Hits & Takes
John Lothian & JLN Staff
It was a busy day for FTX’s Sam Bankman-Fried. He is featured in several stories, including the lead story about his testimony before Congress on behalf of his clearing structure proposal before the CFTC, which the CME Group and others on Wall Street oppose. Bankman-Fried also bought a 7.6% stake in Robinhood, which caused the price of the shares in the brokerage app company to soar as much as 43%. He needed the bump, though, as another story claimed Bankman-Fried had “lost half his net worth in 2022” and was down to $11.3 billion, according to the Bloomberg’s Billionaires Index.
While the drama was Bankman-Fried versus Terry Duffy, FIA’s Walt Lukken was also there sharing his thoughts on the matter on behalf of the FIA and its members. This balancing act of Lukken’s, representing his Wall Street members, and associate members like the CME Group, comes after an all-crypto, all the time FIA Boca conference where Terry Duffy skipped out on participating in the exchange leaders panel. FIA’s MarketVoice covered the panel with a story titled “US Congress questions industry on merits and risks of FTX’s non-intermediated model; FIA’s Lukken testified before House Ag Committee.”
Don’t count on the Elon Musk Twitter deal getting done. He said the deal was on hold in a tweet, but later he said he is still committed to it. I still believe Mr. Market will not let this deal occur and Musk will pull out before the price of Tesla shares collapses completely. They are clearly the pressure point for him.
Lionel Laurent of Bloomberg gets credit for the story with the headline of the day with the title
“Crypto’s Chainsaw Massacre Bloodies Digital Exchanges.” The subheadline, right to the point, says “The platforms that have promoted Bitcoin and other new currencies have a lot to answer for.”
A strong second for the headline of the day also comes from Bloomberg with this story from Misyrlena Egkolfopoulou titled “How a Cryptocurrency Trader Turned $10,000 Into $200 in Just Days”, with the subheadline “The collapse of Terra and Luna are part of broader market turbulence that has rattled the crypto world, even as some holders of the coins shrug at steep losses.”
One of our interviews at OIC 2022 was with Kevin “Lex” Luthringshausen of Tradier. Tradier has the episode 35 of its OptionsBrewTV out titled “Social.Trade Startup Spotlight.” In this episode, Lex interviews Joe Masson of Social.Trade, a platform where you can find your favorite traders and follow their stock and options trades.
At OIC we asked Kevin about why he is called Lex. It was the trading badge acronym he chose and his friends recommended when the movie Superman was popular. The badge nickname stuck and even his wife calls him Lex. Lex also shot a Trader’s Workshop interview from OIC yesterday.
The Trade’s Managing Editor Laurie McAughtry and Senior Reporter Annabel Smith sat down together after a busy day two of TradeTech for a video to discuss some of the notable issues and key themes.
The OCC is looking for help in its human resources department. Here is the job listing for a Senior Associate.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
TabbFORUM on May 9 introduced the TabbFORUM 40 Top Innovators in Financial Markets, “leaders who possess that special blend of vision, strategy and execution.” The list includes Richard Sandor, Chris Giancarlo, Terry Duffy, the DTCC’s Michael Bodson, Hester Peirce, Adena Friedman, and many more. The word is there will be an awards ceremony in early June. You can find the announcement and list of names here.~SR
CEO Loh Boon Chye on SGX’s investment in TT, links with Shenzhen and CME, and its ETF and FX business
Loh Boon Chye, the CEO of the Singapore Exchange (SGX), sat down with John Lothian News at FIA Boca 2022 to talk about SGX’s moves in the ESG space, its investment in Trading Technologies, its links with the Shenzhen Stock Exchange and the CME, and its growing ETF and FX business.
FIA’s International Derivatives Expo is returning to The Brewery in London this coming 6-8 June. Standing still is not an option in today’s evolving cleared derivatives environment. Without adapting to new products, processes, technologies and regulations, your business won’t meet the needs of tomorrow’s industry. We’re bringing together industry leaders, vendors and policymakers to discuss what’s “now” in derivatives, and what lies ahead. Sign up here.
A collapse of Tether could be crypto’s ‘Lehman Brothers moment’ as the world’s top stablecoin begins to wobble and major tokens plummet, analyst says
Matthew Fox – Business Insider
Crypto markets are getting roiled this week following the collapse of Luna and its related stablecoin, Terra, which deviated by more than 50% from its $1 peg this week. The implosion of Terra has spread to other stablecoins in recent days, including Tether, which is the largest stablecoin based on its $81 billion market capitalization. Investors have long questioned what reserves Tether has to back up its $1 peg, and the stablecoin traded off as much as 5% to $0.95 early Thursday. The destabilization of various stablecoins could represent crypto’s “Lehman Brothers moment” as investors begin to worry about the systemic risk ingrained in cryptocurrency markets.
***** Tether falling below $1 just has too many bad metaphors.~JJL
Wall Street brokers question FTX futures trading plan; Cryptocurrency exchange would replace intermediaries with automated risk management
Gary Silverman – FT
A trade group representing some of Wall Street’s biggest brokers has warned US regulators that a proposal by cryptocurrency exchange FTX to automate risk management in the leveraged futures market lacks sufficient detail to be approved in its current form and could prove disruptive. The FTX plan has created a sensation in the financial world, raising the prospect that trading approaches being developed in the crypto markets will find wider uses in traditional finance if the Commodity Futures Trading Commission, a US derivatives regulator, gives its approval. Wall Street’s response has been eagerly anticipated because FTX is seeking permission to use computers to perform functions in the futures markets now entrusted to brokers, called futures commission merchants, the largest of which are arms of JPMorgan Chase and Goldman Sachs.
***** I submitted my comment letter on this a while back with the “Why I hate Chuck Mackie” commentary.
Why Beyonce Is Recession-Proof, According to Goldman Sachs; Consumers will still spend in a recession: Katie Koch at GSAM; ‘Tech is down at the moment, but it’s not out,’ she says
Michael P. Regan and Vildana Hajric – Bloomberg
As the Federal Reserve’s efforts to tame inflation roil both stocks and bonds, investors everywhere are struggling to figure out the best way to play defense in markets amid concerns that a recession is on the horizon. One of the top executives at Goldman Sachs Asset Management has a surprising idea: Beyoncé.
****** That is one hip Goldman exec.~JJL
The Government’s Nearly Airtight, Mostly Pointless Case Against Elon Musk
Alex Kirshner – Slate
Everyone has their passion. Taylor Swift writes music. Neil deGrasse Tyson likes outer space. Giannis Antetokounmpo plays basketball. And the Securities and Exchange Commission investigates Elon Musk, the richest person in the world, the newly contracted buyer of Twitter, and the longtime annoyer of America’s preeminent Wall Street regulator. The SEC and Musk have been at odds since 2018, almost without interruption, stemming from Musk’s untrue tweet that he had secured funding to take Tesla private. The SEC sued him for making false and misleading statements about his public company, the sides settled, Musk antagonized the agency, the SEC accused him of breaching their settlement, and around they’ve gone. Now there is a new SEC investigation focused on Musk. There is also one at the Federal Trade Commission, according to the Wall Street Journal, which broke news of both on Wednesday.
****** Elon Musk and the SEC will continue to dance for a long time.~JJL
Crypto is ultimately pointless – and the price collapse proves it; Cryptocurrency has always seemed to me like one of those financial manias that sometimes grip the world – like Wall Street in the 1920s, or the dotcom boom that collapsed in 2000
Sean O’Grady – Independent
The apparent crypto meltdown is a good moment to remind ourselves, yet again, that with unregulated financial innovation can come great risks. Losses, in other words, to individuals and dangers posed to the wider financial system and the “real” economy.
****** We speak of crypto winter and crypto mania. Will the crypto fever finally break?~JJL
Thursday’s Top Three
Our top stories Thursday were all from Bloomberg. First was Bloomberg’s What Happened When a Wall Street Investment Giant Moved to Nashville, about AllianceBernstein’s new headquarters. Second was a tie between Crypto Billionaires’ Vast Fortunes Are Destroyed in Weeks and The 10 Best Books for Your Summer Reading List (subtitle: Or maybe we’re just drawn to tales of corruption, greed, intoxication, deception, disaster, delusion, and war). Third was a repeat from Wednesday’s top three, Flow Traders Executive Leaves After Swedish Ski Trip Incidents.
26,832 pages; 238,496 edits
FTX’s Bankman-Fried and CME’s Duffy square off on crypto futures in Capitol Hill hearing; CME chief says bitcoin futures proposal would be ‘catastrophic’ for U.S. economy
Chris Matthews – MarketWatch
Major players in the commodity futures industry appeared before Congress Thursday to protest a proposal by cryptocurrency exchange FTX to allow customers to buy leveraged crypto derivatives around the clock, with the head of the CME Group arguing that allowing such a move could be “catastrophic” for the U.S. economy and retail investors. The FTX proposal asks that the Commodity Futures Trading Commission amend its registration to allow it to lend money to its customers to buy bitcoin and ether futures 24 hours a day, 365 days per year.
Cryptocurrencies Melt Down in a ‘Perfect Storm’ of Fear and Panic; A steep sell-off that gained momentum this week starkly illustrated the risks of the experimental and unregulated digital currencies.
David Yaffe-Bellany, Erin Griffith and Ephrat Livni – NY Times
The price of Bitcoin plunged to its lowest point since 2020. Coinbase, the large cryptocurrency exchange, tanked in value. A cryptocurrency that promoted itself as a stable means of exchange collapsed. And more than $300 billion was wiped out by a crash in cryptocurrency prices since Monday. The crypto world went into a full meltdown this week in a sell-off that graphically illustrated the risks of the experimental and unregulated digital currencies. Even as celebrities such as Kim Kardashian and tech moguls like Elon Musk have talked up crypto, the accelerating declines of virtual currencies like Bitcoin and Ether show that, in some cases, two years of financial gains can disappear overnight.
FTX Founder Sam Bankman-Fried Buys 7.6% Stake in Robinhood; Robinhood shares rose as much as 42% in after-hours trading
Orla McCaffrey – WSJ
One of the biggest names in cryptocurrencies is betting on individual investors. Sam Bankman-Fried, the 30-year-old billionaire who founded the cryptocurrency exchange FTX, bought a 7.6% stake in Robinhood Markets Inc., according to a Thursday regulatory filing. He paid about $648 million for the stake, which would make him the trading app’s third-largest shareholder. Mr. Bankman-Fried’s shares are worth around $482 million based on Thursday’s closing price of $8.56. Shares of Robinhood jumped as much as 42% in after-hours trading.
Less than a month until our #DerivativesForum #Frankfurt takes place! Secure your tickets now to join us on site or virtually from 24 to 25 May for keynotes, panels, and networking with speakers and the many participants already registered. Tickets, agenda and further details:
‘We Cannot Divest’ From Systemic Risks, Says Pioneering Sustainable Investor; Six questions for Geeta Aiyer, founder and president of Boston Common Asset Management.
Leslie Norton – Morningstar
For 30 years, Geeta Aiyer has been at the vanguard of sustainable investing. Aiyer was the first U.S. investor to be elected to the board of the U.N.-backed Principles for Responsible Investment. She also founded two venerable firms specializing in environmental, social, and governance investing: Walden Capital and Boston Common Asset Management. The India-born Aiyer now serves as president of Boston Common, which has developed a reputation for prodding companies to change, including the Washington Commanders football team. Aiyer shared her story with me in late April, onstage at the annual ESG summit of the CFA Society of Washington, D.C. The following interview has been condensed and edited for clarity.
Investors Face a World Where Stocks No Longer Reign; The age-old mantra of ‘there is no alternative’ to stocks gets a stiff test as market losses mount, inflation accelerates and interest rates rise
Akane Otani – WSJ
For years after the 2008-09 financial crisis, interest rates were so low that many investors argued that to get a decent return, you had to put a hefty chunk of your portfolio in the stock market. That conviction was so popular that Wall Street gave it a name: TINA, short for “there is no alternative” to stocks. Sure, the stock market was riskier than, say, government bonds that are guaranteed to pay out coupons every year. But returns on stocks were so much better than practically everything else in the markets that investors saw few viable alternatives for where to put their money.
