Hits & Takes
John Lothian & JLN Staff
New JLN Associate Editor Alex Teng’s first episode of Options Discovery as part of The Spread video series will debut next week. The format will be Alex looking at options, trying to explain them to people his age and the like, while also conducting interviews with industry luminaries to give him some instruction and direction for his discovery journey.
The man who was the star of The Spread when it debuted, Spencer Doar, has a new gig. He is part of the corporate communications department at Cboe Global Markets, having departed 3PTS Communications and the world of public relations agency work for public relations work at an exchange. JLN wishes him well in his new endeavor. Maybe we can get Spencer as a guest interview on Options Discovery.
One person Alex should interview is someone who did two interviews for us in San Antonio, Texas, at the Options Conference, Joe Corona of Matrix Executions. Today, we published our interview with Joe about Matrix. We also have an interview with Joe for the Open Outcry Traders History Project that will be coming out soon and is not to be missed.
Yesterday, the U.S. Senate confirmed the nominations of Jaime E. Lizarraga and Mark Toshiro Uyeda to be members of the Securities and Exchange Commission. Lizarraga’s term expires on June 5, 2027, and Uyeda’s term expires on June 5, 2023. The current SEC commissioners yesterday issued the proforma welcome statement for Lizarraga and Uyeda.
While I was at the Tom Kadlec retirement party on Wednesday, I took several pictures of the events and published them in a post on JohnLothianNews.com. There is a picture of ADM Chairman Juan R. Luciano speaking, ADM Vice Chairman Ray Young giving Tom his gold watch, incoming ADMIS President John Stotts speaking and a couple of group pictures.
Speaking of ADMIS, ADM announced yesterday that Stuart Jackson had been named managing director of ADM Investor Services International Limited (ADMISI). He succeeds Fabian Somerville-Cotton, who sadly passed away last month.
The World Federation of Exchanges is holding a webinar titled “Circuit breakers and market quality” on June 21 at 16:00 PM-17:00 PM BST. The event moderator is Pedro Gurrola-Perez, head of research, The World Federation of Exchanges, and the presenter is Kaitao Lin, Financial Economist, also of the WFE. There are two panelists: Heinrich Lutjens, vice president, economic research, Nasdaq and Steven Poser, director, NYSE research and strategy.
When I was a cub reporter for Commodity News Services, the first book I was told to read by a source was “Extraordinary Popular Delusions and the Madness of Crowds.” This experience may have influenced my experience with the crypto phenomenon. There is a story today in The New York Times by Farhad Manjoo about bubbles and delusions titled “Crypto, Houses, Sneakers, Rolexes: How FOMO Drove the Economy.” It is well worth the read.
When your corporate team-building activity is walking on coals, just say no. The New York Times has a story about a corporate event of coal walking that went bad. How about just going out for beers instead?
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Tom Kadlec Retirement Party in Pictures
ADMIS President Tom Kadlec is retiring at the end of June and on June 15 the firm held a retirement party for him on the rooftop deck of the CBOT Building, attended by ADM and ADMIS personnel and others from around the derivatives industry. Kadlec was presented with a gold watch by Ray Young, the vice chairman of ADM, who oversees ADMIS.
Veteran Trader Joe Corona Talks Strategy and Matrix Solutions with JLN at 2022 Options Conference
Joe Corona is a veteran trader who serves as the chief strategy officer of brokerage firm Matrix Executions. Corona spoke to JLN at the Options Conference in San Antonio, Texas for the JLN OIC Industry Leader video series. We also interviewed him for the Open Outcry Traders History Project, a video which will be released later.
The Last of Lehman Brothers; The bank whose collapse marked the beginning of the 2008 financial crisis is only mostly dead. These are the people attending to its last remains ahead of its final court cases.
Lucca De Paoli and Jeremy Hill – Bloomberg
Daryl Rattigan arrived at Lehman Brothers 18 years ago for a three-month assignment from his law firm. Eventually the bank gave him a full-time job at its real estate finance arm in London. Then the bank suddenly collapsed. And he’s still there, almost 14 years later. It turns out that when global financial institutions die, it can take a while. These deaths require caretakers. The spirit of a bank, even in life, is debt, and debts don’t settle easily into a grave. Most of the assets banks own are the debts of others: the mortgages, commercial loans, and IOUs payable to the bank. On the other side, of course, banks owe—to their bond- and note holders, counterparties in financial trades, and a long list of other creditors. Banks such as Lehman topple over when they suddenly can’t wring enough cash from their assets to meet their liabilities.
*****Every 10 years a journalist is required to write a story with this headline.~JJL
Anna Sorokin Wants to Change ‘Scammer Persona’ by Selling NFTs
Carrington York – Bloomberg
Anna Sorokin, the infamous scammer who inspired a Netflix series that chronicled her grifting pursuits, is exploring a new hustle — NFTs. The exclusive collection of NFTs is an attempt to move away from her “scammer persona,” a decision made after Sorokin became known for her delinquencies, which ranged from stealing from businesses and friends while posing as German heiress. Sorokin announced the collection in an interview that first aired on NBC News NOW.
***** Here is a person without an ounce of self-awareness.~JJL
Elon Musk Tells Staff Twitter Should Allow ‘Pretty Outrageous’ Tweets; Tesla CEO doesn’t rule out layoffs, endorses some remote work; Billionaire spoke to Twitter employees at an all-hands meeting
Kurt Wagner, Edward Ludlow, and Maxwell Adler – Bloomberg
Elon Musk discussed his stance on what types of content should be allowed on Twitter Inc.’s social network, saying that people should be allowed to say “pretty outrageous things” but that the platform doesn’t have to give those posts reach. Musk elaborated on his beliefs Thursday during an all-hands gathering at Twitter, according to staff who participated in the virtual meeting. It marked the first time the billionaire, who is chief executive officer of Tesla Inc., has addressed Twitter employees since agreeing in late April to buy the company for $44 billion. Twitter needs to allow more space for people to say whatever they want, Musk said, as long as it doesn’t violate the law. But he added that the company needs to balance that by making sure people “feel comfortable” on the service, otherwise they won’t use it, according to people familiar with the discussion. His goal is to expand Twitter’s user base to 1 billion users, he said. The company had about 229 million daily active users as of March.
***** What is “pretty outrageous?” That is in the eye of the beholder. Or, the eye of the power holder. ~JJL
Thursday’s Top Three
Our top story Thursday was An age of real wealth destruction, from The Financial Times. Second was the SEC press release SEC Requests Information and Comment on Advisers Act Regulatory Status of Index Providers, Model Portfolio Providers, and Pricing Services. And third was JLN’s Remembrances of Hal Hansen, with the addition of a remembrance by Dr. Richard Sandor.
26,855 pages; 238,893 edits
Elon Musk sued for $258 billion over alleged Dogecoin pyramid scheme
Jonathan Stempel – Reuters
Elon Musk was sued for $258 billion on Thursday by a Dogecoin investor who accused him of running a pyramid scheme to support the cryptocurrency. In a complaint filed in federal court in Manhattan, plaintiff Keith Johnson accused Musk, electric car company Tesla Inc (TSLA.O) and space tourism company SpaceX of racketeering for touting Dogecoin and driving up its price, only to then let the price tumble. Musk is CEO of both Tesla and SpaceX. “Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint said. “Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement.”
BNP Paribas Interested in Buying State-Owned ABN Amro
BNP Paribas SA has expressed interest in a potential acquisition of ABN Amro Bank NV, the Dutch consumer lender that’s been government-owned since the financial crisis, Bloomberg News reports. France’s biggest bank recently reached out for a meeting with the Dutch government and discussed its interest in a transaction, the people said, asking not to be identified because the information is private. BNP is drawn to ABN Amro’s retail and corporate franchise and the opportunity to expand in northern Europe, the people said.
SEC looks at stricter rules for index providers; S&P Global and MSCI could be reclassified as investment advisers by US regulator
Chris Flood – FT
Wall Street’s top watchdog is examining whether to impose stricter rules on providers of financial indices that now guide trillions of dollars of investments globally. The Securities and Exchange Commission on Wednesday formally requested information from the market on whether to impose tougher standards on companies such as S&P Global, MSCI and FTSE Russell, which are considered data publishers at present. The changes proposed by the SEC could mean that index providers, which have developed into some of the most influential power brokers in modern financial markets, would be treated as investment advisers and held to the same standards as fund managers.
