‘Dumb Money’ Is on GameStop, and It’s Beating Wall Street at Its Own Game

Jan 28, 2021

First Read

$27,651/$300,000 (9.2%)


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FIA 2020 Volume Review Shows Global Growth, Geographic Evolution of Industry
Suzanne Cosgrove – John Lothian News

While activity in futures and options was undeterred by the pandemic in 2020, logging record volume for a third year in a row, a closer look at data produced by the Futures Industry Association shows a shift in recent years in where that volume occurred and what was most actively traded.

In a webinar held Wednesday, Will Acworth, senior vice president of publications, data and research at the FIA, acknowledged that much of the growth in 2020 derivatives trading was driven by nascent markets in India, China and Brazil.

In a ranking by 2020 volume, the National Stock Exchange of India (NSE) was the leading global exchange, followed by Brazil’s B3 at No. 2. CME Group was ranked No. 3, according to the FIA.

To read the rest of this story, go here.

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Hits & Takes
John Lothian & JLN Staff

Don’t forget to register for FIA Boca-V to be held on March 16 to 18. While there will be no golf or endless meetings by the pool, there will be great content from your industry peers sharing their latest thoughts about industry trends and happenings. JLN will be providing coverage as we have for other recent FIA virtual conferences.

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign overnight, but the campaign is nearing 10% of our goal. Support our efforts to preserve industry history by donating to our GofundMe campaign.

Do you have a story to tell about The Path to Electronic Trading? How about the beginning of financial futures? Or were you an open outcry trader? Contact me and let’s talk about getting you interviewed for one of our series.

Would you like one of our “The World Needs Journalists” hoodies? I have some inventory. They are $45 plus shipping. Let me know. Speaking of hoodies, Bernie Sanders sold $1.8 million worth of merchandise with this picture of him in his mittens from the inauguration and donated it to charity.

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

*****

A luxury condo in Brighton, East Sussex, U.K. has been listed for sale via bitcoin and Ethereum. The seller is a cryptocurrency entrepreneur. I’m not familiar with U.K. property taxes, but I imagine they are no more fun that the ones we have to do in the U.S. every year, and paying taxes on property you bought in bitcoin is sure to be even more vexing than the usual amount.~MR

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Sponsored Content
?Special Report? First year anniversary workshop of TOCOM/JPX Electricity Futures

Asia’s Most Successful Electricity Futures at Tokyo Commodity Exchange (TOCOM)/Japan Exchange Group (JPX) celebrated its first year of listing in a co-hosted webinar with Quick Corp. on December 15, 2020. The event was attended by over 250 people from 152 companies.

At the workshop, Mr. Hatakeyama, Director-General for Commerce and Service Industry Policy of METI gave an opening remarks and Mr. Ishibashi of Astmax Trading, Inc. gave a keynote speech on Electricity trading and Risk management. In the panel discussion, traders from different power companies shared their experiences in using TOCOM Electricity Futures and their internal risk control systems. They pointed out that there is still a huge opportunity in Electricity Futures market in Japan and requested the exchange to list new products such as those covering the Hokkaido and Kyushu areas and change the product design to extend contract months.

For more details, please refer to the following link
https://www.tocom.or.jp/uploads/en_news/2021/report_E.pdf

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Has time lost all meaning for you? Join the club; ‘Covid-19 is teaching us that the symbols and structures that give shape to our lives do not need to be set in stone’
Gillian Tett – FT
For the past few weeks, a guilty secret has been lurking in my living room: a pine tree, about nine feet tall, with silver and gold ornaments and a wonky star on top. Yes, our Christmas tree. Still.
/on.ft.com/36l0xph

*****Time has gone digital and moved from a tick to tock.~JJL

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WallStreetBets Founder Reckons With Legacy; Jaime Rogozinski likens recent surge in GameStop shares to a ‘train wreck happening in real time’
Akane Otani – WSJ
The man who created Reddit’s WallStreetBets isn’t who you think he is. He’s 39 years old. He lives in Mexico City with his wife, a physician, and spends his weeks chasing after their 3-year-old twins and tending to his day job as a consultant—hardly the sort of character one might associate with the roiling investing forum. He never imagined the Reddit community he created in 2012 would morph into a force so powerful that it would send GameStop Corp. shares into overdrive, nearly topple a hedge fund and leave professional money managers around the country staring at Twitter with their mouths agape.
/on.wsj.com/3ckemZ2

*****The market will write this legacy.~JJL

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The New Virus Strains Make the Next 6 Weeks Crucial; “Let’s not wait until we wrap the car around the tree to start pumping the brakes.”
Ezra Klein – NY Times
I hope, in the end, that this article reads as alarmism. I hope that a year from now it’s a piece people point to as an overreaction. I hope. Coronavirus cases are falling. Vaccination numbers are rising. We are already jabbing more than a million people a day, which means President Biden’s initial goal of 100 million vaccinations in 100 days was far too conservative. In California, where I live, Governor Gavin Newsom lifted the statewide stay-at-home order. It feels like dawn is breaking.
/nyti.ms/3cfwZx7

*****I am going to start to wear two masks instead of just one.~JJL

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Wednesday’s Top Three
Our most-read story Wednesday was the Financial Times’ Reddit traders wage battle against Wall Street. Second was The Wall Street Journal’s How GameStop’s Reddit- and Options-Fueled Stock Rally Happened. And for more Reddit and GameStop news, third was The New York Times’ Can Anything Stop GameStop?

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MarketsWiki Stats
198,677,193 pages viewed; 25,178 pages; 229,607 edits
MarketsWiki Statistics

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CryptoMarketsWiki Website»
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

Recently updated pages include
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Lead Stories

‘Dumb Money’ Is on GameStop, and It’s Beating Wall Street at Its Own Game; GameStop shares have soared 1,700 percent as millions of small investors, egged on by social media, employ a classic Wall Street tactic to put the squeeze — on Wall Street.
Matt Phillips and Taylor Lorenz – NY Times
A real estate salesman in Valparaiso, Ind. A former line cook from the Bronx. An evangelical pastor and his wife in Huntington Beach, Calif. A high school student in the Milwaukee suburbs. They are among the millions of amateur traders collectively taking on some of Wall Street’s most sophisticated investors — and, for the moment at least, winning. Propelled by a mix of greed and boredom, gleefully determined to teach Wall Street a lesson, and turbocharged by an endless flow of get-rich-quick hype and ideas delivered via social media, these investors have piled into trades around several companies, pushing their stock prices to stratospheric levels.
/nyti.ms/36lfJCS

Reddit Crowd Bludgeons Melvin Capital in Warning to Industry
Katherine Burton and Hema Parmar – Bloomberg
An online group targets a hedge fund star and inflicts losses; But Steve Cohen and Ken Griffin are betting he will prevail
The first sign of trouble for hedge fund wunderkind Gabe Plotkin came in late October: A poster on Reddit’s popular wallstreetbets forum was taking aim at his wildly successful investment firm.
/bloom.bg/3r5w5aN

