ED&F Man agrees debt restructuring in eleventh-hour rescue; JPMorgan fires employees who took Covid relief funds

Sep 10, 2020

First Read

David Downey Knows Security Futures Like No One Else
John Lothian

David Downey does not suffer fools well. His statements are very direct and to the point. And he knows when he is right and is willing to point out where regulators and competitors are wrong. Downey is in the process of shutting down OneChicago, but his writings and comments about security futures products will live on much longer and may yet change the world.

A perfect example of this was his letter to the CFTC from October 1, 2018, ostensibly about security futures position limits and position accountability, but really an opportunity for him to unload about how security futures are misunderstood by the regulators. The comment was for the CFTC, but aimed at both the CFTC and the SEC.

Downey took the OneChicago job after retiring from a career with Timber Hill and Interactive Brokers. He retired suddenly, as I wrote earlier, for personal reasons that involved a tragic car accident that took the lives of two close friends. There is a great profile of Downey by Anthony Malakian in Waters Technology from 2011 I recommend.

It was Thomas Peterffy who convinced Downey to take the OneChicago job, and Malakian says it all happened because of one sentence from Peterffy, “No one thinks it can be done.”

To read the rest of this commentary, go HERE.

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Hits & Takes
JLN Staff

ED&F Man saw the abyss and walked back from it, getting a last minute deal to extend their debt and inject some cash into their business. See more details in the FT story at the top of Leads.

The American Financial Exchange [[https://bit.ly/2FsqubG
|announced a new Ameribor30 product]], which is a forward looking Ameribor rate. Also. Alabama-Based ServisFirst Bank announced the first loan based on the Ameribor30 for $20 million.

It was yesterday in 1997 that CME launched the e-mini S&P 500 futures contract.

The CME Group also had some records on September 8 in the equity index quadrant. In Micro E-mini futures and options, 4.16M+ futures contracts traded in a single day and 26K+ total Micro E-mini S&P 500 options contracts traded.

John MacNamara and Daniel Day-Robinson have started a new business in the UK called ‘Trade Finance Rhino’. You can see more information on their new site at https://www.tfrhino.com.

Peak6 has a story on their website about Paul Whalen, who went from being an Indiana University Bloomington jazz piano student to data team lead.

FIA Japan is officially supporting a FinCity, Tokyo-organized on-line event scheduled on 9/11 at 4pm JST. Details are HERE.

ChartIQ is looking for a sales director in Chicago to sell their ChartIQ visualization tools and Finsemble smart desktop.

Sign up for Barchart’s FREE virtual grain summit. The event features a concise agenda, focused on the latest trends, analysis and technology impacting the grain markets and one panel each day. The event is on Sep 21 – 23 at 2pm CST. Register HERE.

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

*****

On the heels of ICE’s Sept. 4 acquisition of Ellie Mae, the latter company announced that “Ellie Mae Experience 2021”, a technology conference for the residential mortgage industry, will be an online event held March 8-26, 2021. Registration for the three-week long event will open in October 2020. You can go here for more information and here to receive updates.~SR

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Euronext Prepares $4 Billion Bid for Borsa Italiana
Tommaso Ebhardt, Jan-Henrik Foerster, and Alessandra Migliaccio – Bloomberg
Joint bid with Italian partner to come as soon as this week; Deutsche Boerse also planning to make offer for Italy exchange
Euronext NV is preparing to submit a bid as soon as this week for Borsa Italiana SpA together with an Italian state-owned lender, people with knowledge of the matter said. The offer is set to value the business, which is owned by London Stock Exchange Group Plc, at about 3.5 billion euros ($4.1 billion) to 4 billion euros, according to the people. Euronext has agreed to a joint bid with Italy’s Cassa Depositi e Prestiti SpA, which would get about an 8% stake in Euronext if the deal is successful, the people said, asking not to be identified because the information is private.
/bloom.bg/3hhp1Cn

*****The exchange for sale game is being played in Europe again.~JJL

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Why Libor’s demise threatens small businesses most
Claire Jones – FT
In death as in life, Libor’s demise is seldom discussed without mentioning that the rate underpins contracts worth hundreds of trillions of dollars. Yet, as efforts to ditch the interest rate benchmark intensify, are we missing out on where the true difficulties in dumping Libor lie? We think most of what those in the know dub “tough legacy” contracts — that is, contracts where an alternative to the London Interbank Borrowing Offered Rate (Libor) cannot easily be found — are in the cash markets. That makes up only about a fifth of total assets underpinned by Libor with the balance derivatives. While the derivatives market has its own challenges, its financial sophistication has meant it’s in a far stronger position in preparing for transition. By focusing more on the overall size of the market, we’re underestimating the massive implications the death of Libor will have on lending to businesses — especially smaller ones.
/on.ft.com/2Fjrakb

*****It is a slow death.~JJL

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How Travel Will Change Post-Pandemic: 10 Expert Predictions; We asked industry pros where we’ll be traveling in years to come and how hotels, flights, airports and even luggage will evolve—for the better
Andrew Nelson
1. We’ll rethink Europe.
Expect a cooling of the romance with Europe’s capitals and new affection for less-crowded cities with strong cultural offerings. “I’d keep an eye on Lyon and Hamburg,” said UK-based travel writer Annie Fitzsimmons, who also predicts a rediscovery of less populated European islands. Among them: Germany’s 24-mile-long island of Sylt, a Teutonic Nantucket.
/on.wsj.com/3hks8tg

*****This article assumes two things, that there is a post-pandemic and that there will be travel. My guess is migrations will be more important than travel.~JJL

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QAnon has the makings of America’s al-Qaeda; The US faces great danger if Trump loses the election in November
Edward Luce – FT
Mention terrorism and most Americans will instantly think of Muslims. On Friday the US will commemorate the 19th anniversary of the September 11 2001 terror attacks. In reality, America should nowadays be far more worried about domestic threats. Two-thirds of its terrorist incidents last year were carried out by rightwing extremists. That rose to 90 per cent in the first five months of this year.
/on.ft.com/2F8Abg1

*****History is repeating itself in the wrong ways.~JJL

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John Rogers Shares Insights about Stocks and Race Relations
Ariel Investments
In this interview John Rogers candidly discusses his opinions on the market, different sectors, and individual companies that were at the time of the interview held in one or more of Ariel’s strategies.
/bit.ly/3bI6VIy

*****The perfect person to talk about both.~JJL

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Wednesday’s Top Three
Our top story Wednesday was the Futures Industry Association press release FIA releases surveillance and market abuse guidelines. Second was a repeat from Tuesday’s top three, Crain’s Chicago’s Here’s the evidence—in case you needed it—that downtown’s been seriously damaged. Third was JPMorgan says staff and customers may have broken law on Covid-19 loans, from the Financial Times.

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Lead Stories

ED&F Man agrees debt restructuring in eleventh-hour rescue; Centuries-old brokerage had struggled to sell assets to raise much-needed cash
Philip Stafford – FT
ED&F Man, one of London’s oldest commodities brokers, has restructured nearly $1.5bn of debt and raised an extra $320m in working capital from lenders, staving off a funding crunch. A judge at the English High Court approved on Wednesday the company’s plan to switch its debt, held in credit facilities that mature in the next two weeks, into new secured loans and notes that come due over the next three years.
/on.ft.com/3jWoqYG

JPMorgan fires employees who took Covid relief funds; Bank says dismissed staff sought help from the Small Business Administration
Laura Noonan – FT
JPMorgan Chase has dismissed several employees who allegedly pocketed bailout funds that were supposed to help businesses dealing with the Covid-19 crisis, a person familiar with the situation said. Bloomberg reported earlier on Wednesday that America’s largest bank had discovered that some employees improperly applied for and received money under the Economic Injury Disaster Loan (EIDL) programme, which offered grants of up to $10,000 and low interest loans to businesses hurt by the pandemic.
/on.ft.com/3k4VFcc

Citi becomes first big Wall Street bank to be run by female CEO
Laura Noonan – The Financial Times
Citigroup is set to become the first major Wall Street bank to have a female chief executive, after it announced on Thursday morning that Mike Corbat will step down next February and be succeeded by the company’s president Jane Fraser.
The succession was largely teed up on Ms Fraser’s appointment as president last year, which insiders said was a precursor to her eventually becoming chief executive.
/on.ft.com/2RffG3z