The SEC’s Power to Police Markets Is Under Attack in Court; A Fifth Circuit ruling limits one of the watchdog’s enforcement tools. The same theory might make it harder to address new issues such as crypto.
Lydia Beyoud – Bloomberg
The US Securities and Exchange Commission has a lot of complicated new issues on its plate, from crypto to the aftermath of the meme-stock explosion. Now add this: A movement to cut back on regulators’ legal authority is making headway in court. Hedge fund manager George Jarkesy spent almost a decade battling an SEC in-house judge’s ruling against him for allegedly misleading investors in two of his funds. On May 18 two judges with the US Court of Appeals for the Fifth Circuit agreed that the SEC violated his constitutional right to a jury trial when it put its case before what’s known as an administrative law judge.
Basis Trade Blowup Adds New Drama to BOJ Fight With Bond Market
Masaki Kondo and Chikako Mogi – Bloomberg
Pockets of Japan’s bond market are imploding as the central bank battles to keep control of its policy goals and beat back those betting against it. A small tweak to the Bank of Japan’s bond purchase plan this week blew up an arbitrage strategy popular with overseas investors known as the basis trade. It exacerbated a supply shortage of government bonds that has ramped up pressure on domestic financial institutions, leading them to turn to the BOJ for help to relieve the strain.
Musk, Tesla, SpaceX Are Sued for Alleged Dogecoin Pyramid Scheme
Bob Van Voris – Bloomberg
Elon Musk, SpaceX and Tesla Inc. were sued for $258 billion over claims they are part of a racketeering scheme to back the cryptocurrency Dogecoin. Keith Johnson, “an American citizen who was defrauded out of money by defendants’ Dogecoin Crypto Pyramid Scheme,” sued Musk and his companies, claiming they constitute an illegal racketeering enterprise to inflate Dogecoin’s price.
Crypto Hedge Funds Made Rookie Mistakes; Leverage plus speculation equals disaster.
Mark Gongloff – Bloomberg
I wrote earlier this week about how laser-eyes-having, rocket-emoji-tweeting crypto bros are making all the same mistakes as foosball-playing, sock-puppet-employing dot-com bros before them (there’s now even an Ale Lampietti TikTok about it, in case your eyes are sleepy from all these words). But the historical echoes go even deeper than that. Crypto’s collapse has whole battalions of hedge funds being carried out on their shields, and Lionel Laurent writes they made the same mistakes as another late-’90s train wreck, Long Term Capital Management. That squad of bond-market brainiacs levered up to fill their boots with emerging-market debt and currencies just before two massive emerging-market financial crises. Crypto hedge funds, having apparently never heard of, much less read, “When Genius Failed,” followed the LTCM playbook, except worse: Many used griftalicious decentralized finance for their borrowing, piling crypto leverage on top of crypto speculation.
Crypto Traders Turn Against Each Other in a Collapsing Market; With profits scarce, attacks on trading positions can pay off; One trader gets liquidated, another gets a liquidation fee
Olga Kharif – Bloomberg
With crypto prices tumbling precipitously, traders have begun increasingly turning against one another to eke out ever-elusive profits. Many shark traders scour blockchains — digital ledgers for recording transactions — seeking information on other traders, particularly those with highly leveraged positions, an anonymous user known as Omakase, a contributor to the Sushi decentralized exchange, said in an interview.
When Crypto’s Own Hedge Fund Geniuses Failed; A lot of smart investors seem to have forgotten that prices can go down — and keep going down.
Lionel Laurent – Bloomberg
Cryptocurrencies were supposed to teach traditional financiers a thing or two about how to avoid collapses and crises. Yet it feels like we’re simply repeating history. Specifically, the messy hedge-fund humiliation captured in “When Genius Failed.” After Terra and Luna’s $60 billion stablecoin collapse and the freeze of withdrawals at crypto-lending platform Celsius, trading firm Three Arrows Capital now appears to be in trouble. The fund is liquidating its holdings amid plummeting prices, and an ominous tweet from co-founder Zhu Su about “communicating with relevant parties” is stirring fears of something potentially more fatal.
Crypto and US Politics: Is Bipartisan Regulation Possible? A proposed crypto bill supported by a Democrat and a Republican would shake up the industry.
Victoria Vergolina – Bloomberg
In this episode, we’re taking another look at the US approach to regulating cryptocurrencies. There is a real drive on Capitol Hill to figure out how to define and regulate this asset class and protect consumers. The bipartisan duo of Democratic Senator Kirsten Gillibrand of New York and Republican Senator Cynthia Lummis of Wyoming are proposing sweeping legislation that tackles everything from who gets to regular crypto to Bitcoin mining. But can it pass? And how would it work? Bloomberg reporter Allyson Versprille tackles these questions.
Binance’s $200 Million Forbes Deal is ‘Changing,’ CEO Zhao Says; CEO Changpeng Zhao did not specify how Forbes terms may change; Zhao ‘still hoping’ that Musk proceeds with Twitter buyout
Emily Nicolle, Francine Lacqua and Tom Mackenzie – Bloomberg
Binance Holdings Ltd.’s agreement to invest $200 million in Forbes is “changing” after the publisher’s deal to go public via a so-called SPAC fell through, the crypto exchange’s Chief Executive Officer Changpeng ‘CZ’ Zhao said. In an interview with Bloomberg TV, Zhao reiterated that Binance still wants to make the investment, though he didn’t give any details on how the terms would change. “It’s changed a little bit, but I believe that’s still in discussions,” Zhao said, noting that Binance’s commitment to invest in Forbes was part of a broader strategy to invest in traditional media outlets.
Coinbase’s Chaotic Day of Job Cuts Follows Rapid Hiring Spree; The crypto exchange slashed 18% of its workforce Tuesday, cutting off access to laptops and email before some employees got the news.
Misyrlena Egkolfopoulou and Claire Ballentine – Bloomberg
Andrew Grass helped hire about 200 people at Coinbase Global Inc. earlier this year. Now most of those hires — and Grass himself — are gone. In a process that several former employees described as impersonal and shocking, the largest US digital-asset trading platform on Tuesday cut about 18% of its workforce, or roughly 1,100 jobs, citing the plunge in cryptocurrencies and worsening economic conditions. Chief Executive Officer Brian Armstrong revealed the news to affected employees through an email, but some said they didn’t receive it and found out about the layoffs via social media instead. Others said their first hint that something was wrong came when they were unable to log onto their work laptops.
Crypto hedge fund Three Arrows fails to meet lender margin calls; BlockFi was among a clutch of firms that liquidated the Singapore-based group’s positions
Kadhim Shubber and Joshua Oliver – FT
Three Arrows Capital failed to meet demands from lenders to stump up extra funds after its digital currency bets turned sour, tipping the prominent crypto hedge fund into a crisis that comes as a credit crunch grips the industry. The group’s failure to meet margin calls this past weekend makes Three Arrows the latest victim of an acute fall in the prices of many tokens such as bitcoin and ether that is rippling across the market. Singapore-based Three Arrows is among the biggest and most active players in the crypto industry with investments across lending and trading platforms.
Crypto’s turbulence teaches hard, but not new, lessons; Regulating stablecoins should be a first step to taming a borderless industry
The Editorial Board – FT
Fortune favours the brave, so one crypto exchange, crypto.com, exhorted in a commercial fronted by basketball’s LeBron James. It was part of a crypto advertising blitz during February’s Super Bowl, when the industry splashed out on celebrity-endorsed segments that would reach more than 200mn viewers. Crypto truly arrived in the mainstream. Four months later, so too have heavy losses, as the war in Ukraine, creeping inflation and general market jitters have tamed animal spirits. This week alone, a big crypto exchange, Binance, briefly halted bitcoin withdrawals, and Celsius, a lending platform, blocked redemptions. Meanwhile crypto.com, perhaps not feeling as brave as it did, announced job cuts, as did a listed rival, Coinbase. The value of bitcoin temporarily dipped below its “realised price” of $20,000 from its November high of $68,000 — meaning the average buyer has lost money.