US stock trading volumes soar past 2008 peak in Reddit battle; More than 23bn shares changed hands on Wednesday as amateur investors tussle with hedge funds
Philip Stafford, Alice Kantor and Leo Lewis – FT
The frenzied battle between amateur investors and hedge funds pushed trading volumes on Wall Street past a peak set at the height of the financial crisis in 2008. More than 23bn shares changed hands in the US on Wednesday, exceeding the high in October 2008 by almost a fifth, according to data from Bloomberg. It was also the third-biggest day for turnover in dollar terms on records that stretch back 13 years, the data showed.
/on.ft.com/3cibeg4

Robinhood Clients Report Trading Restrictions on GameStop, AMC
Annie Massa – WSJ
Clients of Robinhood Markets, the upstart online brokerage with millions of users, reported that they are unable to trade high-flying stocks, including GameStop Corp. and AMC Entertainment Holdings Inc. Those stocks and others are “not supported” on Robinhood, according to a note on at least one of its platforms Thursday. On Wednesday, Charles Schwab Corp.’s TD Ameritrade also curtailed transactions on GameStop, AMC and other securities.
/bloom.bg/3prnFdp

LSE boss says London must ‘move quickly’ to attract prized companies; David Schwimmer’s intervention comes ahead of release of review of listings regime
Philip Stafford – FT
The head of the London Stock Exchange Group has warned that the government must move quickly to overhaul the UK’s listing rules if it wants to challenge Wall Street for the next wave of tech companies going public. The message from David Schwimmer, who has led the LSE since 2018, comes as a review of the rules for company listings by former EU commissioner Jonathan Hill is due to be published next month.
/on.ft.com/2NKhPWs

‘Short squeeze’ spreads as day traders hunt next GameStop; Wild trading continues after hours as Reddit message group Wallstreetbets briefly goes dark
Robert Smith, Laurence Fletcher and Madison Darbyshire, Eric Platt and Hannah Murphy – FT
A “short squeeze” that started on Wall Street swept across the globe on Wednesday, triggering another day of frenetic upward moves in the share prices of previously-unloved companies, followed by a dramatic plunge in after-hours trading when a popular Reddit message board went dark.
/on.ft.com/3aftgwG

‘Weaponised’ options trading turbocharges GameStop’s dizzying rally; Retailer’s shares more than double in single day, leaving them up almost 1,800% in 2021
Robin Wigglesworth – FT
GameStop’s rocket-fuelled trading this month, which has taken the stock’s gain in 2021 to almost 1,800 per cent, is a vivid example of how a new army of day traders have “weaponised” financial derivatives to their advantage.
/on.ft.com/3cmWXyV

Occupy Wall Street spirit returns as traders upset the elites; Reddit’s army of ‘degenerates’ challenges the financial establishment
Katie Martin – FT
In retrospect, the Occupy Wall Street movement missed a trick. Protests in Lower Manhattan annoyed some of the passing bankers. The tents clustered outside the London Stock Exchange got in the way of a quick trip to Starbucks. But the events of the past week show that the way to really upset the financial elites is to do it from the inside.
/on.ft.com/36kkr3U

China and Japan expand ETF connectivity scheme; Stock exchanges in Shanghai, Shenzhen and Tokyo to explore further co-operation
Selena Li and John Sedgwick – FT
China’s two main stock exchanges in Shanghai and Shenzhen and the Japan Exchange have added new exchange traded funds and vowed to expand the product types included in their joint ETF Connectivity scheme, which has struggled to gain momentum after it was launched 18 months ago.
/on.ft.com/3cke300

CME Group to launch global emission offset futures contract on March 1
CME Group
U.S. exchange operator CME Group will launch a global emissions offset futures contract on March 1 to help establish a global price for carbon credits, it said on Tuesday.
Many global companies such as oil majors Shell and BP have pledged to reach net zero emissions, but will need to buy or generate carbon credits to offset the emissions they are unable to cut from their operations.
/yhoo.it/39nPkGr

GameStop Skeptics Citron, Melvin Succumb to Epic Short Squeeze
Nishant Kumar – Bloomberg
Stock had soared in premarket trading following Musk tweet; Short sellers under ferocious attack from retail investors
Melvin Capital and Citron Capital closed out of their short positions on GameStop Corp. as the firms succumbed to the stock’s meteoric ascent. Melvin Capital closed its position after repositioning its portfolio, according to a spokesperson. Citron Capital’s Andrew Left also said Wednesday that the firm covered the majority of its GameStop short bets at “a loss of 100%” in a YouTube video.
/bloom.bg/36jEVJX

Jane Street: the top Wall Street firm ‘no one’s heard of’; The fast-growing market-maker helped keep bond ETFs liquid during turmoil last year
Robin Wigglesworth – FT
A year ago, the world seemed oblivious to signs that a novel virus outbreak in China was a serious, global threat. But one of Wall Street’s biggest but most secretive money machines saw the debacle coming and battened down the hatches.
/on.ft.com/3t7ivVS

Finns Unveil Plan to Become World’s Most Financially Literate
Kati Pohjanpalo – Bloomberg
The Nordic country with one of the world’s best education systems wants its people to be top of the class in managing their finances. Finland is tackling a worrying rise in consumer credit defaults by striving to become the most financially savvy country by 2030. On Thursday, Justice Minister Anna-Maja Henriksson unveiled a financial literacy strategy to meet that aim. Drafted under the guidance of the central bank over the past year, the strategy aims to boost people’s financial skills by enlisting experts from banks, pension and insurance companies, as well as social media influencers, to reach across generations.
/bloom.bg/2Mv96a7

GameStop’s ‘French Revolution’ Is a Crypto-Farce; Pseudo-populist Redditors show Bitcoiners a thing or two about taunting regulators.
Lionel Laurent – Bloomberg
The GameStop Corp. short squeeze has been tipped as finance’s “French Revolution” — a middle finger to the establishment by a hive mind of Redditors able to channel cash into the stock market at such pace and scale that expert hedge funds have had to be thrown lifelines. That bored day-traders could teach the pros a thing or two is reminiscent of other tales of the wisdom of the crowds — Garry Kasparov’s four-month chess match against the internet in 1999 comes to mind. It’s also rightly attracting regulatory scrutiny.
/bloom.bg/2YjYmho

NASDAQ Head Calls on Regulators to ‘Manage the Situation’ after Redditors Drive Up Gamestop Stock
Zachary Evans- National Review
A man walks past a GameStop store in Austin, Texas, March 26, 2018. (Mohammad Khursheed/Reuters)
The president of the NASDAQ has called on financial regulators to step in after a group of Reddit users drove up the price of GameStop stock. The Redditors — members of a forum called WallStreetBets, which has more than 2.5 million members — banded together to buy up GameStop stock after realizing that the hedge fund Melvin Capital had shorted the stock to a massive extent. GameStop’s shares have soared as a result, while Melvin Capital was forced to receive a $2.75 billion cash infusion from fellow hedge funds Citadel and Point72 Capital Management to cover their losses.
/bit.ly/39mP2j4

Reddit’s WallStreetBets Briefly Goes Private After Discord Shuts Down Server
Connor Smith – Barron’s
Discord removed the WallStreetBets server on Wednesday. A spokesperson noted the removal was due to hateful and discriminatory content and was not related to GameStop stock’s recent surge.
/bit.ly/2Mygi5i

IOSCO Issues Sound Practices To Assist Members In Enhancing Complaint Handling And Protect Retail Investors
IOSCO
The Board of the International Organization of Securities Commissions today published a report that sets forth nine Sound Practices aimed at assisting its members in developing and improving their complaint handling procedures and mechanisms for retail investors.
/bit.ly/3ptF059

