coronavirus Briefings in January
David Kocieniewski – Bloomberg
Richard Burr and Kelly Loeffler deny any impropriety; Feinstein and Inhofe also sold stock after briefings
Four U.S. senators sold stock after receiving sensitive briefings in late January about the emerging threat of the coronavirus, sparking concerns that they put safeguarding their private finances before their duty to protect public health. Senator Richard Burr, a Republican from North Carolina, and Kelly Loeffler, a Republican from Georgia, both completed their sales at a time when the Trump administration and GOP leaders were downplaying the potential damage the virus might cause in the U.S. and before drastic stock-market plunges set off by the pandemic.
*****Senator Loeffler made a statement on Twitter that said: “I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement.”~JJL
The Staggering Rise in Jobless Claims This Week
Quoctrung Bui and Justin Wolfers – NY Times
Numbers released on Thursday by the Labor Department — as well as a preliminary analysis of even more recent data — provide the first hard confirmation that the new coronavirus is bringing the United States economy to a shuddering halt. The government reported that the number of initial unemployment claims rose to 281,000 last week, a sharp rise from 211,000 the previous week. This rise in initial claims of 70,000 is larger than any week-to-week movement that occurred during (or since) the 2008 financial crisis.
Obama’s Ebola czar says coronavirus infections will ‘explode’ in next few weeks, won’t decrease until May
Suzanne Smalley -Yahoo News
Ron Klain, who served as President Barack Obama’s “Ebola czar,” says Americans need to prepare for a massive spike in coronavirus cases and deaths over the next few weeks.
California governor issues statewide stay-at-home order; Confirmed coronavirus cases in the U.S. doubled in two days
Rick Noack, Alex Horton, Marisa Iati, Meryl Kornfield, Miriam Berger, Siobhán O’Grady, Michael Brice-Saddler, Hannah Knowles and Teo Armus – Washington Post
California Gov. Gavin Newsom (D) issued a statewide stay-at-home order starting Thursday evening. “This is a moment we need to make tough decisions,” Newsom said at an online news conference. It is the strongest statewide restriction yet aimed at stemming the spread of the coronavirus. The announcement follows similar orders issued in the past few days across the San Francisco Bay area and Los Angeles.
Virus Hits Europe Harder Than China. Is That the Price of an Open Society? The epidemic is now bigger in Europe, where governments aren’t used to giving harsh orders, and citizens aren’t used to following them.
Richard Pérez-Peña – WSJ
The macabre milestones keep coming. By Wednesday, Europe had recorded more coronavirus cases and fatalities than China. On Thursday, Italy — by itself — passed China in reported deaths.
The U.S. Must Protect Free Markets in the Oil Price War; Texas is poised to benefit from stabilizing global supply, but it needs the federal government to make a deal.
Ryan Sitton – Bloomberg
Uncertain times are upon us. Our jobs and way of life are being affected by the coronavirus pandemic and by the measures being taken to halt its spread. While these measures are necessary, they are also suppressing demand for goods and services, crippling key parts of our economy. Many families will soon feel a great deal of economic pain, if they aren’t already.
‘At War With No Ammo’: Doctors Say Shortage of Protective Gear Is Dire; The lack of proper masks, gowns and eye gear is imperiling the ability of medical workers to fight the coronavirus — and putting their own lives at risk.
Andrew Jacobs, Matt Richtel and Mike Baker – NY Times
The Open Cities Community Health Center in St. Paul, Minn., is considering shutting down because it doesn’t have enough face masks. Doctors at Barnes Jewish Hospital in St. Louis are performing invasive procedures on coronavirus patients with loose fitting surgical masks rather than the tight respirator masks recommended by health agencies. At a Los Angeles emergency room, doctors were given a box of expired masks, and when they tried to put them on, the elastic bands snapped.
Italy Set to Tighten Its Lockdown as Fatalities Top China
Jerrold Colten, John Follain, and Ania Nussbaum – Bloomberg
Conte weighs extension until at least early May, officials say; Army could be used to enforce lockdown with stricter rules
Prime Minister Giuseppe Conte’s government is set to reinforce and extend the near-total lockdown on Italy as it struggles to contain the coronavirus, after overtaking China as the country with the highest recorded number of deaths.
Coronavirus Will Change the World Permanently. Here’s How; A crisis on this scale can reorder society in dramatic ways, for better or worse. Here are 34 big thinkers’ predictions for what’s to come.
For many Americans right now, the scale of the coronavirus crisis calls to mind 9/11 or the 2008 financial crisis—events that reshaped society in lasting ways, from how we travel and buy homes, to the level of security and surveillance we’re accustomed to, and even to the language we use.
No, We’re Not All Going to Have to Stay Home for 18 Months; Coronavirus doesn’t present an either/or between pandemic and permanent lockdown. We’re buying time for better choices.