Analysis-U.S. crypto-lending firms likely to see greater regulation after Celsius troubles
Hannah Lang and Katanga Johnson – Reuters
Liquidity troubles at crypto lending platform Celsius Network, which have left its 1.7 million customers unable to redeem their assets, will increase U.S. regulatory pressure on the sector, which was already on the defensive amid other crises this year. The industry has been battling scrutiny over concerns that digital assets are being used to evade sanctions on Russia and the May collapse of cryptocurrency TerraUSD, which sent the market plunging and raised systemic risk worries. New Jersey-based Celsius’s move this week to freeze withdrawals, citing “extreme” market conditions, has spotlighted other problems with the crypto sector: weak investor safeguards.
The Crisis at Celsius Is Rocking DeFi and Crypto; The company froze withdrawals in what looks like an effort to stop a virtual bank run. Now boosters are wondering where the bottom is.
Zeke Faux – Bloomberg
Celsius Network amassed more than $20 billion in assets with a pitch that seemed to defy the basic physics of finance. Deposit crypto coins and earn interest rates as high as 18%, tens or hundreds of times the rates on traditional savings accounts. “When you look at what the banks pay, you say to yourself, ‘Somebody is lying. Either the bank is lying or Celsius is lying,'” co-founder Alex Mashinsky said in an interview last year. More than a million people entrusted their savings to Celsius, according to the company. Even as skepticism mounted over whether its interest rates were sustainable, and customers started withdrawing hundreds of millions of dollars amid a deepening crypto rout, Mashinsky maintained that his company was safe. Then, on the night of June 12, Celsius announced it was halting withdrawals because of “extreme market conditions.” It was like a bank locking depositors out of its branches to preserve cash in the midst of a panic. “We are working with a singular focus: to protect and preserve assets to meet our obligations to customers,” Celsius said in a post on Medium.
Who’s Really Sending Aid to Ukraine?; The U.S. and frontline states are doing their part against Russian aggression. France? Non.
The Editorial Board – WSJ
On Thursday four European leaders visited Kyiv, met with Ukrainian President Volodymyr Zelensky, and hit the right notes in public remarks. Feel-good moments won’t reverse Russia’s recent battlefield gains, however, and Europe has fallen down on military assistance for Ukraine. No one expected much to come from the visit, but at least it didn’t appear to be harmful, as some in Kyiv had feared. The leaders of Germany, Romania, France and Italy announced that they support granting Ukraine European Union candidate status. French President Emmanuel Macron also said Paris will send six more Caesar self-propelled howitzers to add to the 12 already in Ukraine. That’s welcome news but still an underwhelming contribution from the EU’s leading military power.
Fortescue founder slams EU buyers of Russian gas; Businessman says western countries not moving to wind and solar fast enough
Neil Hume and Eva Szalay – FT
The founder of Fortescue Metals Group, one of the world’s biggest producers of iron ore, has accused western politicians of “propping up the Kremlin” by relying on natural gas imports from Russia instead of ramping up the production of alternative energy capabilities. Andrew Forrest said the only beneficiary from widespread energy price rises was the Russian government as he called out leaders in the west for not doing enough to move away from their reliance on gas imports from the country. “Natural gas is Putin’s power,” the billionaire businessman said in a speech at the FT Hydrogen Summit on Thursday. He said western countries should be looking to renewable sources of power like wind and solar energy to replace fossil fuels faster. His comments came on the same day that Russia placed sanctions on Forrest, banning him from entering the country.
Draghi Says Russia Only Offers ‘Lies’ to Explain Gas Cuts
Chiara Albanese – Bloomberg
Italian Prime Minister Mario Draghi said Russian statements that its gas cuts to Europe are due to technical reasons are lies, a view he said is shared by several partners including Germany. “We have been told the reason for gas cuts across Europe is technical, but both Germany, and us, and others, believe these are lies,” Draghi told reporters after he met Ukrainian President Volodymyr Zelenskiy during a visit to Kyiv with Germany’s Olaf Scholz and France’s Emmanuel Macron. “There is a political use of gas, as there is a political use of wheat,” Draghi said.
Russia is struggling to make $100 million in debt payments because of US sanctions, and Moscow may see its first default in a century
Phil Rosen – Business Insider
Roughly $100 million of coupon payments on Russian debt has not yet arrived in creditors’ accounts, Bloomberg reports, with a deadline approaching later this month that could trigger a default. Moscow aims to pay foreign creditors through unsanctioned banks, even after the US blocked bond payments last month. Finance Minister Anton Siluanov said at the St. Petersburg International Economic Forum that the Kremlin still intends to deliver dollar and euro payments to bondholders, though he did not elaborate on a timeline.
Dutch Spies Foil Russian Plot to Infiltrate War Crimes Court
Cagan Koc – Bloomberg
The Dutch secret service said it foiled an attempt by a Russian intelligence officer to infiltrate the International Criminal Court in The Hague posing as a Brazilian intern. The alleged spy tried to enter the Netherlands in April and was sent back to Brazil after being recognized as a danger to national security, the Dutch intelligence service, or the AIVD, said in a statement on Thursday. Covert access to the court’s building and systems would have been highly valuable to Russia because of the court’s investigations into the nation’s invasion of Ukraine, the AIVD said.
Russia says Europe faces $400 bln in costs in higher energy prices
Russia promised on Thursday to speed up talks about increased gas sales to China and warned that Europe would pay a hefty price for its oil embargo against Russia. Deputy Prime Minister Alexander Novak said Europe would pay an extra $400 billion in higher energy prices and could face a shortage of oil products. He did not give a time frame. Russia is heavily reliant on its multi-billion dollar energy exports for its financial health, while more than half the European Union’s gas imports come from Russia, leaving the bloc exposed to any supply disruptions.
Russian Cuts Force Europe to Use Gas It Was Saving for Winter; Reserves fell for first time since EU started active storing; Energy companies turn to inventories as Russia cut supplies
Elena Mazneva and Anna Shiryaevskaya – Bloomberg
Cuts in natural gas supplies from Russia are forcing European utilities to tap reserves normally used during the peak winter season. In one of the latest signs of how the region’s energy crisis is escalating, storage levels fell this week for the first time since mid-April, when traders typically start to top up facilities, data from Gas Infrastructure Europe show. That’s helping drive gas futures toward their biggest weekly gain since the Kremlin began its war on Ukraine.
More Than 100 EU Companies Still Operating in Russia, Study Says
Clara Hernanz Lizarraga – Bloomberg
More than 100 companies from European Union countries continue to operate in Russia nearly four months after the invasion of Ukraine sparked a range of international sanctions against Moscow, a study showed. The 116 EU companies make up nearly half of the 247 multinational firms still doing business in the country despite mounting public pressure to punish President Vladimir Putin’s regime for the attack, according to research at the Yale Chief Executive Leadership Institute led by Jeffrey Sonnenfeld.
Exchanges, OTC and Clearing
Stacey Cunningham Becomes Advisor to Uniswap Labs
Shanny Basar – Traders Magazine
Stacey Cunningham, former president and current board member of the New York Stock Exchange, has become an advisor to Uniswap Labs, the decentralized exchange which contributes to Uniswap, a protocol for trading and automated liquidity provision in cryptocurrency Ethereum.
CME Crypto Contracts Benefit from Volatility
CME Group’s monthly futures volumes across bitcoin and ether contracts saw a surge in volume in May, indicating a rise in speculative activity, according to digital asset data provider CryptoCompare.
Bitcoin futures contracts volume at CME was 250,650 contracts, the highest since February 2021 according to CryptoCompare’s May 2022 Exchange Review. The exchange’s ether futures also reached an all-time high volume with 136,165 contracts traded in May, up 63% from April.
EBS Market on CME Globex Notice
Topics in this issue include: Critical Information; Product Changes; Announcements and Additional Resources.
CME STP Notices: June 16, 2022
CME STP; CME STP FIX.
CME Globex Notices: June 13, 2022
Critical System Updates; Product Launches; Product Changes.
Reduction of Block Trade Minimum Threshold for Certain Equity Index Futures Contracts and Basis Trade at Index Close (BTIC) Transactions
Effective Sunday, July 17, 2022 for trade date Monday, July 18, 2022, and pending all relevant
regulatory review periods, Chicago Mercantile Exchange Inc. and The Board of Trade of the City of Chicago, Inc. (collectively, the “Exchanges”) will reduce the block trade minimum threshold for certain equity index futures contracts and Basis Trade at Index Close (“BTIC”) transactions as more specifically described in the table below.