Covid-19 Complacency Poses Potential Risk to Global Financial Stability, IMF Warns; Investor expectations for recovery, government support have fueled asset prices, raising concerns about excessive risk-taking
Andrew Ackerman – WSJ
Expectations for an economic recovery and continued government aid are fueling overconfidence among investors, the International Monetary Fund said Wednesday, raising the risk of a sudden drop in asset prices that could threaten financial stability.
/on.wsj.com/2Yosfgo

Outages Continue to Plague Online Brokerages; Schwab, Vanguard, Fidelity and others reported new service disruptions
Geoffrey Rogow and Dawn Lim – WSJ
Outages and interruptions rattled investors using some of the largest online brokers on Wednesday. Charles Schwab Corp. SCHW -5.19% , Vanguard Group, Fidelity Investments and several other online brokerages reported service disruptions, either to clients directly or on their social-media accounts. The new technical issues come after brokerage customers already encountered brief delays executing trades this week or temporarily lost access to vital account information.
/on.wsj.com/39q523E

S.B.A. finds ‘anomalies’ in hundreds of thousands of small business relief loans
Stacy Cowley – NY Times
The restarted Paycheck Protection Program allows hard-hit small businesses to get a second government-backed relief loan, but thousands of business owners who are trying to apply have been ensnared by what the Biden administration said are significant errors in the program’s loan records.
/nyti.ms/3j6srL3

Trading platforms are limiting trades of GameStop and other companies.
Gillian Friedman and Tara Siegel Bernard – NY Times
Retail stockbrokers placed restrictions on Wednesday on trading of GameStop, AMC Entertainment Holdings and other securities as the companies have become the center of a frenzy that has driven triple-digit spikes in their stock prices in recent days.
/nyti.ms/2MuOH50

Coronavirus

U.K. Offers Help as EU Faces Vaccine Shortage After Astra Fiasco
Nikos Chrysoloras, Thomas Penny, and Alberto Nardelli – Bloomberg
Spahn says Germany facing at least another 10 tough weeks;
EU weighs options after Astra backtracking on deliveries
Britain signaled it may provide assistance to the European Union as the bloc weighs options to safeguard Covid-19 vaccine supplies amid a severe disruption from AstraZeneca Plc. The potential U.K. offer comes after the EU failed to convince the drugmaker at a meeting Wednesday to divert doses from Britain to make up for a production glitch in the continent.
/bloom.bg/36kjRmA

Why Vaccines Might Not Be Able to Eliminate Covid-19
Jason Gale – Bloomberg
The road to eliminating Covid-19 is long and paved with uncertainty. Many countries are counting on vaccines to build sufficient immunity in their populations so that SARS-CoV-2 isn’t able to find susceptible people to infect, causing transmission of the coronavirus to slow and eventually stop. But even with the rollout of highly effective vaccines, immunization coverage may not reach that level — the so-called herd immunity threshold — anytime soon. For one thing, it’s not known what level of immunity is required and whether vaccines will be potent enough to achieve it. There’s also the threat of emerging coronavirus variants that may weaken the effectiveness of immunizations.
/bloom.bg/3a6e9pu

Dubai Stocks Tumble Amid More Virus-Linked Curbs on Travel
Shaji Mathew and Filipe Pacheco – Bloomberg
Dubai’s stock index slumped as the city imposed further restrictions on air travel and hospitals amid another record surge in coronavirus cases. The Middle East business hub reduced the validity of PCR virus tests to three days from four “irrespective of the country they are coming from,” according to a statement issued late on Wednesday. It is also now mandatory to have prior appointments for hospital visits.
/bloom.bg/3aaMsM7

Pfizer CEO Says Science Will Prevail With Covid-19 Here to Stay; Albert Bourla talks about having the tools to manage the virus as we do the seasonal flu, the new variants, and the difference between the Trump and Biden administrations.
John Micklewait – Bloomberg
In an interview with Bloomberg Editor-in-Chief John Micklethwait, one of the people most responsible for helping to vaccinate the world against Covid-19 discusses how his company is navigating the pandemic.
/bloom.bg/3afoBuG

EU and AstraZeneca fail to resolve vaccine supply dispute; European bloc attacks drugmaker’s ‘continued lack of clarity’ on deliveries
Michael Peel and Donato Paolo Mancini – FT
The EU and AstraZeneca failed to end a crisis over coronavirus vaccine supplies, as Brussels attacked the company’s “continued lack of clarity” on its delivery schedule and demanded it come up with a clear plan.
/on.ft.com/3aa4Y7A

England lockdown starts to suppress Covid-19, study suggests; Imperial College London data show rate of infection close to stable or falling slightly
Anna Gross – FT
The lockdown in England is beginning to curb coronavirus transmission, according to a closely watched study, although stubbornly high infection rates will continue to strain the overstretched healthcare system.
/on.ft.com/3aqPOuT

South Korea leans on military to accelerate Covid vaccine rollout; Seoul has yet to launch programme but aims to inoculate 70% of citizens by September
Edward White and Song Jung-a – FT
South Korea is depending on the military to help oversee the country’s coronavirus vaccination programme as Seoul races to make up for a late start in inoculating its citizens for Covid-19.
/on.ft.com/3r4D1ox

UK experts defend 12-week delay for second vaccine dose; Britain remains outlier but six-week gap for mRNA jab gains international support
Clive Cookson – FT
A month after the UK government decided to extend the gap between first and second jabs of the Covid-19 vaccines from three to 12 weeks to ensure maximum inoculation as soon as possible, Britain’s “first doses first” policy remains an outlier in global terms.
/on.ft.com/3cdKpK2

Pfizer Covid-19 Vaccine Works Against Mutations Found in U.K, South Africa Variants, Lab Study Finds; The results, while preliminary and not peer reviewed, are the latest to suggest that vaccines can protect against the strains
Daniela Hernandez – WSJ
A Pfizer Inc. PFE -2.90% laboratory study found that coronavirus mutations identified in the U.K. and South Africa had only small impacts on the effectiveness of antibodies generated by the company’s Covid-19 vaccine.
/on.wsj.com/3a757Zk

Vaccine Stocks Dwindle in the E.U.
NY Times
The bloc has locked horns with drug makers over delivery problems, and Germany said its shortage of doses could last another 10 weeks. China canceled Lunar New Year celebrations for millions of migrant workers.
/nyti.ms/36kCUxf

As Virus Grows Stealthier, Vaccine Makers Reconsider Battle Plans; Vaccines by Moderna and Pfizer-BioNTech effectively protect recipients. But in a worrying sign, they are slightly less effective against a variant found in South Africa.
Denise Grady, Apoorva Mandavilli and Katie Thomas – NY Times
As the coronavirus assumes contagious new forms around the world, two drug makers reported on Monday that their vaccines, while still effective, offer less protection against one variant and began revising plans to turn back an evolving pathogen that has killed more than two million people.
/nyti.ms/3cdNzxo