Justin Fox – Bloomberg
Remember a week and a half ago when CNBC’s Rick Santelli said that “maybe we’d just be better off” if we just infected everybody with the coronavirus now? His reasoning:
Before Virus Outbreak, a Cascade of Warnings Went Unheeded
David E. Sanger, Eric Lipton, Eileen Sullivan and Michael Crowley – The New York Times
The outbreak of the respiratory virus began in China and was quickly spread around the world by air travelers, who ran high fevers. In the United States, it was first detected in Chicago, and 47 days later the World Health Organization declared a pandemic. By then it was too late: 110 million Americans were expected to become ill, leading to 7.7 million hospitalized and 586,000 dead.
Some Data to Explain This Time of Uncertainty
Phil Mackintosh — Traders Magazine
Although the market action recently seems crazy, and the selloff has been dramatic, markets are doing what markets do best. Providing liquidity and estimating future valuations. Fastest bear market in history (but not the worst) It is true this is the fastest bear market in history. As recently as Feb. 19, 2020, the S&P 500 was at all-time highs. Now the market is down nearly 30% from those levels.
A Look at Economies and Markets After Covid-19; Once the coronavirus is defeated, the new normal will be marked by much slower growth, the risk of deflation and a distrust of equities.
A. Gary Shilling – Bloomberg
The 1920s didn’t “roar” until viewed from the perspective of the depressionary 1930s. Similarly, in the aftermath of the serious global recession I believe the coronavirus has sparked, the 2010s will look like a Golden Age of slow but steady economic growth with rising employment and declining inflation and interest rates. Here’s what to expect when things return to “normal.”
Governor Expects More Than Half Of Californians To Become Infected With Coronavirus
John Ruwitch – NPR
California Gov. Gavin Newsom expects about 56% of the state’s population – more than 22 million Californians – to be infected with the coronavirus over an eight-week period.
The Fragile System Supplying Food to the World Is Under Strain
Millie Munshi, Megan Durisin, and Corinne Gretler – Bloomberg
‘There could be a supply shock in terms of logistics:’ FAO; Farm, retail groups warn of labor crunch, panic-buying strains
Global warehouses are stuffed with frozen cuts of pork, wheels of cheese and bags of rice. But as the coronavirus snarls logistical operations, the question becomes: How does all that food actually get to people?
The S&P500 “Fear Index” closed at all time highs this week as volatility across assets remain near historic highs
Ryan Todd – The Block
The CBOE Volatility Index (VIX), also known as the “Fear Index,” has now surpassed and sustained some of the highest levels set in 2008. Interpreted as a measure of 30-day forward expectation of volatility in the S&P500 index, the VIX traded above the 83 handle this week and closed at all time highs on Monday, according to FactSet.
How the Coronavirus Changed Everything About Economic Policy; The Covid-19 crisis has suddenly created a new consensus among policy makers and economists in favor of bold new fiscal measures
Jon Sindreu – WSJ
The coronavirus crisis has turned into the biggest threat to the global economy since 2008. The big difference this time around is that a surprising consensus has emerged about what to do about it. Indeed, the specific characteristics of the Covid-19 outbreak give it the power to change economic policy forever.
Are We Destroying Society In Order to Save It?
In 1968, journalist Peter Arnett claimed that a U.S. major had told him that a particular village in Vietnam, Ben Tre, had to be extirpated: “It became necessary to destroy the town to save it” (from the Vietcong), sayeth the major (according to Arnett). This has entered American discourse as “we had to destroy the village to save it.”
Best Defense Against Virus Proves Crushing to States’ Finances
Jason Grotto, Shruti Singh, and Noah Buhayar – Bloomberg
Federal government sending billions to offset cost of fight; Dismal fiscal outlook leads to worst muni-bond rout since 1984
It’s a bitter irony: As state and local governments struggle to blunt the new coronavirus outbreak, the most effective weapons hammer their fiscal health.
Exchanges, OTC and Clearing
Cboe Global Markets Launches Business Continuity Webpage for COVID-19 Updates
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today launched a webpage detailing its Business Continuity Plans amid the developing novel coronavirus (COVID-19) situation.
The World Federation of Exchanges issues statement on Covid-19 and market volatility; Exchanges and CCPs support market participants in the face of the global coronavirus (Covid-19) economic shock
World Federation of Exchanges
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today issued a statement on coronavirus (Covid-19) and current market volatility.
Will Sebi and exchanges let stock brokers work from home? Leading institutions will take up the matter with the finance ministry and Sebi.
Sugata Ghosh, ET Bureau
Foreign portfolio managers, the largest investor group in the Indian stock market, as well as several brokers have asked bourses to allow employees of brokerages and dealers to transact from their homes amid fears of further spreading of the COVID-19 virus and a near lock-down situation.
Virus Revives Beaten-Down CFD Firms as Britons Bet on Markets
Donal Griffin – Bloomberg
CMC soars most ever as profit set to surpass market consensus; CMC, IG and Plus500 all experiencing surges in revenue
For a group of firms selling risky derivatives to retail investors in Britain and beyond, the coronavirus has meant good business.
The Bermuda Stock Exchange Issues Statement On Business Continuity
The Bermuda Stock Exchange (“BSX” or “Exchange”) today issued a statement on the Exchange’s response to the Covid-19 virus and business continuity.