How More Than $1 Trillion of Crypto Vanished in Just Six Months; The helium is coming out of bitcoin and other cryptocurrencies as investors shy away from risk
Peter Santilli, Corrie Driebusch – WSJ
Traders’ flight from risky investments has halved the price of bitcoin and other cryptocurrencies, wiping out more than $1 trillion worth of digital money since November. Wild swings are fairly common with cryptocurrencies, but even seasoned investors were left reeling as bitcoin dropped 29% over a seven-day losing streak that just ended as a stablecoin—one part of the crypto world that touted its stability—unexpectedly crashed.
Crash of TerraUSD Shakes Crypto. ‘There Was a Run on the Bank.’; The stablecoin, pledged to maintain a value of one dollar, plunged as low as 23 cents this week, showing cryptocurrencies’ vulnerability
Alexander Osipovich and Caitlin Ostroff – WSJ
The cryptocurrency TerraUSD had one job: Maintain its value at $1 per coin. Since it launched in 2020, it had mostly done that, rarely straying more than a fraction of a penny from its intended price. That made it an island of stability, a place where traders and investors could stash their funds in between forays into the otherwise frenzied crypto market. This week TerraUSD became part of the frenzy too, slumping by more than a third on Monday and then tumbling as low as 23 cents on Wednesday.
Synthetic reverse FUD; Crypto turns to the fake press release to prop things up
Robin Wigglesworth – FT
It seems someone is not coping well with the whole Terra/Luna omnishambles. At all. Look at what landed in our inbox this morning.
Terra’s Crypto Meltdown Was Inevitable; An epic crash in algorithmic stablecoins spells trouble for the entire industry.
Gian M. Volpicelli – Wired
At a Mexican restaurant in North London a few weeks ago, a handful of small-time but remarkably discerning retail cryptocurrency investors predicted that terra and luna would crash. Several of them were scoffing at terra, or UST, a stablecoin whose price equivalence to the dollar is underpinned by algorithms and game theory rather than cash or collateral, and at the notion that it would maintain its peg in the long run.
Crypto’s Chainsaw Massacre Bloodies Digital Exchanges; The platforms that have promoted Bitcoin and other new currencies have a lot to answer for.
Lionel Laurent – Bloomberg
Cryptocurrencies only seem to “work” when prices are going up. On the way down, nothing functions as it should — a trait common to Ponzi schemes throughout history. In the current market carnage, the exchanges that have promoted digital currencies have a lot to answer for. Bitcoin, supposedly a store of value and inflation hedge in the eyes of luminaries such as Jack Dorsey or El Salvador’s Nayib Bukele, is failing at both. It’s down about 56% in six months as investors dump it for the traditional fiat money that crypto was supposed to disrupt.
LME Seeks Increased Transparency to Prevent Repeat of Nickel Squeeze; Bourse proposes rules to force disclosure from OTC dealers; Squeeze demonstrates effects OTC can have on wider market: LME
Mark Burton – Bloomberg
The London Metal Exchange plans to force members to regularly report details of their over-the-counter metals positions, substantially expanding its market surveillance capabilities in the wake of this year’s nickel squeeze. The LME has already imposed emergency limits on daily price moves to prevent a repeat of the 250% spike in nickel prices seen in March, and is now looking to expand its oversight of the bilateral deals agreed between dealers and their clients.
How a Cryptocurrency Trader Turned $10,000 Into $200 in Just Days; The collapse of Terra and Luna are part of broader market turbulence that has rattled the crypto world, even as some holders of the coins shrug at steep losses.
Misyrlena Egkolfopoulou – Bloomberg
That was then. Thirty-odd days later, Luna and Terra have collapsed and their very futures are in doubt. And, from Bitcoin down, a selloff in digital money appears to be accelerating, part of a broader wipeout of more than $200 billion from the cryptocurrency market. To crypto’s doubters, this looks like a shakeout that’s long overdue, and one that mirrors the wider troubles in financial markets. With stocks down and interest rates up, weak links in crypto are giving way. In peril are parts of a vast, global ecosystem of crypto minters, promoters, traders, exchanges – players who’ve been lured, and lured others, into the crypto universe.
China’s Newest Commodity Exchange Eyes Silicon as First Contract; Guangzhou Futures Exchange country’s 5th commodities bourse;p Industrial silicon prices spiked last year amid power crunch
China’s newest commodity exchange plans to launch its first contract later this year, focusing on industrial silicon after wild swings in the metal’s price in 2021. The Guangzhou Futures Exchange plans to offer silicon contracts in the second half of the year, said a bourse official. It’s also planning to create an index that tracks a broad range of commodities, and is awaiting final government approvals for the launch, said the official, who asked not to be identified because the information isn’t public.
FTX’s Bankman-Fried Defends Crypto Derivative Plan That Irks CME
Crypto billionaire Sam Bankman-Fried is defending FTX’s proposal to take the middleman out of Bitcoin and Ether futures trading as the plan comes under heightened attack by other exchanges. The plan from his crypto trading platform FTXwould allow the company’s US arm to execute every aspect of customers’ crypto derivatives trades on its own — thus bypassing banks and other financial intermediaries. The proposal, which the Commodity Futures Trading Commission is currently considering, would apply specifically to trades made using margin, which involves putting up collateral.
FTX’s Futures Trading Plan Attracts Wall Street Critics; The FIA pointed out shortcomings in its feedback to the CFTC.; The CFTC received industry feedback until May 11.
Crypto exchange FTX has proposed changes to the existing US derivatives clearing rules, mostly by bringing automation. As the Commodity Futures Trading Commission (CFTC) sought industry feedback on the proposals, the established futures market participants came in as critics. The Futures Industry Association (FIA), which includes the likes of Goldman Sachs, JPMorgan and other major US derivatives participants, on Wednesday said that FTX’s “model could exacerbate financial instability in a time of heightened market volatility.” In its 24-page response, the industry body also highlighted the use of the proposed system for “market manipulation.”
Billionaire Sam Bankman-Fried has lost half his net worth in 2022 but he says the crypto market isn’t going to zero and will recover with stocks: ‘Crypto markets have mostly stabilized’
Taylor Locke – Fortune
It’s been a brutal week for the cryptocurrency market. In the last 24 hours, more than $200 billion of wealth was wiped from the market. Bitcoin (BTC) fell below $30,000, sinking to $26,597, as the TerraUSD (UST) stablecoin crashed far below its $1 peg, applying more downward pressure on the overall market. But fear not: The cryptocurrency market won’t crash to zero, Sam Bankman-Fried told Fortune. Though his net worth has fallen by half since late March, the 30-year-old crypto billionaire isn’t worried. He’s currently worth about $11.3 billion, according to Bloomberg’s Billionaires Index.
Tesla’s billion-dollar bitcoin bet may be under water as crypto crashes
Tim Levin – Insider
In February 2021, Tesla made waves when it announced a $1.5 billion bitcoin investment, while most corporations wouldn’t touch the volatile cryptocurrency with a ten-foot pole. But that ten-figure bet may be now under water as the crypto market at large plunges, erasing hundreds of billions in gains that investors have enjoyed as cryptocurrencies soared in recent years. The price of bitcoin has plummeted 17% since Sunday, to around $29,000 for one coin as of Thursday morning — or roughly 55% from a November peak near $68,000. The downturn comes amid a similar skid in broader financial markets, leaving investors little room to hide and wait out the storm.
How Do Advisors Get Paid – and Is There a Best Structure?
Karen Hube – Barron’s
Good advisors can more than offset the fees they charge through money-saving financial planning moves, tax-efficient investing, and careful portfolio asset allocation. But it is important to make sure a fee structure matches your needs so you don’t pay more than you need to.
FTX CEO Sam Bankman-Fried To Defend His Disruptive Plan For Crypto Derivatives In Front Of Congress
Javier Paz – Forbes
A showdown worth of pay-per view television will be available this morning at 10am EST. But this will not be a UFC fight, instead it is a hearing to discuss the future of derivatives trading. Derivatives are financial contracts that let investors hold hedging or speculative positions at regulated U.S. exchanges overseen by the Commodity Futures Trading Commission (CFTC). In particular, the event will center on crypto derivatives, which let investors get exposure to digital assets such as bitcoin and ether.
Scrutiny of Elon Musk’s Twitter Moves Intensifies in Washington
Matt Robinson – Bloomberg
The Wall Street Journal reported on Wednesday that the SEC is investigating Musk’s submission of a form that investors must file when they accumulate more than 5% of a company. The Federal Trade Commission is also reviewing the bid by the world’s richest person to take Twitter private. Musk disclosed on April 4 that he acquired more than 9% in the company, a week later than regulations allow and by using a filing typically reserved for passive investors. He has since embarked on a highly-public takeover bid.
U.S. regulators see ‘endgame’ to LIBOR phaseout
Jim Tyson – CFO Dive
Financial institutions and companies seeking loans are sunsetting LIBOR after years of pressure from the Fed and other regulators worldwide. The subject of a manipulation scandal in 2012, LIBOR is the reference rate for trillions of dollars in mortgages, derivatives, business loans and other financial contracts. It is derived from London banks’ estimates of what they would be charged when borrowing from other banks. SOFR is based on overnight repurchase agreements secured by U.S. Treasurys.
Coinbase Brings Another Cryptocurrency Risk to Light
Riley Adams – Kiplinger
A precipitous plunge in Coinbase Global (COIN, $72.99) stock is suddenly more than just a concern to current shareholders. That’s because the cryptocurrency exchange operator just warned its users that, in the event of a bankruptcy, the company might just hold on to their digital assets. Typically, the most important news to come out of a publicly traded company’s quarterly earnings report is … well, the earnings. Analysts, media and investors all flock to see how the company’s most recent sales, profits and other performance metrics stacked up, and when available, what the company projects it will do going forward.
Rebuilding the broken futures commission merchant paradigm; The futures commission merchant (FCM) model is broken. The $5.5 billion industry is in dire straits. Once considered a low-risk activity supported by initial margin and daily mark-to-market calls, clearing today is a capital-intensive and ‘returns-challenged’ activity
Jerome Kemp – Risk.net
The clearing operating model is an anachronism compared with the massive amounts of exposure and risk flowing through FCMs’ books. On any given day, an FCM extends unsecured credit to its clients, hoping the advance is eventually covered. In today’s world of leverage, volatility and geopolitical uncertainty – in which tens of billions of dollars of margin moves every business day – the ‘cheque is in the mail’ approach cannot survive.
CFTC CATCHES ANOTHER PONZI FX SCAM, WORTH OVER $543,000; He was able to persuade these investors by claiming his companies had historically made large profits, between 8 to 25% per month.
Rick Steves – Finance Feeds
The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Eshaq M. Nawabi and his companies Nawabi Enterprise and Hyperion Consulting Inc. for fraud and misappropriation related to an off-exchange Forex trading scheme. The defendants have allegedly solicited funds totaling at least $543,000 from at least seven investors as part of the FX scam, according to the financial watchdog that oversees the foreign exchange space in the United States.
Wall Street watchdog to ramp up scrutiny of risky derivative products
Katanga Johnson – Reuters
The chair of the U.S. Securities and Exchange Commission warned on Wednesday that the agency may bring more enforcement actions in cases involving risky derivatives, saying such products can create “system-wide risks” during times of market stress. Last month, the agency brought charges against Bill Hwang, the owner of private fund Archegos, and other executives, alleging they engaged in fraud and market manipulation to create huge exposures to a handful of stocks using sophisticated equity swaps.