American Financial Exchange Announces Addition Of AMERIBOR30 — A New Forward-Looking AMERIBOR Rate – Alabama-Based ServisFirst Bank Announces First Loan Based On AMERIBOR30
Mondovisione
The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced the addition of an indicative 30-day forward AMERIBOR rate called AMERIBOR30 to its suite of product offerings. AFX developed the AMERIBOR30 methodology at the request of its member banks. AMERIBOR30 used methodology and transactions that aligns with macroeconomic theory and academic research on the term structure of interest rates. Birmingham, Alabama-based, ServisFirst Bank, is using the AMERIBOR30 rate to price a $20 million loan.
/bit.ly/2FsqubG

U.S. Office Of Financial Research Begins Publishing Repo Data, Unveils Short-term Funding Monitor
Mondovisione
The U.S. Office of Financial Research (OFR) released its new U.S. Repo Markets Data Release, a prototype publication of daily data on repo markets, and unveiled the Short-term Funding Monitor, an interactive tool that provides a more complete view into short-term funding markets.
/bit.ly/32gqPaF

How Tech Options Started Juicing the Stock Market
Yakob Peterseil – Bloomberg
The precipitous rise of U.S. technology stocks in 2020 left even seasoned veterans on Wall Street struggling for explanations. Sure, many of the companies were among the select few that had prospered during the pandemic, as online shopping and working from home proliferated. But the stock gains were so stratospheric — Apple Inc. shares doubled in five months — that some market watchers began to speculate that a traditional hedging trade might be fanning the flames. Options trading — so the theory goes — had evolved from a way for investors to protect against losses to a key driver of market frenzy.
/bloom.bg/3bJrq7E

EU mulls legal action against Britain over plan to break Brexit deal
Paul Sandle, Gabriela Baczynska – Reuters
Britain and the European Union will hold emergency talks on Thursday over Prime Minister Boris Johnson’s plan to undercut parts of the Brexit divorce treaty, with Brussels exploring possible legal action against London.
/reut.rs/2DPpU7G

Hong Kong Arrests 15 People Tied to Next Digital Stock Surge
Natalie Lung and Gregor Stuart Hunter – Bloomberg
Police hold suspects for alleged stock manipulation in August; Next Digital jumps 97%, mirroring last month’s sudden gains
Hong Kong’s police force said it arrested 15 people in connection to last month’s surge in shares of Next Digital Ltd., the media company owned by vocal government critic Jimmy Lai. The arrests were made on suspicion of the use of illegal funds and conspiracy to defraud, Chung Wing-man, chief superintendent of the narcotics bureau, told reporters at a Thursday briefing. The people, who made a combined profit of about HK$38 million ($4.9 million), traded a high volume of Next Digital shares and the police have reason to doubt their source of income, Chung said.
/bloom.bg/32hx0v0

Nomura Says Corporate Client Data Leaked to Securities Firm
Takashi Nakamichi – Bloomberg
Employee shared information on 275 firms, including on trading; Brokerage to consider taking actions including legal measures
Nomura Holdings Inc. said information on corporate clients was leaked by an employee to a securities firm, little more than a year after it was hauled up by the financial regulator for lax controls.
/bloom.bg/2Fkd81t

US report warns climate change could create economic chaos
Matt Egan – CNN Business
The far-reaching consequences of climate change have the ability to create chaos in the financial system and disrupt the American economy, according to a federal report released Wednesday. The report, the first of its kind by a US government entity, calls for Congress to swiftly impose a price on carbon and urges financial regulators to “more urgently and decisively” work to understand and blunt the looming economic damage from climate change.
/cnn.it/3hgZKIF

Why Boris Johnson’s Britain Is Turning ‘Rogue State’ Over Brexit
Joe Mayes, Jonathan Browning, and Ellen Milligan – Bloomberg
Boris Johnson’s government published legislation Wednesday allowing it to re-write parts of the Brexit divorce deal it signed with the European Union last year. The move to tear up part of an international treaty has sparked consternation in Brussels and could scupper efforts to secure a key trade agreement between the two sides. It puts Britain at risk of becoming a “rogue state,” according to Ian Blackford, a Scottish lawmaker.
/bloom.bg/3hpc7Tb

****** I think this whole Brexit thing would make a great “Mission Impossible” movie.~JJL

Dynamo Acquires Imagineer Technology Group, Expanding Its Leading Market Position in Cloud Software for the Global Alternatives Industry;Dynamo will now serve nearly half of top 50 hedge funds by AUM
Dynamo Software
Dynamo Software, the premier provider of comprehensive cloud software for the alternative investment industry, announced today that it acquired Imagineer Technology Group, combining two of the top alternatives software vendors. The acquisition adds significant value across Dynamo’s product set and brings Dynamo’s customer base to over 1,000 clients of its CRM, deal management, portfolio monitoring, and investor reporting capabilities. Dynamo, majority-owned by San Francisco-based private equity firm Francisco Partners, did not disclose the terms of the deal.
/bwnews.pr/2DQ8Bn0

Wall Street bids a not-so-fond farewell to exchange traded notes; The unloved cousins of the ETF have been criticised for being riskier than they appear
Robin Wigglesworth – FT
Exchange traded notes, the smaller and often unloved cousins of the bigger and broader $6tn exchange traded fund industry, seem to be dying out — and few lament their passing.
/on.ft.com/3m1WCUu

CFTC to Issue Guidance on Corporate Compliance Programs; Memo would follow efforts by other agencies to spur investment that prevents regulatory infractions
Dylan Tokar – WSJ
The U.S. Commodity Futures Trading Commission is expected to issue guidance detailing how it will evaluate corporate compliance programs—the latest effort by a U.S. enforcement agency to get companies to invest in programs that prevent regulatory infractions.’
/on.wsj.com/3hdBmYt

SoftBank shareholders push for answers on ‘Nasdaq whale’ bets; Japanese group urged to reveal who is running unit at centre of large US equity options trades
Leo Lewis and Kana Inagaki, and Robert Smith and Katie Martin I- FT
SoftBank shareholders are calling on the technology conglomerate to reveal who is running the unit at the centre of its large US equity options trades, with nerves over an unexplained strategic shift stoking a 10 per cent decline in its share price.
/on.ft.com/3k5hvws

How a retail options craze fuelled SoftBank’s ‘whale’ trade; Fad for short-term options complemented the Japanese group’s outsized bets
Robin Wigglesworth and Richard Henderson – FT
SoftBank caused a splash when it emerged as the “Nasdaq whale” that had placed big options bets linked to US stocks, but some analysts suspect the overall market impact may be less than that of a massive shoal of much smaller but frenzied fish — retail investors. Under the direction of founder Masayoshi Son, SoftBank has bought $4bn worth of options on big US technology stocks since the summer, with a notional value of about $30bn, according to people familiar with the matter.
/on.ft.com/2GMGB4O

Fund Managers’ CEO Mania Gave a Head Start in 1,400% Rally
Kati Pohjanpalo – Bloomberg
Two money managers at a Finnish fund have turned the study of chief executives into a game-changing investment strategy. Burton Flynn and Ivan Nechunaev, who help manage the Evli Emerging Frontier Fund, were early buyers of shares in Supermax Corp. After meeting the CEO of the Malaysian maker of medical gloves in mid-2019, they invested in the company just before its stock soared 1,400%.
/bloom.bg/3igYwyd

Women in Finance Q&A; With Jessica Morrison, CEO and Head of Execution Services APAC, Virtu Financial
FixGlobal.com
Briefly discuss the career path that led you into finance?
I never intended to get into finance; fine art and sculpture was the original plan. Becoming a single mum at 21 was the driving force behind going back to school first to take ‘A levels’ (UK) and subsequently securing a place to read Law at the University of Cambridge. Once there, I went to the standard ‘magic circle’ law firm recruitment drives, with the idea of getting a training contract in London. In 2002 there were few senior women in law; trainees worked 70+ hour weeks and slept in beds in the basement. When I raised that I needed to be home to care for my daughter, I was told that a career in top-tier law firm was not going to work, and I should try academia or teaching.
/bit.ly/3bOj3Yz