DTCC Response To ESMA SFTR Delay
In response to the announcement that the European Securities and Markets Authority (ESMA) expects competent authorities not to prioritise their supervisory actions towards reporting entities in respect to the Securities Financing Transactions Regulation (SFTR) until July 13, 2020, DTCC’s Val Wotton said:
Clarification of the scope of short selling bans imposed by European national authorities
Please note that with a view to index products traded on Eurex, the German Federal Financial Supervisory Authority (BaFin) has clarified on its webpage the scope of the short selling bans introduced in March 2020 by several European national authorities.
Derivatives Forum 2020 in Frankfurt: a day full of highlights
The third Derivatives Forum in Frankfurt, held on 27 February in the beautiful surroundings of the “Gesellschaftshaus Palmengarten”, was a huge success. It was organised by Eurex, featuring eleven renowned co-sponsors and 550 participants from more than 180 buy- and sell-side firms, regulators and associations.
Coronavirus Spread Puts Fintech Lenders At Risk
Jeff Kauflin – Forbes
As the coronavirus spreads at an exponential rate and U.S. consumers stay locked in their homes, businesses large and small are hunkering down, many laying off workers as they try to survive a recession. Among financial technology companies, those lending money to average Americans may be facing the biggest risks, as unemployment grows and any stimulus Congress passes replaces only a portion of lost income.
Small Businesses Hunker Down, Sending Fintech Into a Tailspin
Peter Rudegeair – WSJ
Coronavirus is causing big pains for companies that cater to small businesses.
Payments processors, lenders and other service providers to small, bricks-and-mortar firms are bracing for a slowdown as the fallout from the pandemic hits many of their customers, especially retailers and eateries. New York, New Jersey and other states ordered the closure of bars, restaurants, gyms and other businesses to foot traffic to try to slow the spread of the coronavirus.
Singapore Fintech Startup MatchMove Joins Digital Bank Race
Yoolim Lee and Chanyaporn Chanjaroen – Bloomberg
Singapore financial-technology firm MatchMove has teamed up with homegrown finance company Singapura Finance Ltd. and two others to apply for a digital banking license in the city-state.
The MatchMove-led consortium is the latest group to announce it’s submitted an application for a digital full banking license to the Monetary Authority of Singapore. That sets the firm against heavyweights including Sea Ltd., which is backed by Tencent Holdings Ltd., and the Grab Holdings Inc.-Singapore Telecommunications Ltd. consortium.
The Coder and the Dictator
Nathaniel Popper and Ana Vanessa Herrero – The New York Times
Just after midnight one Tuesday in early 2018, the vice president of Venezuela commandeered the nation’s TV airwaves. Looking composed despite the hour, in a blue suit and red tie, he announced that the government was about to make history by becoming the first on Earth to sell its own cryptocurrency. It would be known as the Petro.
Surfing the spread: how derivatives traders played last week’s crypto turmoil
Celia Wan – The Block
From sweeping liquidations to exchange outages, crypto market volatility over the past week created more than a few headaches for traders. Yet there was at least one upside that emerged amid the fray: arbitrage opportunities. Since March 12, a significant disparity has emerged between the price for BitMEX’s perpetual swaps and bitcoin’s spot price. Meanwhile, the stablecoin USDT – which is supposed to be one-to-one pegged tied to the U.S. dollar – has been trading at a premium. And bitcoin futures has also reversed the historical trend of printing a higher price than spot – it has been trading at a discount instead.
Binance, Huobi to support Steem hard fork into Hive; STEEM token price shoots up
Yogita Khatri – The Block
Two major crypto exchanges – Binance and Huobi – have said that they will support a planned hard fork of the Steem Steem blockchain, which would result in the new Hive network.
Steem Hard Forks Today Over Fears of Justin Sun Power Grab
Sebastian Sinclair – Coindesk
Major crypto exchanges Binance and Huobi have aligned behind a controversial hard fork of the Steem blockchain scheduled for Friday. An initiative developed by a Steem community group called Hive, the fork is set to go live at around 14:00 UTC. The blockchain split is the latest development in the ongoing dispute between Tron founder Justin Sun and the Steem community who have been in a fight for control over who controls the social media and content-focused blockchain.
Indian police arrest woman who stole 64 bitcoins from her former employer
Yogita Khatri – The Block
Police officials in India have arrested a woman who stole 64 bitcoins (worth about $430,000) from her former employer. The 26-year-old woman, Ayushi Jain, worked for Bengaluru-based Bitcipher Labs and stole bitcoins earlier this year, the Times of India reported Friday. Ashish Singhal, co-founder of Bitcipher Labs, noticed the irregularity and filed a complaint with police, which led to Jain’s arrest.
Coronavirus is forcing fans of Bitcoin to realize it’s not a “safe haven” after all
Mike Orcutt – MIT Technology Review
All hell seems to be breaking loose in the financial markets in light of the coronavirus pandemic. But if you’ve spent any time talking with a Bitcoin enthusiast, you’ve probably been told (perhaps many times) that moments like this are what the cryptocurrency was made for. Some of its most ardent fans have contended that since the digital asset is “uncorrelated” with traditional assets like stocks, it is a “safe haven” against market crashes like those we are seeing right now.