Reminder to Complete HKIDR E2E Test by 15 July 2022
With reference to the Exchange circulars (Ref. No.: CT/030/22 and CT/046/22), all Relevant Regulated Intermediaries (RRIs)2 are reminded to participate in and complete the E2E Test for the HKIDR (including two new features of the Orion Central Gateway – Securities Market) by 15 July 2022. RRIs should refer to the published test packages and connectivity guide to complete the mandatory testing.
Suspension of CCASS Services on 2 July and 9 July 2022 (Saturdays)
To facilitate internal drill and upgrade activities, CCASS online services will be suspended on the following Saturdays:
ICE Midland WTI American Gulf Coast Futures See Record Volume
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that ICE Midland WTI American Gulf Coast futures (contract code: HOU) had a single day volume record on June 14 with 4,136 contracts traded.
Launch of Nikkei 225 micro Futures and Nikkei 225 mini Options
Osaka Exchange, Inc. (OSE) is glad to announce that in response to strong investor demand, it will be launching Nikkei 225 micro Futures and Nikkei 225 mini Options linked to the Nikkei Stock Average, which is calculated by Nikkei Inc. OSE is aiming to launch these contracts in the second quarter of 2023.
Partial Revision of Rules of Settlement by Delivery for Commodity Futures Transactions in Accordance with the Introduction of Invoice System to Japanese Consumption Tax
Osaka Exchange, Inc. (OSE) and Tokyo Commodity Exchange, Inc. (TOOCM) will revise the rules of settlement by delivery for commodity futures transactions in accordance with the introduction of invoice system to Japanese Consumption Tax on October 1, 2023.
Index Consultation Regarding Proposed Amendment to Policies Concerning Calculation of TSE Indices
On June 17, 2022, JPX Market Innovation & Research, Inc. made an announcement titled “Index Consultation Regarding Proposed Amendment to Policies Concerning Calculation of TSE Indices”. This matter is subject to the Index Consultation until July 17, 2022.
Regular constituents change in KRX Minimum Volatility Index
There will be regular constituents change in KRX Minimum Volatility Index, which are effective from June 24th, 2022.
Moscow Exchange launches options trading on real estate index and Chinese yuan
On June 20, 2022, trading on the derivatives market of the Moscow Exchange will begin trading in two new derivative instruments: options on the real estate index and the Chinese yuan-Russian ruble exchange rate.
Arca Options Deep Feed – Reminder
With the migration to NYSE Pillar beginning on July 11, 2022, the Arca Options Deep market data product will now be available for the full order book in each series on a real-time basis rather than at the first three price levels.
Circular on Releasing the Revised Copper Cathode Contract Specifications
The revised Copper Cathode Contract Specifications of the Shanghai Futures Exchange have been reviewed and adopted by the Board of Directors of Shanghai Futures Exchange (SHFE), and reported to the China Securities Regulatory Commission. These rules are hereby released and shall take effect from December 21, 2022. Standard warrants can only be issued according to the new delivery grade from December 21, 2022. The existing standard warrants of #1 Standard copper (Cu-CATH-2) must be cancelled and converted to physicals from June 19, 2023.
Thai Bourse Says Trading Tax Should Be Delayed to Support Market
Investors’ sentiment on Thailand’s stock market would weaken further if the government decides to impose an equity-trading tax this year. Higher trading costs will erode confidence in the domestic market, which has already been hurt by accelerating inflation and rising interest rates, the Stock Exchange of Thailand said in statement Wednesday. Companies will also face higher cost of capital from a new tax, affecting their ability to raise funds for expansion and investments.
Trading Technologies’ TT® Platform Wins Best Sell-Side Execution Management System (EMS) at TradingTech Insight USA Awards 2022
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, today announced that its TT platform won the award for Best Sell-Side Execution Management System (EMS) at the TradingTech Insight USA Awards 2022 last evening in New York.
TradingTech Insight is a publication of A-Team Group. A-Team editors worked closely with an Advisory Board to select the shortlist in each award category, and members of the capital markets community voted to determine the winners.
Facebook, Twitter Agree to New European Rules on Online Posts; EU’s new code of practice on disinformation aims to prevent advertising from appearing alongside posts deemed to be intentionally false or misleading
Kim Mackrael and Sam Schechner
Facebook owner Meta Platforms Inc., Twitter Inc. and other social-media platforms have agreed to abide by tougher European Union standards for policing online postings, offering a preview of the type of rules big tech companies will face under a coming digital-content law. The EU’s code of practice on disinformation, unveiled Thursday, replaces an earlier, voluntary set of guidelines for addressing online content that officials view as deliberately false or misleading. Officials said they intend to make portions of the new code obligatory for major platforms under the new law, the Digital Services Act. Under the new code—agreed to by an array of companies also including ByteDance Ltd.’s TikTok and Alphabet Inc.’s Google—social-media platforms will be expected to take steps to prevent advertising from appearing alongside what policy makers describe as intentionally false or misleading information. Platforms will also be expected to provide users with more tools for identifying such content online.
Slack’s Subtle Redesign Aims to Make Users Feel Less Overwhelmed
Jo Constantz – Bloomberg
The Slack sidebar is getting an update, but you’re forgiven if you haven’t noticed. Slack began rolling out the changes last Wednesday without fanfare, but it will take a few weeks to kick in for everyone. The new look is supposed to help users feel less overwhelmed, a frequent complaint heard by the ubiquitous workplace communications platform. Notification badges on the sidebar are now white instead of red, some extraneous icons are gone and there are more notification sounds to choose from. Overall, though, it doesn’t look much different.
China Accepts Ant’s Financial Holding Bid, Reuters Says
Lulu Yilun Chen – Bloomberg
China’s central bank has agreed to accept Ant Group Co.’s application to set up a financial holding company, Reuters reported, clearing a path for the fintech giant to potentially revive its listing plans following a lengthy regulatory overhaul. The People’s Bank of China’s acceptance signals that approvals are expected and Ant is poised to emerge from a regulatory crackdown, Reuters reported, citing people familiar with the matter.
Deutsche Bank installs app on bankers’ phones to track private messages; Movius software to monitor calls and texts following widespread regulatory probes of inappropriate contact
Owen Walker and Arash Massoudi and Stephen Morris – FT
Deutsche Bank has begun installing an application on bankers’ phones to track all their communications with clients amid regulatory probes into inappropriate messaging that have rattled the industry. The German lender has started requiring certain bankers to download Movius, a US mobile app that allows compliance staff to monitor calls, text messages and WhatsApp conversations, according to people with knowledge of the policy.
How should we police the trader bots? The complications of testing algorithmic trading strategies for extraordinary times.
Bryce Elder – FT
An interesting thing about flash crashes is that they should no longer happen. The rules to protect markets against algorithmically generated disorder are established, wide-ranging and highly demanding. Problem is, those rules don’t seem to be applied. Consequences can appear obvious, such as last month, when European markets sold off after a Citigroup trader in London reportedly added an extra zero to an order. Cross-market ripple effects that session strongly suggest that algos across multiple firms were failing to respond to thinner-than-usual volume and contributing to the turbulence. That in turn raises difficult questions around whether the same algos might be rocking the boat in less obviously stressed conditions.
Cybersecurity Alert – June 16, 2022
This email is to warn member firms of an ongoing phishing campaign that involves fraudulent emails purporting to be from FINRA and using either the domain name “@firms-finra.org” or “@firms-sipc.org”. Neither of these domains is connected to FINRA and firms should delete all emails originating from these domain names.
Microsoft (MSFT) to Acquire Cyber Security Start-Up Miburo
Zacks Equity Research
Microsoft MSFT recently announced plans to acquire Miburo, a cyber threat analysis and research start-up. Miburo specializes in the detection of and response to foreign information operations.
As part of the agreement, Microsoft will use Miburo’s cybersecurity tech to partner with other companies in the public and private sectors to find solutions that keep customers safe online.
Cybersecurity Disconnect Between Digitally Free and Unfree Countries Persists While Freedom on the Net Declines
Avast Software, Inc.