Where Is Guinea’s Gold? A London Laundering Case May Hold Clues; A murky deal stretching across three continents raises questions about the city’s bullion market.
Eddie Spence, Jonathan Browning, and Katarina Hoije – Bloomberg
The government of Guinea wants to know what happened to three tons of its gold. The answer may lie in London. In March, Guinean authorities arrested a former head of the central bank and charged him with embezzlement after the custodian of the gold, Belgian refiner Affinor BVBA, said it was unable to return it.
Crypto billionaire Sam Bankman-Fried: ‘I got involved with no clue what a blockchain was’; The FTX founder on hype, the problem with bitcoin and how crypto can build a fairer financial system
Joshua Oliver – FT
When an aide told me that “one of our drivers” would pick me up for my lunch with Sam Bankman-Fried, I imagined a hulking black SUV of the kind that shuttles high rollers to and from the casinos in Nassau, where the 30-year-old crypto billionaire lives. Instead, it’s a modest maroon Honda that pulls up outside my hotel. The headlong drive along the island’s winding coast road takes us past the terracotta-roofed compound that houses Bankman-Fried’s crypto exchange, FTX, which processes billions in transactions every day, and the overgrown seafront plot where it plans to build a new 1,000-seat headquarters, having moved to the Bahamas from Hong Kong after China outlawed crypto trading last year.
What is a stablecoin and why is tether central to the global crypto market? The $80bn stablecoin has drawn close scrutiny after it slipped far from its peg against the dollar
Siddharth Venkataramakrishnan and Joshua Oliver – FT
The fall in price of tether has ratcheted up tensions in the jittery cryptocurrency markets, underscoring the stablecoin’s central role behind daily trading of digital assets such as Bitcoin.
Norwegian oil fund denounces ‘corporate greed’ over executive pay; World’s largest sovereign wealth fund has voted against packages at Intel, Apple, IBM and GE so far this year
Richard Milne and Patrick Temple-West – FT
The world’s largest sovereign wealth fund has attacked “corporate greed” and excessive pay for “mediocre performance” and vowed to take action against the worst offenders. Nicolai Tangen, chief executive of Norway’s $1.2tn oil fund, told the Financial Times that it would in particular target large salary packages that were not justified by performance, or were opaque or insufficiently long-term.
What BlackRock, Vanguard and State Street Are Doing to the Economy
Farhad Manjoo – NY Times
When I got on the phone with Vivek Ramaswamy on Tuesday afternoon, I was not expecting to find common cause. Ramaswamy is a tech entrepreneur, a frequent contributor to conservative outlets including The Wall Street Journal’s editorial page and the author of a book whose very title sounds as if it were formulated in a lab at Fox News to maximally tickle the base and trigger the libs: “Woke, Inc.: Inside Corporate America’s Social Justice Scam.”
Life in a Ukrainian Unit: Diving for Cover, Waiting for Western Weapons; Analysts say the outcome of fighting now is riding on the accuracy, quantity and the striking power of long-range weapons. Ukraine is pleading for more.
Andrew E. Kramer – NY Times
Through binoculars, the Ukrainian soldiers can see the Russian position far in the distance. But the single artillery weapon they operate at a small, ragtag outpost on the southern steppe has insufficient range to strike it. These circumstances have imposed a numbingly grim routine on the Ukrainians, who are pounded daily by Russian artillery salvos while having no means to fight back. Every few hours, they dive into trenches to escape shells that streak out of the sky.
Ukrainian Armed Forces destroyed, in one day in the east, 55 units of occupiers’ equipment and shot down a helicopter
Kateryna Tyshchenko – Ukrayinska Pravda
The situation on the Donetsk and Luhansk fronts is difficult, but the Ukrainian military repulsed 18 Russian attacks in one day, destroyed 55 units of Russian military equipment, and shot down a helicopter and drones.
Ukraine Human Toll Grows, With 14 Million Displaced and 3,500 Civilian Deaths; The U.N. says the number of deaths is likely far higher, and a top EU official says Russia is ‘the most direct threat to the world order’
Joanna Sugden, Matthew Luxmoore and Mauro Orru – WSJ
About 14 million Ukrainians have been forced from their homes—including more than six million who have fled the country—and at least 3,496 civilians have been killed since Russia began its invasion, United Nations officials said. The number of people uprooted by the fighting amounts to nearly one-third of Ukraine’s prewar population of 44 million. Most of those seeking refuge outside of Ukraine are women, children or the elderly because wartime legislation prevents most men of fighting age from leaving.
Rand Paul holds up $40 billion in aid for Ukraine.
Alyssa Lukpat and Emily Cochrane – NY Times
Senator Rand Paul of Kentucky on Thursday single-handedly delayed a bipartisan effort to quickly send $40 billion in aid to Ukraine, which Congress had tried to fast-track amid the escalating brutality of Russia’s war. The Senate needed unanimous consent to waive procedural hurdles and approve the humanitarian and military aid package, which the House passed 368-to-57 on Tuesday. Mr. Paul, a Republican and a libertarian who generally opposes U.S. spending on foreign aid, objected, halting what had been an extraordinary effort to rapidly shepherd the largest foreign aid package through Congress in at least two decades.
A Ukrainian commander created a Twitter account to ask Elon Musk for help escaping a steel plant besieged by Russian troops
Kate Duffy – Insider
A soldier in Ukraine has requested help from billionaire Elon Musk to help people escape a Mariupol steel plant besieged by Russian forces. Serhiy Volyna, a Ukrainian marine commander, said in a Facebook post on Wednesday that he had created a Twitter account purely to ask Musk for help. “People say you come from another planet to teach people to believe in the impossible,” Volyna said in his Twitter post to Musk. “Our planets are next to each other, as I live where it is nearly impossible to survive.” He added: “Help us get out of Azovstal to a mediating country. If not you, then who? Give me a hint.”
Ukraine says it blew up Russian pontoon bridges over a key river — and units trying to cross it; The defense ministry shared images that appeared to show dozens of destroyed or damaged armored vehicles on both banks of the Siverskyi Donets River.
Patrick Galey and Sara Mhaidli – NBC News
Ukraine’s military says it blew up a key Russian crossing on the Siverskyi Donets River on its eastern front, inflicting heavy losses in a potentially significant blow to the Kremlin’s designs on the regions of Luhansk and Kharkiv. Images shared by the defense ministry appeared to show a ruined pontoon crossing with dozens of destroyed or damaged armored vehicles on both banks. “Artillerymen of the 17th tank brigade of the #UAarmy have opened the holiday season for [Russian forces],” the ministry said on Twitter. “Some bathed in the Siverskyi Donets River, and some were burned by the May sun.”
Moscow warns Finland over NATO bid as Ukraine says Russian ship damaged
Anne Kauranen and Jonathan Landay – Reuters
Moscow warned Finland on Thursday it would face consequences as it seeks to apply for NATO membership “without delay” and Ukraine said it had damaged a Russian navy logistics ship in the Black Sea, where there has been renewed fighting in recent days. The Vsevolod Bobrov vessel was near Snake Island, close to Ukraine’s sea border with Romania, spokesman Serhiy Bratchuk for the Odesa regional military administration in southern Ukraine said.
Russian Oil Output Shrinks Under Western Pressure; An EU oil embargo could drive down Russian supply by 3 million barrels a day, according to International Energy Agency
Matthew Dalton and Will Horner – WSJ
Western pressure on Russia over the invasion of Ukraine lowered the country’s crude-oil output by 9% in April and reshaped the global oil market as Russia sought new buyers for its production outside the West, the International Energy Agency said. Russia’s lost supplies amounted to 900,000 barrels a day in April and are expected to grow by a further 600,000 barrels a day this month—totaling around 1.5% of the world’s oil output when the invasion began. An oil embargo being considered by the European Union, the biggest destination for Russian crude, would likely push those losses to as much as 3 million barrels a day from July, bringing Russian oil production to its lowest level in nearly two decades, the IEA said in its monthly report Thursday.
Sanctions target ‘shady network’ backing Putin, UK says; Travel bans and asset freezes imposed on 7 family members and five financiers
Robert Wright and Jasmine Cameron-Chileshe – FT
The UK has imposed sanctions on the “shady network” of family and business associates that it says supports the “luxury lifestyle” of Russian president Vladimir Putin — including several cousins, his ex-wife, his rumoured partner and her grandmother. Seven Putin family members and five financiers were targeted with travel bans and asset freezes on Friday.
Sweden Says Joining NATO Would Have ‘Conflict-Dampening Effect’
A report released by Stockholm signaled that it would likely follow Finland’s lead in vowing to apply for NATO membership. The moves come as the Group of 7’s agricultural ministers met in Germany to discuss new ways to get Ukrainian harvests to world markets.
Exchanges, OTC and Clearing
Cboe Global Markets Announces 2022 Annual Meeting Results
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced the preliminary shareholder voting results from its 2022 Annual Meeting held today.
Cboe Global Markets Declares Second-Quarter 2022 Dividend
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced its Board of Directors has declared a quarterly cash dividend of $0.48 per share of common stock for the second quarter of 2022. The second-quarter 2022 dividend is payable on June 15, 2022, to stockholders of record as of May 31, 2022.
CME Group Chairman and Chief Executive Officer Terry Duffy to Appear Before U.S. House of Representatives Agriculture Committee
CME Group – PR Newswire
CME Group Chairman and Chief Executive Officer Terry Duffy will appear at a hearing of the House Agriculture Committee on Thursday, May 12 to review an FTX proposal to launch an altered clearing model that could inject significant systemic risk into the U.S. financial system. “FTX’s proposal is glaringly deficient and poses significant risk to market stability and market participants,” Duffy said. “FTX proposes to implement a ‘risk management light’ clearing regime that would significantly increase market risks by potentially removing up to $170 billion of loss-absorbing capital from the cleared derivatives market, eliminating standard credit checks, and destroying risk management incentives by limiting capital requirements and mutualized risk. Under false claims of ‘innovation,’ FTX’s proposal is nothing more than cost-cutting measures that would come at the expense of risk management best practices, market integrity, customer safety and, ultimately, financial stability.”
CME STP Notices: May 12, 2022
CME STP; CME STP FIX; CME STP TRADE VIEW
CME Globex Notices: May 9, 2022
Topics in this issue include:
Critical System Updates; Product Launches; Product Changes
EBS Market Integration Notice: New and Updated Content
EBS Market Integration onto CME Globex
EBS Market’s Central Limit Order Book and eFix Matching Service will launch on CME Globex. You will receive subsequent notices with additional details and actions required to support the EBS Market integration onto CME Globex.
Effective Dates for Spot Month Position Limits in the June 2022 CME, CBOT,
NYMEX and COMEX Core Products
Dear Market Participant:
Spot month limits are effective at the close of trading on the dates listed (in chronological order):
Deana Lawson wins the Deutsche Börse Photography Foundation Prize 2022
Deutsche Börse Group
Deana Lawson has won the Deutsche Börse Photography Foundation Prize 2022. The artist was announced as the 2022 winner of the prestigious £30,000 prize at a special ceremony at The Photographers’ Gallery (TPG), London, on Thursday, 12 May 2022.
The influential prize, which has been presented in partnership with Deutsche Börse Group since 2005, rewards artists and projects recognised as having made a significant contribution to international photography over the past 12 months.
SFM Interview: Eurex Repo expands buy-side access as overall volumes boom
Double-digit percentage growth in European repo volumes has been fairly common over the last few months and even across quarters, largely driven by expected changes in European Central Bank policies reacting to global rate hikes. We speak with Eurex Repo about the market trends that are driving volumes and get an update on buy-side and Environmental, Social and Governance (ESG) investing developments.
Navigating the challenges of institutional access to crypto trading
Institutional interest in crypto trading is growing exponentially. However, firms face numerous challenges in accessing liquidity pools and optimizing exposure. Eurex talked to Thomas Uhm at market maker and electronic liquidity provider Jane Street about how firms are accessing the market and what needs to change for institutional crypto trading to realize its potential.