Judge Calls Out Kleiman Attorneys Over ‘Excessive’ Fees in Craig Wright Case
Paddy Baker – Coindesk
The legal team representing the brother of Craig Wright’s deceased business partner greatly overclaimed on legal fees, according to the judge overseeing the case. Magistrate Judge Bruce Reinhart of the federal court of the Southern District of Florida criticized the fees claimed by the attorneys representing Ira Kleiman – who is suing Wright for 50 percent of the bitcoin (BTC) and intellectual property he owned before 2014 – as “excessive” and ruled they wouldn’t be granted in full.
Tezos Foundation had over $600M in assets as of January, 47% in bitcoin
Yogita Khatri – The Block
Tezos Foundation, a non-profit behind the development of the Tezos protocol, had $635 million in total assets as of January 31. Almost half (47%) of these assets were held in bitcoin (BTC), according to a biannual report published by the foundation on Thursday. Bitcoin holdings were followed by the foundation’s native tezos (XTZ) token (23%) and a stability fund (16%), which includes assets such as bonds, exchange-traded funds, and commodities.
Citi says it recently ‘topped up’ its equity stake in Ethereum-based trade financing platform komgo
Yilun Cheng – The Block
Citi has increased its equity stake in komgo – a startup building an Ethereum-based enterprise blockchain for trade financing – and started integrating its trade processing system with komgo’s blockchain. Launched in 2018 in partnership with ConsenSys, komgo features an end-to-end platform to streamline trade financing in the commodities industry. Using the platform, equities buyers and sellers can leverage distributed ledger technology (DLT) to communicate with each other as well as with their banks and services providers. The project was launched alongside a number of investor founders including Citi, Societe Generale, ING Group, and Sumitomo Mitsui Banking Corporation.
Bitcoin Shows Some Signs of Stabilization After Brutal Decline
Vildana Hajric – Bloomberg
Here’s some good news for cryptocurrency fans: Bitcoin is showing signs of stabilizing after suffering a severe decline amid the wider coronavirus-induced meltdown. Based on the last four trading days, the largest digital token has bounced from session lows to gradually mark higher-lows, a signal it may be forming a bottom after the almost 30% decline this month.
A crypto hedge fund co-founded by a former Nasdaq strategist is raising $100M
Yogita Khatri – The Block
Alpha Sigma Capital, a crypto and blockchain hedge fund co-founded by former managing director of strategy at Nasdaq Global Corporate Solutions Enzo Villani, is raising $100 million. Announcing the news on Wednesday, Villani said the fund was officially launched in early January, with a focus on investing in crypto and blockchain companies. “As a hedge fund, we have the flexibility to invest in tokens, debt, equities, and derivatives which allows our investors downside protection while focused on above-market returns,” said Villani.
Bitcoin May Need Months to Recover, Fundstrat Chartist Says
Joanna Ossinger and Eric Lam – Bloomberg
Bitcoin’s technicals are in rough shape after its spectacular tumble last week and a recovery might take months, according to Fundstrat Global Advisors LLC. The largest cryptocurrency is trading about 40% below its mid-February high, with a particularly notable drop between March 12 and 13, when it lost more than $3,000 in about 16 hours. Now it has broken below its 2015-2020 uptrend, leaving its price action “badly compromised,” according to technical strategist Rob Sluymer.
The total supply for stablecoin USDC has risen by 42% since March 1
Yilun Cheng – The Block
The supply for the USDC stablecoin has jumped significantly since the start of the month. The market capitalization for the dollar-backed stablecoin has climbed by approximately $200 million since March 1, now surpassing the $600 million benchmark. This figure represents a 42% increase, based on data collected by The Block. According to a Wednesday blog post by cryptocurrency exchange Coinbase, “more and more consumers and institutions turn to USDC as a trusted means to weather the turbulence.”
Senator Dumped Up to $1.7 Million of Stock After Reassuring Public About Coronavirus Preparedness; Intelligence Chair Richard Burr’s selloff came around the time he was receiving daily briefings on the health threat.
Robert Faturechi and Derek Willis – Propublica
Soon after he offered public assurances that the government was ready to battle the coronavirus, the powerful chairman of the Senate Intelligence Committee, Richard Burr, sold off a significant percentage of his stocks, unloading between $628,000 and $1.72 million of his holdings on Feb. 13 in 33 separate transactions.
Trump Oversells Breakthroughs in Boasts of U.S. Virus Response
Josh Wingrove – Bloomberg
Medical ship not ready, drug not approved, masks on backorder; Pence has also over-promised on U.S. action to combat virus
A hospital ship that can’t yet sail, a drug that’s not approved for coronavirus, a windfall of masks that’s not due until next year. Donald Trump has repeatedly overstated his government’s accomplishments as he tries to calm Americans and fight the spread of coronavirus.
President Trump Cancels In-Person G7 Summit Planned For June
Bobby Allyn – NPR
The gathering of world leaders at the Group of 7 summit will not happen in-person this year as scheduled for Camp David in June, and will instead be a video conference, the White House said Thursday.
