FTX’s Original Sin Is a Warning to All of Crypto

Mar 28, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

Bernard Goyder of Risk.net has a big scoop that BGC Group, led by Howard Lutnick, is in discussions with banks and principal trading firms (PTFs) to form a consortium that would have a stake in its electronic trading and exchange businesses. The story is titled “BGC forming consortium to take on CME Group’s rates empire” with the subheadline “Banks and PTFs are being offered a stake in FMX, which has CFTC approval to launch a futures exchange.” Here is a summary of the article:

Negotiations, ongoing for several weeks, involve major US Treasury dealers such as Bank of America, Barclays, Citadel Securities, Citi, Goldman Sachs and JP Morgan. The consortium aims to challenge CME Group‘s dominance in the US rates market, where CME operates BrokerTec, the largest interdealer venue. FMX, a unit of BGC, recently obtained CFTC approval to launch a futures exchange competing directly with CME’s interest rate futures complex. However, final details of the consortium, including governance, economic terms, and asset inclusion, are still being negotiated. Despite complexities, consortiums are common in fixed-income trading, with examples like BrokerTec and Tradeweb. A BGC spokesperson challenged the accuracy of Risk.net’s report without specifying the inaccuracies. However, both the banks and PTFs involved declined to provide any comments on the matter.

Goyder wrote a previous story about the cash Treasury markets on March 6 titled “Clobbered: how ‘toxic’ flows reshaped US Treasury trading” with the subheadline “Volumes have dropped by more than a third at BrokerTec. The reasons are complex, the outlook uncertain.” Here is a summary of that story:

Since CME Group acquired BrokerTec in 2018, daily trading volumes for US Treasury securities on the platform have plummeted by 39%, with dealers increasingly relying on internalizing customer flows and sourcing liquidity from non-bank market-makers, even as US Treasury issuance has soared. Around 10% of all US Treasury trading now occurs via streaming channels, and BGC’s Fenics UST has secured a 25% share of interdealer volumes since its 2018 launch. Non-bank liquidity providers say it has become harder to profitably monetize the remaining dealer flows on BrokerTec. “It’s just leftovers,” says a PTF source.

The issue of “toxic” flows on BrokerTec has prompted dealers to seek alternative venues, such as streaming services offered by Tradeweb and MarketAxess, which have seen significant growth. Lutnick’s Fenics UST has emerged as a big winner with its curated order book approach. Despite the decline, BrokerTec remains a significant player in US Treasury trading, particularly during periods of volatility, though it faces challenges from evolving market dynamics and increased competition. But things are looking up; regulatory changes, such as the US Treasury clearing mandate, could impact BrokerTec’s future trajectory, boosting CME’s critical role in a fully cleared inter-dealer US Treasury market.

The Langer v. CME Group, Inc. class action lawsuit has continued to grind through its various steps since the January 30 hearing laid out the timetable for the CME to make its case to decertify the class action status and to exclude the expert testimony of Dr. Jonathan Arnold. The judge has also outlined the schedule for the replies and a status conference. The plaintiffs have until April 12, 2024 to reply to the CME’s motions for summary judgment, to decertify the class, and to exclude the testimony of Plaintiffs’ expert Jonathan Arnold. On May 14, the CME will have a chance to reply one more time and on May 29 there will be a status conference via Zoom.

If you are interested in reading any of the filings, you can read the CME’s February 16 “Memorandum of Law in Support of their Motion to Decertify the Class” or its “Memorandum of Law in Support of their Motion for Summary Judgment.” The latter is an excellent history of the CME and CBOT and their journey through the transition to electronic trading, demutualization and merging.

Lastly, there is the February 16 “Defendants’ Memorandum of Law in Support of their Motion to Exclude the Testimony of Dr. Jonathan Arnold,” which made me want to pass a law preventing lawyers from using sharp knives, as Dr. Arnold appeared to have been eviscerated by the CME’s legal team. For his part, Dr. Arnold’s report from this past July, when he estimated the “total foregone fees across all Plaintiffs is $1.008 billion excluding prejudgment interest and $1.390 billion including prejudgment interest through June 30, 2023,” can be found HERE.

The Financial Times is reporting that research shows that the melting of polar ice due to climate change is impacting global timekeeping by slowing down the Earth’s rotation. This phenomenon has been observed through changes in Earth’s gravity field measured by satellites since 1976. As a result, the Earth’s rotational speed deviates from standard time, leading to periodic additions of leap seconds to co-ordinate universal time (UTC). Recently, fluctuations in the Earth’s core have caused it to rotate faster, prompting discussions about the possibility of implementing a negative leap second by 2026.

The New York Times is reporting that Anguilla has raked in over $32 million, a significant portion of its GDP, from registration fees for “.ai” internet addresses. With the rise of artificial intelligence, companies clamor for domain names reflecting their involvement in the sector, fueling a surge in demand for “.ai” addresses, including notable entities like Elon Musk’s A.I. company.

CNN is reporting that Germany is considering a ban on breeding dachshunds and other dog breeds prone to skeletal anomalies, sparking concerns among dog lovers. The proposed law aims to prevent “torture breeding” and strengthen animal protection regulations. However, this move has raised eyebrows, leaving Snoopy and other beloved breeds wondering if they’ll be next on the chopping block. I for one will tell you the world would be worse off without the comedian dogs known as dachshunds.

FIA Boca is done, which means one thing: FIA is getting ready for IDX in London. You can see details and register for the June 17-19 conference HERE.

The SEC’s Office of Human Resources is hosting a virtual information session on April 9, 2024 from 11:00 AM – 12:00 PM CDT designed to share information about the agency’s SEC Scholars Program, application process, and helpful tips for interested applicants.