People News – August/September 2020
Marketvoice Staff – FIA.org
Appointments, promotions and other people news in the derivatives industry
/bit.ly/3hc5R0D

Hong Kong Wins More Listings of U.S.-Traded Chinese Firms; The new deals follow a string of stock sales in Hong Kong by big Chinese tech firms that already trade in New York
Joanne Chiu – WSJ
The tally of U.S.-listed Chinese companies securing alternative listings in Hong Kong grew, as stock in China’s largest restaurant group started trading in the city and a major hotel chain began taking orders for its own offering.
/on.wsj.com/32l7vJv

Oil Traders Gird for More Price Swings; Recent volatility ended a stretch of calm in the oil market. Many are using options markets to bet there’s more drama to come.
Joe Wallace, Pat MInczeski – WSJ
Traders are betting on fresh upheaval in the oil market, in an abrupt turnaround from the calm of recent months. U.S. oil prices have slid 12% since the end of August, and on Tuesday notched their biggest one-day drop since June. Though the market has clawed back some of those declines, many say trading in the options market shows investors preparing for further drops, as pressures on crude prices mount from forces including a slow recovery in fuel demand and the presidential election.
/on.wsj.com/35nyVjF

Wall Street brushes off political tensions to dig deeper into China; BlackRock, Citigroup, Vanguard and JPMorgan Chase have struck a succession of deals
Thomas Hale, Siobhan Riding and Wang Xueqiao – FT
Some of Wall Street’s most powerful financial institutions are stepping up efforts to strike deals in China even as relations sour between Beijing and the US.
/on.ft.com/3k9SPmx

How Covid-19 sparked a dividend drought for investors; Government and central bank support has saved businesses, making it hard for them to hand money to shareholders
Robin Wigglesworth and Katie Martin – FT
James Murray is upset. The retired engineer from Edinburgh enjoys a fixed pension, but supplements it with a steady stream of dividend payments from BP. The oil company’s decision this summer to cut its dividend has forced Mr Murray into a personal austerity regime.
/on.ft.com/2GHQVuF

China’s tech and finance groups flock to Singapore; City’s tech allure burnished as barriers go up against Chinese groups in US and India
Mercedes Ruehl – FT
China’s largest technology and financial services companies are stepping up efforts to expand in Singapore, as doors slamming shut on mainland groups in the US and India make the Asian finance hub crucial for international growth.
/on.ft.com/2GGsBcE

Tradeweb Direct Added as Counterparty to New York Fed’s Secondary Market Corporate Credit Facility
Tradeweb Markets Inc.
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced that its Tradeweb Direct broker-dealer has been added as a counterparty for the Federal Reserve Bank of New York’s Secondary Market Corporate Credit Facility (SMCCF). Tradeweb’s credit trading platform is already utilized as a trade execution venue for the SMCCF for trading with counterparties on a fully-disclosed basis. As an Eligible Seller for the SCCF, Tradeweb can now enable anonymous “all to all” trading, sourcing liquidity from additional counterparties across its institutional and retail trading platforms.
/bit.ly/2ReSDFT

Manhattan Apartment Listings Soar, Pushing Vacancies to a Record
Oshrat Carmiel – Bloomberg
Rents tumble 7.7% while landlords offer perks in 54% of leases; Units getting harder to fill after New Yorkers fled lockdown
Manhattan apartments are piling up on the market — and it’s getting harder to fill them. Rental listings jumped to a record 15,025 at the end of August, more then double the inventory from a year earlier, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The borough’s vacancy rate reached a new high of 5.1%. Last August, it was under 2%.
/bloom.bg/3hftRQD

France Says U.S. Blocking Global Digital Tax Talks
Reuters
France accused the United States on Wednesday of seeking to undermine international talks to update cross-border taxation for the digital age and urged Europe to prepare an EU tax if the negotiations fail.
/bit.ly/32glcJu

Miscellaneous

How the Coronavirus Attacks the Brain; It’s not just the lungs — the pathogen may enter brain cells, causing symptoms like delirium and confusion, scientists reported.
Apoorva Mandavilli – NY Times
The coronavirus targets the lungs foremost, but also the kidneys, liver and blood vessels. Still, about half of patients report neurological symptoms, including headaches, confusion and delirium, suggesting the virus may also attack the brain.
/nyti.ms/3igzqjf

Several Covid-19 Vaccines Could Join Winner’s Circle; Several coronavirus vaccines could pass muster in clinical trials, with distribution in phases starting as soon as this fall, experts say
Peter Loftus – WSJ
The first vaccine that proves to safely protect people against Covid-19 disease will be a breakthrough moment but is unlikely to be the sole answer to curbing the coronavirus pandemic.
/on.wsj.com/3maJTz5

Saliva-based coronavirus tests come to market; Two UK companies target businesses seeking rapid tests for employees
Anna Gross – FT
Two UK companies will on Thursday launch rapid saliva-based tests for Covid-19, amid growing calls for more testing capacity in Britain as employees head back to their offices and students return to school.
/on.ft.com/3m6Slza

The surprising resilience of the Covid consumer; How to ensure the surge in retail sales continues
The editorial board – FT
When the going gets tough, the tough go shopping. The pandemic has had a catastrophic impact on economies across the globe, yet one bright spot in the UK and elsewhere has been that people have continued to spend. The most recent British figures show spending is higher now than at this point in 2019. A rebound in consumption was bound to follow an easing of lockdowns, yet the extent of the recovery has surprised economists and helped soothe concerns that savings rates would shoot up.
/on.ft.com/3k0zmEH

UK considering new rapid-result Covid tests for up to 10m people a day; Leaked documents indicate Project Moonshot could see 2-4m daily tests by December and then expanded
Jim Pickard, Jasmine Cameron-Chileshe and Sarah Neville – FT
The UK government is considering proposals to carry out rapid-result Covid-19 tests on up to 10m people a day by early next year, equivalent to everyone in the country each week, under plans set out in leaked documents.
/on.ft.com/2FfQ44a

Indonesia’s Virus Cases Rise by Record as Jakarta Tightens Curbs
Rieka Rahadiana and Harry Suhartono – Bloomberg
Indonesia’s coronavirus cases jumped by a record on Thursday as the capital prepares to return to tougher movement restrictions to stem infections. The National Disaster Management Agency reported 3,861 Covid-19 cases in the 24 hours to midday of Sept. 10, with 120 more deaths. A total of 207,203 people in the world’s fourth most-populous nation had been infected, including 8,456 in total fatalities.
/bloom.bg/35ppkZM

How AMLO’s Crown Jewel Became the World’s Deadliest Covid Company; More employees have died at Pemex than at any other company in the world—and Mexico’s president wants to keep the oil producer pumping, no matter what.
Amy Stillman – Bloomberg
Tomás Morales Vega shivered and huddled close to his co-workers in a narrow corridor outside the doctor’s office. They knew they’d be waiting awhile—there was only one doctor on the Pol-A platform processing center, one of almost 240 platforms and other structures operated in the Gulf of Mexico by Petróleos Mexicanos, or Pemex, Mexico’s state-owned oil company. Outside, wind whipped the platform and waves smashed into its towering steel legs.
/bloom.bg/3bGAk64

Europe Tries to Beat Virus Flareups With Patchwork of Strategies; An unpredictable hodge podge of restrictions may be almost as bad as lockdowns
Rudy Ruitenberg, Emily Ashton, and Raymond Colitt – Bloomberg
Tucked in a side street of Paris’s bustling Boulevard du Montparnasse, a tidy bistro is struggling without executives talking business at lunch and tourists sampling the Japanese-inspired French delicacies in the evening.
/bloom.bg/32h9yOu

AstraZeneca Still Aiming for Oxford Covid Vaccine by Year-End, CEO Says
Suzi Ring and Marthe Fourcade – Bloomberg
CEO Soriot seeks to reassure investors after trial halt; Trial participant’s diagnosis is still not certain, chief says
AstraZeneca Plc Chief Executive Officer Pascal Soriot said the coronavirus vaccine the company is developing with the University of Oxford could still be ready before the end of the year after pausing its trials due to a possible serious neurological problem in one patient.
/bloom.bg/3ihJDMe