Exchanges, OTC and Clearing

LSEG Turquoise welcomes back Swiss securities as exchange equivalence is agreed; As the UK and Switzerland agree stock exchange equivalence, LSEG’s Turquoise confirms the relaunch of Swiss securities on the trading venue.
Jon Watkins – The Trade
The London Stock Exchange Group’s (LSEG) pan-European equities trading venue, Turquoise, has confirmed it will re-admit Swiss securities for trading on or after 3 February 2021. The move comes following an agreement between Switzerland and the UK regarding stock exchange equivalence, one of many aspects of the fallout of Brexit on the markets in recent weeks.
/bit.ly/3t4AaO9

European Commission grants equivalence to US equities clearing houses; The EU regulator has adopted an equivalence decision that determines US CCPs under the Securities and Exchange Commission regime as equivalent to EU rules.
Annabel Smith – The Trade
The European Commission has granted equities central counterparties (CCPs) in the US under the Securities and Exchange Commission (SEC) regime equivalence to EU rules. The equivalence decision is an important first step in allowing European access to CCPs, registered with the Securities and Exchange Commission (SEC), that clear US equity options and security-based swaps, and vice-versa.
/bit.ly/2NFoJfv

EURO STOXX® 50 Index Futures: Change of the smallest price change (tick) for outright futures; Eurex Circular 007/21 EURO STOXX® 50 Index Futures: Change of the smallest price change (tick) for outright futures
Eurex
The Board of Management of Eurex Deutschland has decided to reduce the smallest price change (tick) in outright contracts of EURO STOXX® 50 (FESX) Index Futures with effect from 21 June 2021.
/bit.ly/2M5xYW6

Nasdaq Reports Fourth Quarter and Full Year 2020 Results; Delivers Strong Growth in Revenue and EPS
Nasdaq
2020 net revenues1 were $2,903 million, an increase of 15% over 2019. Revenues in the Solutions segments2 increased 11%, while Market Services revenues increased 21% due to elevated trading volumes.
/bit.ly/2YmtnBf

Nasdaq Announces Quarterly Dividend of $0.49 Per Share
Nasdaq
The Board of Directors of Nasdaq, Inc. (Nasdaq: NDAQ) has declared a regular quarterly dividend of $0.49 per share on the company’s outstanding common stock. The dividend is payable on March 26, 2021 to shareholders of record at the close of business on March 12, 2021. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.
/bit.ly/2MyaMj6

CME Globex Notices: January 25, 2021
CME Group
Critical System Updates
iLink 2 on MSGW Decommission – Migrate to iLink 3 Now
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
Update – iLink 3 SBE Schema Update – March 7 UPDATE
CME FX Link Enhancements – March 28
CME FX Link Enhancements: Drop Copy Impact – March 28
/bit.ly/2YpkEOB

CME STP Notices: January 28, 2021
CME Group
CME STP
CME STP Support of US BrokerTec Markets – February 1
BrokerTec Stream on CME STP – February 1
Update – New Aggressor Indicator Flag on CME STP – February 21 UPDATE
Enhancements for Exercise and Assignment Trades on CME STP – February 22
CME STP FIXML API Connectivity Documentation
/bit.ly/39v5b6h

CONNEQTOR started accepting application for the production
JPX
Tokyo Stock Exchange, Inc. (TSE) has been developing RFQ (Request for Quote) functions and CONNEQTOR with the aim of improving the liquidity of ETFs. We are pleased to announce that applications for the production use of CONNEQTOR have been accepted as of today. For details, please refer to the attachment. (Updated on January 28: Okasan Securities Co., Ltd. was added as Trading Participants through which Investors are scheduled to be able to trade ETFs from the first day of operations.)
/bit.ly/35OuONy

Fintech

Virtu POSIT Alert Australia matches record $67.2 million trade; The record trade on POSIT Alert Australia is the culmination of various improvements made to the system by Virtu Financial.
Hayley McDowell – The Trade
The Australian block indications network from Virtu Financial matched its largest single trade worth $67.2 million earlier this month. The record single trade on Virtu’s POSIT Alert Australia platform was also the largest trade matched between a POSIT Alert front-end user and an electronic conditional order in POSIT Alert Asia-Pacific’s history.
/bit.ly/3sYQLTz

China’s Crackdown Will Shake Up World’s Largest Fintech Market
Bloomberg
In a four-year campaign to root out risks to China’s financial system, regulators have set upon their biggest target yet: the world’s largest financial technology sector.
All three financial watchdogs have made it their primary goal this year to curb the “reckless” push of technology firms into finance, taking aim at a sector where loose oversight fueled breakneck growth for companies such as Ant Group Co. and Tencent Holdings Ltd.’s Wechat Pay. They have the green-light from President Xi Jinping, who in November called on regulators to “dare to” master their supervisory role.
/bloom.bg/39sMSyx

Latam’s Fintech Revolution: How Conductor Is Taking Banking Beyond The Bank
Daniel Webber – Forbes
There are few markets currently enjoying as rapid change in finance as Latin America. But among the biggest rising stars in the region is Brazilian Banking as a Service (BaaS) fintech Conductor. And the company’s approach has powerful implications for embedded finance in its home country and beyond.
/bit.ly/3iVfnry

Outages at online trading platforms prompt calls for better fintech
Shruti Shekar – Yahoo Finance
A number of trading apps and platforms crashed Wednesday morning and experts say banks and companies running these platforms should have been better equipped with the latest fintech.
Users of Scotia iTRADE, RBC Direct Investing, and TD Ameritrade among others, each had difficulty connecting to their accounts, as GameStop Corp. (GME), AMC Entertainment Holdings’ (AMC), and other unlikely stock market darlings soared once again.
/yhoo.it/2YmfaEj

Refinitiv Makes ESG Company Scores Free, Rolls Out ESG Voice App To Facilitate Access To Latest ESG Company Data
Mondovisione
Building on its commitment to drive positive change through its data and insight, Refinitiv today announced that its ESG company scores are now available for free on Refinitiv.com. Users will also now have access to Refinitiv ESG data through the Refinitiv ESG Voice App.
/bit.ly/2YkDBlJ

IOWArocks Launches Global Marketplace For Data, Tech, And Services
Mondovisione
IOWArocks, the global marketplace for data, tech, and services, today announces two significant initiatives. The first being the launch of a new, single destination website under the IOWArocks umbrella brand showcasing: IOWAdata, the global data marketplace; IOWAtech for advanced technology solutions and IOWAserv for consultancy services to support the growing data community. Secondly, MDX Technology (MDXT), which powers the IOWArocks global data marketplace, has been renamed IOWAtech, with its established Connect product suite continuing to support new and existing customers in helping to drive substantial cost savings through legacy technology displacement and power business growth.
/bit.ly/39rMW1n

Cryptocurrencies

The Bitcoin Paradox
John Mac Ghlionn – Coindesk
In a recent piece for Coin Geek titled “The BTC bubble will pop soon,” the journalist Patrick Thompson writes: “the digital currency market bubble is coming to an end; some believe that the markets have one pump left before a major decline, but regardless, the end is near.” But wait, haven’t we heard this all before? Yes, hundreds of times. In fact, as I have written elsewhere, Satoshi’s brainchild has died some 400 times since its inception. Jesus supposedly rose from the dead once, but the man from Nazareth has got nothing on bitcoin. You see, bitcoin is not a bubble, it’s a pin. It’s the answer to the question of how we, the people, combat financial mismanagement and fiduciary negligence. Then again, it is a bubble. I call this the Bitcoin Paradox. Let me explain.
bit.ly/3pEbdGY