Eurex Exchange Readiness Newsflash | Transaction Size Limits (TSL) – Switch-over of Transaction Size Limits (TSL) in T7 Simulation and Publication of Focus Call content
Eurex Exchange Readiness Newsflash | Transaction Size Limits (TSL) – Switch-over of Transaction Size Limits (TSL) in T7 Simulation and Publication of Focus Call content
Euro Fixed Income Futures: Definition of reporting and position limits for June 2022
Eurex Circular 051/22 Euro Fixed Income Futures: Definition of reporting and position limits for June 2022
Position limits apply only to long positions in the front month contracts of the products concerned. Reporting limits will be valid from 31 May 2022 after close of trading until 3 June 2022 after close of trading.
VaR Platform – Official Launch
Reference is made to the circular dated 26 January 2022 (Reference: CD/CDCRM/034/2022). With the successful completion of the practice session in February 2022, the official launch of VaR Platform is tentatively scheduled on 13 June 2022 (Monday) subject to regulatory approval, where the new value-at-risk model will replace the existing flat-rate model for calculation of margin and Default Fund1 contributions of Hong Kong Securities Clearing Company Limited (HKSCC) Clearing Participants (CPs).
Intercontinental Exchange Prices $8 Billion in Senior Notes and Issues Notices of Redemption for Four Series of Senior Notes due 2022 and 2023
Intercontinental Exchange (NYSE: ICE), a leading global provider of data, technology and market infrastructure, announced today that it priced an underwritten public offering of $8 billion in new senior notes.
Publication of JPX Working Paper, Vol.38 “Analysis of Short Side Market Inefficiencies Using Artificial Market Model”
Japan Exchange Group, Inc. (JPX) today published JPX Working Paper, Vol.38 “Analysis of Short Side Market Inefficiencies Using Artificial Market Model”.
* This Japanese version was released on March 9, 2022.
Extension of Trust Term and Additional Contribution to Stock-Granting ESOP Trust
Japan Exchange Group, Inc. (JPX) has decided today that it will continue and make an additional monetary contribution to the incentive plan for employees of JPX and its subsidiaries, the “Stock-Granting Employee Stock Ownership Plan Trust” (hereinafter, the “ESOP Trust”), which was introduced in FY2016.
Additional Contribution to Stock-Granting Trust in Stock Compensation Plan for Executives
Japan Exchange Group, Inc. (JPX) decided today at the meeting of its Compensation Committee that it will make an additional contribution to the stock-granting trust (hereinafter, the “Trust”) of the stock compensation plan for executives (meaning executive officers and those equivalent thereto, excluding persons such as outside directors, directors who are members of the Audit Committee, and auditors; hereinafter the same) of JPX and its subsidiaries that provide the core businesses of JPX Group (hereinafter, the “core subsidiaries”; JPX and the core subsidiaries are hereinafter collectively referred to as the “implementing companies”; and this plan shall hereinafter be referred to as the “Plan”).
Consultation on OTC Position Reporting for all Physically Deliverable Metals & Accountability Levels for Reportable OTC Positions
The London Metal Exchange (“LME”) seeks the views of Members and other interested parties on the following proposals, which the LME believes will further enhance its visibility of OTC markets in the near term, in the interests of the market as a whole: (i) the introduction of a revised requirement for Members to report all OTC positions in physically deliverable aluminium, aluminium alloy, cobalt, copper, lead, NASAAC, nickel, tin and zinc to the LME on a weekly basis with no minimum position size threshold (noting that should the LME adopt this proposal, it intends to withdraw the existing daily nickel-related OTC position reporting requirements set out in Notice 22/064); and (ii) the extension of Accountability Levels to OTC positions (each a “Proposal” and together the “Proposals”). This Notice also lays out the LME’s current view on the longer term plan to establish a systematic OTC trade and position reporting framework that will assist in improving future market transparency and stability.
LME Clear Board Risk Committee
Clearing Members of LME Clear are invited to submit nominations to join the Board Risk Committee (“Committee”)
Nasdaq Announces 2022 Annual Meeting of Shareholders
Nasdaq, Inc. (Nasdaq: NDAQ) has scheduled its 2022 Annual Meeting of Shareholders for June 22, 2022 at 8:00 AM ET. Shareholders of record will be able to vote and ask questions online during the meeting. The virtual meeting website will be accessible 15 minutes prior to the meeting start by visiting: www.virtualshareholdermeeting.com/NDAQ2022.
MarketNYSE American options, NYSE ARCA options
Beginning on May 20, 2022 for NYSE Arca Options, and on June 6, 2022 for NYSE American Options, Done-for-Day (“DFD”) message delivery will be modified to begin at 4:15 PM ET (1:15 PM ET on early close days).
NCDEX to launch futures trading in coffee by June-end
Suresh P. Iyengar – The Hindu Business Line
Plans similar trading in PVC, to introduce LES in steel contracts: MD Arun Raste. The National Commodities and Derivatives Exchange (NCDEX), the country’s largest agriculture commodity exchange, is chartering a major comeback with plans to launch futures trading in coffee and PVC (polyvinyl chloride).
Robinhood stock soars after CEO of crypto exchange FTX takes a stake
Emily Bary – MarketWatch
Shares of Robinhood Markets Inc. rocketed higher in after-hours trading Thursday after a filing revealed that Sam Bankman-Fried, the chief executive of cryptocurrency exchange FTX Trading, has taken a 7.6% stake in the popular trading platform’s stock. Bankman-Fried has amassed 56.27 million shares of Robinhood according to the filing, which came out after Thursday’s closing bell. Robinhood shares rose 23% in after-hours trading Thursday.
Crypto exchange FTX CEO reveals stake in trading app Robinhood
Greg Roumeliotis and Hannah Lang – Reuters
Samuel Bankman-Fried, the chief executive and founder of cryptocurrency exchange FTX, revealed a 7.6% stake in Robinhood Markets Inc on Thursday, capitalizing on the weakness of the shares of the trading app to build a position. Bankman-Fried said in a regulatory filing he did not have any intention of taking control of Robinhood. The company’s dual-class shares currently give Robinhood’s founders control of 64% of the voting shares outstanding. A person familiar with the matter said that Bankman-Fried had not informed Robinhood of any plans to merge it with his FTX platform.
Tesla, Twitter shares drop as Elon Musk’s legal issues grow
Tom Krisher – AP
Shares of Tesla and Twitter have tumbled this week as investors deal with the fallout and potential legal issues surrounding Tesla CEO Elon Musk and his $44 billion bid to buy the social media platform. Of the two, Musk’s electric vehicle company has fared worse, with its stock down almost 16% so far this week to $728. Twitter shares fell 9.5% for the week, closing Thursday at $45.08. Both stocks have taken a bigger hit than the S&P 500, which is down 4.7% for the week. Along with malaise in the broader markets, investors have had to weigh legal troubles for Musk, as well as the possibility that his acquisition of Twitter could be a distraction from running the world’s most valuable automaker.
Twitter fires two executives and freezes most hiring after Musk’s deal to buy the company.; An internal memo shared with employees said the platform’s general manager and general manager for revenue would be departing.
Mike Isaac – NY Times
Twitter’s chief executive fired two top executives, froze most new hiring and said he was slashing spending on Thursday, as the social media company tries to change its business trajectory while grappling with a takeover from Elon Musk, the world’s richest man. In a memo shared with employees and obtained by The New York Times, Parag Agrawal, Twitter’s chief executive, said the company was pausing most hiring and pulling back on discretionary spending, though it was not planning layoffs. The moves stemmed partly from Twitter not hitting goals in audience and revenue growth, Mr. Agrawal wrote.
If This Is Another Dot-Com Bubble, the Cloud Has a Silver Lining; Digital transformation is still in an early phase, which means many hard-hit cloud and “software-as-a-service” stocks could bounce back in years to come.
Trung Phan – Bloomberg
Are we in another dot-com-style crash? The question is top of mind amid the 2022 market rout. While similarities abound, one difference stands out: This phase of digital transformation is still in its early days, which means that some beaten-down tech names could have healthy prospects for long-term growth. True, U.S. equities have been trading down hard for months, and tech is down very hard: From their recent peaks, companies in the NASDAQ have sold off at a rate comparable only to the Dot-Com Bubble (October 2000 to October 2002) and the Great Financial Crisis (November 2008 to April 2009). As Jason Goepfert of Sundial Capital Research tweeted about the NASDAQ on April 29, even before this week’s meltdown.
Wall Street’s vise grip on its quant trading wizards may finally be backfiring — pushing them into the arms of Silicon Valley; Shackled with onerous noncompete agreements that can last years, Wall Street quants are increasingly joining startups to work on iBuying, autonomous driving, and crypto.
Alex Morrell – Business Insider
In March, a crypto unicorn was born. Gauntlet, founded just four years ago, soared to the billion-dollar valuation milestone by offering risk-management and stress-testing tools for crypto-lending operations — tools that have become a hot commodity amid the boom in digital assets. But the company also owes thanks for its turbocharged growth to a quirk of the paranoid and hyper-competitive world of Wall Street quant trading.
Elon Musk puts $44bn Twitter deal ‘on hold’; Shares drop almost 20% after entrepreneur questions fake accounts on social media site
Arash Massoudi, Cristina Criddle and Robert Wright and Ortenca Aliaj – FT
Elon Musk has put his takeover of Twitter “temporarily on hold” over concerns about the number of spam and fake accounts on the social media platform, raising fresh doubt over whether the Tesla chief executive will complete the $44bn deal. The entrepreneur announced the move in a Twitter message on Friday, sharing a link to a Reuters news story this month that suggested the number of fake accounts on the site represented less than 5 per cent of its 229mn users.
TradeTech: AI-enabled algo developments will drive price discovery; Decisions must be based on data, but you cannot ignore the human element, finds TradeTech panel.
Laurie McAughtry – The Trade
A group of expert practitioners gathered together at TradeTech this week to discuss the complex developments in the field of AI-enabled algo developments, and how they can improve access to liquidity, enable better price discovery, and facilitate real-time market insights.
TradeTech Round Up Day Two
Kiays Khalil – The Trade
The TRADE managing editor Laurie McAughtry and senior reporter Annabel Smith sit down together after a busy day two of TradeTech to discuss the key themes of the day – join them to review the most notable topics and hotly discussed events and key challenges facing the industry right now.
The Cybersecurity Executive Order: From Missed Opportunity to Unexpected Progress
Robert DuPree – Nextgov
Last May, the Biden administration issued its Executive Order on Improving the Nation’s Cybersecurity. Released with much fanfare in the immediate aftermath of the Colonial Pipeline ransomware attack and shutdown—and resultant gas station lines and price spikes—it contained some positive features. But, as I cautioned at the time, in many respects it unfortunately represented a “missed opportunity.”
Just in time? Bosses are finally waking up to the cybersecurity threat
Danny Palmer – ZDNet
Boardrooms have a reputation for not paying much attention to cybersecurity, but it could be that executives are finally keen to take more interest in securing the systems and networks their businesses rely on.
Senior figures from American, British and Australian cybersecurity agencies have said that business execs are now more aware of cyber threats and are actively engaging with their chief information security officer (CISO) and information security teams.
AMD, Google Partner in Unprecedented, EPYC Cybersecurity Effort
Francisco Pires – Tom’s Hardware
AMD and Google have announced an intricate, deep-level collaboration on cybersecurity research for AMD’s server-class EPYC CPUs — one that’s now been running for five years. According to Wired, the partnership leveraged two Google Cloud Security research teams alongside Google’s Project Zero (a cybersecurity research arm within the company), and AMD’s firmware group.
Two words will change your cybersecurity in 2022
Dave Karp – Security Magazine
Two words will uplevel your cybersecurity in 2022 — simplify and consolidate. To thrive in today’s market, organizations must apply these principles to their operational systems.