Avast Digital Wellbeing Report shows that people in countries with more digital freedom face fewer cybersecurity risks and stronger privacy regulations, yet transparency into privacy remains a problem worldwide
Avast (LSE: AVST), a global leader in digital security and privacy, released its first Digital Wellbeing Report today. The Covid-19 pandemic has had an unprecedented impact on the wellbeing of internet users across the world, with an unparalleled spread of misinformation, cybercriminals abusing unaware internet users with scams and cyber attacks, and several governments implementing authoritarian tactics.
The Top Five Mistakes Of Underperforming Cybersecurity Teams
Lyndon Brown – Forbes Councils Member
Lyndon is Chief Strategy Officer at Pondurance. He specializes in building high-growth enterprise SAAS companies.
Cyber breaches and the associated costs continue to soar. The damage from cybercrime was expected to exceed $6 trillion in 2021, according to Cybersecurity Ventures, with businesses bearing the brunt of the loss.
Despite rising security budgets, stopping cyberattacks still seems like a losing battle; it’s evident that organizations simply can’t spend their way out of trouble. They need to think less about purchasing every single security product and more about how to match their resources to actual threats. The key to combating cybercrime is working smarter, not harder.
Crypto lender Celsius hires lawyers to help it restructure its finances, after it froze withdrawals of customer deposits: report
Zahra Tayeb – Business Insider
Leading crypto lender Celsius Network has brought in lawyers to help it tackle a growing pile of financial problems, The Wall Street Journal reported Wednesday. Celsius froze all withdrawals, swaps and transfers between accounts on Monday, citing market volatility and extreme market conditions, after crypto markets tanked at the weekend. The company has now hired law firm Akin Gump Strauss Hauer & Feld to advise it as it looks into restructuring its finances and other strategic alternatives, the WSJ reported Wednesday, citing people familiar with the matter.
A major crypto hedge fund is wobbling as $10 billion Three Arrows Capital sees a spate of liquidations
Taylor Locke – Fortune
As the crypto winter intensified in early June, Galaxy Digital CEO Mike Novogratz said he thinks two-thirds of crypto hedge funds will go out of business. His prediction took days to start bearing out. After $400 million in liquidations, a major hedge fund in the space, Singapore-based Three Arrows Capital, or 3AC, is reportedly facing insolvency, and many dominos look likely to fall next. 3AC’s lenders continue to come forward as the fund, which managed $10 billion in assets in March, according to blockchain analytics firm Nansen, fails to meet margin calls and liquidates its cryptocurrency holdings, adding more downward pressure on the beleaguered market.
tZERO Announces Appointment of New Directors to Its Board; Edwin Marcial, Former Founding CTO of Intercontinental Exchange, and Michael Blaugrund, COO of New York Stock Exchange, Join tZERO’s Board of Directors
tZERO, a leader in financial innovation and liquidity for private companies, announced today the appointment of two new directors to its Board: Edwin Marcial, former Senior Vice President and founding Chief Technology Officer of Intercontinental Exchange (NYSE: ICE), and Michael Blaugrund, Chief Operating Officer of the New York Stock Exchange (NYSE). Blaugrund’s appointment is in conjunction with a significant minority investment by ICE and follows the appointment of David Goone as tZERO’s Chief Executive Officer. Marcial and Blaugrund have capital markets expertise complementary to tZERO’s Board of Directors, positioning the company for further growth and innovation in the blockchain marketplace. With these changes, tZERO’s Board is now composed of six directors, which includes others: Matt Mosman, Chairman of tZERO’s Board of Directors and General Partner at Pelion Venture Partners, David Goone, Chief Executive Officer at tZERO, Chris Campbell, Chief Strategist at Kroll, and John Jacobs, former Executive Vice President and Chief Marketing Officer of Nasdaq.
El Salvador’s Big Bitcoin Gamble Backfires to Deepen Debt Woes; Latest bout of crypto winter hits nation’s Bitcoin investment; Dollar bonds trade near all-time lows as losses fuel risks
Sydney Maki – Bloomberg
An epic rout that has wiped out about two-thirds of Bitcoin’s value is exacerbating the debt crisis in the world’s most crypto-friendly country. In the year since El Salvador approved Bitcoin as legal tender, the nation has lost almost $56 million by gambling on the digital asset, according to calculations by Bloomberg. That may not sound like much, but for a financially troubled country like El Salvador, every bit counts.
Israel and Hong Kong Team Up to Test Digital Currency Cyber Risk; Bank of Israel, Hong Kong Monetary Authority to work on trial; Currency to be distributed by an intermediary, tested for risk
Daniel Avis – Bloomberg
The Bank of Israel is working with the Hong Kong Monetary Authority on a trial which will test a new digital currency, including against cyber security risks, the Bank of Israel said. The joint project, which will start in the third quarter, will use a two-tier central bank digital currency (CBDC), it said in a statement. It will be issued by the central bank and then distributed by financial intermediaries like banks. In fits and starts, Israel is coming around to explore the idea of a CBDC after shelving its initial effort in 2018, when a team set up by the central bank recommended against issuing a digital version of the shekel.
Token at the Center of Crypto Storm Becomes Arbitrage Target; Ethereum bulls see discounted stETH as an arbitrage trade; But risks like potential ‘liquidation cascades’ still remain
Muyao Shen – Bloomberg
An arbitrage opportunity appears to be emerging already from the latest crypto meltdown, with traders pointing to the price disparity between Ether and a version of the second-largest digital-asset that has been at the center of the recent turmoil. The token, stETH, represents staked Ether on the Ethereum blockchain and counts troubled crypto lender Celsius and hedge fund Three Arrows Capital as major holders. Since its launch by decentralized app Lido Finance in late 2020, stETH has become one of the most popular collateral assets for lending and borrowing in DeFi. But the recent market illiquidity and stETH’s worsening discount to Ether’s price has now made it the focal point of critical market chatter.
Crypto Debt Can Be Trouble; Also banker chats, pre-MBA hiring and bond market liquidity.
Matt Levine – Bloomberg
One thing that has happened is that the prices of risky cryptocurrencies have gone down. Bitcoin traded above $40,000 two months ago; today it got close to $20,000. Ethereum went from $3,000ish to $1,100ish. The total market capitalization of all cryptocurrencies, “which topped $3 trillion in November, dropped below $1 trillion.” In the abstract, this is just fine. Extremely speculative people had extremely speculative positions in extremely speculative assets, and the prices went up a lot, and then they went down a lot. Some gamblers made some money and then they lost some money; that’s how gambling works. People who put their life savings into Bitcoin should be told, very firmly, that they should not have done that; that was wrong, and now they know. Also though they still have like half of their life savings. If you put your life savings in the S&P 500 you haven’t had a great year either.
I went to a physical NFT gallery where digital art was displayed on TV screens. It felt completely pointless.
Katie Canales – Business Insider
Consensus 2022 in Austin, Texas, was a mega-gathering of crypto disciples, lawmakers, and high-brow executives. t offered many a spectacle for attendees, like a dogecoin-covered Mclaren, a pull-up “HODL” bar — and a real-life art gallery for NFTs. In the exhibit, I saw pictures of cars, trippy cartoon portraits, manipulated images of sweeping city landscapes, and dystopian-looking scenes, to describe a few.
BlockFi Seeks to Quell Fear Amid Fallout from Crypto Hedge Fund Three Arrows; Lending platform confirms a client failed to meet margin call; Collateral-damage concern chills crypto market amid downturn
Yueqi Yang and Hannah Miller – Bloomberg
Crypto lending platform BlockFi Inc. said it continues normal operations and no client funds are impacted, in an apparent move to allay concerns over contagion risks from the suspected troubles at crypto hedge fund Three Arrows Capital LLC.
Your 401(k) Is Sagging. Bitcoin Won’t Fix It; Crypto fans want to unleash a giant pile of retirement money on the assets, but it is an awful idea.
Spencer Jakab – WSJ
Janet Yellen isn’t a HODLer. You probably shouldn’t be one either. The Treasury Secretary said last week that it would be reasonable for Congress to regulate whether cryptocurrency belongs in retirement accounts. At the moment, digital assets fall into a legal gray area when it comes to pensions.
Huobi Global Launches Vietnam-Exclusive NFT Collection to Spur Local Blockchain Industry
Huobi Mascot NFT Series is Huobi’s first country-specific NFT series and can be purchased using VND.