Dogecoin Surges 77% as Retail Fever Pitch Stretches Into Crypto
Joanna Ossinger and Gregor Stuart Hunter – Bloomberg
The frenzy of Reddit-fueled stocks is reaching some of the weirder parts of the cryptocurrency world. Dogecoin, a digital coin started as a joke, soared as much as 77% since 11:04 a.m. Hong Kong time, according to data from cryptocurrency tracker CoinGecko. Over the past 24 hours, it’s up 42% to $0.01129497.
/bloom.bg/3cpAjG9

Cash-Rich Software Company Mints No-Lose Bitcoin Trade
Crystal Kim – Bloomberg
Crypto rally puts MicroStrategy convertible deep in the money; A classic ‘heads I win, tails we tie’ play, fund manager says
MicroStrategy Inc.’s bet on Bitcoin is paying off — for its bond holders. When the enterprise software maker issued convertible debt in December with the intention of using the proceeds to add to its Bitcoin pile, the company opened a backdoor for bond investors to play the crypto craze.
/bloom.bg/3qZ3Xpt

Minerd Says Institutional Demand Can’t Justify Bitcoin’s Price
Olivia Raimonde – Bloomberg
Still sees viability of the asset class in the long run; Says GameStop-style froth to continue through first quarter
Guggenheim’s Scott Minerd says institutional investors alone aren’t enough to sustain Bitcoin prices above $30,000. “Right now, the reality of the institutional demand that would support a $35,000 price or even a $30,000 price is just not there,” Minerd, the firm’s chief investment officer, said in an interview on Bloomberg Television. “I don’t think the investor base is big enough and deep enough right now to support this kind of valuation.”
/bloom.bg/2MfDkhg

Bitcoin ‘Might Break Down Altogether,’ BIS Head Carstens Warns
Catherine Bosley – Bloomberg
Central banks should be first to issue digital money: BIS; Stablecoins raise governance issues, BIS general manager says
Bitcoin is inherently risky and only central banks should issue digital currencies, according to the Bank for International Settlements. “Investors must be cognizant that Bitcoin may well break down altogether,” because the system becomes vulnerable to majority attacks as it gets close to its maximum supply of 21 million coins, BIS General Manager Agustin Carstens said in a speech for the Hoover Institution on Wednesday.
/bloom.bg/3cjTT6v

As Bitcoin ETFs stall, a new $180m crypto trust fund goes public
Jeff John Roberts – Fortune
There are many quirks to Bitcoin investing, but one of the biggest ones is that regulators have refused to approve an exchange-traded fund that holds the digital currency. In the absence of an ETF—which investors use as a cheap and easy way to get exposure to various assets —companies have turned to a workaround in the form of trusts to offer Bitcoin on the stock market. The latest example is Ninepoint Partners, a Canadian fund that went public after raising $180 million from private investors. After receiving regulatory approval earlier this month, the firm listed its shares on the Toronto Stock Exchange on Wednesday.
bit.ly/3cpGGJz

Reddit inks scaling tech partnership with the Ethereum Foundation
Michael McSweeney – The Block
Popular online forum site Reddit is partnering with the Ethereum Foundation, according to an announcement made Wednesday. In a post penned by Reddit admin jarins on the r/Ethereum subreddit, the partnership signifies how Reddit “will be increasing our commitment to blockchain, accelerating scaling and resources for the Ethereum ecosystem, and bringing the value and independence of blockchain technology to our communities and millions of redditors.” “Our intention is to help accelerate the progress being made on scaling and develop the technology needed to launch large-scale applications like Community Points on Ethereum. The scaling technology developed through this partnership will be open-sourced and publicly available for anyone to use,” jarins wrote.
bit.ly/3a8XZvD

BlockFi Company Intelligence: Building a Neobank for Crypto
Ryan Todd – The Block
One month into 2021 and it already has been a year of firsts for crypto. Headlined by the total market value of all outstanding digital assets surpassing more than a trillion dollars for the first time ever, several crypto metrics are now (again) measured in the trillions — including annual on-chain transaction volumes of stablecoins, annual spot volumes at major crypto exchanges, and quarterly derivative volumes in 4Q’20. Nearly 900,000 unique addresses now hold at least 1 bitcoin, with roughly 150,000 addresses holding at least 10 BTC. Naturally, as the industry has reflated and grown to new highs in terms of users, volumes, and overall market valuations, there exists a growing need from market participants (both retail and institutional) to receive financial services and product offerings built specifically for the digital asset ecosystem.
bit.ly/3osVV6y

BIS: CBDC Research Gaining Steam but Widespread Issuance Years Away; Central banks remained adamant private stablecoins do not factor into their CBDC calculus.
Danny Nelson – Coindesk
The monetary revolution will be digitized … but for the vast majority of earthlings likely not anytime soon, according to central bank digital currency (CBDC) research published Wednesday by the Bank for International Settlements (BIS). To get there, though, 86% of the central banks surveyed in BIS’ third annual CBDC questionnaire said they were at least considering the pros and cons of issuing digital-first fiat, up from 80% last year. This year’s survey featured 65 central banks. Even more telling was the share of central banks moving beyond mere table talk. BIS said 60% of central banks are now conducting CBDC experiments or proof of concepts. Just 42% said the same in 2019.
bit.ly/3r0kUjr

Grayscale has incorporated six more trusts, including ones for Polkadot and Aave
Yogita Khatri – The Block
Crypto asset manager Grayscale has incorporated six more trusts, including those tied to Polkadot (DOT) and Aave (AAVE) tokens. The other four trusts include Monero (XMR), Cardano (ADA), Cosmos (ATOM), and EOS.IO (EOS). All the six trusts were formed Wednesday by Delaware Trust Company, Grayscale’s “statutory trustee.” The new trust formations come a week after The Block reported that Grayscale has incorporated six more trusts in recent months, including those tied to Chainlink (LINK) and Tezos (XTZ) tokens. At the time, Grayscale CEO Michael Sonnenshein told The Block that trust formations do not mean the firm will launch these products.
bit.ly/3r0mBNI

Australian Crypto Exchange to Delist BSV Over ‘Bullying’ Threat to Bitcoin Developers; The exchange’s CEO said “Recent talk of legal action against developers working to improve the Bitcoin ecosystem proved to be the final straw.”
Daniel Palmer – Coindesk
Independent Reserve, one of the largest digital currency exchanges in Australia, says it will delist the bitcoin SV cryptocurrency due to controversial behavior by its team.
/bit.ly/39opDFx

Politics

Pandemic Deepens Graft and Democracy Breaches, Transparency Says
Zoltan Simon – Bloomberg
Virus crisis is exploited for corruption, according to report; Bribery, power grabs complicate health, economic emergencies
With populations under lockdown and governments wielding greater emergency powers, the Covid-19 crisis has exacerbated already alarming levels of graft and democratic violations worldwide, Transparency International said. Bribery for virus tests and the procurement of medical supplies to are allowing ruling elites to skim taxpayer funds, according to a report from the global corruption watchdog published Thursday. Transparent budget spending is also particularly difficult to enforce during a pandemic, it said.
/bloom.bg/36mFEKl