Johnson, Trump Want Coronavirus Tests That Haven’t Been Made
Tim Loh and Marthe Fourcade – Bloomberg
U.K. prime minister is talking up a potential ‘game changer’; Makers of virus diagnostics are struggling to meet demand
U.K. Prime Minister Boris Johnson, U.S. President Donald Trump and other leaders want to ramp up coronavirus testing. There’s just one problem: Providers of the diagnostics can’t make enough kits to keep up with demand.
A terrified nation needs a leader during this crisis, not a salesman
Opinion by Michael D’Antonio – CNN
A terrified nation in the grip of a pandemic tuned into a White House briefing on Thursday and heard not a sober, confident leader, but a salesman hyping unproven treatments, boasting of non-existent achievements, and offering false hope instead of realistic counsel.
Trump’s Call With Governors Shows Confusion in U.S. Virus Fight
Justin Sink and Mario Parker – Bloomberg
State leaders say they’re competing with feds for supplies; President fields concerns from Democrats, Republicans
President Donald Trump’s video conference with state governors on Thursday was meant to highlight coordination among the nation’s top elected officials as they fight the coronavirus outbreak. Instead, it illustrated their differences.
Trump Told Governors to Buy Own Virus Supplies, Then Outbid Them
Jordan Fabian – Bloomberg
President Donald Trump’s directive for governors to buy their own medical supplies to fight the coronavirus has run into a big problem — the federal government.
Fatigue Will Be the Carrier of the Second Coronavirus Wave; We’re just not built to sustain a state of high vigilance.
Clara Ferreira Marques – Bloomberg
Drastic global measures to keep populations apart and slow the spread of the coronavirus could remain in place for months. That’s posing the difficult question of how long hundreds of millions of us can keep this Herculean effort going.
Just Give Every American $1,200 Already; Anyone who feels they don’t need the money is free to donate it.
Karl W. Smith – Bloomberg
Congress and the White House are largely in agreement that direct payments to individuals should be a central part of any stimulus, with the latest plan sending out checks of $1,200. They are divided, however, on how those payments should vary by income, family size and potentially other variables.
White House Relaxes Rules on Federal Grant Programs Due To Virus
Gregory Korte – Bloomberg
The White House is giving federal grant recipients more flexibility because of the coronavirus pandemic, allowing agencies to extend some grants and waive some reporting requirements. The flexibility laid out in the memorandum from the Office of Management and Budget is similar to the relaxed rules given to programs directly working on COVID-19 research and response.
Coronavirus Fears in Capitol Spur Calls for Lawmakers to Vote Remotely; Concerns rise after two House lawmakers test positive for Covid-19
Byron Tau – WSJ
Senators could cast their votes remotely under a bipartisan proposal, as fears about the new coronavirus raised questions about how Congress will function during the pandemic.
Trump’s 500 Million Respirators Could Take 18 Months to Deliver
Shira Stein – Bloomberg
Grant application allows delivery over 18-month period; Health-care workers have been reusing masks.
The 500 million N95 air-filtering respirator masks President Donald Trump said the federal government ordered could take up to 18 months to be delivered, according to the grant application.
Coronavirus (COVID-19) Update—Regulatory Relief
On March 17, 2020, the CFTC issued separate no-action relief letters to futures commission merchants (FCM) and introducing brokers (IB), swap dealers (SD) and forex dealer members (FDM) that are designed to facilitate the separation of personnel in response to the COVID-19 pandemic. As discussed below, NFA is issuing similar relief from NFA requirements for Members that are in compliance with the terms of the CFTC’s no-action relief. Additionally, NFA is providing FDMs with relief from the filing deadline for Chief Compliance Officer (CCO) Annual Reports.
IOSCO Staff Member In Madrid Tests Positive For Covid-19
The IOSCO General Secretariat confirms that a member of its staff at its headquarters in Madrid has tested positive for Covid-19. This individual is receiving medical treatment and we wish our colleague a quick and full recovery.
Securities Commission Malaysia Grants Regulatory Flexibilities For Market Participants
The Securities Commission Malaysia (SC) today announced that it will grant flexibilities for capital market participants in meeting selected regulatory requirements, in view of Covid-19 and the implementation of the Movement Control Order (“MCO”) between 18 to 31 March 2020.
New Research: Female Investors Lag Behind Male Counterparts in Investment Knowledge and Confidence
Female investors lag behind their male counterparts when it comes to investment knowledge and confidence, according to new research conducted by the FINRA Investor Education Foundation (FINRA Foundation) and the George Washington University School of Business’ Global Financial Literacy Excellence Center (GFLEC).
FINRA Appoints Greg Ruppert Executive Vice President of National Cause and Financial Crimes Detection Programs
FINRA announced today that it has named Greg Ruppert as Executive Vice President, National Cause and Financial Crimes Detection Programs. Ruppert will join FINRA March 23 and will report directly to Bari Havlik, Executive Vice President, Member Supervision.
Canadian Securities Regulators Warn Public Of Coronavirus-Related Investment Scams
The Canadian Securities Administrators (CSA) is warning investors about companies claiming to have products or services that will prevent, detect or cure coronavirus (COVID-19) infection.