Huobi Global, the world’s leading crypto exchange, today announced that Huobi Global will be launching the Galaxy – Huobi Mascot NFT Series (Galaxy) for users in Vietnam. Galaxy, which showcases Huobi’s unicorn mascot, will be Huobi’s first country-specific NFT digital collection.
Ukraine Wins Initial EU Recommendation for Membership Path; EU commission also backs candiacy status for Moldova; EU imposes conditions on countries for lengthy process ahead
Alberto Nardelli and Jorge Valero – Bloomberg
The European Commission recommended that Ukraine be granted candidate status in a symbolic step on the long path to become members of the European Union, commission President Ursula von der Leyen said Friday.
Germany spars with ECB over bond market risks; Bank’s talk of fragmentation threatens to dent confidence, Lindner tells Lagarde
Sam Fleming and Martin Arnold – FT
Germany’s finance minister has challenged the European Central Bank over the spectre of bond market fragmentation in the eurozone, saying he did not see particular hazards in current market conditions. Christian Lindner told the ECB’s president in a closed-door session that he was not worried by recent moves in spreads between bond yields in the euro area, and that talking about fragmentation in the bloc’s financial markets could damage confidence, according to people familiar with the discussion. His words came after the ECB held an emergency meeting on Wednesday in which its governing council pledged to accelerate plans to create a “new anti-fragmentation instrument” — a reference to the widening gap in the cost of borrowing between more stable sovereigns such as Germany and more vulnerable member states such as Italy.
Canadian securities regulators release report on 2016-2019 Achievements and 2019-2022 Business Plan
The Canadian Securities Administrators (CSA) today released two publications: the CSA Business Plan 2016-2019 Achievement Highlights and the CSA Business Plan 2019-2022. Both documents demonstrate the CSA’s commitment to investor protection, fostering fair and efficient capital markets, reducing risks to market integrity, streamlining regulation and effective enforcement. The CSA Business Plan 2019-2022 sets out the priorities of its members over the course of the next three-year period. This new plan re-affirms the CSA’s commitment to responsive and harmonized regulation at the national level and alignment with international standards, where appropriate. The CSA members have highlighted forty initiatives that continue to address industry participants’ needs and promote market integrity and investor confidence in Canada’s capital markets.
Sweden’s Riksbank Gets New Governor From Financial Watchdog; Some analysts see Erik Thedeen as more hawkish than incumbent; Stefan Ingves to leave at end-2022 after 17 years as governor
Niclas Rolander – Bloomberg
The head of Sweden’s financial watchdog, Erik Thedeen, will become the new governor of Riksbank after Stefan Ingves ends his 17-year stint steering monetary policy in the biggest Nordic economy. Thedeen, head of the Swedish Financial Supervisory Authority since 2015, has been appointed for a term of office of six years, according to a statement on Friday. He will take office on Jan. 1 and set monetary policy for the first time in the February 2023 meeting.
SEC Charges Firm and Five Brokers with Violations of Reg BI; Brokerage firm sold $13.3 million worth of high-risk bonds to retirees and other retail investors
The Securities and Exchange Commission today charged registered broker-dealer Western International Securities, Inc. and five of its registered representatives, or brokers – Nancy Cole, Patrick Egan, Andy Gitipityapon, Steven Graham, and Thomas Swan – with violating Best Interest Obligation regulations (commonly referred to as Regulation Best Interest or Reg BI) when they recommended and sold an unrated, high-risk debt security known as L Bonds to retirees and other retail investors. From July 2020 through April 2021, Western sold an aggregate of $13.3 million of L Bonds.
Statement on Senate Confirmation of Jaime Lizárraga and Mark Uyeda
We congratulate Jaime Lizárraga and Mark Uyeda on their successful Senate confirmations to serve as Commissioners. On behalf of the entire agency, we would like to welcome them both back to the Securities and Exchange Commission. We look forward to their many contributions to the agency and our work on behalf of the American public.
SEC Charges Former Texas City Official for Falsifying City’s Financial Documents
The Securities and Exchange Commission charged former City of Johnson City, Texas chief administrative officer and city secretary, Anthony Michael Holland, with securities fraud for creating and causing to be distributed falsified financial statements and a falsified audit report for the city’s 2016 fiscal year.
ASIC reduces administrative burden for authorised representatives appointing claims handling staff
ASIC has issued relief to reduce the administrative burden on general insurance industry participants of notifying ASIC of large numbers of employees who provide claims handling and settling services on their behalf. ASIC has made a legislative instrument, ASIC Corporations (Notification of Authorised Representatives) Instrument 2022/301, which exempts Authorised Representatives from the requirement to notify ASIC of the sub-authorisation of employees who provide a claims handling and settling service on their behalf. Authorised Representatives are persons (including companies) authorised to provide a financial service on behalf of an Australian Financial Services (AFS) licensee.
Reflections from the ASIC Chair; Speech by Chair Joseph Longo at the Law Council of Australia Business Law Section Corporations Workshop, 4 June 2022.
Good morning everyone. I would like to begin by acknowledging the Traditional Owners and Custodians of the lands on which we meet today, and to pay my respects to their Elders past, present and emerging. I extend that respect to Aboriginal and Torres Strait Islander people present today. Thank you to the Law Council Business Law Section Corporations Committee for giving me the opportunity to speak to you today. I have been a regular participant in these annual Corporations workshops, and in my experience they are always enjoyable and stimulating.
FCA’s work on market abuse and manipulation – update 17 June 2022
People seeking to abuse the insider knowledge they have to make a quick buck place their fingers on the scales. As well as disadvantaging those who play by the rules, they undermine confidence in markets that are vital for companies seeking capital and investors building their savings. It is natural and legitimate therefore that people have questions for us as the markets regulator about what we’re doing to prevent and tackle such market abuse.
Overview of major banks’ financial results as of March 31, 2022
Following the announcements by major banks, etc. of their financial results as of March 31, 2022, the FSA has compiled the figures, etc. announced by these banks.
Joint Exercise by MAS, BdF and ACPR to Strengthen Cross-border Cyber Crisis Response and Preparedness
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS), the Banque de France (BdF) and the Autorité de contrôle prudentiel et de résolution (ACPR) yesterday carried out a joint crisis management exercise focused on cybersecurity threats. The exercise follows from the Memorandum of Understanding on Cooperation in Cybersecurity signed between MAS, BdF and ACPR in November 2019.
Investing and Trading
The Fed Pricked the Everything Bubble; It is hard for investors to escape. But not every investment is equally exposed to the Fed.
James Mackintosh – WSJ
Some investors pray to their god for financial success. For the rest of us, there’s the Federal Reserve. After more than a decade in which the Fed giveth, it hath taken away. The markets quite rightly fear that Jerome Powell is in a smiting mood. Monday brought the definitive evidence that the “Everything Bubble” is deflating, although it is better understood as the expected result of cheap money and low inflation rather than a true bubble. The S&P 500 finally closed more than 20% below its January high, the standard definition of a bear market, although on an intraday basis it was briefly there in May.
Stock Traders Coming to Grips With a Fed as Baffled as They Are; Decade of allocation decisions being easy is over: Gokhman; Tough to admit, but Fed doesn’t have crystal ball: Amoroso
Vildana Hajric – Bloomberg
Fifty or 75? Headline or core? Prices at the pump and in the basket, or expectations for what they’ll one day be? Traders looking to bet on the path of Federal Reserve policy and its impact on the economy griped about being flummoxed after Chair Jerome Powell’s press conference Wednesday. With precious little to base an investment case on, it took them less than a day to decide to sell everything. There was a time when investors could be relatively certain about where the central bank was headed, even in times of stress. Now, with inflation out of control and odds of a recession rising fast, figuring out what will happen next is proving impossible.
Bond Traders Are Declaring the Death of Forward Guidance
Tracy Alloway, Michael Mackenzie, and Liz McCormick – Bloomberg
Thursday’s selloff in bond markets may be just a taste of what’s to come. Bond yields are jumping again after the Federal Reserve hiked benchmark interest rates by 75 basis points — the biggest increase since 1994 — as it attempts to tamp down inflation that still sits at its highest level in four decades. The move came after Fed Chair Jerome Powell had effectively ruled out the possibility of a 75 basis point increase at the central bank’s meeting just last month.