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

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The Climate Investment Summit returns to London Climate Action Week on June 26, 2024, for its fifth consecutive year. Partnering with the London Stock Exchange Group for the third time, the summit is focused on current and emerging investment trends in clean energy, decarbonization, and climate and nature-based solutions. With climate finance taking center stage at the upcoming COP29, the urgency of funding transformative solutions for climate change is apparent. Participants can attend virtually or in person. Learn more and register HERE. ~SAED

Our most read stories from our previous edition of JLN Options were:
A Turbocharged Bitcoin ETF Is More Popular Than TSMC in Korea from Bloomberg.
LIST completes migration to Euronext’s Optiq from The Trade.
Volatility shape-shifters: arbitrage-free shaping of implied volatility surfaces from Risk.net. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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Google Cloud’s Rohit Bhat Discusses the Future of Data, AI, and the Cloud in Financial Markets
JohnLothianNews.com

Data is the next gold rush, says Google Cloud’s Rohit Bhat. Bhat was interviewed at FIA’s International Futures Conference in Boca Raton, FL by John Lothian News for the JLN Industry Leader series sponsored by Wedbush. Bhat spoke about the critical role of data, artificial intelligence (AI), and cloud technology in driving innovation and differentiation.

Watch the video »

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House Republicans Demand SEC Explain What’s Up With Crypto Platform Prometheum
Jesse Hamilton – CoinDesk
As Prometheum Inc. nears an unprecedented moment in U.S. crypto history by beginning a custody operation that intends to hold customers’ Ethereum tokens {{ETH}}, the industry’s friends in Congress are demanding the Securities and Exchange Commission (SEC) explain what it means to do about this first U.S. special purpose broker-dealer (SPBD) for digital assets.
“We are faced with an alarming scenario in which a SPBD has announced that it intends to offer custodial services for ETH under a regime that does not permit such activity,” the Republican chairmen of the House Financial Services and Agriculture committees wrote in a letter to SEC Chair Gary Gensler, also signed by 46 other members of Congress. “This action, if allowed to proceed, could have irreparable consequences for the digital asset markets.”
/jlne.ws/43EbpuN

***** The Prometheum conundrum.~[JJL]]

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Don’t Be Fooled: The Worst Corporate April Fools’ Jokes and How to Spot Them; Some April 1 jokes hit the mark, some fail miserably; Classics include ‘Voltswagen,’ circus CEOs and talking tulips
Chloe Meley – Bloomberg
It’s that time of year again – April Fools’ Day is around the corner with investors waiting to see where the first joke will land and whether anyone will fall for it. Will it be via an X post? Or a company statement? Or a video message? From TGI Fridays Inc. announcing that its chief executive officer will step down to join the circus to Volkswagen AG’s purported name change to “Voltswagen” in the US, what’s meant to be a fun ploy to bolster a brand runs the risk of turning into a flop.
/jlne.ws/3IVLd5j

***** Look for announcements like this: “FutureTrade Inc., a leading innovator in the financial technology sector, is proud to announce the launch of the world’s first time-traveling trading platform, TimeTrader. This groundbreaking platform revolutionizes the futures markets by allowing traders to access future market data before it even happens, providing an unprecedented advantage in trading strategies. TimeTrader utilizes cutting-edge quantum algorithms and temporal displacement technology to bring traders market insights from the future. With this platform, traders can accurately predict market movements with 100% accuracy, enabling them to make informed decisions and capitalize on market trends before they unfold.” ~JJL

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Dear Donald Trump, Here’s How to Manage Your Stock-Market Fortune; It requires recognizing a fundamental truth about Truth Social: The current valuation can’t last
James Mackintosh – The Wall Street Journal
Dear Mr. Trump,
Congratulations! You have finally managed to make it as a multibillionaire, at least on paper-and thanks to the meme-ification of your Trump Media & Technology Group DJT 2.51%increase; green up pointing triangle under the ticker DJT, you are in the unusual position of being majority owner of a company bigger than some members of the S&P 500. Now comes the hard part: turning it into cash. You have a few options, but the bad news is that none of them are assured.
/jlne.ws/3TSpJN5

***** I can’t wait to hear whose fault it is that the price of DJT went down when he tries to cash out.~JJL

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Wednesday’s Top Three
Our most clicked item Wednesday was the John Lothian News video Futures Discovery: Physical Delivery VS Cash Settlement, episode 7 in our Futures Discovery video series, which was no. 2 on Tuesday. Second was SEC Charges Former Arista Networks Chairman Andy Bechtolsheim with Insider Trading, a litigation release from the SEC. Third was How will the cost of Sam Bankman-Fried’s crimes be counted at sentencing? from the Financial Times.

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Lead Stories

FTX’s Original Sin Is a Warning to All of Crypto; Evidence from the criminal trial of Sam Bankman-Fried suggests fraud was built into FTX from the very beginning.
Zeke Faux and Max Chafkin – Bloomberg
Sometime between FTX’s collapse and Sam Bankman-Fried’s fraud conviction a year later, a consensus formed about the onetime boy genius of cryptocurrency: His wild, curly hair and beanbag chair naps at the office were largely for show, but his company FTX, which had been used by millions of people to buy and sell digital currencies, was the real deal. The crypto faithful see FTX as an almost-success story-if only its owner hadn’t taken customer money to cover side gambles. As the author Michael Lewis put it on 60 Minutes, “They actually had a great, real business.” That idea has been bolstered by a twist in the FTX bankruptcy: When the company collapsed, $8 billion in customer funds had vanished, but the lawyers running it now say they expect to recover enough money to pay back everyone in full. Bankman-Fried’s allies have used this to suggest that the customer funds weren’t so much stolen as they were redirected into at least a few surprisingly good investments. “Whatever else might be said about Bankman-Fried, he was a brilliant businessman,” the law professors Ian Ayres and John Donohue wrote in a recent essay arguing he was wrong to even declare bankruptcy. His lawyers have used this argument to call for a light sentence; on March 28 a federal judge will decide whether to go easy on him or send him to prison for 40 years or more, as prosecutors are seeking.
/jlne.ws/49gruIv