Why Are N95 Masks Still So Difficult to Get? The federal government continues to abdicate its responsibility to help provide this essential protective gear.
Joe Nocera – Bloomberg
Last week — which is to say, six months into a pandemic that has killed more than 185,000 Americans — the American Nurses Association released the results of a survey of its membership. The survey asked whether nurses were still experiencing shortages of personal protective equipment, or PPE.
/bloom.bg/32iDhGZ

Lloyd’s of London Says Covid Claims Could Reach $6.5 Billion
Benjamin Robertson -Bloomberg
Insurance exchange operator predicted a torrid year in May; Insurers also hit by an early hurricane season in the U.S.
The coronavirus bill for insurers continues to mount with Lloyd’s of London saying it expects to pay out up to 5 billion pounds ($6.5 billion) in claims. The world’s largest insurance market announced a pre-tax loss of 400 million pounds for the first half of the year after reinsurance provisions helped cover some 2.4 billion pounds of losses from Covid claims. The firm posted a 2.3 billion profit for the same period last year.
/bloom.bg/2Rjf8tf

Six Months of Pandemic, and We’re Still Struggling; We’ve still got a lot to learn about living with Covid-19.
Mark Gongloff – Bloomberg
About six months ago, back in early March, I started working from home, my kids started learning from home, a pandemic was raging and health-care workers lacked adequate equipment. Today, in early September … I am still working from home, my kids are still learning from home, a pandemic is still raging and health-care workers still lack adequate equipment.
/bloom.bg/32evSbq

Pay People to Get Vaccinated; Once a reliable vaccine exists, it won’t stop the pandemic unless most people are willing to take it. Economics provides a solution.
N. Gregory Mankiw – NY Times
What’s the best way to get the economy back on track after the Covid-19 recession? Simple: Achieve herd immunity. And what’s the best way to achieve herd immunity? Again, simple: Once a vaccine is approved, pay people to take it.
/nyti.ms/3ihnltT

Airlines Plan 8,000-Jet Airlift to Distribute Covid Vaccines
Christopher Jasper -Bloomberg
Multiple-dose vaccines would require even more cargo capacity; IATA calls it the ‘largest single transport challenge ever’
Reaching all 7.8 billion people on the planet with a coronavirus vaccine will require a global airlift filling the equivalent of 8,000 Boeing Co. 747 freighters, according the International Air Transport Association.
/bloom.bg/32ePUm7

Astra Targets Vaccine in 2020; Deaths Top 900,000: Virus Update
Bloomberg News
AstraZeneca Plc Chief Executive Officer Pascal Soriot said the coronavirus vaccine the company is developing with the University of Oxford could still be ready before the end of the year. Global deaths from the pandemic exceeded 900,000.
/bloom.bg/3iiqYQs

China Vaccine Frontrunner Says Shots Are Safe Amid Astra Setback
Bloomberg News
Sinopharm vaccine has been given to hundreds of thousands; AstraZeneca’s halted trial has no impact on Sinopharm testing
China National Biotec Group Co. said none of the recipients of its two coronavirus shots has reported an obvious adverse reaction or infection, as the Chinese vaccine front-runner presses ahead with testing after AstraZeneca Plc suspended its trial.
/bloom.bg/3iiwItw

Exchanges, OTC and Clearing

Addition of the CME Globex Electronic Trading Venue for all Options on Weather Futures Contracts and Related Administrative Amendments to Certain Product Chapters
CME Group
Effective Sunday, September 20, 2020, for trade date Monday, September 21, 2020, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will permanently list all options on weather futures contracts (the “Contracts”) for trading on the CME Globex electronic trading platform (“CME Globex”). Also at this time, the Exchange will implement related administrative amendments to the Exercise Price rules of certain product rulebook chapters noted in Exhibit 2 below to clarify that eligible put and call options of the Contracts are listed dynamically.
/bit.ly/3ife3P0

2021 Soybean Meal Futures and Soybean Oil Futures Delivery Differentials
CME Group
The Board of Trade of the City of Chicago, Inc., (CBOT or Exchange) per Rule 13106. (Shipping Plants) of Chapter 13 (“Soybean Meal Futures”), and pending all relevant CFTC regulatory review periods, hereby advises that the territorial delivery differentials, in dollars per ton, for all Soybean Meal futures delivery months (Clearing Code: 06; Globex Code: ZM) beginning with the January 2021 contract month and ending with the December 2021 contract month shall be as follows:
/bit.ly/3hf6sPq

Intercontinental Exchange, Inc. Announces Secondary Offering by Selling Stockholder Related to Ellie Mae Acquisition
Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Ellie Mae Parent, LP, an entity controlled by Thoma Bravo (the “selling stockholder”), intends to offer for sale in an underwritten secondary offering 9,180,568 shares of ICE’s common stock pursuant to ICE’s shelf registration statement filed with the Securities and Exchange Commission (SEC). The shares being offered were originally issued to the selling stockholder in connection with the acquisition of Ellie Mae, Inc., which ICE completed on September 4, 2020.
/bit.ly/2R8NnUq

Intercontinental Exchange Announces Pricing of Secondary Offering of Common Stock
Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today the pricing of an underwritten secondary offering by Ellie Mae Parent, LP, an entity controlled by Thoma Bravo (the “selling stockholder”), of 9,180,568 shares of ICE’s common stock at a price to the public of $100.20 per share. Goldman Sachs & Co. LLC served as the sole underwriter for this offering. The offering is expected to close on or about September 11, 2020, subject to satisfaction of customary closing conditions.
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Qontigo and Eurex respond to new industry classification
Eurex
New ICB classification leads to one new and three redefined Supersectors; Qontigo creates new STOXX indices covering Supersectors; Eurex launches additional EURO STOXX and STOXX Europe 600 Supersector futures and options
Deutsche Börse’s index provider Qontigo and its derivatives exchange Eurex are adapting their offering to the upcoming new classification of industrial sectors. To reflect the new Industry Classification Benchmark (ICB) framework, they have announced an expansion of their sector indices and derivatives offering coming into force on September 21.
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Eurex Exchange Readiness Newsflash | Eurex Exchange’s T7 Release 9.0 – Publication of documentation
Eurex
With this Newsflash we would like to highlight the system documentation for T7 Release 9.0 available on the Eurex website www.eurexchange.com.
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Eurex’s global MSCI offering – the perfect choice for Asia
Eurex
With 136 MSCI futures and 22 MSCI options covering emerging and developed markets, Eurex is the exchange with the most comprehensive suite of global MSCI derivatives available across all time zones. Together, Eurex and MSCI, provide clients with the most diverse and innovative range of index derivatives and have signed an agreement on the long-term extension of their strategic relationship, providing the stability the market needs during these turbulent times.
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Quarterly review of the BEL 20®, BEL Mid®and BEL Small®
Euronext
Euronext today announced the quarterly review of the BEL 20®, BEL Mid® and BEL Small® indices. The changes due to the review will be effective from Monday 21 September 2020.
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Euronext announces quarterly review results for the PSI 20®
Euronext
Euronext today announced the results of the quarterly review for the PSI 20®. The changes due to the review will be effective from Monday 21 September 2020.
/bit.ly/3k546nS

SIX and Nasdaq launch first connection under European microwave network expansion; After confirming plans to team up and expand the European microwave network, SIX and Nasdaq Nordics have launched the first connection between London and Stockholm.
Annabel Smith – The Trade
Exchange operators SIX Group and Nasdaq Nordics have launched the first connection between London and Stockholm, after confirming plans to expand SIX’s European microwave network in April. The launch will provide faster and more secure transactions for market participants, as data and signals can be delivered via microwave infrastructure across Europe instead of using fiber optic cable, SIX said in a statement.
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Fintech

Credit Suisse launches Switzerland’s first major digital banking rival
Brenna Hughes Neghaiwi, Oliver Hirt – Reuters
Credit Suisse will launch a digital banking app in October challenging fintechs like Revolut in the Swiss bank’s home market by offering free foreign transactions and fully digital wealth management, the bank said on Thursday.
/reut.rs/35mP3ln