Swiss Franc Stages Biggest Rally in Years on SNB Rate Hike; Euro-Swiss franc pair sees biggest drop since Brexit vote; SNB vows to intervene if currency rises too much or weakens
Libby Cherry and Greg Ritchie – Bloomberg
The Swiss franc staged its biggest rally in years against the euro and the US dollar after the Swiss National Bank unexpectedly hiked rates by 50 basis points. The euro dropped by the most against the franc since the outcome of the Brexit referendum in June 2016, sinking to as low as 1.0131 francs. The currency also strengthened almost 3% against the US dollar, the biggest advance in almost seven years. The rally continued even after the SNB vowed to intervene if the currency gained excessively, though it will also take action if it weakens.
Private Markets Will Pump the Oil; Also FX markets, oracle update latency, index-provider regulation and a gas station fat finger.
Matt Levine – Bloomberg
Let’s say that you are a giant universal investor and you own 10% of every company in the world. The chief executive officer of one of your portfolio companies, a US oil and gas exploration and production business, calls you up and says “hey, oil prices are really high, I want to drill a bunch of wells and ramp up production to sell lots of oil at $120 a barrel, whaddaya think?” What do you think?
‘The opposite of policy coordination’: Swiss National Bank and Bank of England lift interest rates following Fed hikes
Steve Goldstein – MarketWatch
The difficulty in keeping up with the Federal Reserve’s interest rate hike plan was seen on Thursday as the Swiss National Bank made a surprise half-percentage point rate hike, and the U.K. central bank moved rates to the highest level in 13 years. The Swiss National Bank took observers by surprise with a half-point increase, to -0.25%, which was its first increase in 15 years. “What we are seeing is the opposite of policy coordination,” said analysts at Evercore ISI. “Under the old currency wars central banks tried to avoid deflation and prop up growth by preventing their currencies from appreciating against their peers. Under the new reverse currency wars central banks are trying to dampen imported inflation by preventing their currencies from depreciating in particular against the mighty dollar.”
Glencore Trading Profit Is on Course to Smash Through Record; Company says first-half trading profit will top $3.2 billion; Glencore says coal costs have risen along with prices
Thomas Biesheuvel – Bloomberg
Glencore Plc’s first half-profit from trading commodities will be bigger than it typically reports for an entire year, putting the resources giant on course for a record 2022 as it cashes in on soaring prices and volatility.
Glencore Made More Money Trading Commodities in Six Months Than It Expected All Year; London-listed trader cites unprecedented volatility in markets, follows rival Trafigura in reporting blockbuster results
Alistair MacDonald – WSJ
Commodities giant Glencore GLNCY -4.52%? PLC said Friday it made more money trading oil, metals and other commodities in six months than it had expected to make all year, citing unprecedented volatility in markets in the wake of the global recovery from the pandemic and the invasion of Ukraine.
Time to cut your stock market losses — or not? Bear market history suggests staying invested beats cashing out
Merryn Somerset Webb – FT
Trigger warning: if you are a crypto fanatic you may find this column both offensive and distressing. Right, that bit out of the way, it is not crypto I want to start with. It is other, lesser, chaos. If you spent the past few weeks attempting to navigate stock markets — or attempting to ignore them — you might have the feeling that everything is unmapped, unprecedented and unpredictable.
Father’s Day advice for new investors; As markets turn bearish, will young investors run screaming into the woods?
Claer Barrett – FT
It is Father’s Day this Sunday and judging by the rather lame selection of cards, dads are mostly good at DIY, football, golf and fishing, not to mention drinking beer. So far, so stereotypical. But what about your dad’s investing skills?
Environmental, Social and Corporate Governance
AAB Wealth advises that the investment future is female; Richard Johnston says we should mind the ‘gender investment gap’ when it comes to women trading stocks and shares
Richard Johnston – AAB Wealth
Finance and investing still has something of an image problem. All too often, it’s seen as being largely for those who are “male, pale and stale”. Women make up a much smaller proportion of investors, and there’s concern for those who have fallen into the “gender investment gap”. Women aged between 21 and 53 are thought to have half the amount set aside for funding investment than men in the same age group, for example. However, change is coming. Research has shown that since the pandemic, women are changing their approach to investing. They’re also getting wealthier – women are expected to control 60 per cent of the UK’s wealth by 2025. This makes it more important than ever to pay attention to this under-served group of investors.
The Investors Putting Billions Into Climate Tech Don’t Plan to Stop Now; Green startups have seen funding collapse in previous market downturns. This time will be different, according to investors, thanks to savvier companies and a broader set of backers.
Mark Bergen – Bloomberg
Bill Gates is worried about a dark period ahead for the global economy. “We’re going to go through a winter period for a number of years,” he warned a room full of go-getting green entrepreneurs last week, lamenting at a TechCrunch event that their success had come up against bad timing.
Oil Producers Are Planning the World’s Biggest Floating Wind Farm
A group of oil and gas firms are looking at building a giant floating wind f; rm off Norway to power their fossil-fuel operations.
Will Mathis – Bloomberg
A group of oil and gas producers including Equinor ASA, Shell Plc and TotalEnergies SE are considering building what would be the world’s largest floating wind farm off Norway to power their fossil-fuel activities. The companies are looking at options to build a 1-gigawatt wind farm to power operations in the Troll and Oseberg oil and gas fields, they said Friday. It’s an example of the complex road to cutting global carbon emissions, where deep-pocketed fossil-fuel firms with strong engineering expertise could play a key role in renewables growth even as they continue their polluting businesses.
ESG Investment Cools as the Sector’s Notoriety Grows
A spike in public criticism of ESG, by Elon Musk and others, may be leading institutional investors to reconsider their allocations.
Nathaniel Bullard – Bloomberg
Since the start of 2019, investors have plowed more than $300 billion into environmental, social and governance (ESG)-themed exchange traded funds. Monthly investment has ebbed and flowed, but the annual trend has been on a consistent upward trajectory: $30 billion in 2019, $94 billion in 2020, and $159 billion in 2021.
The Relationship Between ESG and Fraud
From challenges in navigating ESG transition risk to avoiding fraudulent funds, innovation brings us closer to having hope on the horizon.
On the surface, ESG reporting is a perplexing process with some self-reporting shenanigans going on. Even more troubling, actual criminal, fraudulent funds have come to light. The regulatory road has taken a few turns in the right direction in terms of enforcement, and there are positive signs coming from the oversight function. Most importantly, there is hope on the horizon with help from new advances in ESG related innovation.
Passive ESG Investing Could Exacerbate Market Volatility
ETF Contributor – Nasdaq
The rise of environmental, social, and governance (ESG) investing over the last few years also saw the rise of another trend: passive investing. According to an academic study, however, the combination of both could be dropping buckets of volatility into the capital markets.
Beleaguered Credit Suisse to pay almost 10% rate on bonds; Investors demand high interest from the struggling bank as it raises more than $1.5bn
Nikou Asgari – FT
Credit Suisse is set to pay nearly double-digit interest rates for its latest bond offering as investors demand high compensation from the crisis-ridden bank. The Swiss lender is due to pay 9.75 per cent in interest on its new debt that is being sold late on Thursday, according to people familiar with the matter. The bank will raise at least $1.5bn and its bond offering comes amid a sell-off in financial markets as major central banks raise interest rates in an effort to tame spiralling inflation. “It’s the first time in ages that we’ve seen a coupon that’s almost double digits,” said a bond investor. “We’d forgotten what double digit looks like but this one is really near.”
Citi’s $900 Million Revlon Gaffe Risks Getting Even More Painful
Jeremy Hill and Eliza Ronalds-Hannon – Bloomberg
It took less than a day for Citigroup Inc.’s now-infamous payment error to Revlon Inc. lenders to come up in the cosmetics giant’s bankruptcy. The bank’s two-year-old blunder — in which it wired the balance of a $900 million loan rather than just the interest, and then failed to get most of it back when investors claimed Revlon was in default and should have repaid them anyway — will likely impede the company’s restructuring plans, court papers show. The problem: it’s not clear who, if anyone, has the rights to the repayment of the remaining $500 million of loan principal caught up in an ongoing court battle over the accidental transfer.