U.S. Department of the Treasury Releases Report on Managing Artificial Intelligence-Specific Cybersecurity Risks in the Financial Sector
U.S. Department of the Treasury
Today, the U.S. Department of the Treasury released a report on Managing Artificial Intelligence-Specific Cybersecurity Risks in the Financial Services Sector. The report was written at the direction of Presidential Executive Order 14110 on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. Treasury’s Office of Cybersecurity and Critical Infrastructure Protection (OCCIP) led the development of the report. OCCIP executes the Treasury Department’s Sector Risk Management Agency responsibilities for the financial services sector.
/jlne.ws/49dr1Xl

SBF Prison Time Hangs on Persuading Judge He Is No Bernie Madoff; Prosecutors are seeking 40-50 years for disgraced crypto mogul; FTX customers, investors incurred losses of over $10 billion
Bob Van Voris and Hannah Miller – Bloomberg
The judge presiding over Sam Bankman-Fried’s sentencing Thursday will have to decide whether the fallen crypto mogul is a run-of-the-mill financial fraudster or a villain eclipsed only by Ponzi scheme mastermind Bernie Madoff. Whichever view carries the day will determine whether the 32-year-old Bankman-Fried spends most of his remaining years behind bars or emerges from prison while still in middle age.
/jlne.ws/4acf45o

Coinbase must face US securities regulator’s lawsuit, judge says
Hannah Lang and Jody Godoy – Reuters
A federal judge in Manhattan on Wednesday said the U.S. Securities and Exchange Commission’s lawsuit against Coinbase can move forward, but dismissed one claim the regulator made against the largest U.S. cryptocurrency exchange. U.S. District Judge Katherine Polk Failla partly granted Coinbase’s motion to dismiss the SEC’s lawsuit which alleges the company is flouting its rules. While the decision is a partial win for Coinbase in what could be a lengthy and expensive court battle, it largely blesses the SEC’s approach to cryptocurrency and agrees with other judges who have sided with the regulator.
/jlne.ws/3vv7uUx

Judge rejects Coinbase’s ‘major questions doctrine’ argument in landmark SEC case
Leo Schwartz – Fortune
The Securities and Exchange Commission notched a victory on Wednesday in its ongoing campaign to rein in the crypto industry, as Judge Katherine Failla ruled largely against a motion by Coinbase to dismiss a lawsuit brought by the agency. In her 84-page decision, Failla argued that the SEC had adequately alleged that Coinbase, the leading crypto exchange in the U.S., had operated outside of securities laws by offering products involving cryptocurrencies to users without first registering with the agency.
/jlne.ws/3TW4OsD

How the Sam Bankman-Fried Trial and Sentencing Unfolded, Day by Day; FTX founder was convicted of fraud over collapse of the crypto exchange
James Fanelli, Caitlin Ostroff and Corinne Ramey
This is your place to review FTX founder Sam Bankman-Fried’s criminal trial, which ended with his conviction. A judge is set to sentence him on Thursday, March 28. We’ve shared our daily observations from the courthouse in a reporter’s notebook below.
/jlne.ws/49dEqyA

How will the cost of Sam Bankman-Fried’s crimes be counted at sentencing? Disputes over how much FTX customers have lost come to the fore as crypto exchange founder awaits his fate in US court
Scott Chipolina and Joe Miller – Financial Times
When Sam Bankman-Fried is sentenced on Thursday, the US judge deciding his fate will weigh a range of factors, from the nature of his offences and history to how much his actions cost the investors and customers of the FTX crypto exchange he founded. Defining the financial fallout from his crimes has proven particularly contentious, with lawyers for the former crypto kingpin and the prosecutors who convicted him taking sharply divergent views.
/jlne.ws/3VzrRKK

UBS Banker’s Frustration Exposes Cracks in World of Climate Finance; The world’s biggest banks are quietly hanging on to carbon-intensive clients because of what they see as unrealistic demands from regulators and civil society – and the threat to their fees.
Alastair Marsh and Natasha White – Bloomberg
Judson Berkey didn’t hold back. It was early February and the UBS Group AG banker had WebEx-dialed into a meeting held on the 17th floor of the Japanese Financial Services Agency’s building in the Kasumigaseki district of central Tokyo. The closed-door gathering with representatives of the Federal Reserve, the European Central Bank and public officials from around the world was billed as a “check-in” for regulators to ask key market participants how they were dealing with the growing tapestry of rules and guidelines around transitioning the economy away from high-carbon assets. What might otherwise have been a staid conference took an unexpected turn as Berkey, group head of engagement and regulatory strategy at UBS, interjected. The finance industry was being asked to align loans, investments and capital-markets portfolios with a global warming trajectory of 1.5C, while the planet may in fact be hurtling toward a 2.8C increase from pre-industrial times, he noted.
/jlne.ws/3TUNELO

OpenYield Launches Fully Automated, Equity-Like Marketplace to Lead Bond Trading Into the Next Era; OpenYield’s unique liquidity, low cost and flexible technology makes it easy for broker-dealers, advisors and asset managers to offer attractive bond investing solutions to retail clients
OpenYield Trading LLC
OpenYield Trading LLC, a FINRA-registered broker-dealer and SEC-registered alternative trading system (ATS), today printed its first trade, marking the launch of its platform. OpenYield modernizes fixed-income investing and empowers broker-dealers, advisors and asset managers to easily enter the bond market or enhance their existing offerings. With unique liquidity, no minimums, flexible APIs and a powerful technology stack that delivers data and analytics, OpenYield provides a low-cost, equity-like marketplace for bond trading.
/jlne.ws/3IXpMAY

Over $1B in U.S. Treasury Notes Has Been Tokenized on Public Blockchains; Tokenized Treasuries are digital representations of U.S. government bonds that can be traded as tokens on the blockchain.
Omkar Godbole – CoinDesk
The market for tokenized U.S. Treasury debt is booming. The market value of Treasury notes tokenized through public blockchains like Ethereum, Polygon, Valanche, Stellar and others has crossed above $1 billion for the first time, data tracked by Tom Wan, an analyst at crypto firm 21.co, show. Tokenized Treasuries are digital representations of U.S. government bonds that can be traded as tokens on the blockchain. The market value has risen nearly 10-fold since January last year and 18% since traditional finance giant BlackRock announced Etheruem-based tokenized fund BUIDL on March 20.
/jlne.ws/43AxkD8