Fintech Can Come Out of the Shadows
Brian P. Brooks and Charles W. Calomiris – WSJ
If it lends like a bank and processes payments like a bank, is it a bank? Maybe not, depending on the outcome of a case pending in the Second U.S. Circuit Court of Appeals. In the lawsuit, New York financial-services superintendent Linda Lacewell claims a company can’t be a bank unless it accepts deposits, no matter that it offers other services—consumer loans, credit cards or payment processing—that banks have traditionally offered. This claim is legally and historically wrong, as well as risky. Consumer protection and the safety and soundness of our financial system are at risk if it succeeds.
/on.wsj.com/2FjAWmd

These are the Chinese fintech firms you should be aware of
Tanner Brown – MarketWatch
Fintech behemoth Ant Group Co. has attracted the China-watching finance world’s attention, and for good reason — its coming IPO may break records if it raises its targeted $30 billion in Shanghai and Hong Kong.
But partially obscured by Ant’s large shadow are several exciting Chinese fintech firms to keep an eye on as activity heats up in the space. Here are a few:
/on.mktw.net/32lfE0x

OCC chief, N.Y. regulator dig in on fintech chartering, preemption
Brendan Pedersen – American Banker
Acting Comptroller of the Currency Brian Brooks and New York Department of Financial Services Superintendent Linda Lacewell traded barbs Wednesday in the perpetual struggle between federal and state regulators over the dual banking system.
In remarks during a livestreamed event hosted by the Cato Institute, Brooks took issue, among other things, with the view by some states that their laws better protect consumers. He said some aggressive state laws to restrict interest rates have the effect of “rationing” credit.
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M&T’s new fintech unit rolls out first product
Miriam Cross – American Banker
When the enterprise transformation office at M&T Bank began exploring problems the bank could fix for its small-business customers, the team landed on a challenge facing a very specific niche: solo attorneys and small law firms that struggled to efficiently reconcile their trust accounting.
So M&T hatched a fintech-like unit to solve the issue.
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Citi, JPMorgan and State Street back fintech startup Capitolis
Anna Irrera – Reuters
JPMorgan Chase & Co, Citigroup Inc and State Street Corp have invested $11 million in Capitolis, a New York-based technology startup that seeks to help banks use capital more efficiently, the companies said.
/reut.rs/3k8CY7H

Credit Suisse launches Switzerland’s first major digital banking rival
Brenna Hughes Neghaiwi and Oliver Hirt – Reuters
Credit Suisse will launch a digital banking app in October challenging fintechs like Revolut in the Swiss bank’s home market by offering free foreign transactions and fully digital wealth management, the bank said on Thursday.
Credit Suisse’s new CSX banking app will offer free online banking from next month, a move it hopes will attract new customers to more lucrative services it will add over coming months, including taking out mortgages, making investments and planning pensions, Switzerland’s second-biggest bank said.
/reut.rs/35mP3ln

University of Strathclyde spurs fintech forwards with MSc; As the new higher education academic year nears, David Lee assesses the groundbreaking collaborative research work being undertaken by the University of Strathclyde
The Scotsman
It’s three years since the University of Strathclyde kick-started an academic fintech revolution by launching the UK’s first MSc in the subject.
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Number of traders on buy-side trading desk not impacted by technology, research suggests; Research from Greenwich Associates shows that the number of traders on desks has changed very little from 2018 to 2019 despite technological advances.
Annabel Smith – The Trade
Technology investments on the buy-side trading desk have not come at the expense of traders, a recent report from Greenwich Associates has suggested. The research revealed that the number of traders on buy-side trading desks has remained essentially unchanged from 2018 to 2019 with eight on average in fixed income, slightly over seven in equities, and six in foreign exchange.
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EDI Obtains ISO 27001 Certification
Mondovisione
Exchange Data International (EDI), the London-based financial data provider, is pleased to announce they have obtained the internationally recognised ISO 27001 certification.
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Cryptocurrencies

North Korean hackers steal billions in cryptocurrency. How do they turn it into real cash?
Patrick Howell O’Neill – MIT Technology Review
For years, North Korea’s Kim dynasty has made money through criminal schemes like drug trafficking and counterfeiting cash. In the last decade, Pyongyang has increasingly turned to cybercrime—using armies of hackers to conduct billion-dollar heists against banks and cryptocurrency exchanges, such as an attack in 2018 that netted $250 million in one fell swoop. The United Nations says these actions bring in vast sums which the regime uses to develop nuclear weapons that can guarantee its long-term survival.
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INX crosses minimum $7.5 million threshold for its security token IPO, now accepting BTC, ETH and USDC
Yogita Khatri – The Block
Crypto exchange INX, which recently launched its security token initial public offering (IPO), has crossed the minimum $7.5 million threshold imposed by the U.S. Securities and Exchange Commission (SEC). The regulator wanted INX to raise the first $7.5 million of its up to $117 million IPO in dollars and not crypto. Now that the minimum requirement has been met, INX will start accepting bitcoin (BTC), ether (ETH), and USDC stablecoin, beginning September 14.
/bit.ly/33uVtfZ

Court Denies Bitmain $30M in Damages From Co-Founders of Rival Poolin
Wolfie Zhao – Coindesk
A court in China has denied an appeal by bitcoin mining giant Bitmain seeking $30 million in damages from the three co-founders of Poolin, one of the world’s largest cryptocurrency mining pools. The Beijing No. 1 Intermediate People’s Court issued a ruling on the appeal on Aug. 31 and made it public on Sept. 8. The court’s final decision marks the closure of the year-long lawsuit that could have significantly harmed the operations of the rising rival to Bitmain’s pool business.
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Australian University Finds Privacy Issues With Blockchain Technology
Sebastian Sinclair – Coindesk
A research paper from the University of South Australia suggests blockchain technology needs to be refined so it can better protect privacy. Described in a university blog post on Thursday, the research findings show the very features that make blockchain secure are also problematic for personal privacy, particularly under European standards. The work was conducted by emerging technologies researcher Dr. Kirsten Wahlstrom in collaboration with Dr. Anwaar Ulhaq and Prof. Oliver Burmeister of Charles Sturt University, also in Australia.
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NYAG and Bitfinex to conference with the New York Supreme Court on disputed documents
Aislinn Keely – The Block
In the latest Court order in the ongoing iFinex dispute with the New York Attorney General (NYAG), New York Judge Joel M. Cohen is mandating a video conference between the two parties next week. A filing from today set a date for a discussion on Sept. 17 regarding the NYAG’s insistence that iFinex produce certain documents. The Court date was set after the NYAG requested the conference yesterday. “At the conference we seek, the OAG will request that the Court order the immediate production of documents and information by Respondents as required under the April 24, 2019 Order…” read the filing.
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Mastercard launches customizable CBDC testing platform
Momina Khan – The Block
Mastercard has launched a “virtual and custom” testing platform that will allow central banks to evaluate digital currency systems. According to an announcement published on Wednesday, the platform will facilitate an environment where banks, financial service providers, and consumers can partner to simulate the issuance, distribution, and exchange of central bank digital currencies (CBDCs) and evaluate customized CBDC use cases.
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YouTube Ignored Warnings About XRP ‘Giveaway’ Scams, Ripple Says
Paddy Baker – Coindesk
Ripple has disputed YouTube’s claims that it knew nothing about the XRP “giveaway” scams, accusing the platform of “willful blindness” after being alerted hundreds of times. Ripple took action against YouTube in April, holding the platform responsible for the multiple videos that used its logo and the likeness of CEO Brad Garlinghouse to promote scams that ask victims to send XRP in order to be eligible for a larger amount that, of course, never arrives.
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IRS Spends $250,000 on Analytics Tools As Crypto Focus Grows
Andrew Hayward – Decrypt
The IRS spent $250,000 on a contract with Blockchain Analytics and Tax Services LLC. Reportedly, the contract is unrelated to recent requests by the IRS for privacy coin tracing tools. The agency recently sent out letters to cryptocurrency holders about unpaid taxes.
The United States Internal Revenue Service’s (IRS) eye on cryptocurrency has grown over the last couple years, and in recent months the government agency has both spent money on cryptocurrency tracing tools and put out a call for additional ones.
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Centre’s USDC coin is now supported by Algorand in addition to Ethereum
Momina Khan – The Block
Centre’s USDC stablecoin is now supported by the Algorand blockchain, according to an announcement Wednesday from the consortium. It’s the second blockchain to support the coin, joining Ethereum. According to a statement from Centre, Algorand will allow users to exchange USDC — the second-largest stablecoin behind Tether with over 7% global market share — at a speed of over 1,000 transactions per second (TPS) with a transaction fee of 1/20th of a cent, making transactions both faster and cheaper than those on Ethereum. Ethereum can process 15 TPS at an average transaction fee of about $2.65.
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Ether Traders May Be Hedging Against DeFi Slowdown: Analyst
Omkar Godbole – Coindesk
Options market data shows increased activity in ether (ETH) puts, or bearish bets. According to one trader, that reflects fears of a drop in prices led by a slump in decentralized finance (DeFi). Ether’s put-call volume ratio – a measure of activity in put options relative to calls (bullish bets) – rose to 2.45 on Wednesday. That’s the highest level since Oct. 31, 2019, according to data source Skew. In other words, more than two put options were traded against every call option – a sign of bearish market sentiment.
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SushiSwap initiates migration of over $800M in liquidity funds from Uniswap
Saniya More – The Block
Over $800 million in liquidity funds are being transferred from Uniswap to its upstart competitor, SushiSwap. SushiSwap, a fork of Uniswap, is gaining popularity because unlike Uniswap, it rewards its liquidity providers with a native governance token, SUSHI. If successful, the migration could cause Uniswap’s overall liquidity to drop by nearly 60 percent.
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Slovak cryptocurrency exchange ETERBASE discloses $5.4 million hack; Bitcoin, Ether, ALGO, Ripple, Tezos, and TRON assets were stolen in the hack.
Catalin Cimpanu – Zdnet.com
ETERBASE, a Bratislava-based cryptocurrency exchange, disclosed this week a security breach. The exchange said hackers breached its internal network and stole cryptocurrency funds worth $5.4 million.
/zd.net/32gEGOj