More than ever, reducing your security team’s load is critical for recruitment and retention. Don’t add more tools and programs; instead, get back to basics. Using the essential tools wisely will improve your security posture far more than throwing money at vendors.
Supply Chain Cybersecurity Addressed by NIST Guidance
Linn F. Freedman – The National Law Review
The National Institutes of Science and Technology (NIST) Information Technology Laboratory recently released guidance entitled “Software Supply Chain Security Guidance,” in response to directives set forth in President Biden’s Executive Order 14028—Improving the Nation’s Cybersecurity.
Luna Wasn’t on Terra Firma; Algorithmic stablecoin TerraUSD shared the weaknesses of fiat currencies like the dollar but without many of its strengths
Telis Demos – WSJ
Algorithmic stablecoins might be a novel creation, but they couldn’t avoid some very old problems. TerraUSD is, or was, the largest. The stablecoin part refers to how it aims to always be worth one U.S. dollar, making it a useful digital substitute for the greenback. The algorithmic part describes how it aims to accomplish this: By being swappable for another token, Luna, that had no fixed value. If the value of TerraUSD moved below $1, it could be “burned” and exchanged for a dollar’s worth of Luna—and vice versa. But that mechanism evidently broke down, and TerraUSD has ceased to be worth $1. It now fetches around 40 cents.
FTX chief takes stake in online brokerage Robinhood; Sam Bankman-Fried’s disclosure of $648mn in share purchases sends company’s stock soaring
Madison Darbyshire, Antoine Gara, and Miles Kruppa – FT
Sam Bankman-Fried, the billionaire founder of cryptocurrency exchange FTX, has amassed a 7.6 per cent stake in online retail brokerage Robinhood, calling it an “attractive investment”. Bankman-Fried said in a securities filing he has no “intention of taking any action toward changing or influencing the control of [Robinhood]” and bought the stake purely as an investment. However, he left open the possibility of calling for the company to consider “strategic alternatives or operational or management initiatives”.
People are calling on Coinbase users to transfer their crypto into hardware wallets after the exchange warned a bankruptcy could mean losing their investment
Katie Canales – Business Insider
Coinbase on Tuesday warned it could absorb its users’ crypto as property in the unlikely event of bankruptcy. The acknowledgment put some crypto-watchers in a tizzy as it appeared to go against a core tenet of the decentralized finance movement: giving people complete control and ownership of their money. And now, many users on Twitter and other social media sites are calling for Coinbase users to transfer their crypto to so-called hardware wallets as a solution. Experts have long said hardware storage is the most secure way to store keys, and Douglas Borthwick — chief business officer at crypto firm INX — told Insider that doing so is something that many long-time crypto users, or HODLers, have already mastered.
With Bitcoin Whales Exiting the Network, What’s BTC’s Next Stop?
Varuni Trivedi – FX Empire
Some of the top players in the crypto market are of the opinion that this bear market is here to stay, at least for the short term. However, nothing is constant in the crypto market, and the aforementioned statement, too, is merely a speculation and opinion. After hitting its lowest point since December 2020, bitcoin’s price sat at $29,213 at press time, down by almost 20.85% over the week.
Celebs like Matt Damon and Tom Brady have been hawking crypto in high-profile ads — but if you invested when they told you to, you’d be seeing major losses as crypto nosedives
Avery Hartmans – Business Insider
If you’ve turned on your TV anytime in the past six months or so, chances are you’ve seen a celebrity hawking crypto. And if you’re among those swayed by their endorsements, you’d be out hundreds, if not thousands of dollars right now. Celebrities have been steadily hopping on the crypto craze for years, but it wasn’t until last fall that they began starring in high-profile ad campaigns promoting cryptocurrency exchange platforms. In September, Tom Brady and Gisele Bündchen appeared in a $20 million campaign for crypto exchange FTX where they called people in their contacts — everyone from a surgeon to a dog-walker — to convince them to start investing on the platform.
Bitcoin Has Survived Worse. This Crypto Crash Could Offer Opportunities.
Jack Denton – Barron’s
A cryptocurrency crash has wiped away $600 billion in value in the past week, as the largest digital asset, Bitcoin, plummeted by more than 25%. The scale of the selloff is massive, but this isn’t the first time cryptocurrencies have seen intense volatility. And, already, some on Wall Street are eyeing opportunities. Bitcoin slid 11% over the past 24 hours to $28,000, having dipped below $26,000 in earlier trading. Just last week, the largest crypto was changing hands around $40,000. Six months ago, it was sitting at its all-time high near $69,000—more than double its current level.
Nomura Starts Offering Bitcoin Derivatives to Clients in Asia
Cathy Chan – Bloomberg
Japan’s biggest brokerage is offering non-deliverable forwards and non-deliverable options settled in cash, and can now trade Bitcoin futures and options, Tim Albers, head of forex structuring in Asia ex-Japan, said in an interview. Nomura carried out its first digital trade on CME Group Inc.’s platform this week with Cumberland DRW LLC, a market-maker in Bitcoin and other cryptocurrencies. That trade was made despite a recent meltdown in the crypto sector after the collapse of the TerraUSD stablecoin triggered a flight from many popular digital tokens.
Cryptocurrency meltdown continues as investors exit risky market
The massive downturn in cryptocurrencies continued Thursday, as the price of Bitcoin plunged to its lowest point since 2020. Peter Smith, CEO and co-founder of Blockchain.com, joins CBS News’ Lilia Luciano to discuss the recent volatility.
Cryptocurrency Is Failing Its Investment Test; Why own an umbrella that does not block the rain?
John Rekenthaler – Morning Star
Julius Caesar once suffered through a similar week, during mid-March, 44 B.C. It has been just about that disastrous for cryptocurrency. Over the past several days, the “stablecoin” UST, designed to be worth one U.S. dollar, plunged to $0.26. (Some “currency” that!) The stock of cryptocurrency exchange Coinbase (COIN)–the National Basketball Association’s exclusive crypto platform, should you care–shed more than half its value. And the price of the oldest cryptocurrency, bitcoin, dropped 30%.
Warnings From the Crypto Crash; As the Federal Reserve withdraws liquidity to fight inflation, stablecoins won’t be the last casualties.
The Editorial Board – WSJ
Well, the party was fun while it lasted. But now the liquidity tidal wave is crashing as it always does when credit conditions tighten. This week’s crypto-currency crash is the first body exposed on the beach, and let’s hope the damage doesn’t spread too far into the financial system and broader economy. Some $200 billion in crypto assets have blown up in 24 hours, led by the collapse of the so-called stablecoin TerraUSD. The crypto universe used to be small and dominated by Bitcoin enthusiasts, but it has swelled as investors sought higher returns amid negative real interest rates.
Tether Takes Victory Lap After Stablecoin Regains Peg; Tether’s Paolo Ardoino said redemptions included $600 million; ‘Actually the peg was not broken,” Ardoino said during Spaces
Olga Kharif – Bloomberg
Amidst worries that Tether, the world’s biggest stablecoin, was losing its 1-to-1 peg to the dollar, Paolo Ardoino stepped in to reassure investors. Tether’s chief technology officer emphasized that the private company behind the coin that plays a critical role in the crypto ecosystem had no problem with redemptions, including even a $600-million repayment in the last 24 hours.
Naive NFT fans spread malware en-masse in massive targeted attack; The Fake Apes Attack
Lewis White – Stealth Optional
The crypto bubble’s mass expansion in 2021 resulted in a huge wave of NFT sales, ushering in a controversial industry of cryptoart. As is common knowledge by now, the cryptoart industry is a hot target for scams, plagiarism and fraud. However, particularly naive NFT fans are now helping to spread one of the industry’s most dangerous hacks.
NFT scams, toxic ‘mines’ and lost life savings: the cryptocurrency dream is fading fast; It was supposed to be a financial revolution. Instead, crypto has become an environmentally disastrous gift to con artists
David A Banks – The Guardian
Cryptocurrencies, according to their most ardent supporters, are supposed to supplant nations’ existing currencies and end central banks’ control over the money supply. Instead, individuals will be able to trade with each other in a decentralised, digital financial ecosystem. This is a good thing, they promise, because unlike states and their central banks, technology is incorruptible. Crypto-evangelists imagine technology as a replacement for social and political institutions.
Why the black sheep of the crypto world has investors in a panic
Allison Morrow – CNN Business
Within the often head-scratching world of cryptocurrencies, there’s a small but growing sub-species known as “algorithmic stablecoins” that have some investors and regulators ringing alarm bells. This week, one popular so-called algo coin cratered, wiping out billions of dollars’ worth of value in just a few days. The coin, called TerraUSD, is designed to maintain its value at $1, forever and ever, amen. Instead, it fell as low as 23 cents Wednesday before recovering some ground. It was hovering around 60 cents early Thursday.
Panic in the crypto market has Janet Yellen’s attention
Julia Horowitz – CNN Business
Investors in stocks, bonds and commodities are all on edge right now. But in the market for cryptocurrencies, unease has morphed into full-on panic, catching the attention of regulators in Washington tasked with maintaining financial stability. What’s happening: As of last Friday, the price of bitcoin had plunged almost 50% from its all-time high as traders — concerned about whether the Federal Reserve’s bid to fight inflation could tip the economy into a recession — dumped riskier investments. But in recent days, the implosion of TerraUSD, a high-profile crypto experiment, has fueled a deeper anxiety. On Thursday, Tether — a popular “stablecoin” billed as a safe place for crypto investors to park their cash — broke its peg to the US dollar, unleashing further alarm. The price of bitcoin fell as low as $26,350.
A Stablecoin ‘Death Spiral’; Some crypto insiders say they saw the implosion of TerraUSD coming. Other stablecoins could also run into trouble.
Andrew Ross Sorkin, Vivian Giang, Stephen Gandel, Lauren Hirsch, Ephrat Livni, Jenny Gross, Anna Schaverien and David F. Gallagher – NY Times
Highly unstable: This week’s implosion of TerraUSD is once again shaking confidence in crypto markets, and raising alarms about investor protection. Crypto insiders say they saw this coming. TerraUSD, or UST, is supposed to be a stablecoin — a type of cryptocurrency meant to be pegged to a stable asset — that should not fluctuate in price. UST was pegged to the dollar. To maintain their pegs, custodial stablecoins are backed by reserves like dollars, U.S. Treasury bonds or other traditional assets. UST, though, is based on an algorithm that encourages traders to maintain its value. But a big sell-off in Luna, a sister currency linked to UST, plunged UST yesterday to a low of 23 cents.
Joshua M Brown – The Reformed Broker
For years there has been a controversy about whether or not the stablecoin Tether was truly backed by liquid assets or if the whole thing was just smoke and mirrors. I wouldn’t know. My understanding of stablecoins is that they are more of a tool – a medium of exchange within the crypto markets – than they are an investment.
Terraform Again Halts Blockchain Behind UST Stablecoin, Luna; Halt comes as UST stablecoin and related token Luna go to zero; Terra developers had earlier stopped and restarted blockchain
Sunil Jagtiani – Bloomberg
The blockchain behind the collapsed TerraUSD stablecoin and the affiliated Luna token stopped processing new transactions for the second time in less than a day. Terraform Labs said in a tweet from its verified Twitter account that validators, the entities responsible for verifying transactions on the blockchain, had taken the step to “come up with a plan to reconstitute” the Terra network.
Venture capitalists seek big returns with NFTs; Andreessen Horowitz and Paradigm have begun investing directly in hype-fuelled market of digital collectibles
Miles Kruppa – FT
Venture capitalists are ploughing millions into digital art, virtual land and online collectibles, the new frontier for investors seeking big returns in crypto. Digital items known as non-fungible tokens (NFTs) burst into mainstream culture last year, quickly becoming a multibillion-dollar market ranging from computer-generated art pieces to cartoon characters costing thousands of dollars.