AI Is Making Financial Fraud Easier and More Sophisticated, US Treasury Warns; Agency will look at ways to improve cross-agency coordination; Gaps identified in capabilities of small firms versus large
Allyson Versprille – Bloomberg
Artificial intelligence is making it easier for fraudsters to carry out more sophisticated attacks on financial firms, the Treasury Department said in a report Wednesday. Recent advancements in AI mean criminals can more realistically mimic voice or video to impersonate customers at financial institutions and access accounts, the agency wrote. They also allow bad actors to craft increasingly sophisticated email phishing attacks with better formatting and fewer typos, according to Treasury.
/jlne.ws/4axH0AB

UBS makes Sergio Ermotti best-paid European bank boss; Swiss lender awards returning chief executive $15.9mn for steering integration of Credit Suisse
Owen Walker – Financial Times
UBS has made Sergio Ermotti Europe’s best-paid bank boss less than a year after he returned to the lender, saying the Swiss executive had successfully steered the integration of rival Credit Suisse. Ermotti was paid a total of SFr14.4mn ($15.9mn) last year, the bank’s annual report said on Thursday, higher than the SFr12.6mn received by his predecessor Ralph Hamers in 2022. But Ermotti’s pay was only for nine months. Spread across a full year, his total pay package would be SFr19.2mn. Ermotti was parachuted back into the top job – a role he previously had for nine years – just weeks after UBS agreed to rescue Credit Suisse last March. Since then, the bank’s share price has climbed 60 per cent.
/jlne.ws/3VvB9rk

Ukraine Invasion

Putin tells pilots: F16s can carry nuclear weapons but they won’t change things in Ukraine
Reuters
If Western countries supply Ukraine with F-16 fighters, the aircraft will not alter the situation on the battlefield, Russian news agencies quoted President Vladimir Putin as telling military pilots on Wednesday. But the fighters, he was quoted as saying, can carry nuclear weapons and Moscow would have to take account of that in its military planning. “If they supply F-16s, and they are talking about this and are apparently training pilots, this will not change the situation on the battlefield,” Tass quoted Putin as telling pilots at a gathering northwest of Moscow.
/jlne.ws/4ct7THT

Russia perseveres with bombardments of Ukraine in an effort to wear down air defenses
Illia Novikov – Associated Press
Russia fired salvoes of drones and missiles overnight at southern and eastern regions of Ukraine, authorities said Thursday, injuring more than a dozen people as the Kremlin’s forces persevered with attritional attacks designed to wear down Ukrainian defenses. Air defense systems intercepted 26 out of 28 Shahed drones, Ukraine’s air force said. Russian forces also launched five missiles overnight, it said.
/jlne.ws/49d36aE

Just three weapons will turn the Ukraine war back around. And the USA is back in the fight
David Axe – The Telegraph
Six months after blocking US president Joe Biden’s proposal to spend another $61 billion on aid to Ukraine, Speaker of the House Mike Johnson – who alone can schedule votes in the narrowly Republican-controlled legislative body – seems to have reversed his opposition to Ukraine’s war effort. With retirements and special elections having reduced his majority to just two votes out of 438, and with a small contingent of far-right Republican extremists refusing to vote on any bill that has bipartisan support, Johnson increasingly relies on Democrats to enact budgets and other legislation.
/jlne.ws/3IXhrNG

How Ukraine is using mobile phones on 6ft poles to stop drones
Joe Barnes – The Telegraph
Ukraine is using a network of thousands of mobile phones deployed across the country to track incoming drones and missiles. The project, which Ukrainian sources have said is too secretive to discuss in detail, was disclosed by the US Air Force’s most senior officer in Europe at a recent event. General James Hecker, head of US Air Forces in Europe, described the most simplistic acoustic sensors as a network of thousands of mobile phones attached to 6ft poles.
/jlne.ws/3vwhUDm

Israel/Palestine Conflict

Israel Set Out to Destroy Hamas and Free Hostages-but Worries It Can’t Do Both; Many see the war’s two objectives as irreconcilable, upsetting unity and threatening to collapse the government
Dov Lieber – The Wall Street Journal
Zvika Mor’s 22-year-old son Eitan was taken hostage by militants on Oct. 7, but he says he can’t support a cease-fire deal that would allow Hamas to survive, even if it would free his oldest child. “I really care about my son,” said Mor, a father of eight and life coach for teens with ADHD. “But I really understand this is a national issue. We are talking not only about my son’s life, but millions of people here, including my other kids, and grandchildren.”
/jlne.ws/4auapeY

Exchanges, OTC and Clearing

SIX picks up majority stake in fixed income data provider FactEntry; The move is set to further enhance SIX’s position within the asset class globally, solidifying it as a provider of fixed income data and solutions.
Claudia Preece – The Trade
SIX has acquired a majority stake in FactEntry – a global provider of fixed income reference data, analytics, and solutions – in a bid to solidify its position in the asset class as a provider of data and analytics globally.
The acquisition closed yesterday 27 March. Financial details are yet to be disclosed.
/jlne.ws/3vCQCLt

Abaxx Announces Closing of C$18,687,500 Bought Deal Financing Including Full Exercise of Over-Allotment Option
Abaxx
Abaxx Technologies Inc. (CBOE CA:ABXX) (“Abaxx” or the “Company”), a financial software and market infrastructure company, majority shareholder of Abaxx Singapore Pte Ltd., the owner of Abaxx Commodity Exchange and Clearinghouse (individually, “Abaxx Exchange” and “Abaxx Clearing”), and producer of the SmarterMarkets™ Podcast, is pleased to announce that it has closed its previously announced bought deal financing (the “Offering”). The Company issued a total of 1,437,500 common shares (the “Common Shares”) on a bought deal basis at an offering price of C$13.00 per Common Share (the “Offering Price”), which includes 187,500 Common Shares issued pursuant to the exercise of an over-allotment option, in full, for gross proceeds of C$18,687,500.
/jlne.ws/3x7Dbne