Politics

Trump Admits Downplaying the Virus Knowing It Was ‘Deadly Stuff’ In taped interviews with the journalist Bob Woodward, the president said as early as February that the virus was more dangerous than the flu, even as he told the country otherwise.
Maggie Haberman – NY Times
President Trump acknowledged to the journalist Bob Woodward that he knowingly played down the coronavirus earlier this year even though he was aware it was life-threatening and vastly more serious than the seasonal flu. “This is deadly stuff,” Mr. Trump said on Feb. 7 in one of 18 interviews with Mr. Woodward for his coming book, “Rage.”
/nyti.ms/3bLtfBc

Oh Lord, We’re Financing Trump; Next time your lawn needs a rehab, you know whom to bill.
Gail Collins – NY Times
Hey, it looks like Donald Trump is running out of money. Stop applauding. The Times’s Shane Goldmacher and Maggie Haberman reported this week that just as the presidential race is steaming into high gear, the Trump campaign has frittered away more than $800 million of the $1.1 billion it raised since the start of 2019. The money went to much-needed initiatives like $11 million in reservations for Super Bowl ads. A great investment! Look what it did for Michael Bloomberg.
/nyti.ms/3ih4IXh

Mr. Trump Knew It Was Deadly and Airborne; He lied about the coronavirus anyway.
The Editorial Board – NY Times
On Feb. 7, during a taped interview with Bob Woodward, President Trump acknowledged that the coronavirus could be transmitted through the air, that it was very dangerous and that it would be difficult to contain. “This is deadly stuff,” he told the investigative journalist. “You just breathe the air, and that’s how it’s passed,” the president warned.
/nyti.ms/32g9JJW

Dollar’s Dominance Gives U.S. Upper Hand in China Fight
Kari Soo Lindberg, Nick Wadhams, and Jenny Leonard – Bloomberg
China’s main tool is restricting access to its vast market; Chinese banks taking steps to comply with U.S. sanctions
China’s latest threat to bar companies with ties to U.S. officials who visit Taiwan points to a weakness for Beijing in its sanctions battle with Washington: It can control its own borders, but the greenback rules the world.
/bloom.bg/3heSr4g

The Mighty Money ($3 Billion) Fueling Campaign 2020
Bill Allison – Bloomberg
The 2020 presidential campaign might well be remembered as when the dam truly broke on money in U.S. politics. Twelve years after the first presidential election in which candidate fundraising eclipsed $1 billion, the 2020 race is on pace to shatter the $3 billion mark, thanks largely — but not solely — to the presence of billionaires on the ballots.
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China Denounces U.S. Student Visa Cuts as Racial Discrimination
Bloomberg News
Visas for more than 1,000 China students, researchers revoked; U.S. says action needed to protect key military technologies
The U.S. has revoked the visas of more than 1,000 Chinese students and researchers for national security reasons, drawing protests and a threat of possible retaliation from Beijing.
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Trump Unable to Escape Virus Fallout as His Own Words Haunt Him
Josh Wingrove and Mario Parker – Bloomberg
Woodward book lands as voters are about to decide election; Biden says Trump’s comments reveal ‘a life-and-death betrayal’
Donald Trump’s bid to focus his re-election campaign on anything but the pandemic hit another setback Wednesday, as the president acknowledged publicly downplaying the threat of the coronavirus in February even though he knew it was dangerous.
/bloom.bg/2Re9ybC

Facebook, Google, Twitter urged by EU to do more against fake news
Foo Yun Chee – Reuters
Two years after agreeing to a self-regulatory code of practice to tackle disinformation, Facebook, Alphabet’s Google, Twitter and other tech rivals must try harder to be more effective, the European Commission said on Thursday.
/reut.rs/3hiIG4O

South Africa Heading Toward Becoming a Failed State, Group Says
Antony Sguazzin – Bloomberg
Political, economic impasse has stalled South African growth; Risk consultancy advocates maintaining welfare, SEZ zones
South Africa faces a precipitous economic and political collapse by 2030 unless it changes its economic model and implements growth-friendly policies, according to Eunomix Business & Economics Ltd.
/bloom.bg/3hkGmdE

Why Egypt Didn’t Profit From Peace With Israel As the UAE Will; The Emiratis are not burdened by the legacies of war that handicap Egyptians.
Timothy Kaldas – Bloomberg
The agreement between the United Arab Emirates and Israel to normalize their relations, described by some as a “peace” deal, seems to have hit a snag over weapons purchases. The UAE is keen to join the exclusive club of nations allowed to buy F-35 fighter jets; in exchange for allowing the transaction to proceed, Israel is seeking additional American weapon systems.
/bloom.bg/2DMzYhD

Exclusive: Russian state hackers suspected in targeting Biden campaign firm – sources
Joel Schectman, Raphael Satter, Christopher Bing, Joseph Menn – Reuters
Microsoft Corp (MSFT.O) recently alerted one of Democratic presidential candidate Joe Biden’s main election campaign advisory firms that it had been targeted by suspected Russian state-backed hackers, according to three people briefed on the matter.
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Whistleblower Says DHS Leadership Tried to Halt Reports on Russian Interference; The complaint alleged that acting DHS Secretary Chad Wolf said an intelligence notification on the subject should be ‘held’ because it ‘made the president look bad’
Dustin Volz – WSJ
A Trump administration official filed a whistleblower complaint alleging that he was instructed to stop disseminating intelligence memos on threats posed by Russia to the presidential election because doing so would be harmful to President Trump, according to records of the complaint released by the House Intelligence Committee.
/on.wsj.com/3bOi7Dx

Billionaires battle over proposed Illinois tax hike on the wealthy
Robert Frank – CNBC
Billionaire hedge funder Ken Griffin is going head-to-head with the billionaire governor of Illinois over a plan to increase taxes on the wealthy.
/cnb.cx/3bIkrMt

Regulation

CFTC’s Climate-Related Market Risk Subcommittee Releases Report
CFTC
The Commodity Futures Trading Commission’s Climate-Related Market Risk Subcommittee of the Market Risk Advisory Committee (MRAC) today released a report entitled Managing Climate Risk in the U.S. Financial System. The Climate Subcommittee voted unanimously 34-0 to adopt the report.
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FIA Statement On CFTC MRAC Subcommittee Report On Climate Change
Mondovisione
FIA President and CEO Walt Lukken today made the following statement on the release of the CFTC’s Market Risk Advisory (MRAC) subcommittee report on market risks related to climate change:
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AAT sets aside disqualification of SMSF auditor
ASiC
On 5 August 2020, the Administrative Appeals Tribunal (AAT) set aside ASIC’s decision to disqualify Mr John Gilliland from being an approved self-managed superannuation fund (SMSF) auditor.
/bit.ly/2RdB0Gw