ESMA Delays SFTR Reporting Requirements
Shanny Basar – MarketsMedia
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is issuing a Public Statement to ensure coordinated supervisory actions on the application of Securities Finance Transactions Regulation (SFTR), in particular, on the requirements regarding the reporting start date, as well as the registration of Trade Repositories (TRs). This approach is needed in response to the effect of current adverse developments events as a result of the COVID-19 pandemic.
Hedge Fund Priest Sanctioned Over Press Leaks in SEC Case
Lemelson ‘concedes’ leak violated protective order;Must pay $100 per page of disclosed confidential info
A priest who has a side gig as a hedge fund manager must pay a penalty for leaking information protected as part of an SEC suit to a reporter, a Massachusetts federal district judge said.
As part of the Australian Government’s response to the novel coronavirus (COVID-19), the Australian Securities and Investments Commission (ASIC) is working to maintain the integrity and stability of Australia’s financial system.
ASIC suspends AFS licence of Longhou Capital Markets Pty Ltd
ASIC has suspended the Australian financial services (AFS) licence of Longhou Capital Markets Pty Ltd (Longhou), a Queensland-based financial services provider, for a period of three months, expiring 12 June 2020.
Guidelines for meeting upcoming AGM and financial reporting requirements
Annual General Meetings
Coronavirus (COVID-19) may temporarily impact on companies’ ability to hold an annual general meeting (AGM). This issue is most immediately relevant for listed and unlisted public companies with 31 December balance dates that are required to hold an AGM by 31 May 2020. For these entities, ASIC:
Key Terms for Tough Times: The Vocabulary of Stressed Markets
Key Terms for Tough Times: The Vocabulary of Stressed Markets
When financial markets experience turbulence, Wall Street employs a jargon all its own to describe important elements of tough, uncertain times. Here’s a look at some of the most common terms and what they mean.
FSA/FCA Interest Rate Hedging Products Lessons Learned Review deadline extended until early 2021
John Swift QC, the Independent Reviewer examining the Financial Services Authority (FSA) and Financial Conduct Authority (FCA)’s supervisory intervention in relation to Interest Rate Hedging Products (IRHPs), has informed the FCA that the deadline for submission of his report in relation to the Review must be extended until early 2021 as a result of necessary precautions to be taken in response to the COVID-19 virus.
Connaught Fund Independent Reviewer announces update on delivery of his report
News stories Published: 20/03/2020 Last updated: 20/03/2020
Raj Parker, the Independent Reviewer into the FSA/FCA approach to the Connaught Income Fund Series 1 (the Fund), has today announced that he expects that his draft report will be delivered in early May 2020. This will be followed by the usual fact-checking and representations process with the report being finalised in the summer.
Investing and Trading
Jobless Claims Mount as Employers and Workers Face Bleak Outlook
New filings for unemployment benefits rose 30 percent last week amid cutbacks and shutdowns over the coronavirus crisis.
Patricia Cohen – NY Times
In an early sign of the coronavirus pandemic’s devastating impact on American workers, the Labor Department on Thursday reported a 30 percent increase in unemployment claims last week, one of the largest spikes on record.
U.S. power industry may ask key employees to live at work if coronavirus worsens
Valerie Volcovici, Scott DiSavino – Reuters
The U.S. electric industry may ask essential staff to live on site at power plants and control centers to keep operations running if the coronavirus outbreak worsens, and has been stockpiling beds, blankets, and food for them, according to industry trade groups and electric cooperatives.
Financial Engineering Made Risky Loans Seem Safe. Now They Face a Huge Test; Widespread economic damage in the wake of the coronavirus threatens to undermine a fast-growing category of debt that turns risky loans into triple-A-rated investments
Cezary Podkul and Paul J. Davies – WSJ
Cirque du Soleil canceled its famed shows in Las Vegas and around the world last week, leaving fans disappointed. Over 100 investment funds suffered too, as the value of the circus’s loans tumbled.
Wealthy Facing Margin Calls Show Pitfalls of Pledged Shares
Blake Schmidt, Pei Yi Mak, Venus Feng, and Tom Metcalf – Bloomberg
India’s Gautam Adani posts additional $1.4 billion of shares; Pledging stock is a popular financing tool for billionaires
In today’s plunging markets, borrowing against stock is proving expensive. India’s Gautam Adani and his family put up an additional $1.4 billion of shares as collateral on existing debt this month, according to a Bloomberg analysis of regulatory filings through Thursday for four of his group’s companies.
‘How did things end up like this?’ America’s newly unemployed grapple with coronavirus fallout
Barbara Goldberg, Nate Raymond, Jessica Resnick-Ault, Lucy Nicholson – Reuters
Across the United States, thousands of waiters, cooks, hotel staff, actors, bartenders and workers in other sectors have suddenly found themselves unemployed as the coronavirus pandemic has scythed through the world’s biggest economy.
Bond Markets Are Veering Into a Vicious Cycle; Unprecedented mutual-fund outflows will exacerbate the stampede out of corporate and municipal debt already set in motion by the coronavirus outbreak.