NSE Indices wins ‘2024 Best of the Best Awards’ by Asia Asset Management for Index Provider of the Year in India & Best ESG Index Provider in India
National Stock Exchange of India
NSE Indices Ltd, a subsidiary of NSE and a leading provider of indices and index-related services for the capital markets, is proud to announce that it has been honoured with two prestigious awards at the Asia Asset Management Best of the Best Awards 2024. NSE Indices has won awards for ‘Index Provider of the Year in India’ and ‘Best ESG Index Provider in India.’ For the past five years, NSE Indices Ltd has consistently won the title of the Index Provider in India, as recognised by Asia Asset Management. The Asia Asset Management Best of the Best Awards, an annual award program organized by Asia Asset Management, celebrates excellence in the financial sector by recognising outstanding achievements of financial institutions and pension funds throughout the past calendar year.
/jlne.ws/3vxur9K

FTSE Russell announces the results of its March 2024 country classification review for equities and fixed income
London Stock Exchange Group
Portugal will be added to the FTSE World Government Bond Index (WGBI) effective with the November 2024 index profiles. FTSE Russell, the global index provider, has published the results of its March 2024 country classification review for equities and fixed income.
/jlne.ws/43BVgpE

EBS Market on CME Globex Notice: March 28, 2024
CME Group
To EBS Customers From CME Group # 20240328. Notice Date 28 March 2024 Topics in this issue include: CRITICAL SYSTEM INFORMATION
/jlne.ws/3ISERDU

CME Globex Notices: March 25, 2024
CME
To: CME Globex and Market Data Customers From: Global Market Solutions & Services (GMSS) # 20240325 Notice Date: 28 March 2024 Topics In This Issue Include: Critical Updates
/jlne.ws/49eOlUz

CME STP Notices: March 28, 2024
CME
To: CME STP Customers From: Global Market Solutions & Services (GMSS) # 20240328 Notice Date: 28 March 2024 Topics In This Issue Include: CME STP AND CME STP FIX CME STP Support of European Markets Infrastructure Regulation (EMIR) Refit Obligations for CME Cleared OTC IRS/FX – April 14 Equity Option Trade Type Flags in CME STP FIXML and FIX – April 28 CME STP Migration for EBS Customers – December 31
/jlne.ws/4aBhnPv

Clearing Transformation Functionality – Effective July 22, 2024
CME Group
Please be advised that CME Clearing is planning to move forward with the new Clearing Transformation functionality. The results of this operation will affect open interest, but will not be included in Exchange volume totals. The results of Clearing Transformation will be eligible for Post-Trade Processing (Give-Up, and Average Pricing). The Production Date for this change will be for trade date Monday, July 22, 2024.
/jlne.ws/4cvIqgP

EEX Zonal Futures for Nordic power derivatives markets: successful first week of trading
European Energy Exchange
The European Energy Exchange (EEX) has launched its new zonal futures products for the Nordic power derivatives markets. To date, the first week has seen a total of 10 trades in the Swedish (SE3) and Danish (DK1) bidding zones, with a total traded volume of 32,811 MWh. The very first trade on the first day of availability was concluded by Norlys Energy Trading and Uniper on the Swedish zone SE3.
/jlne.ws/3VBEnJW

Seventh SALTA Annual Awards for the South African Exchange Traded Product (ETP) Industry
JSE
Satrix Managers (Pty) Ltd, the pioneers of the Exchange Traded Funds ETF industry in South Africa, have again taken the most SALTA Awards at a function held at the JSE in Sandton on Wednesday evening, 27 March 2024. Satrix are to be congratulated on, once more, coming out on top as the premier issuer of listed tracking products in South Africa.
/jlne.ws/4ao11cS

TMX Group Limited to announce Q1 2024 financial results on Thursday, May 2, 2024; Analyst conference call and Annual and Special Meeting of Shareholders to be held Friday, May 3, 2024
TMX Group Limited
TMX Group Limited will announce its financial results for the first quarter ended March 31, 2024 in the evening of Thursday, May 2, 2024. An analyst conference call to review the results will be held at 8:00 a.m. EDT on Friday, May 3, 2024.
/jlne.ws/3IYwFlm

Special Change in KRX Minimum Volatility Index, etc. for Alchera
KRX
Since Alchera(347860) has been designated as “Investment Attention Issue” on March 28th, 2024, KRX will remove the constituent from KRX Minimum Volatility Index, etc. Applied indices : KRX Minimum Volatility Index, KRX FactSet Digital Infrastructure Index.
/jlne.ws/4awqLnl

Excused Withdrawals of Market Maker Quotations
MEMX
This Regulatory Notice is being provided by Members Exchange (“MEMX” or “Exchange”) to all MEMX Market Makers as a reminder of the excused withdrawal process. MEMX rule 11.20(d)(1) states that all MEMX registered Market Makers must enter and con;nuously maintain a twosided trading interest. MEMX rule 22.6(d) states that all MEMX registered Op;ons Market Makers must enter con;nuous bids and offers in 60% of the cumula;ve number of seconds, or such higher percentage as the Exchange may announce in advance. There are certain circumstances where excused withdrawals are permiSed.
/jlne.ws/3TDgnmU

Fintech

Amazon Invests $2.75 Billion in AI Startup Anthropic
Matt Day and Rachel Metz – Bloomberg
Amazon.com Inc. says it’s investing an additional $2.75 billion in Anthropic, completing a deal it made last year to back the artificial intelligence startup and expand a partnership between the companies. The infusion brings Amazon’s total investment in Anthropic, a well-regarded builder of AI tools able to generate text and analysis, to $4 billion, following an earlier investment announced in September. As part of that deal, Amazon had the right to contribute the additional funds in the form of a convertible note, provided it did so before the end of March.
/jlne.ws/3IWyMpS