In the Republican Party, the post-Trump era lasted a week
Stephen Collinson – CNN
Two roads diverged in American politics, and the Republican Party chose the one traveled by disgraced ex-President Donald Trump and QAnon conspiracy theorists. While pundits ponder the GOP’s future — and traditionalists hope to change course out of the wreckage left by Trump’s insurrection — Washington’s power players and state activists have already made their choice. Highlighting the former President’s lightning fast rehabilitation, the House Minority Leader Kevin McCarthy will visit Trump in Florida on Thursday after repudiating his own criticism of the incitement of the US Capitol riot. Only a week after Trump left the White House, it’s clear that his party is not ready to let him go. Extremists and Trumpists are on the rise, while lawmakers who condemned his aberrant conduct fight for their political careers. The anti-Trump wing — represented by members of Congress such as Sens. Ben Sasse of Nebraska and Mitt Romney of Utah and Illinois Rep. Adam Kinzinger — look like a small and outmaneuvered force.
cnn.it/3pEbTMw

U.S. Warns of Domestic-Terror Threat After Biden’s Win
Chris Strohm – Bloomberg
New bulletin cites ‘grievances fueled by false narratives’; Homeland Security Department advisory runs through April 30
The Homeland Security Department warned that U.S. officials and buildings face a heightened risk of attack in the coming weeks due to violent domestic extremists angry over issues including Joe Biden’s victory as president and coronavirus restrictions.
/bloom.bg/3iSzVBb

Regulation

BaFin employee suspended over Wirecard insider dealing allegations; German financial watchdog files criminal complaint against staff member
Olaf Storbeck – FT
German financial watchdog BaFin has filed a criminal complaint against one of its employees who is suspected of having used insider information when trading Wirecard shares last summer, just before the German payments company disclosed that EUR1.9bn in corporate cash was missing from its accounts.
/on.ft.com/3r3v6HN

Biden Regulatory Freeze Affects Some Proposed Anti-Money-Laundering Rules; The freeze could give companies and industry groups more time to study the proposals, observers said
Mengqi Sun – WSJ
A regulatory freeze imposed by the Biden administration could affect regulations proposed by the U.S. Treasury Department unit focused on combating money laundering and terrorist financing. The White House issued a memorandum last week ordering federal departments and agencies to halt new or pending rules and regulations advanced by the former Trump administration until a Biden appointee reviews the rules. Such reviews are commonly imposed by incoming administrations.
on.wsj.com/39v0ucF

Biden Regulatory Freeze Affects Some Proposed Anti-Money-Laundering Rules; The freeze could give companies and industry groups more time to study the proposals, observers said
Mengqi Sun – WSJ
A regulatory freeze imposed by the Biden administration could affect regulations proposed by the U.S. Treasury Department unit focused on combating money laundering and terrorist financing.
/on.wsj.com/2M9QcFG

ASIC warns investors of imposter bond scams
ASIC
ASIC is warning investors of a rise in imposter bond investment offers. Scammers pretend to be associated with well-known domestic and international financial service firms and offer high yield bond investments to investors. ASIC has recently become aware of two such scam operations targeting investors in Australia and others in countries such as the UK.
/bit.ly/2YolUS8

ASIC consults on financial reporting and AGM deferral relief for companies in external administration
ASIC
ASIC has today released Consultation Paper 337 Externally administered companies: Extending financial reporting and AGM relief (CP 337) seeking feedback on proposals to reduce the regulatory burden for externally administered companies.
/bit.ly/2Yo0nsU

ESMA appoints new Management Board member
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has appointed a new member to its Management Board to fill a vacancy following the departure of a member of the Board of Supervisors.
/bit.ly/3osuZEf

Proposed Rule Change Relating to the Private Placement Filer Form under FINRA Rules 5122 and 5123
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) proposed changes to the Private Placement Filer Form (“Filer Form”) that members complete when submitting private placement filings under FINRA Rules 5122 (Private Placements of Securities Issued by Members) or 5123 (Private Placements of Securities).
/bit.ly/39soiOi

SEC Charges Vuuzle Media Corp. and Affiliated Individuals in Connection With $14 Million Offering Fraud
SEC
The Securities and Exchange Commission today charged Vuuzle Media Corporation, a purported online live streaming and entertainment company, and its founder Ronald Shane Flynn (a.k.a. Ronnie Shane) with fraudulently offering over $14 million in securities to investors across the United States using an aggressive boiler room sales scheme.
/bit.ly/3pEAwZT

Securities Investor Protection Corporation (Notice of the determination of the Board of Directors of the Securities Investor Protection Corporation (SIPC) regarding the standard maximum cash advance amount, beginning January 1, 2022)
SEC
/bit.ly/2L0sFXo

Why does the FCA care about diversity and inclusion?
UK FCA
Speech by Georgina Philippou, Senior Adviser to the FCA on the Public Sector Equality Duty, given at the Ethnic Diversity in the City and Corporate UK Summit.
/bit.ly/3pEClWJ

FCA asks banks to reconsider branch closures during coronavirus lockdown
UK FCA
Firms are reminded to consider the impact of national restrictions on compliance with the Principles, given our existing guidance on branch closures.
/bit.ly/3oqL79k

Autorité des Marchés Financiers Renews Call For Heightened Vigilance Against Cyber Threats In Québec’s Financial Sector
Mondovisione
The Autorité des marchés financiers (AMF) is concerned by the increasing number of security incidents, including cyber incidents, affecting major institutions in Québec’s financial sector. The AMF is therefore again calling on the financial institutions and businesses it supervises to adequately assess information technology risks and take all necessary steps to bolster privacy safeguards and cybersecurity.
/bit.ly/39oSmdq

Investing and Trading

GameStop Briefly Tops $500 as Stock Resumes Momentous Surge
Paul Jarvis – Bloomberg
Stock momentarily rises above $500 in U.S. premarket trading; Other short-seller favorites gain ground too after brief pause
GameStop Corp. resumed its rally in early U.S. trading, momentarily pushing the stock above $500, as day traders moved on from limits to the Reddit forum whose users have fueled the stock’s meteoric ascent. The shares were up 40% at $490 at 7:13 a.m. New York time. They have advanced more than 1,700% this year, fueling a rally in retail trading across the board and leading some short sellers to throw in the towel.
/bloom.bg/3t3BK2O

GameStop Frenzy Reaches Biden and Powell as Hedge Funds Squeezed
Michael P. Regan and Vildana Hajric – Bloomberg
What started as internet trader chatter is now much bigger; ‘Everybody’s leveraged,’ leaving the broad market vulnerable
Everything started innocently enough, way back in 2019, with people on message boards swapping ideas about a left-for-dead chain of mall stores. Now it’s much bigger: for pundits prone to the dramatic, a David vs. Goliath parable for the age of wealth inequality. Perhaps a vestigial legacy of Trumpism and the populist backlash against “the elites.”
/bloom.bg/3qX1Jae

In 11 Hours of Pure Mania, 100% Stock Gains Popped Up Everywhere; Even as the broader stock market sank, shares loved by day traders on Reddit soared.
Sarah Ponczek and Claire Ballentine – Bloomberg
Cooped up at home, glued to Reddit and Stocktwits chat forums, empowered by Robinhood accounts, funded by massive government money-printing and emboldened by a bull market that has turned reckless risk-taking into a virtue, America’s new band of day traders is frantically bidding up a wide range of fringe, oddball stocks in what has become one of the great financial manias in recent history.
/bloom.bg/3t3HGbT