Investing and Trading

Why Blank Check Companies Are The Hottest Thing This Year
Joe Weisenthal and Tracy Alloway – Bloomberg
SPACs have been around a long time. The basic premise is that a group of people raise a bunch of money from public market investors, with the premise of then going out to buy a specific, individual company. They’re seen as an alternative to IPOs. While historically they’ve had a reputation for some questionable deals, this year they’ve been booming. All kinds of big names like Bill Ackman and Paul Ryan (yes, that one) are getting in on the action. On this episode, we speak with Kelly Driscoll, one of the founders of the SPAC Fusion Acquisition Corp, who explains why these entities are so hot right now.
/bloom.bg/3k5eH2k

There’s No Vaccine Yet for Tech Market Excess; The sell-off has paused without removing the froth, though at least pharma stocks are starting to behave more sensibly.
John Authers – Bloomberg
Tech stocks didn’t have to endure much of a correction. All the sectors that had been doing mighty well until hitting a traffic bump at the end of last week rebounded Wednesday. It would be unwise to assume this is over, but for now the most important point is that the excesses of the post-Covid rally haven’t been corrected (and not just because it is still premature to declare the pandemic over). The Nasdaq 100 never quite dropped to its 50-day moving average before bouncing:
/bloom.bg/32dULnQ

Environmental, Social and Corporate Governance

Rio Tinto board can choose CEO – at expense of ESG
George Hay – Reuters
Simon Thompson is in a tricky position. Rio Tinto’s chairman attempted last month to draw a line under the company’s disastrous decision to blow up Aboriginal heritage sites to make way for iron ore mines. It didn’t work. With shareholders pushing for something tougher than axing Chief Executive Jean-Sebastien Jacques’ 2020 bonus and a chunk of his long-term incentive plan, a bigger sacrifice is needed.
/bit.ly/2F6V4YX

How to separate the good from the bad and ugly ESG funds
Billy Nauman – Financial Times
Environmental, social and governance investing has been one of the hottest sectors of 2020, as investors have flooded into the market looking to immunise their portfolios against climate risk and help promote a sustainable recovery from the pandemic.
But what are people actually getting when they buy an exchange traded fund labelled “ESG”? The answer can vary wildly depending on which fund they choose.
/on.ft.com/2ZqGfXT

Musings On ESG In A Changing Global Workplace
Charina Amunategui – Forbes
Environmental, social and governance (ESG) are three key factors for measuring a company’s sustainability and social responsibility. However, with the changes suddenly imposed by the current pandemic, how will these new conditions, in the context of global business, affect the way we work?
/bit.ly/3391iza

BlackRock unveils suite of ESG multi-asset ETFs; ‘Cost-efficient, transparent and sustainable’
Anna Fedorova – InvestmentWeek
BlackRock has launched a suite of three ESG multi-asset ETFs to provide investors with a “cost-efficient, transparent and sustainable way” to invest during times of market uncertainty. The three portfolios are each made up of iShares ETFs and offer investors three pre-defined risk profiles – conservative, moderate and growth – each aiming to deliver a total return.
/bit.ly/32e4TNm

UBS Pushing Wealth Clients to Choose Sustainable Investing First
Marion Halftermeyer – Bloomberg
Socially-responsible products to be preferred solution; Virus crisis brings new urgency to change in priorities
UBS Group AG will offer sustainable investments as its preferred solution for wealth management clients worldwide as the Covid-19 crisis underscores the need for more socially and environmentally responsible financing.
/bloom.bg/3ihJEzP

How Fertilizer Is Making Climate Change Worse; Green groups have been pushing for years to get farmers to reduce their use of ammonium nitrate. Now some are starting to listen.
Paul Tullis – Bloomberg
The explosion that rocked Beirut last month, killing at least 190, was a grim echo of prior accidents caused by the explosive synthetic fertilizer ammonium nitrate.
/bloom.bg/3hpd79T

Animal Populations Fell by 68% in 50 Years and It’s Getting Worse; Food production and other human activities are destroying the very systems they rely on, according to a new study
Eric Roston – Bloomberg
The world is losing its mammals, birds, amphibians, reptiles and fish, and with them, the security of ecosystems that have supported humanity since it first emerged.
/bloom.bg/3ihgKjh

BP’s $1.1 Billion Deal Marks First Step Into Offshore Wind
Mikael Holter and Rakteem Katakey – Bloomberg
Oil giant announces purchase of U.S. assets from Equinor; Company has a $5 billion-a-year renewables investment plan
BP Plc, the oil giant that announced a seismic strategy shift last month, made its first venture into offshore wind power with a $1.1 billion purchase of U.S. assets from Norway’s Equinor ASA.
/bloom.bg/3bKOumB

Institutions

Lloyd’s of London expects thousands of workers back by end of next month; Insurance market anticipates it will pay out £5bn in claims relating to Covid-19
Oliver Ralph – FT
Lloyd’s of London, the insurance market, is expecting thousands of people to be back on the floor of its underwriting room by the end of next month. Lloyd’s is one of the last face-to-face financial markets in the City of London, with brokers and underwriters meeting to discuss commercial insurance policies on everything from property to cyber attacks. It closed in March as the lockdown started, and reopened them only last week.
/on.ft.com/2DL6Ya0

BlackRock Aladdin veteran joins IHS Markit financial services solutions division in senior role; Zion Hilelly spent 20 years at BlackRock, most of which was spent developing the post-trade and outsourcing capabilities of the institution’s flagship Aladdin platform.
Annabel Smith – The Trade
A 20-year BlackRock veteran that has been instrumental in developing the asset manager’s flagship Aladdin platform has departed to join data and analytics provider IHS Markit. Zion Hielelly has been appointed managing director, head of operations, client support, and services and transformation for its financial service solutions division, in a newly-created role.
/bit.ly/2ZovqWs

Morgan Stanley’s Rich Clients Shift to Hedge Funds for Defense
Sonali Basak – Bloomberg
Election uncertainty, run-up in tech stocks setting off alarms; ‘People have become increasingly uncomfortable,’ Huneke says
Wealthy investors who have ridden the likes of Apple Inc. and Amazon.com Inc. to all-time highs are getting increasingly nervous about the stock market’s fragility. High-net-worth clients of Morgan Stanley have been reversing course and investing in hedge funds, according to Ben Huneke, head of investment solutions in the wealth-management division. Investing is getting more complicated as the market turns volatile, benefiting an industry that fell out of favor in recent years. The affluent also fear they may have to pay a hefty portion of their gains to the government.
/bloom.bg/2RiS79P

Tom Barrack Steps Back from Colony Capital in Era of ‘Reprice and Reinvent’
John Gittelsohn and Jason Kelly – Bloomberg
Prominent investor sees economics of real estate changing; Firm has shifted strategy to focus on digital infrastructure
Tom Barrack built Colony Capital Inc. buying distressed real estate during economic downturns. This time, however, Colony is selling brick-and-mortar properties as it reshapes its portfolio to focus on what it calls “digital infrastructure.” With the pandemic battering commercial real estate, Barrack said properties including malls and hotels are still attractive to investors who are raising cash to take advantage of the next round of distressed opportunities.
/bloom.bg/2R8ZbWC

Hedge Funds at Sohn Make Bullish Bets on Long-Term Asian Growth
Bei Hu and David Ramli – Bloomberg
Eurizon says India’s personal care, skin-care sector will grow; Anatole’s Yang is bullish on China fast fashion, short Inditex
Hedge fund gurus are betting on the longer-term growth in Asia, picking winners from India to Japan and China as they look past market volatility brought on by Covid-19.
/bloom.bg/2Rb2Mnh

UBS Plans Higher Fees to Push Rich Clients Out of Costly Cash
Marion Halftermeyer – Bloomberg
Weath clients with 500,000 francs or less to face new charges; UBS urging customers to put more money into investments
UBS Group AG plans to increase charges for international wealth management clients located abroad and holding deposits in Switzerland, broadening its efforts to reduce costly cash holdings as negative interest rates persist.
/bloom.bg/3iiPqku