How Silicon Valley’s ‘Oppenheimer’ found lucrative trade in AI weapons; Anduril Industries’ Palmer Luckey is leading the start-ups infiltrating the US government’s war machine
Tabby Kinder – Financial Times
From below, the ALTIUS-600M looks like a black cross sailing through the sky. It has a slender fuselage and a stretched wingspan that makes it twice as wide as it is long. Up close, it’s a blend of metal and circuitry, a sleek and ominous testament to human ambition. It is also one of the first artificially intelligent weapons to be deployed by the US in a real war. Shot from a tube like a missile, first its wings telescope outwards, then it identifies its target, flying for up to 280 miles. It circles high in the sky, for as long as four hours, and then strikes on the ground. The “M” is for munitions; on impact it explodes in a ball of flames.
/jlne.ws/3xaPPlv

OpenAI’s app store draws investors and students seeking artificial aids; CEO Sam Altman wants customised chatbots to supercharge its business but data suggests ‘GPTs’ have limited appeal
Clara Murray – Financial Times
Chatbots that claim to predict future share prices and evade plagiarism detectors are among the most popular on OpenAI’s new app store, according to data that provides the first glimpse into the practical ways that millions are using generative artificial intelligence. The Microsoft-backed start-up has allowed paying users to create custom versions of ChatGPT since November, with other subscribers then able to access these so-called “GPTs” through an online store.
/jlne.ws/4cwuJhF

US requiring new AI safeguards for government use, transparency
David Shepardson – Reuters
The White House said Thursday it is requiring federal agencies using artificial intelligence to adopt “concrete safeguards” by Dec. 1 to protect Americans’ rights and ensure safety as the government expands AI use in a wide range of applications. The Office of Management and Budget issued a directive to federal agencies to monitor, assess and test AI’s impacts “on the public, mitigate the risks of algorithmic discrimination, and provide the public with transparency into how the government uses AI.” Agencies must also conduct risk assessments and set operational and governance metrics.
/jlne.ws/4avGHX8

Super Micro’s AI Boom Carries a Big Price Tag; Maker of Nvidia-based AI servers has a hot hand, but high-cost business model leaves stock looking overheated
Dan Gallagher – The Wall Street Journal
Super Micro Computer’s artificial-intelligence boom is real enough. Its booming stock price also seems to be discounting some more difficult realities, though. The company more commonly known as Supermicro made a big splash when it joined the S&P 500 last week. Even before being added to the index, its stock had more than tripled since the start of the year and risen by more than 1,000% in the past 12 months. That far and away beat anything else on the index, including AI titan Nvidia.
/jlne.ws/3TW8ISj

The A.I. Boom Makes Millions for an Unlikely Industry Player: Anguilla; The small Caribbean territory brought in $32 million last year, more than 10 percent of its G.D.P., from companies registering web addresses that end in .ai.
Emma Bubola – The New York Times
/jlne.ws/4cDL5VV

BlackRock’s Tokenized Fund Quickly Rakes in $245M, Right Behind Franklin Templeton’s Older Offering
Krisztian Sandor – CoinDesk
/jlne.ws/3PAI0vB

*****Here is the story from Bloomberg.

Amazon Bets $150 Billion on Data Centers Required for AI Boom; Spending spree is a show of force as the company looks to retain cloud computing edge over Microsoft and Google.
Matt Day – Bloomberg
/jlne.ws/43DTowT

Robinhood Unveils Credit Card in Further Push Beyond Trading
Lyla Du and Paige Smith – Bloomberg
/jlne.ws/3xcvNar

Gates Foundation-Backed Group Plans Instant-Payment Systems for 15 African Nations; About 400 million adults have no access to financial systems; AfricaNenda targets universal payment systems access by 2030
Eric Ombok – Bloomberg
/jlne.ws/3TRXVs2

Cybersecurity

Coro, building cybersecurity for SMBs, locks down $100M at a $750M valuation
Ingrid Lunden – TechCrunch
Enterprises and other large organizations have long been a lucrative and obvious target for cybercriminals, but in recent years – thanks to more sophisticated breach techniques and the rise of AI – small and medium businesses are now also very much on the map. Now, Coro – one of the startups building tools specifically for smaller businesses – is announcing a big round of funding after seeing its recurring revenues shoot up 300% in the last year. It has raised $100 million in a Series D round of funding. Sources close to the deal tell TechCrunch that its valuation is over $750 million post-money.
/jlne.ws/43Gjxef

New iPhone Password Attack Warning Issued To Apple Users
Kate O’Flaherty – Forbes
Apple iPhone users are being targeted in a new attack targeting the password reset feature.
The attack, which bombards Apple users with notifications or multi-factor authentication (MFA) messages, aims to persuade iPhone users that they need to reset their password. The annoying popups will appear on all Apple devices-iPhones, iPads and Macs.
/jlne.ws/3TAhfJ2

Extremists in US Are Increasingly Doxxing Executives, Officials
Andrew Martin – Bloomberg
Extremists in the US are increasingly doxxing executives and public figures, according to a new report from cybersecurity firm Recorded Future. The idea behind doxxing is to publish personal information about someone online, like their home address or phone number, to spur harassment or even violence. The attacks are relatively easy to carry out because personal information in the US is widely available online and in government records.
/jlne.ws/3PFruKU

Cryptocurrencies

The Bitcoin Halving Could Accelerate Consumer Adoption of BTC
David Bailey – CoinDesk
As the world gets into a frenzy around the coming Bitcoin halving – and the price of bitcoin {{BTC}} as a result – it’s important to take a moment for a reality check. The halving is a non-event for the vast majority of the world. At its core, it’s a simple evolution in how much the people who process bitcoin transactions get paid. All electronic payments, whether made via credit card, Venmo or the tap of a phone, require some kind of processing.
/jlne.ws/3TySTzr