Brian Chappatta – Bloomberg
My first thought when seeing fixed-income fund flows this week? This must be a typo. My second thought (that’s suitable for print)? This is going to get ugly. In what was nothing short of an absolute stampede out of bonds, investors yanked an unprecedented $35.6 billion from U.S. investment-grade funds in the week ending March 18, according to Refintiv Lipper data released Thursday. To be honest, calling it unprecedented is an understatement — the previous record was $7.27 billion, set one week earlier.
Global Climate Talks May Become Pandemic’s Next Victim
Jess Shankleman – Bloomberg
U.K. reassessing Glasgow COP26 talks scheduled for November; Coronavirus has already curtailed preliminary UN meetings
The U.K. is assessing whether the coronavirius pandemic sweeping across the globe could threaten its plans to convene a critical climate summit later this year.
Carbon’s Coronavirus Plunge in Europe Stoked by Options Trade
Mathew Carr and Will Mathis – Bloomberg
Allowances dropped through strike prices ahead of expiry date; U.K. carbon-permit auction revenue plunged 31% to 92m euros
One of the biggest selloffs in the history of Europe’s carbon emissions market stoked record trading in futures and put options as the economic impact of the coronavirus worsened.
‘Black Swan’: A Rare Disaster, Not as Rare as Once Believed; The name for an unforeseen catastrophe goes back centuries in Europe, where no black swans had ever been seen. Eventually they turned up.
Ben Zimmer – WSJ
Grappling with the coronavirus pandemic and its disastrous impact on financial markets, commentators have reached for a familiar metaphor: the “black swan.”
The Next Coronavirus Financial Crisis: Record Piles of Risky Corporate Debt; A fast-growing market in junk-rated leveraged loans is showing severe strains, a sign of a looming credit crunch that could stifle future economic growth
Matt Wirz and Nick Timiraos – WSJ
Serious strains are starting to appear in the $1.2 trillion market for loans to high-risk companies, which have borrowed record sums in recent years as investors chased bigger yields.
Toilet rolls and Treasury bonds tell the same panicked story; Bond fund investors are running for the exits amid ‘rising illiquidity’
Gillian Tett – FT
The phrases “toilet paper” and “Treasury bonds” are not often uttered in the same breath. Right now, however, they should be.
Distressed Debt in U.S. Doubles to $500 Billion in Two Weeks
Olivia Raimonde – Bloomberg
U.S. energy sector has largest share of troubled borrowers; Could be ‘worse than 2008’ as pandemic spreads, analyst says
In less than two weeks, the amount of distressed debt in the U.S. alone has doubled to a half-trillion dollars as the collapse of oil prices and the fallout from the coronavirus shutters entire industries.
Even Coffee Supplies Under Threat Amid Global Transport Woes
Isis Almeida – Bloomberg
Volcafe expects logistical delays to become more widespread; Sucafina encouraged buyers to place orders as soon as possible
Some of the world’s largest coffee traders are bracing for supply-chain disruptions as the coronavirus pandemic threatens to cause delays to ports and other transport operations.
No Limit Down for Stocks, No Shut-Off, and the Christmas Line Holds
Vildana Hajric and Elena Popina – Bloomberg
S&P 500 rises 0.5% for the smallest move since February; Index had notched eight straight days with moves of 4%
It was an unusual day on Wall Street Thursday. Futures on the S&P 500 avoided triggering any volatility halts, the whole market didn’t need to be shut off at any point, and a 15-month-old support line on price charts buttressed the bulls.
Distaste for Stocks So High Even the Bears Are Starting to Run
Claire Ballentine and Vildana Hajric – Bloomberg
Biggest ETFs tracking S&P 500 lose billions in single day; Indicates potential bottom in the making as retail buyers exit
You know things are bad in the stock market when Jeffrey Gundlach is closing out his shorts. “The panic is palpable,” tweeted the billionaire money manager, saying it was the first time in years he didn’t have any bearish bets in his private portfolio. His words came as the S&P 500 was having another 5% plunge, its eighth consecutive daily swing of 4% or more en route to the fastest 30% drawdown.
How Low Can Oil Go? One Forecast Sees $5 a Barrel
Crude has fallen about 60% this year to the lowest since 2003; But traders expect further losses on virus, Saudi-Russia fight
Oil traders struggling to navigate one of the biggest oil crashes in history say the worst is yet to come.
Wall Street Agrees the World Is in Recession, Disagrees on Depth
Simon Kennedy – Bloomberg
BofA, Goldman and Bank of America run different 2020 forecasts; Quarterly U.S. and China performances likely worst in 50 years
Wall Street economists are united in declaring that the coronavirus has forced the world economy into a recession, but they are divided over its depth. In what Ethan Harris, chief economist at Bank of America Corp., calls “forecast leap frogging,” strategists have been forced to repeatedly cut their predictions for global growth as the virus spread from China to Europe and the U.S.
Deutsche Bank warns virus may ‘materially’ impact targets
Deutsche Bank (DBKGn.DE) said on Friday that the impact of the coronavirus outbreak may affect the lender’s ability to meet its financial targets as the fragile bank undergoes a major revamp after years of losses.