Fighting the current: Young Americans reject the banks they’re born into
Serah Louis – MoneyWise
There was a time when customers relied on one bank for all their needs, and each generation remained loyal to the institution their parents used. Those days are rapidly coming to an end. A recent report from the Bank Administration Institute (BAI) found that less than half of Gen Z and millennials used the same financial institution as their parents in 2021. That’s a significant drop compared to 61% of Gen Z and 54% of millennials in 2020. With younger customers fully aware of their wealth of options — and valuing very different things than their parents — big banks will need to catch up to remain relevant.
ADMISI Personnel Announcement
ADM (NYSE: ADM) today announced that Stuart Jackson has been named managing director for ADM Investor Services International Limited (ADMISI). He succeeds Fabian Somerville-Cotton who sadly passed away last month. Jackson has served as the finance director for ADMISI for the past five years.
Santander names Héctor Grisi as new chief executive; Head of Spanish bank’s North American and Mexico business to replace longtime head José Antonio Álvarez
Stephen Morris – FT
Santander has named Héctor Grisi its next chief executive, promoting one of its top regional executives to work alongside executive chair Ana Botín and drawing a line under the failed appointment of Andrea Orcel more than three years ago.
Andy Bell to step down from his investment platform after 27 years; Longtime chief financial officer Michael Summersgill will replace founder at helm of AJ Bell
Joshua Oliver – FT
Andy Bell, the entrepreneur who built the online stock brokerage firm he founded into one of the UK’s largest investment platforms, will step down as chief executive later this year. AJ Bell on Thursday announced Bell would step back from running the company in October and be replaced by deputy chief executive Michael Summersgill.
Long COVID Could Be a ‘Mass Deterioration Event’; A tidal wave of chronic illness could leave millions of people incrementally worse off.
Benjamin Mazer – The Atlantic
In late summer 2021, during the Delta wave of the coronavirus pandemic, the American Academy of Physical Medicine and Rehabilitation issued a disturbing wake-up call: According to its calculations, more than 11 million Americans were already experiencing long COVID. The academy’s dashboard has been updated daily ever since, and now pegs that number at 25 million. Even this may be a major undercount. The dashboard calculation assumes that 30 percent of COVID patients will develop lasting symptoms, then applies that rate to the 85 million confirmed cases on the books. Many infections are not reported, though, and blood antibody tests suggest that 187 million Americans had gotten the virus by February 2022. (Many more have been infected since.) If the same proportion of chronic illness holds, the country should now have at least 56 million long-COVID patients. That’s one for every six Americans.
Hong Kong Bars and Drinkers Find Ways Around New Covid Test Rule; Rule easy to circumvent and won’t stop spread, say bar goers; New infections have risen nearly four-fold to over 1,000 a day
Linda Lew and Shirley Zhao – Bloomberg
It was quieter than normal in Hong Kong’s Lan Kwai Fong — the nightlife hub in the heart of the city’s Central district — on the first day of a new Covid-19 rule that requires bar, pub and club patrons to show a negative test result to gain entry. But the bars and their patrons displayed nifty gamesmanship around the government’s latest pandemic move.
Global Energy Crunch is Making Gas Too Pricey for Asia; Asian LNG prices are up nearly 70% this week on supply crunch; The region’s buyers are rethinking LNG procurement plans
Stephen Stapczynski – Bloomberg
A breakneck rally in Asian natural gas spot prices is forcing some importers to halt plans to buy additional shipments of the power plant fuel. North Asia spot liquefied natural gas prices are surging toward $40 per million British thermal units, the highest in over three months, on fears of a global supply squeeze, according to traders with knowledge of the matter. The benchmark is up nearly 70% so far this week and is at a seasonal high.
Australia invokes emergency powers to block coal exports in energy crisis; Authorities permitted to keep supplies, if needed, after consumers told to turn off the lights
Nic Fildes – FT
Australian authorities have given themselves the power to block coal exports if the resource is needed to ease the country’s crippling power crisis in the latest measure taken to avert the risk of blackouts. Rising coal and gas prices, coupled with outages at ageing coal-fired power stations, have plunged the market into turmoil this week, forcing the Australian Energy Market Operator to take control of the wholesale market to ensure reliable supply of electricity to eastern states.
CDC Advisers to Review Covid-19 Vaccines for Young Children; Two-day discussions mark step toward making Pfizer and Moderna shots available to one of last groups lacking access
Liz Essley Whyte – WSJ
Vaccine advisers to the Centers for Disease Control and Prevention are set to decide whether to recommend Covid-19 shots for children as young as 6 months. The meeting, which begins Friday, is one of the final steps before the shots can be made available to the nearly 20 million children from 6 months to under 5 years of age, one of the last groups in the U.S. without access to the vaccines.
Russia’s investment showcase becomes morale-boosting exercise; This year’s St Petersburg forum is low key as Ukraine war tensions keep western delegates away
Max Seddon and Nastassia Astrasheuskaya – FT
Russia’s annual investment conference in St Petersburg was created by president Vladimir Putin to showcase the country’s businesses and lure global investors to Russia. But with Russia mired in an economic crisis sparked by western sanctions, this year’s forum looks more like a morale-boosting exercise.
BuzzFeed Taps Karolina Waclawiak as Editor in Chief of News Division; Waclawiak, a six-year BuzzFeed veteran, has served as the site’s top culture editor
Alexandra Bruell – WSJ
BuzzFeed Inc. appointed its top culture editor, Karolina Waclawiak, as editor in chief of its newsroom, tapping a veteran insider to lead a division that has been dealing with changes in leadership and strategy. The appointment of Ms. Waclawiak, who has been with BuzzFeed for six years, was announced in a staff memo Thursday afternoon. She will start on July 1, a spokesman said. Ms. Waclawiak will take over a newsroom that cut its teeth on big investigative swings—including a Pulitzer Prize-winning series of articles about China’s infrastructure for detaining Muslims in its Xinjiang region—but has been shrinking of late as the now-public BuzzFeed is looking to boost profitability.
Wedding Guests Are Broke, Tired and Begging for Mercy; This year could approach a record for the number of marriages being celebrated; ‘Everyone and their mom in my life is getting married’
Jacob Passy – WSJ
For Mackenzie Crocker, chats with friends and colleagues often turn to weddings. But Ms. Crocker has an unusually full bouquet of tidbits to add to the conversation. She expects to attend 18 wedding celebrations this year. “Everyone and their mom in my life is getting married,” says Ms. Crocker, a 25-year-old from Conway, Ark. “It’s become a part of my personality at this point.” The summer wedding season is upon us, and this time it’s coming down with the force of two tons of rice. Between nuptials delayed by the pandemic and those for recently engaged couples, this year could approach a record set in the 1980s for the number of marriages being celebrated. Ms. Crocker estimates more than half of her weekends over the past year featured a wedding, bridal shower or bachelorette party.
To Fill the Job Gap, Rehiring Older Could Be Wiser; Going back to work after retiring is hard, but there is plenty the federal government could do to combat age discrimination and improve training.
Teresa Ghilarducci – Bloomberg
To solve the labor shortage, all eyes are turning to the more than 1.3 million older workers who were pushed out or voluntarily left the labor force during the pandemic. But don’t hold your breath waiting for all of them to come back now. Sure, some older workers are returning, but they’re outliers. Displaced older workers face huge challenges returning to the labor force and won’t return en masse until the federal government takes significant steps to end age discrimination and assist with health-care costs.
Without Commuters, US Transit Agencies Are Running Out of Options; Agencies reliant on fares for funding look to promotions to lure people back. But longer term, they’re staring down service cuts and price hikes.
Skylar Woodhouse – Bloomberg
Public transit agencies are struggling to come to grips with the possibility that daily commuters may never come back. Authorities across the country are leaning on promotions and price cuts in an attempt to recover lost ridership with the rise of remote work during the pandemic. But long term, budgets may need to be adjusted to account for fewer ticket sales — a tough reality for systems already struggling to fund improvements and general upkeep. “A lot of agencies are going to hit the fiscal cliff either next year or the year after, and it’s not going to be pretty,” said Jim Aloisi, a professor in transportation policy and planning at Massachusetts Institute of Technology. “The problem is structural and it has to do with how agencies have relied too heavily on fare revenue.”
The high price society pays for social media; Does social media cause depression and anxiety?
Tim Harford – FT
Sitting exams is unpleasant at the best of times, but my daughter believes she has extra cause to complain. Two of her A-level papers are scheduled for the same time, so she must take a break between them with only an invigilator for company. “I can’t even have my phone,” she protests.