Larry Fink’s BlackRock Deploys $100M Onto Ethereum’s Blockchain: World’s Biggest Asset Manager Has Big Plans For Crypto
Jordan Robertson – Benzinga
BlackRock Inc., the world’s largest asset manager, has deployed $100 million onto Ethereum anticipating the approval of BlackRock’s new Digital Liquidity Fund. CEO Larry Fink believes tokenization and exchange-traded funds (ETFs) will revolutionize finance, and many experts believe the tokenization market could reach $10 trillion in 2030. According to a March 19 filing with the Securities and Exchange Commission (SEC), BlackRock launched a new initiative – The BlackRock USD Institutional Digital Liquidity Fund. The fund was incorporated in the British Virgin Islands in partnership with Securitize, a San Francisco-based asset tokenization company. BlackRock is gearing up for something big as a wallet on Ethereum linked to the company has been identified and holds $100 million in digital U.S. dollars (USDC).
/jlne.ws/4abRrKt

BlackRock’s Fink Says an Ether ETF Is Possible Even if ETH Is a Security
Helene Braun – CoinDesk
BlackRock CEO Larry Fink said an ether ETF would still be possible even if the U.S. Securities and Exchange Commission designates the cryptocurrency as a security, which would increase the regulatory scrutiny around the second-largest digital asset. Asked Wednesday on Fox Business whether BlackRock – which has made waves in crypto through its bitcoin exchange-traded fund introduced earlier this year – could still list an ETF that holds Ethereum’s ether if the crypto is a security, he replied, “I think so.”
/jlne.ws/3PBlweg

Politics

Janet Yellen warns China against clean energy dumping; US Treasury secretary tells Beijing its trade practices will distort markets and harm workers
James Politi – Financial Times
US Treasury secretary Janet Yellen has warned China not to flood the world with cheap clean energy exports, saying they would distort global markets and harm workers. Yellen delivered her message to Beijing from a solar energy manufacturer in Georgia on Wednesday, just days before her second trip to China as Treasury secretary. The comments reflect continued concern in the Biden administration about China’s trade practices, which are likely to be a source of friction during Yellen’s visit despite recent efforts by both countries to stabilise relations.
/jlne.ws/4aexHG0

Joe Lieberman, Longtime U.S. Senator and Vice Presidential Candidate, Dies at 82; The moderate Democrat spent decades in the U.S. Senate
John McCormick and Talal Ansari – The Wall Street Journal
Joe Lieberman, a former longtime Connecticut senator and moderate Democrat who became the first Jewish American nominated to a major party’s presidential ticket as Al Gore’s 2000 running mate, died Wednesday at age 82. Lieberman’s death in New York City followed complications from a fall, his family said in a statement. “His beloved wife, Hadassah, and members of his family were with him as he passed,” the statement said. “Senator Lieberman’s love of God, his family, and America endured throughout his life of service in the public interest.”
/jlne.ws/4acamos

China Envoy Says Economic Competition Is the New Climate Risk
Bloomberg News
Economic competition between nations has become the new hurdle in the fight against climate change, according to China’s new climate chief. Political roadblocks have impacted climate negotiations for decades now, such as when the US withdrew from the Kyoto Protocol in 2001, said Liu Zhenmin, who was named Beijing’s Special Climate Envoy earlier this year. Now the battle over who will profit from the tools combating global warming is creating new frictions.
/jlne.ws/3TDV4Sc

Investors bet an election win by Narendra Modi will extend India’s stock market boom; Some analysts are increasingly concerned about lofty valuations and shallow markets
Chris Kay – Financial Times
India’s stock markets are expected to power on if Narendra Modi wins a third electoral victory this year, even as investors grow fearful that the index gains are built on stretched valuations. The country’s enviable economic performance, which has underpinned strong corporate earnings, and political stability under the prime minister are fuelling bullish sentiment among investors, with the IMF forecasting India will grow at 6.5 per cent this year and next.
/jlne.ws/4cBNmAY

Regulation

CFTC’s Energy and Environmental Markets Advisory Committee to Meet April 10 in Kansas City
CFTC
CFTC Commissioner Summer K. Mersinger, sponsor of the Energy and Environmental Markets Advisory Committee (EEMAC), today announced that the EEMAC will hold a public meeting from 9:00 a.m. to 12:00 p.m. (CDT) on Wednesday, April 10 at the University of Missouri – Kansas City in Kansas City, Mo. Members of the public may also attend the meeting virtually or in person, if space permits.
/jlne.ws/3x9Xd0C

SEC Adopts Reforms Relating to Investment Advisers Operating Exclusively Through the Internet
SEC
The Securities and Exchange Commission today adopted amendments to the rule permitting certain internet investment advisers to register with the Commission (the “internet adviser exemption”). The amendments will require an investment adviser relying on the internet adviser exemption to have at all times an operational interactive website through which the adviser provides digital investment advisory services on an ongoing basis to more than one client. The amendments will also eliminate the current rule’s de minimis exception by requiring an internet investment adviser to provide advice to all of its clients exclusively through an operational interactive website and to make certain corresponding changes to Form ADV.
/jlne.ws/3VHCsDL

Prepared Remarks before the SEC / NASAA / Georgia Secretary of State Joint Public Roundtable
Chair Gary Gensler – SEC
The SEC benefits from working closely with state-level securities regulators-as law enforcement partners and as securities regulatory partners. As securities regulators, whether at the state level or the national level, our mission-our charge-is clear. For us at the SEC, we have a three-part mission, focused ultimately on making sure that the markets-broker-dealers, the investment advisers, so-called intermediaries in the middle of the market-they serve investors like you and issuers raising money in the markets. It’s not the other way around; it’s not that you serve the broker-dealers and the investment advisers.
/jlne.ws/4aA4KnR

Statement on Internet Investment Advisers
Chair Gary Gensler – SEC
Today, the Commission voted to adopt final rules regarding when investment advisers providing advisory services exclusively over the internet can register with the Securities and Exchange Commission. I was pleased to support these amendments because they modernize a 22-year-old rule to better protect investors in a digital age. In 1996, Congress divided the responsibility for regulating investment advisers so that larger investment advisers with national presence would be regulated by the SEC while smaller advisers with sufficient local presence would be regulated by the states. We have a good working relationship with these state regulators; the markets benefit from this efficient allocation of resources.
/jlne.ws/4aiGGGo