Regions

Why Warren Buffett could lead other money managers into overlooked Japan; Berkshire’s investment in trading houses highlights the case for unearthing cheap stocks
Leo Lewis – FT
To global portfolio managers, the Tokyo stock market has spent the past few years looking ever more like an old curiosity shop. Everyone knows there are bargains galore in there, but who can be bothered to study the cluttered and poorly labelled shelves when it is so much easier — as both a shopper and an investor — to go to Amazon?
/on.ft.com/3k5hAQM

Post-Brexit UK must respect the rule of law; Boris Johnson’s plan to rewrite EU withdrawal agreement destroys trust and undermines democracy
Philip Stephens – FT
Casting around for a new post-Brexit role in the world, Boris Johnson’s government has been presenting the UK as a champion of liberal democracy. Ministers talk about convening a new “club of democracies”, adding nations such as the Republic of Korea and Australia to the existing G7 group. They have overlooked something. Raising the standard for democracy requires a commitment to the rule of law.
/on.ft.com/3k1Ys63

Ghana’s Power Abundance Turns to Burden as Energy Debts Mount
Moses Mozart Dzawu – Bloomberg
Debt levels could rise if outstanding payments aren’t cleared; Power producers say they may be forced to shut their plants
Ghana lured investors to its power industry to end chronic electricity shortages with deals it can no longer afford. The deals’ terms require the government to pay for electricity generated even if there’s no demand for it. The move helped Ghana end its power crisis by 2016, boosting its generation to about 4,600 megawatts, well above national peak demand of 2,700 megawatts.
/bloom.bg/2ZkLDMc

Former Goldman Sachs Banker Seeks to Have 1MDB Charges Dropped
Hadi Azmi – Bloomberg
A former Goldman Sachs Group Inc. banker has sought to have his charges lightened or dropped after Malaysia had withdrawn criminal charges against the U.S bank accused of misleading investors over $6.5 billion in bond sales it helped organize for 1Malaysia Development Bhd. or 1MDB.
/bloom.bg/325dC2S

Hong Kong’s Sun Hung Kai Sees More Headwinds Amid Pandemic
Shawna Kwan – Bloomberg
Sun Hung Kai Properties Ltd., Hong Kong’s biggest developer, reported earnings that missed analysts’ estimates and said it sees more economic headwinds from the pandemic and rising U.S.-China tensions. Underlying earnings, which exclude property revaluations, dropped 9% to HK$29.4 billion ($3.8 billion) for the year ended June 30, Sun Hung Kai said in a filing Thursday. That missed the average estimate of HK$30.2 billion from 11 analysts surveyed by Bloomberg.
/bloom.bg/33iNxyb

China’s Record Dollar-Bond Flood Leaves Buyers Wanting More
Rebecca Choong Wilkins – Bloomberg
Orders for Chinese debt were 7.6 times issuance size in August; Central bank support, economic rebound boost investor demand
Demand for dollar bonds from Chinese issuers soared to a fresh high as the nation’s economic recovery gained momentum. Orders for Chinese offerings rose to 7.6 times their issuance size in August, the highest ratio since Bloomberg began collecting available deal statistics in 2016. Bonds of all Asian issuers, excluding Japan, were 6.8 times subscribed, the highest since March 2019, the data show.
/bloom.bg/3igWNZV

Turkey Discussing Oil and Gas Exploration in Libya
Onur Ant – Bloomberg
Ankara in talks with Libya’s Tripoli government about fields; Negotiations also cover power generation, pipeline services
Turkey is in talks over oil and gas exploration in Libya, as President Recep Tayyip Erdogan’s administration seeks business opportunities in the conflict-ridden North African country.
/bloom.bg/3hhLXkQ

Russia’s Richest Man Owns More Melting Arctic Than Anyone; Vladimir Potanin’s sprawling Siberian mining operations make him the billionaire most exposed to the permafrost crisis.
Yuliya Fedorinova, Laura Mian Lombrana – Bloomberg
Vladimir Potanin, one of the 50 richest people on the planet, stood awkwardly on the Siberian tundra near the remote mining city of Norilsk. It had been less than a week since a spill that threatened to become one of Russia’s worst disasters in the Arctic, caused entirely by an aging fuel tank owned by his mining operations. The billionaire was about to receive a verbal lashing from Russian President Vladimir Putin in front of a national audience.
/bloom.bg/2FrTwrZ

Saudi Mortgages Send Credit Growth Soaring
Vivian Nereim and Abeer Abu Omar – Bloomberg
Credit to private sector is growing at fastest rate since 2014; Home lending equivalent to 85% of July’s monthly credit growth
Saudi Arabia’s mortgage market is almost single-handedly keeping credit flowing to the private sector at the fastest since the kingdom was coming off an oil boom in 2014.
/bloom.bg/3bNMvOC

Brexit

Brexit Worries Reassert Hold Over British Pound; U.K. currency is on worst losing streak versus euro and dollar since March
Paul J. Davies and Caitlin Ostroff – WSJ
The British pound fell against the euro and the dollar Wednesday, extending a seven-day losing streak that is the currency’s worst percentage decline since the coronavirus market crisis in March. Investors are fretting anew about the economic pain from the U.K.’s political divorce from the European Union, which will come on top of the slowdown already inflicted by pandemic-related shutdowns.
/on.wsj.com/3heje0p

Export support for small companies cut ahead of Brexit; Ministers urged to release grants to help businesses make most of online trade shows=
Andy Bounds – FT
UK business groups have accused the government of cutting support for exporters as the Brexit transition draws to a close by refusing to release grants to help thousands of small companies attend trade shows.
/on.ft.com/2ZrfyT7

Brexit: EU has ‘serious concerns’ ahead of emergency talks with UK
BBC
EU official Maros Sefcovic was speaking ahead of emergency talks with Cabinet Office minister Michael Gove on how the changes could affect Northern Ireland.
The government says it is trying to protect the UK’s internal market and the Northern Ireland peace process.
/bbc.in/2FsjFqA

If Brexit violates Northern Ireland treaty, Nancy Pelosi warns ‘no chance’ of US-UK trade deal
Luke McGee – CNN
Rep. Nancy Pelosi, Speaker of the United States House of Representatives, has warned that Britain will be unable to secure a trade deal with the US if it does anything to undermine the treaty that brought peace to Northern Ireland after decades of violence.
/cnn.it/32hTLPv

Irish PM warns Boris Johnson over plans to recast Brexit deal; Micheál Martin says controversial UK move risks forfeiting trust of EU
Arthur Beesley -FT
Ireland has called on the UK to abandon moves to unpick parts of its Brexit treaty, warning that London risks forfeiting the EU’s trust as time runs out in talks on a free trade deal.
/on.ft.com/2Zo2v4K

Johnson’s Road to Brexit Ruin; The British government’s latest maneuver makes it harder to limit the damage.
Editorial Board – Bloomberg
Britain’s reckless mismanagement of its exit from the European Union took a remarkable turn this week, when a cabinet minister casually told the House of Commons that the government was proposing to break international law. In the midst of an effort to forge a trade agreement with the EU that the U.K. presumably hopes will be binding on both sides, this is a strange way to proceed.
/bloom.bg/3hcVjhP

Miscellaneous

Only 20% of workers prioritize lunch on ‘lunch break,’ UK survey finds
Astrid Hall – Fox News
Just one in five workers use their lunch break to actually eat every day — with most using the time to catch up on personal errands and browse social media instead.
A study of 2,000 U.K. professionals found 79% will tuck into their food as they work, so they can use their “lunch break” to do other things.
/fxn.ws/33fxLE3

‘I have no desire to wipe out humans,’ robot writes in ominous op-ed
Shawn Langlois – MarketWatch
That’s GPT-3, OpenAI’s powerful new language generator, saying exactly what a robot intending to destroy humans might say. In an op-ed for The Guardian — yes, robots write op-eds now — GPT-3 was told to write an essay convincing readers that the machines come in peace. No “Terminator,” just benevolent technology for a rosy future.
GPT-3 addressed Stephen Hawking’s warning that AI could spell the end of the human race, assuring readers that ” I would happily sacrifice my existence for the sake of humankind.”
Convinced yet?
/on.mktw.net/3k59TtC

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