Hedge-Fund Titans Lose Billions to Reddit Traders Running Amok
Katherine Burton, Hema Parmar, and Melissa Karsh – Bloomberg
Point72, D1 and Melvin among industry leaders hit with losses; Day-traders continued to pile into shorted stocks on Wednesday
For once, Main Street is beating Wall Street. In a matter of weeks, two hedge-fund legends — Steve Cohen and Dan Sundheim — have suffered bruising losses as amateur traders banded together to take on some of the world’s most sophisticated investors. In Cohen’s case, he and Ken Griffin ended up rushing to the aid of a third, Gabe Plotkin, whose firm was getting beaten down.
/bloom.bg/2NyCtZp

Rock Stars Are Making Fortunes Cashing In on Their Old Songs; Bob Dylan, Stevie Nicks, and other big-time musicians are selling their catalogs to aggressive new buyers.
Lucas Shaw, Thomas Seal – Bloomberg
Bob Dylan was supposed to spend the summer of 2020 on tour, winding his way from the Les Schwab Amphitheater in Bend, Ore., to the Bethel Woods Center for the Arts in upstate New York. Instead, stranded at home because of the pandemic, he lined up the biggest payday of his career.
/bloom.bg/3rcjPW3

How will this wild GameStop saga end? The ghosts of trading catastrophes past offer clues
William Watts – MarketWatch
Champions of GameStop’s jaw-dropping stock surge portray it as a victory by long-suffering mom-and-pop investors over nefarious Wall Street institutions, but some veteran market observers see parallels with past trading catastrophes that ultimately left those same individuals holding the bag.
/on.mktw.net/3civPRn

Stock-Market Frenzy Offers Some CFOs a Chance to Cash In; However, tapping the equity market can take time and present risks
By Nina Trentmann, Kristin Broughton and Mark Maurer – WSJ
The recent surge in some company stocks is providing finance executives with a sudden window of opportunity to tap new sources of funding. But not all of them are likely to cash in, as it takes time to prepare an equity sale, and businesses risk raising the ire of regulators if the share price crashes after a fundraising round
/on.wsj.com/3ouChHo

Environmental, Social and Corporate Governance

Microsoft Climate Fund Backs Climeworks Effort to Suck Up Carbon; Software maker to tie executive compensation to sustainability goals
Dina Bass – Bloomberg
Microsoft Corp. said its climate fund will invest in Swiss carbon-removal startup Climeworks AG, and that the company will base executive pay partially on meeting sustainability goals.
/bloom.bg/3t51Hz6

Tesla Might Not Join The ESG Version of S&P 500. What It Means for Investors.
Evie Liu – Barron’s
Tesla has been a member of the S&P 500 since late last year, bringing additional growth and volatility to the widely-followed index. But the benchmark’s sustainable version- – – the S&P 500 ESG Index- – – might not be able to embrace the stock just yet.
Although the electric-vehicle manufacturer has been a pioneer in clean energy, that doesn’t automatically make it a sustainable company. It has brought in low rankings in terms of its performance on other environmental, social and corporate governance, or ESG, issues, at least from S&P Dow Jones Indices.
/bit.ly/2MyHX5S

SEC’s Gensler Must Decide on New ESG Disclosure Rules
Timothy Massad – Bloomberg
One issue that’s sure to be on Gary Gensler’s agenda if he’s confirmed as the new chair of the Securities and Exchange Commission is climate-change-related disclosure. The two Democrats on the five-member commission, Allison Lee and Caroline Crenshaw, have already indicated support for the idea. So the real question is: What will be the scope of any new rules, and will they cover the expanding universe of environmental, social and governance issues — and sustainability in general?
/bloom.bg/3j1JdL5

Climate risk is about to become a much bigger part of the financial system
By Michael J. Coren – Quartz
On Jan. 25, the US Federal Reserve and European Central Bank simultaneously signaled their intent to make climate considerations a central part of finance. Both say they will now analyze the risk climate poses to the stability of individual banks, as well as the broader financial system.
/bit.ly/39ordqX

Institutions

Tech Stocks Drive $123 Billion Gain at Norway Wealth Fund
Ott Ummelas and Lars Erik Taraldsen – Bloomberg
Norway’s sovereign wealth fund returned $123 billion last year as soaring technology stocks added to market gains fattened by crisis support packages. The result is the fund’s second highest in over two decades, and Chief Executive Officer Nicolai Tangen has already said it will be “very difficult to replicate.”
/bloom.bg/3ae4iOf

BlackRock’s Hildebrand Calls Short-Squeeze Mania ‘Nonsense’
Benjamin Robertson, Suzy Waite, and Francine Lacqua – Bloomberg
Vice Chairman says trading frenzy is side-effect of liquidity;l Fidelity’s Richards says regulators may need to respond
BlackRock Inc. Vice Chairman Philipp Hildebrand said the market chaos surrounding shorted stocks was a bubbly side effect of mass liquidity and the pandemic would remain the ultimate driver of prices. “It is not surprising when you think about how much liquidity is in the system, how much policy has fueled asset prices in recent weeks and months,” he said in a Bloomberg Television interview Thursday. “To me this looks like pockets of frothiness, some irrationality undoubtedly, some nonsense undoubtedly.”
/bloom.bg/2NKfkU4

Hedge funds retreat in face of day-trader onslaught; Investment firms pull back from equity market as wild price swings increase their risks
Ortenca Aliaj, Colby Smith, Eric Platt and Michael Mackenzie – FT
Hedge funds have scaled back the size of their bets in the stock market in recent days after volatility caused by groups of amateur traders pushed up shares in companies such as GameStop and inflicted heavy losses on some high-profile firms.
/on.ft.com/2NyGOf9

Hedge fund Melvin closes bet against GameStop after Reddit trader onslaught; Firm’s retreat comes after it was targeted by group of day traders
Ortenca Aliaj and Eric Platt and Laurence Fletcher and Robert Smith – FT
Melvin Capital has exited its bet against GameStop, having lost billions of dollars after a battle with amateur traders who pushed up the share price of the game retailer and other companies it had bet against.
/on.ft.com/3qX0pUQ

Hedge funds feel the heat as Pearson catches day-trader fever; Bearish bets unwound as US exuberance crosses the Atlantic
Bryce Elder – FT
It is a measure of dysfunctional markets that day traders delivered a bigger return for Pearson shareholders within 90 minutes than John Fallon ever managed in seven years as chief executive.
/on.ft.com/3t6rWVC

Nine banks ate into capital buffers under ECB’s pandemic relief; Central bank warns coronavirus crisis could still cause more problems for lenders
Martin Arnold -FT
Nine eurozone banks took advantage of the European Central Bank’s relaxed rules to fall below its minimum capital requirements last year as part of supervisory efforts to keep credit flowing during the coronavirus crisis.
/on.ft.com/3afTyiJ

The hedge fund Point72 has suffered a nearly 15 percent loss amid the GameStop frenzy on Wall Street.
By Kate Kelly – NY Times
As shares of GameStop, the video game retailer, have surged amid a wave of speculative investment by small investors, Point72, the hedge fund run by the Mets owner Steve Cohen, has lost nearly 15 percent this year, according to a person with knowledge of the matter.
/nyti.ms/2MAcVdP