Collector Jason Li on why NFTs make art available to all; The businessman has around a thousand digital artworks, but also loves Chinese ceramics
Georgina Adam – FT
There can be few collectors in the world whose tastes range from Kangxi porcelain to NFTs and are still only in their thirties. But Los Angeles-based Jason Li, who left mainland China to study in the US, then founded and ran a China-focused sports agency, got the contemporary art bug and now has 1,000 non-fungible tokens as part of his art collection.
Is your metaverse crashing? Try the heartland
Will Gray – Fortune
Only toddlers, maniacs, or machines think in binaries, but ours, as you might’ve noticed, is a wild moment in time. If you’d like to know where the future is going, it’s safe to say that, broadly speaking, you’ve got only two choices: It’s the heartland versus the metaverse. Let me explain. On the one hand, you have the vision now aggressively touted by the company formerly known as Facebook. “The metaverse will feel like a hybrid of today’s online social experiences, sometimes expanded into three dimensions or projected into the physical world,” the company announced in its inaugural message under the new “Meta” corporate brand. “It will let you share immersive experiences with other people even when you can’t be together—and do things together you couldn’t do in the physical world.”
Senate Confirms Jerome Powell to Second Term Leading Federal Reserve
After steering through pandemic shock, central bank faces highest inflation spell in four decades
Nick Timiraos – WSJ
The Senate confirmed Federal Reserve Chairman Jerome Powell to a second four-year term that is shaping up to be every bit as trying as his first term as the central bank faces the highest inflation in 40 years. Mr. Powell’s nomination, approved Thursday on an 80-19 bipartisan vote, has been on track for months to win bipartisan approval despite unease over inflation and aggressive interest-rate increases that the Fed has urgently commenced to cool price pressures.
Stanley Fischer’s departure reveals weakness at the Fed; Preserving independence from Washington is vital for the US central bank
Adam Posen – FT
The early resignation of Stanley Fischer, the Federal Reserve board vice-chairman, is a reminder that the coming turnover in the Fed’s leadership is unprecedented in speed and scale. For all the attacks on the Fed since 2008 nothing has really changed in terms of its governance or accountability. Mr Fischer’s resignation, however, reveals one weakness in the organisation to remedy, and one under-appreciated strength to retain.
Rand Paul Blocks Quick Passage of Ukraine Aid Bill; Kentucky senator wants more oversight of spending but rejects holding amendment vote
Lindsay Wise – WSJ
The Democratic and Republican leaders of the Senate tried to fast track a nearly $40 billion U.S. aid package to help Ukraine in its fight against Russia, only to be blocked by Republican Sen. Rand Paul of Kentucky, pushing passage of the bill into next week. Senate Majority Leader Chuck Schumer (D., N.Y.) and Minority Leader Mitch McConnell (R., Ky.) came to the chamber floor together to request unanimous agreement from all 100 senators to allow a vote on the bill immediately. Mr. Paul objected. Without his consent to move more quickly, Mr. Schumer scheduled the first in a series of procedural votes for Monday afternoon to move the bill toward final passage late next week.
Ukraine Aid Delayed After GOP Senator Rand Paul Objects to Vote; $40 billion measure easily passed the US House this week; Senate expected to act on measure and send to Biden next week
Laura Litvan and Erik Wasson – Bloomberg
The Senate was forced to postpone final passage of a $40 billion Ukraine aid package after Senator Rand Paul refused to allow the vote unless language he demanded was added. The Senate, where work can be slowed by objections from one senator, is now expected to vote on the legislation and send it to President Joe Biden’s desk for his signature next week.
Proxy season culture war: Republicans urge investors to vote against ‘woke’ big business like Disney
Jessica Guynn – USA Today
At the Wells Fargo annual meeting in April, a conservative activist presented a shareholder proposal that would force the bank to disclose more information about its charitable giving and warned company leaders against engaging in the kind of LGBTQ advocacy that prompted Florida Gov. Ron DeSantis to repeal Walt Disney’s special tax privileges just days earlier. “Instead of funding this sort of extremism, Wells Fargo needs to take a hard look at the fix that Disney finds itself in,” Paul Chesser, director of the National Legal and Policy Center’s Corporate Integrity Project, said in his remarks.
Statement to House Ag Committee Regarding “Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models”; FIA President and CEO Walt Lukken’s prepared statement before the US House of Representatives Committee on Agriculture
Chairman David Scott, Republican Leader G.T. Thompson, and Members of the Committee, thank you for the opportunity to testify about the US derivatives market structure and the unique proposal set forth by FTX US. I am President and CEO of the FIA, a leading global trade organization for the futures, options and centrally cleared derivatives markets. As someone who also served on the Commission for many years, I am proud of the CFTC’s long history of supporting innovation and competition in the derivatives markets.
An inflation conspiracy theory is infecting the Democratic Party
Catherine Rampell – The Washington Post
A conspiracy theory has been infecting the Democratic Party, its progressive base, even the White House. It’s not quite as self-sabotaging as the horse-dewormer-cures-covid false theory that swept up many Republicans last year, but it’s pretty damaging nonetheless. Call it “Greedflation.” The theory goes something like this: The reason prices are up so much is that companies have gotten “greedy” and are conspiring to “pad their profits,” “profiteer” and “price-gouge.” No one has managed to define “profiteering” and “price-gouging” more specifically than “raising prices more than I’d like.”
CEOs Feel the GOP Squeeze for Weighing In on Social Issues; Discord over everything from global warming to abortion has led politicians to punish businesses, which are beset by competing views from employees and investors.
Jeff Green – Bloomberg
Not that long ago, corporate executives had a single thing to worry about: profit. It was the raison d’etre, and it largely determined a company’s stock price, its ability to pay out dividends, and its longevity as a going concern. The public lionized old-school business leaders such as General Electric Co.’s Jack Welch not because of their winning personalities or social media savvy, but because they could reliably deliver growing profits year after year.
Sunak Says Brexit Deal Causing Harm, Urges EU to Be Flexible; Chancellor publicly aligns position with Johnson on N. Ireland; UK threat to rip up parts of deal risks trade war with bloc
Joe Mayes and Stephanie Flanders – Bloomberg
UK Chancellor of the Exchequer Rishi Sunak said the Brexit settlement in Northern Ireland is causing economic and political harm and called on the European Union to be flexible, comments likely to be seen as an attempt to publicly align himself with Boris Johnson after reports of a rift.
Critic of UK’s Brexit policy appointed to BoE’s Monetary Policy Committee; Swati Dhingra, associate economics professor at London School of Economics, to replace Michael Saunders in August
Delphine Strauss – FT
Swati Dhingra, a trade economist and vocal critic of the government’s policy on Brexit, has been appointed an external member of the Bank of England’s Monetary Policy Committee.
China does not want ‘enemies’ over Ukraine war, but wary of US threats to forex assets
South China Morning Post
Two former central bank advisers have said China does not want to make “enemies” over the Ukraine war, while warning about the “underlying risks” facing the country’s foreign reserve assets after Russia’s invasion. Beijing has refused to condemn Russia’s military aggression and rejected calls from the West to join sanctions on Moscow, which it regards as a strategic partner. In public statements, China has tried to remain neutral towards the conflict, while calling for a peaceful resolution. But its stance has been criticised by Washington and Brussels.
Proxy season culture war: Republicans urge investors to vote against ‘woke’ big business like Disney
Jessica Guynn – USA Today
At the Wells Fargo annual meeting in April, a conservative activist presented a shareholder proposal that would force the bank to disclose more information about its charitable giving and warned company leaders against engaging in the kind of LGBTQ advocacy that prompted Florida Gov. Ron DeSantis to repeal Walt Disney’s special tax privileges just days earlier. “Instead of funding this sort of extremism, Wells Fargo needs to take a hard look at the fix that Disney finds itself in,” Paul Chesser, director of the National Legal and Policy Center’s Corporate Integrity Project, said in his remarks.
Russia needs de-Nazification, says Pussy Riot leader after escape
Russia, not Ukraine, needs de-Nazification, the leader of anti-Kremlin punk band Pussy Riot, who left Russia this week by disguising herself as a food courier, said before her group kicks off a concert tour against the war. At a rehearsal for a concert on Thursday in the German capital, Maria Alyokhina said Russians needed to think carefully about the war. “I have no idea what will be the end of this reflection but without that, the country doesn’t have a right to exist – like Germany after the Second World War. It’s Russia where we should have a de-Nazification, not Ukraine,” she told Reuters Television.
Swiss release some frozen Russian assets
Brenna Hughes Neghaiwi, Silke Koltrowitz – Reuters
The Swiss government on Thursday reported 6.3 billion Swiss francs ($6.33 billion) worth of Russian assets frozen under sanctions to punish Moscow’s invasion of Ukraine, a drop from early April as around 3.4 billion francs in provisionally blocked assets were released. The figure marked a decrease from roughly 7.5 billion Swiss francs in funds the government reported frozen on April 7. Government official Erwin Bollinger pointed to fewer funds — 2.2 billion francs — newly frozen than those that had been released.
CEO Of Cryptocurrency And Forex Trading Platform Charged With Fraudulent Scheme Involving Over $59 Million
United States Department of Justice – Southern District of New York
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation, announced today the unsealing of a Complaint in Manhattan federal court charging EDDY ALEXANDRE, the leader of a purported cryptocurrency and forex trading platform called EminiFX, with commodities fraud and wire fraud offenses. As alleged, ALEXANDRE solicited more than $59 million in investments from hundreds of individual investors after making false representations in connection with the EminiFX trading platform. ALEXANDRE was arrested this morning and will be presented later today before Magistrate Judge Katharine H. Parker in the U.S. District Court for the Southern District of New York.
Cryptocurrency Trader Sentenced To 42 Months
United States Department of Justice; U.S. Attorney’s Office
Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant JEREMY SPENCE, a/k/a “Coin Signals,” was sentenced to 42 months in prison for defrauding more than 170 victims in connection with various cryptocurrency funds that he operated. SPENCE previously pled guilty before U.S. District Judge Lewis A. Kaplan, who imposed today’s sentence. According to the allegations contained in the Indictment and the Complaint, court filings, and statements made in court:
Rhode Island Man Defrauded 170+ People in Crypto Scam, Prosecutors Say; Jeremy Spence, 25, of Bristol, defrauded more than 170 people who poured millions of dollars into his cryptocurrency investment business, prosecutors said
A 25-year-old Rhode Island man who federal prosecutors say defrauded more than 170 people who poured millions of dollars into his cryptocurrency investment business was sentenced in New York City on Wednesday to more than three years in prison and ordered to pay more than $2.8 million in restitution. Jeremy Spence, of Bristol, Rhode Island, solicited more than $5 million in investments through false representations, including bogus statements showing his cryptocurrency trading was very profitable when in fact it consistently lost money, Damian Williams, U.S. Attorney for the Southern District of New York, said in a statement.
OneCoin’s Missing ‘Crypto Queen’ Is Now One of Europe’s Most-Wanted Fugitives; Europol has offered a reward for information leading to the arrest of Dr Ruja Ignatova, who is alleged to have conned people out of up to £12.7 billion.
Max Daly – VICE
A woman who allegedly made billions of pounds by conning hundreds of thousands of people from around the world in a crypto coin scam has been put on Europol’s most-wanted list. Five years after going on the run, police have appealed for the arrest of Dr Ruja Ignatova, founder of OneCoin, a cryptocurrency that sold itself as an alternative to Bitcoin but was instead a pyramid-style scam which relieved people from 175 countries of at least £4 billion.
Tax professionals ‘horrified’ by IRS decision to destroy data on 30 million filers
Kate Dore – CNBC
An audit by the Treasury Inspector General for Tax Administration revealed the IRS has tossed data for millions of payers, sparking anger from the tax community. The material, known as paper-filed information returns in accounting parlance, is sent yearly by employers and financial institutions, and covers taxable activity, such as W-2 forms, with copies sent to taxpayers and the IRS. “The continued inability to process backlogs of paper-filed tax returns contributed to management’s decision to destroy an estimated 30 million paper-filed information return documents in March 2021,” according to the report.