Griffin’s Citadel Sending Aid to Chicago to Help in Pandemic
Sophie Alexander and Amanda L Gordon – Bloomberg
Partners at the hedge fund and securities firms founded by Ken Griffin are donating $2.5 million for public schools and food insecurity relief efforts in Chicago as the effects of the coronavirus pandemic take hold.
Mutual funds face scrutiny over systemic importance; The spotlight is on money market products as Fed provides aid following investor redemptions
Attracta Mooney and Siobhan Riding – FT
The mutual fund industry is facing fresh scrutiny over the systemic risks it poses to the financial system after the Federal Reserve agreed to aid money market funds facing heavy investor outflows.
Hedge fund Millennium shuts several ‘trading pods’ over virus turmoil; Lay-offs expected as market swings wreak havoc on fixed-income and relative-value strategies
Ortenca Aliaj, Robin Wigglesworth and Henny Sender – FT
US hedge fund Millennium Management has closed several of its “pods” run by teams of traders in response to losses related to violent market swings caused by growing fears over the economic impact of coronavirus.
Hedge fund Schonfeld hit as investors slash risk; NY-based computer-driven hedge fund manager suffers double-digit losses this year
Laurence Fletcher – FT
Schonfeld Strategic Advisors, a prominent computer-driven hedge fund manager, has recorded double-digit losses this year, as hedge funds across the board are hit by a scramble to cut risk amid tumbling markets and the coronavirus pandemic.
High-Grade Bond-Fund Outflows Hit $35.6 Billion, Smashing Record
Claire Boston, Olivia Raimonde, and Alex Harris -Bloomberg
Withdrawal dwarfs second-largest outflow of $7.3 billion; Record $249 billion added to government money-market funds
Investors withdrew an unprecedented $35.6 billion from U.S. funds that buy up investment-grade debt this week as the global market rout from the spreading coronavirus intensified. At the same time, a record $249 billion poured into U.S. government money-market funds.
Russia Halts Easing as Ruble Takes Hit from Oil, Virus
Natasha Doff – Bloomberg
Ruble is among worst performing EM currencies this year; Governor Nabiullina to hold a news conference at 3pm Moscow
The Bank of Russia bucked a global trend for interest-rate cuts amid the spread of coronavirus by keeping borrowing costs on hold amid a currency slump.
Europe and U.S. Lack Key Weapon Against Pandemic: Experience; Unlike Asia and Africa, western governments didn’t have plans and teams ready for the pandemic.
Marc Champion and Iain Marlow – Bloomberg
As Italy overtook China on Thursday to become the deadliest center of the coronavirus, it exposed an uncomfortable truth for the rest of Europe and the U.S.
India Funds Hunt for Spreads, Liquidity as Credit Woes Mount
Subhadip Sircar – Bloomberg
Top-rated corporate bonds preferred for spread over government; Some fund managers prefer sovereign paper on liquidity comfort
The massive gyrations in the global bond markets and the ongoing credit crisis in India are forcing money managers to seek liquidity in government bonds even as they eye top-rated corporate paper trading at high spreads to the sovereigns.
Goldman Sees Deepest Australian Downturn Since Great Depression
Malcolm Scott – Bloomberg
Given the rapid deterioration in the Australian economic outlook as the coronavirus causes the closure of borders and restrictions on movement, Goldman Sachs Group Inc. now forecast the sharpest annual GDP contraction since the great depression of the 1920s.
Oil Makes Record Rebound After Trump Hints at Role in Price War
Sharon Cho, Alex Longley, and Jacqueline Davalos -Bloomberg
U.S. seeks to buy 30 million barrels for emergency oil reserve; Trump said he’s trying to find ‘medium ground’ in market fight
Oil surged the most ever in New York as the U.S. president said he could get involved in the standoff between Saudi Arabia and Russia that has rocked crude markets.
Michel Barnier tests positive for coronavirus; EU’s chief Brexit negotiator becomes first senior Brussels policymaker to confirm they have Covid-19
Jim Brunsden – FT
Michel Barnier, the EU’s chief Brexit negotiator, has tested positive for the coronavirus, becoming the first senior Brussels policymaker to confirm that they have Covid-19.
Virus Strikes Brexit With Both Sides’ Top Officials in Isolation
Tim Ross and Ian Wishart – Bloomberg
The coronavirus has struck at the heart of the post-Brexit trade talks between Britain and the European Union, with both sides’ top negotiators now in isolation. David Frost, the U.K.’s chief negotiator, is isolating himself after showing symptoms of the virus, a Downing Street spokesman said on Friday. On Thursday, Michel Barnier, Frost’s EU counterpart, announced on Twitter that he had tested positive for the disease. The two men had not had contact since the first round of talks in Brussels two weeks ago.
RPT-Tumbling pound, virus strategy, Brexit fears lead to heavy slide in UK domestic stocks
Julien Ponthus, Thyagaraju Adinarayan – Reuters
A falling currency, doubts about the UK government’s response to the coronavirus crisis and fresh fears of leaving the European Union without a trade deal are prompting investors to ditch shares of companies exposed to the local economy. The FTSE 250 index, home to mid-sized UK stocks, has sharply underperformed British blue chips and other major European bourses since the coronavirus broke out.