Regions

ECB Urges Banks to Tackle Credit as Pandemic Support Expires
Nicholas Comfort – Bloomberg
Regulator warns of ’embedded level of distress in loan books’; Expiration of support measures could lead to ‘cliff effects’
The European Central Bank is urging lenders to do a better job of gauging the risks they face from a potential spike in defaults as the pandemic increasingly hits companies and consumers.
/bloom.bg/3a9BaYA

ECB In ‘Currency War’ Over Euro, Commerzbank Strategist Says
Jill Ward – Bloomberg
Views suggest ECB wants to force exchange rate: Leuchtmann; Euro has fallen in past two days amid ECB verbal intervention
The European Central Bank’s views on the euro this week amount to a declaration of “currency war,” according to research from one of Germany’s biggest banks. The euro has slid in recent days after policy maker Klaas Knot said the central bank has the tools to prevent any further strengthening of the currency undermining inflation. Officials have since stressed that includes interest-rate cuts, to counter market skepticism, and plan to look into whether the euro’s gain since the start of the pandemic is driven by differences in stimulus policies versus the U.S.
/bloom.bg/3aaYbui

GameStop’s Wild Ride Has Indian Retail Traders Joining In
Ronojoy Mazumdar and Ishika Mookerjee – Bloomberg
Stock among top-traded names on one Indian retail platform; AMC, GameStop also most-traded U.S. stocks on China’s Futubull
India’s day traders are strapping in for the GameStop Corp. ride that’s taken equity markets by storm. The videogame retailer was among the five most-traded names over the past week on Stockal, a platform for Indian retail investors to trade U.S. equities. GameStop accounted for about 15% of all trades on the platform, Sitashwa Srivastava, co-founder and co-chief executive officer said in an interview.
/bloom.bg/3ckM40m

Zimbabwe Miners Say Foreign-Exchange Rule Could Trigger Crisis
Godfrey Marawanyika and Ray Ndlovu – Bloomberg
Exporters must submit 40% of offshore earnings to central bank; Mining companies say hard currency needed to pay for services
Mining companies in Zimbabwe said a central-bank requirement compelling them to surrender more foreign exchange earned from mineral exports will push their operations to the brink. The Reserve Bank of Zimbabwe on Jan. 8 announced that exporters must now hand over 40% of their foreign currency earnings, up from 30%, which is then paid out in the local currency.
/bloom.bg/3a8SpJH

Beijing’s Risky Assault on China’s Most Famous Billionaire; Jack Ma’s experience may have a chilling effect on innovation if Chinese entrepreneurs come to believe a political squeeze is the price of commercial success
Mike Bird – WSJ
Chinese fintech giant Ant Group Co. may need to downgrade its ambitions in the face of a still-evolving regulatory squeeze. The impact will ripple far beyond the company and has the potential to damage incentives for innovation and entrepreneurship in China over the long term.
/on.wsj.com/3ckQ80O

The Ronaldo of Bankers Faces His Ultimate Test; Andrea Orcel is a master dealmaker, but the challenges of running UniCredit — and dealing with Italian politics — are unique.
Elisa Martinuzzi – Bloomberg
UniCredit SpA, the most international of Italy’s banks, has been a big worry to investors of late. The former chief executive officer’s abrupt resignation after a spat with the board over how UniCredit should grow at home sparked fears about the firm becoming a tool of national politics. A systemically important lender was left potentially leaderless and without a strategy.
/bloom.bg/3iTyySw

Brexit

UK cancels post-Brexit review of workers’ rights after protests; Trade unions and opposition MPs said changes would result in lower pay, longer hours and less family time
Jim Pickard – FT
Kwasi Kwarteng, the UK business secretary, has cancelled a post-Brexit review of workers’ rights after a storm of protest led by trade unions and opposition Labour MPs.
/on.ft.com/3t7wUkX

First flashes of Brexit trade trouble appear in UK data
Andy Bruce – Reuters
Early signs of disruption caused by Britain’s shift to its new, less open trading relationship with the European Union are emerging in economic data.
Although the biggest problem for many companies remains the COVID-19 pandemic, details of recent surveys show that Brexit is adding to the strain on the economy.
/reut.rs/3orhsg6

U.K. Builds Fewest Cars Since 1984 as Brexit Weighs on Outlook
William Wilkes – Bloomberg
Carmakers coming off their worst year in the U.K. since 1984 face uncertain prospects for recovery due to post-Brexit trade complications and measures to contain Covid-19.
Production plunged 29% to less than 921,000 vehicles last year, the lowest in almost four decades, the Society of Motor Manufacturers and Traders said Thursday. The trade group expects a rebound to roughly 1 million cars in 2021, but warned returning to a recent peak is unlikely for the foreseeable future. More job losses are on the horizon once furlough schemes end.
/bloom.bg/3oqaIiB

How Brexit is already taking its toll on the U.K. economy; Prime Minister Boris Johnson recently qualified as ‘teething problems’ the many incidents and trade disruptions triggered by the start of Brexit
Pierre Briançon – MarketWatch
With disruptions at European borders and supply chains perturbed by new tariffs, the U.K. economy has begun to show the negative economic impact of leaving Europe’s single market and customs union at the beginning of the year, several indicators show. Gita Gopinath, the chief economist of the International Monetary Fund, said this week as she was presenting the organization’s new economic forecast, that Brexit would shrink the U.K. economy “by about 1%” this quarter. It was the only economy whose performance in 2020 was downgraded by the IMF, which estimates the country’s gross domestic product fell 10% last year.
on.mktw.net/3j1NUob

Brexit parcel price shock: ‘I had to pay £30 for a gift’
Lucy Hooker – BBC
A couple of weeks ago Lili Piraki, a London-based journalist, was surprised by a text out of the blue from delivery firm DHL. She was delighted to hear a friend had sent her a present: a pair of gold earrings from Greece. She was less impressed that she would have to pay nearly £30 in taxes to receive the gift. The extra charges are a result of new post-Brexit rules that came into force on 1 January. Despite the free trade deal agreed before Christmas, which promised to smooth the UK’s exit from the EU, new taxes and charges now apply to almost everything that goes back and forth between the two, including gifts, second hand items, products bought on Amazon or eBay and from private sellers.
bbc.in/39qy17x

Miscellaneous

The Man Who Helped Create the Modern Art Market Has a Few Regrets; The new English translation of Rudolf Zwirner’s autobiography traces the seeds of today’s big money.
James Tarmy – Bloomberg
In 1960, after only a year in business, Rudolf Zwirner’s fledgling gallery in Essen, Germany, was in serious debt. In a panic he turned to the dealer Hein Stünke, whose gallery in Cologne, Der Spiegel, had become a gathering place for the European avant-garde. “Young man,” Stünke said, “you can’t expect to earn enough money with contemporary art. You also have to be active on the secondary market. Buy paintings that customers are looking for, and then resell them at a profit.”
/bloom.bg/3t24Y1X

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CME to permanently close most trading pits

CME to permanently close most trading pits

First Read $40,626/$300,000 (13.5%) Anonymous ++++ Hits & Takes John Lothian & JLN Staff Without fanfare or amplification from its executives, the CME Group shut the books on most -- but not all -- of its floor trading history Tuesday afternoon with the...

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