A Century with a Gold Standard
Chair Gary Gensler – SEC
Thank you. It’s good to join the Annual Conference on Financial Market Regulation once again alongside my SEC colleagues, including Chief Economist Jessica Wachter and Commissioner Allison Herren Lee. The field of economic research is central to our work at the SEC. It helps shape every aspect of our policymaking, from the early design phase to the proposing releases to the consideration of public comments to the adopting releases. It helps us determine the size of fines for enforcement actions. It provides important context for every one of our meetings. I look forward to hearing more about the presentations from today’s conference.
Remarks at Securities Enforcement Forum West 2022
Gurbir S. Grewal – SEC
Good afternoon everyone. Thank you to Bruce Carton for the invitation to speak today and to Professor Joe Grundfest for the very kind introduction. As is customary, my remarks today express my views, and don’t necessarily reflect those of the Commission, the Commissioners, or other members of staff. Ordinarily at an event like this one, I’d speak about all that ways in which we are working to protect investors, including our increased focus on the private fund space, the additional resources we’ve committed to our Crypto Assets and Cyber Unit, and other enforcement priorities. And I’d likely close by reassuring each of you in the defense bar that we’re not doing away with the White Paper and Wells processes, but rather streamlining them. But I’d like to take a different approach today given some recent experiences and observations.
“A ‘New’ New Era:” Prepared Remarks Before the International Swaps and Derivatives Association Annual Meeting
Chair Gary Gensler – SEC
Thank you for the kind introduction. It’s good to be back with the International Swaps and Derivatives Association (ISDA) again. As is customary, I’d like to note that I’m not speaking on behalf of my fellow Commissioners or the SEC staff. Swaps emerged in the 1980s to provide producers and merchants with a way to lock in the price of commodities, interest rates, and currency rates. Our economy benefits from a well-functioning swaps market, as it’s essential that companies have the ability to manage their risks.
SEC Obtains Final Judgment Ordering Mastermind of International Microcap Fraud Scheme to Pay $52,925,214
The Securities and Exchange Commission announced today that it obtained a final judgment against Canadian resident Frederick L. Sharp. In August 2021, the SEC charged Sharp with leading a fraudulent scheme that generated hundreds of millions of dollars from unlawful stock sales and caused significant harm to retail investors in the United States and around the world. Among other relief, the judgment orders Sharp to pay over $50 million in monetary relief.
Monetary Authority Of Singapore Imposes Civil Penalty Of $100,000 On Mdm Tan Su Lan For False Trading
Monetary Authority Of Singapore
The Monetary Authority of Singapore (MAS) has imposed a civil penalty of $100,000 on Mdm Tan Su Lan for false trading in the shares of Aspial Corporation Limited (ACL) and Far East Orchard Limited (FEOL)
Joint Statement of the 25th ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting
Monetary Authority Of Singapore
The 25th ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM+3) was convened on 12 May 2022 under the co-chairmanship of H.E. Dr. Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance of the Kingdom of Cambodia, H.E. Sum Sannisith, Deputy Governor of the National Bank of Cambodia and H.E. Liu Kun, Minister of Finance of the People’s Republic of China, H.E. Chen Yulu, Deputy Governor of the People’s Bank of China. The meeting was held in virtual format under the extraordinary circumstances due to the COVID-19 pandemic. The Vice President of the Asian Development Bank (ADB), the Director of the ASEAN+3 Macroeconomic Research Office (AMRO), the Deputy Secretary-General of ASEAN, and the Deputy Managing Director of the International Monetary Fund (IMF) were also present at the meeting.
Industry Taskforce Consults on Second Version of Green and Transition Taxonomy
Monetary Authority Of Singapore
Singapore, 12 May 2022… The Green Finance Industry Taskforce (GFIT)1, convened by the Monetary Authority of Singapore, today published for public consultation detailed thresholds and criteria for economic activities in the energy, transport, and real estate sectors. This builds on GFIT’s earlier proposed taxonomy in January 20212. It also incorporates a user guide for financial institutions and companies to apply the taxonomy.
Investing and Trading
Negative interest rates are not the drama they seem; Division among central bankers reflects errors that have distorted debate, writes Adam Posen
Adam Posen – FT
Ah, for the good old days of quantitative easing when central bankers agreed what needed to be done to spur economic growth. No longer. In Tokyo, Haruhiko Kuroda, Bank of Japan governor, has just reiterated that he will not rule out a “deepening cut” to the country’s negative interest rates. In contrast, Mark Carney, Bank of England governor, has announced he is “not a fan of negative rates” and Thomas Jordan, president of the Swiss National Bank, has reaffirmed his belief that its “current approach”, including negative rates, “is the right one”. Meanwhile, Janet Yellen, chair of the US Federal Reserve, told Congress in May that “while [she] would not completely rule out the use of negative interest rates”, they would be a last resort.
Global wheat crop set to fall for first time in four years, US forecasts; Futures rally 6% after Ukraine’s output is predicted to decline by more than a third
Emiko Terazono – FT
Global wheat production is likely to fall for the first time in four years, according to a closely watched US government forecast of the upcoming crop season, confirming fears of a further tightening of supply and rising food inflation. Chicago wheat futures for September delivery jumped almost 6 per cent to $11.82 a bushel after the US Department of Agriculture issued its first world estimates for the 2022-23 crop season. Grain traders, food companies and governments have been keeping a close eye on supplies since Russia’s invasion of Ukraine disrupted farming in the top-five wheat-exporting nation. The USDA on Thursday predicted Ukraine’s wheat production would fall by a larger than expected 35 per cent from the year before, to 21.5mn tonnes.
Wheat Prices Spike as US Sees War, Adverse Weather Hurting Crops
Megan Durisin, Michael Hirtzer and Tarso Veloso – Bloomberg
Production in Ukraine, one of the biggest growers, will fall by one-third compared to last year, according to a US Department of Agriculture forecast. Other major producers are battling drought, floods and heatwaves. In all, global stockpiles in the coming season will dwindle to a six-year low. Futures prices in the US surged by the most allowed by exchanges. The smaller wheat harvests and a slow start to the US planting season is risking more food inflation ahead. Hunger is already on the rise in many parts of the globe. In Chicago, benchmark wheat futures jumped by the maximum 70 cents a bushel after the report, which contains the USDA’s first global outlook for the coming season. Winter wheat and Minneapolis spring wheat each climbed by their daily limits to the highest since 2008 before trimming gains.
Amazon Shareholders Should Reject CEO Pay Package, Advisers Say
Matt Day – Bloomberg
Shareholders later this month will have an opportunity to express their views on how the e-commerce giant compensates its recently reshuffled executive ranks. Institutional Shareholder Services Inc. and Glass Lewis & Co., which advise investors on corporate governance issues, both recommend shareholders vote no in the non-binding vote. While it’s rare for the two firms to suggest rejecting executive pay packages, both recently recommended voting against them at Bayer AG and Discovery Inc. Jassy, who took the reins from founding CEO Jeff Bezos in July, was awarded a pay package valued at about $212 million in 2021, the company said, almost entirely in stock grants that vest over 10 years.
Global Diamond Trade Fractures Under the Weight of Russia Sanctions; US restrictions on Russia’s giant diamond miner are causing panic across the industry. Traders are hunting for workarounds to keep tapping one of the world’s main sources of precious gems.
Swansy Afonso – Bloomberg
Russia’s invasion of Ukraine is fracturing a billion-dollar trade that spans the permafrost-laden diamond mines of Siberia, secretive trade houses in Antwerp, dusty polishing powerhouses in India and New York’s glittering designer jewelry stores.
BofA Strategists Say Investor Exodus Signals ‘True Capitulation’; Tech suffers biggest weekly outflows so far this year: BofA; Strategists say bear market bounce could be coming soon
Sagarika Jaisinghani and Lisa Pham – Bloomberg
Money is leaving every asset class and the exodus is deepening as investors rush out of names like Apple Inc., according to Bank of America Corp. strategists. Equities, bonds, cash and gold all saw outflows in the week ended May 11, strategists led by Michael Hartnett wrote in a note, citing EPFR Global data. At $1.1 billion, technology stocks suffered their biggest withdrawals so far this year, second only to financials, which lost $2.6 billion.
Raging Nasdaq Selloff Nears $1 Trillion Weekly Loss; Amazon shares face longest string of declines since March 2008; Peloton, Coinbase results deepen eye-popping stock slumps
Ryan Vlastelica – Bloomberg
Milestones have followed one after another for technology stocks in this week’s market meltdown: Apple Inc. is no longer the world’s most valuable company, Amazon.com Inc. is on its longest losing streak in 14 years and the Nasdaq 100 Index is on pace for its biggest weekly slump since January.
Environmental, Social and Corporate Governance
JPMorgan, Goldman, Ford, others to disclose directors’ race and gender
Four top Wall Street firms and Ford Motor will start to disclose the race and gender of individual directors under deals reached with New York City pension officials, the city’s comptroller, Brad Lander, said on Thursday, while a utility company has pushed back on the idea. According to a representative for Lander, the companies, which include JPMorgan Chase, BlackRock, Morgan Stanley and Goldman Sachs in addition to Ford, will provide the self-identified disclosures on race, ethnicity and gender.
Lake Powell’s drought is part of a growing threat to hydropower everywhere; It’s time to assess water priorities in the American West and across the globe.
Sara Kiley Watson
The entire point of renewable energy is that it comes from a source we can’t use up. Just take solar and wind—the sun won’t stop shining, nor will the wind stop blowing. (If they did, we’d have much bigger problems than figuring out how to power our appliances.) As long as we set up these energy technologies where nature can do its best work, sources like solar and wind give us functionally limitless power without the atmosphere-warming greenhouse gasses emitted by fossil fuels.
U.S. civil rights enforcers warn employers against biased AI
Matt O’Brien – AP
The federal government said Thursday that artificial intelligence technology to screen new job candidates or monitor worker productivity can unfairly discriminate against people with disabilities, sending a warning to employers that the commonly used hiring tools could violate civil rights laws. The U.S. Justice Department and the Equal Employment Opportunity Commission jointly issued guidance to employers to take care before using popular algorithmic tools meant to streamline the work of evaluating employees and job prospects — but which could also potentially run afoul of the Americans with Disabilities Act.
To Solve the Fertilizer Crisis, Just Look in the Toilet; Human waste could be a huge source of agricultural nutrients as the costs of synthetics soar. All it would take are improvements in sewage treatment and some big changes in attitudes.
Adam Minter – Bloomberg
Record-high prices for synthetic fertilizers are making manure a hot commodity. With global food supplies under extreme pressure, fertilizer of any kind is critical to boosting yields and averting food scarcity. Animal manure is part of the solution, and its value has soared in recent weeks. But as farmers seek additional ways to secure nutrients for crops, it’s time to consider an even more plentiful option outside of the pigsty: human waste.
Canada banks face ‘greenwashing’ claims as oil & gas firms obtain sustainable financing
Nichola Saminather – Reuters
For banks in Canada, one of the world’s largest oil producers, it’s not easy being green. In the past two years, Canadian banks have increased the amount of sustainability-linked financing (SLF) they extend to oil and gas clients. SLF refers to financing whose cost changes when certain environmental, social and governance (ESG) requirements are met at the company level but does not require the funds themselves to be used for climate-friendly purposes.
Climate Change Caused Floods That Killed 435 in South Africa; Rainfall exceeded 350 millimeters over two days in some areas; Similar episodes of rainfall can be expected every 20 years
Antony Sguazzin and Khuleko Siwele – Bloomberg
South Africa’s deadliest floods in almost three decades was exacerbated by climate change and similarly heavy rainfall can be expected to occur more regularly, according to scientists collaborating under the World Weather Attribution initiative.
Asia Starts Its Journey Out of the ESG ‘Desert’; The fastest growing region for ESG debt issuance has come a long way in three years, but work still needs to be done to ensure the credibility of green finance products.
Kate Mackenzie – Bloomberg
Hiro Mizuno, former chief investment officer of Japan’s GPIF, the world’s largest pension fund, has recounted how Kofi Annan once said to him that Asian nations were a “desert” of responsible financing.
Oil Major Plans First for ESG Bonds in Japan With Rare Structure; Refiner Eneos Holdings plans to sell transition-linked bonds; ESG debt sales globally have climbed to trillions of dollars
Finbarr Flynn – Bloomberg
A Japanese oil refiner is planning to sell a climate-friendly bond that combines elements of two existing ESG debt structures, in what would be a first in the nation. Eneos Holdings Inc. said Friday that it intends to sell 100 billion yen ($777 million) of transition-linked notes, which are a mix of so-called transition bonds and sustainability-linked notes.
Venture Capitalists Are Aiming to Disrupt Fish Farming; Forever Oceans says it’s built technology that allows it to push into new frontiers for cultivated fish.
Priya Anand – Bloomberg
Off the western coast of Panama, near a town called Puerto Armuelles where Chiquita Banana once had a major presence, Forever Oceans is preparing to harvest and sell almost 3 million pounds of yellowtail to sell in filets or for sushi. While the eight-year-old startup’s product is seafood, its executives spend a lot of time talking about the innovation that goes into the floating cages where its fish spend their lives. The company will succeed, they say, because it has improved the core technologies, from specialized enclosures to sensors and robotics, needed to raise large amounts of seafood farther out in the ocean than traditional fish farms.
Smelting Giant Korea Zinc to Invest $6.6 Billion in Green Power; Company sets sights on battery recycling, hydrogen production; The heavy electricity user is seeking cheaper power sources
Yun Choi – Bloomberg
After nearly half a century expanding its bread-and-butter business into one of the world’s largest metal smelting operations, Korea Zinc Co. is setting its sights on renewable energy to cut costs and drive growth.
Schroders, BlackRock, Pimco Face Losses as Adler’s Troubles Grow
Laura Benitez and Luca Casiraghi – Bloomberg
Around 7.5 billion euros ($7.9 billion) of debt held in part by Schroders Plc, Pacific Investment Management Co LLC, Morgan Stanley, and BlackRock Inc. hangs in the balance after a series of dramatic developments ripped through the German landlord Adler Group SA and its web of interconnected real estate firms following accusations of wrongdoing at the company. In recent years Adler has grown from a little-known property firm to become one of Germany’s biggest landlords, funded by a who’s who of global finance, eager to capitalize on the higher yields the property firm offered. But its bonds started to slide last summer and now the company faces a funding crunch, just as the era of easy money draws to a close, leaving those who had wagered on the company’s 4.5 billion euros of notes nursing heavy losses.
Wall Street on Sale: Goldman, Robinhood Trading Near Book Value
Andrew Bary – Barron’s
Wall Street is on sale along with the much of the stock market, as industry leader Goldman Sachs Group is trading close to book value for the first time in two years. Smaller securities firms like Jefferies Financial Group and Cowen are trading below tangible book value. Banking giant Citigroup (C) has one of the cheapest stocks among major financials, at less than 60% of tangible book value. Buying securities firms below book value could reward investors since book value—or shareholder equity—is a proxy for liquidation value. Firms like Goldman Sachs (GS) have remained highly profitable and have asset-light businesses like investment banking and asset management that likely are worth considerably more than book value.
Heat wave set to rewrite record books in central, Northeast U.S., as climate change worsens
David Knowles – Yahoo! News
After baking the state of Texas, an early-season heat wave is poised to shatter temperature records across the central and Northeastern sections of the United States in the next few days. Unusually hot weather, with temperatures expected to top 100 degrees Fahrenheit throughout a broad stretch of the country, will affect millions of Americans from Texas to Maine and serve as yet another wake-up call as to the mounting evidence of climate change.
HSBC launches $1 bln lending fund for female entrepreneurs
HSBC Holdings (HSBA.L) said on Thursday it was launching a $1 billion lending fund to invest in female-owned businesses over the next 12 months. “The level of funding received over time by female-led businesses is significantly lower than male counterparts, while the recent impacts of the pandemic have seen these same businesses disproportionately affected,” Sam Cooper-Gray, global head of market strategy at HSBC Business Banking, said in a statement. “Female-owned businesses are also less likely to have global networks, meaning international expansion can prove particularly challenging,” she said.
Goldman Names Equities Heads for Japan, Greater China; Joyce to head Japan equities, Tsang to co-head China sales; Goldman reshuffled Asia equities team in April amid departures
Cathy Chan and Danny Lee – Bloomberg
Goldman Sachs Group Inc. made further leadership changes to its securities business in Asia following a reshuffle last month, as the New York-based bank is seeking to bolster its equities presence in Japan and China. John Joyce will relocate to Tokyo to become head of Japan Equities, while Alexis Tsang will rejoin the business from the firm’s Strategic Client Group to become co-head of Greater China equities sales with Philip Sun, according to an internal memo that was confirmed by a Hong Kong-based spokeswoman.
HSBC Begins Internal Analysis to Help Rebut Push for Split; Ping An wants HSBC to debate spinning out its Asian unit; Goldman Sachs is working with HSBC on its internal review
Manuel Baigorri, Harry Wilson, and Jan-Henrik Foerster – Bloomberg
HSBC Holdings Plc has begun an internal review that’s part of an effort to rebut calls from its largest shareholder to discuss splitting off its Asian operations. The London-headquartered bank is examining the case for a breakup after Bloomberg reported late last month that Ping An Insurance (Group) Co. was pushing the lender to spin off its Asian unit to improve returns, according to people familiar with the matter, who asked not to be identified discussing private information.
SoftBank’s Funds Post $27 Billion Loss on Plunging Tech Investments; The Japanese conglomerate’s fortunes have sharply reversed from a record-setting result a year ago.
Paul Mozur – NY Times
The news has gone from bad to worse for SoftBank. The Japanese conglomerate said on Thursday that it had lost about $27 billion in its two Vision Funds for the year that ended in March, as many of the major tech companies it invests in have struggled under rising inflation, concerns about Covid lockdowns in China and broad weakness in global equity markets.
Invesco launches onshore China equity ETFs in Europe; The two funds will use swaps to replicate the performance of A-share indices providing large-cap and mid-cap exposure
Alf Wilkinson – FT
Invesco has added two onshore Chinese equity exchange traded funds to its line-up, both of which will use swaps to offer a synthetic replication model. The Invesco S&P China A 300 Swap and Invesco S&P China A MidCap 500 Swap Ucits ETFs have been launched on exchanges in the UK, Germany, Italy and Switzerland.
The Countries That Avoided a Pandemic Inequality Disaster; Covid has threatened decades of economic progress. Some places have blunted the damage.
Ben Steverman and Enda Curran – Bloomberg
From 2000 to 2019, median incomes in poorer nations rose faster than in wealthy ones, and the number of people living in extreme poverty fell from more than one in four to less than one in 10. Then came Covid-19, threatening to undo that progress. At the start, it seemed obvious that the economic costs — job loss, erosion of wealth, even loss of life — would fall disproportionately on the poor and leave them worse off. The rich, while unable to insulate themselves from illness and mortality, would be safeguarded by an abundance of resources.
Coronavirus: 1 in 5 Hong Kong families unhappy, with mothers suffering more, as overall happiness index of households slips in new survey; Survey finds 81.1 per cent of 1,633 people interviewed scored six and above on family happiness, but overall index of 6.98 is lowest since 2019; Mothers found to have been affected more negatively by Covid-19, ranking lower on family and personal happiness, and scoring worse on perceived financial difficulties
Fiona Sun – South China Morning Post
One in five Hong Kong families felt unhappy, with mothers suffering more than fathers, while the overall happiness index of households dropped this year because of the city’s fifth Covid-19 wave, a survey revealed on Thursday. The survey, launched by the happiness advocacy platform HK.WeCARE of Wofoo Social Enterprises and Lee Kum Kee Family Foundation, interviewed a total of 1,633 people via online questionnaires between March and April this year, and found 81.1 per cent of them scored six and above on a scale of zero to 10 on family happiness. Overall, the city’s family happiness index stood at 6.98, the lowest since 2019, compared with 7.26 in 2021.
What the current spike in Covid-19 cases could say about the coronavirus’ future
Andrew Joseph – STAT News
As the Omicron wave subsided in the United States earlier this year, many experts anticipated a sort of reprieve. We certainly weren’t done with Covid, but perhaps we would get a well-deserved rest. That break seems to be over. An increase in infections that began in places including the Northeast and Puerto Rico is now being seen in other parts of the country. Cases will rise and fall going forward, but more worryingly, hospitalizations have started to increase as well — up 20% over two weeks. The decline in deaths has bottomed out at some 350 a day.
U.S. licenses key Covid vaccine technology to WHO so other countries can develop shots
Spencer Kimball – CNBC
President Joe Biden on Thursday said the U.S. has licensed a key technology used in the current Covid-19 vaccines to the World Health Organization, which would allow manufacturers around the world to work with the global health agency to develop their own shots against the virus. The National Institutes of Health has licensed its stabilized spike protein technology to the WHO and United Nations’ Medicines Patent Pool, Biden said.
Saudi Energy Minister Says Record Fuel Costs Driven by Refining Crunch; Refinery closures have reduced capacity: Prince Abdulaziz; Prince forewarned of crisis at conference in India in October
Grant Smith – Bloomberg
Saudi Arabia’s top oil official said that a refining crunch — rather than any shortage of crude — is driving the surge in fuel costs to unprecedented levels. “The bottleneck is now to do with refining,” Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview. “I did warn this was coming back in October. Many refineries in the world, especially in Europe and the US, have closed over the last few years. The world is running out of energy capacity at all levels.”
Emerging Markets Look So Dire That Brandywine Keeps 25% in Cash; Valuations not attractive given headwinds: Brandywine’s Arno; EM bonds are struggling to compete with US Treasuries
Selcuk Gokoluk – Bloomberg
Brandywine Global Investment Management would rather hold cash than put more money into emerging-market bonds. The money manager, which has $17 billion in emerging-market assets, is holding 25% of its emerging-market funds in cash, up from a normal level of 3% to 5%. Michael Arno, a Philadelphia-based money manager at the firm, said he’d rather let inflation eat into the funds’ holdings than risk bigger losses in EM bonds, which are struggling to compete with US Treasury yields.
Sheikh Khalifa, U.A.E. Ruler, Is Dead at 73; Sheikh Khalifa bin Zayed Al Nahyan was a key figure in his country’s history and one of the world’s richest monarchs. But he had a stroke in 2014 and had stepped back from many public duties.
Ben Hubbard – NY Times
The ailing ruler of the United Arab Emirates, Sheikh Khalifa bin Zayed Al Nahyan, a key figure in his country’s history and one of the world’s richest monarchs, died on Friday, the state-run Emirates News Agency reported. He was 73.
El Salvador’s Bitcoin Losses Are Equal to Next Bond Payment
Aline Oyamada and Michael McDonald – Bloomberg
The rout that has driven Bitcoin down some 40% since late March has deepened President Nayib Bukele’s cumulative losses on the government’s holdings to about $40 million, according to an estimate by Bloomberg. That’s a little more than the country’s next coupon payment on its foreign debt, with $38.25 million due in June 15 on notes maturing in 2035. Bukele’s government spent about $105 million buying Bitcoins since becoming the world’s first government to make it legal tender in September, based on his announcements on Twitter. The cryptocurrency has fallen 45% since the first purchase, cutting down the value of the nation’s 2,301 Bitcoins to about $66 million.