Remarks to the Investor Roundtable Co-Hosted by the SEC, NASAA, and Georgia Secretary of State
Commissioner Mark T. Uyeda – SEC
This roundtable and similar events are a means to collect and share information among investors and regulators. In his most recent shareholder letter, Berkshire Hathaway Chairman Warren Buffet described his model of the ideal shareholder based on his sister Bertie.[1] Like many investors, Bertie is smart, wise, and sensible, but she is not a CPA or an economics expert. She has invested her savings in the capital markets. Bertie is described as “nobody’s fool” but even investors like Bertie can be the victim of investment fraud committed by bad actors using increasingly sophisticated techniques.
/jlne.ws/3PAHFcj

SEC Obtains Final Judgment Against Christian Fernandez in Scheme to Fraudulently Promote Securities Offerings
SEC
On February 20, 2024, the Securities and Exchange Commission (“SEC”) obtained a final judgment against Christian Fernandez, who the SEC previously charged for his involvement in a fraudulent scheme to promote the securities of issuers that were conducting (or purporting to conduct) offerings pursuant to Regulation A, which, if certain conditions are met, provides an exemption to the Securities Act’s registration provisions.
/jlne.ws/43DjtvV

Court Orders Corporate Officer Who Facilitated Microcap Scheme to Pay over $350,000; Securities and Exchange Commission v. Cattlin et al., No. 21-cv-5294 (E.D.N.Y. filed September 23, 2021)
SEC
On March 26, 2024, a federal court in New York entered a final judgment against United Kingdom resident Daniel Cattlin for his role in a scheme that generated more than $5 million of illegal sales of stock in two microcap companies. Among other things, the court ordered Cattlin to pay a total of $354,821.62.
/jlne.ws/3TRWjhY

Coinbase Loses Most of Motion to Dismiss SEC Lawsuit
Nikhilesh De – CoinDesk
A federal judge ruled that the U.S. Securities and Exchange Commission brought enough of a case arguing that Coinbase is operating as an unregistered broker, exchange and clearinghouse that its suit against the cryptocurrency company should move forward. Judge Katherine Polk Failla, of the U.S. District Court for the Southern District of New York, on Wednesday ruled against most of Coinbase’s motion to dismiss the SEC lawsuit, finding that the regulatory agency had a “plausible” case against the exchange. She set an April 19 deadline for the parties to agree on a case scheduling plan.
/jlne.ws/3TSmqFF

SEC: Ripple is “Well-Positioned To Pay a Significant Civil Penalty” of $1.95B
Hope C – CoinMarketCap
In a recent filing with the U.S. District Court for the Southern District of New York, the United States Securities and Exchange Commission (SEC) revealed its proposal for fines and penalties against blockchain firm Ripple. The SEC’s attorneys recommended that Ripple pay approximately $1.95 billion in disgorgement, prejudgment interest, and civil penalties for its alleged violation of securities laws.
/jlne.ws/3vGbfX8

Investing and Trading

FTSE Russell announces the results of its March 2024 country classification review for equities and fixed income; Portugal will be added to the FTSE World Government Bond Index (WGBI) effective with the November 2024 index profiles.
FTSE Russell via Publicnow.com
FTSE Russell, the global index provider, has published the results of its March 2024 country classification review for equities and fixed income. FTSE Russell announces that Portugal will be added to the FTSE World Government Bond Index (WGBI) after its local currency fixed-rate government bond market met all three eligibility criteria (market size, credit rating and a minimum Market Accessibility Level of “2”) for inclusion. Index inclusion will be effective from November 2024 a
/jlne.ws/3TEnWd4

Goldman Sees Pension Funds Offloading $32 Billion of Stock Soon
Jan-Patrick Barnert and Michael Msika – Bloomberg
With stocks set to cap another strong quarter, pension funds are likely to sell an estimated $32 billion in equities to rebalance their positions, according to Goldman Sachs Group Inc. That would be the biggest adjustment since June 2023 and rank in the 89th percentile among estimates over the past three years, wrote analysts at Goldman’s FICC & equities team in a note dated Tuesday.
/jlne.ws/3xb67uO

Coinbase Hits a Snag in Its Battle With the SEC. Why Investors Shouldn’t Panic.
Joe Light – Barron’s
Coinbase Global lost the first round of a battle with the Securities and Exchange Commission that could determine not just the crypto trading platform’s future but that of the industry generally. It’s a significant blow to the company, but the fight is far from over. Last June, the agency sued Coinbase, alleging that it operates an unregistered securities exchange, a claim the company denies. In an 84-page decision on Wednesday, U.S. District Judge Katherine Polk Failla mostly denied Coinbase’s motion to dismiss the SEC’s charges.
/jlne.ws/4cwgUQd

In a Passive World, These Stockpickers Are Thriving; A handful of funds show that an active approach to managing money can still beat the market-at least for a while.
Layan Odeh, Mathieu Dion, and Ye Xie – Bloomberg
Even as the investing world increasingly concludes that low-fee passive investing is the most reliable way to build wealth, a handful of active fund managers who embrace unorthodox strategies are beating the market. They typically run lower-profile operations and exhibit a patience that’s rare in today’s market, making big bets on a smallish number of stocks based on intense research and analysis.
/jlne.ws/3vGc2HA

Traders bet US election will unsettle market calm; Vix and VStoxx indices show expectations of volatility around prospective Biden-Trump rematch
George Steer – Financial Times
Stock traders have begun placing bets on an upsurge of volatility around November’s US election, which is shaping up to feature a tense rematch between President Joe Biden and his predecessor Donald Trump. Futures contracts tied to the value of the Vix index – the so-called “fear gauge” that measures expectations of near-term swings in the S&P 500 equities benchmark – are pricing in a rise in market stress in the weeks before and after voters head to the polls.
/jlne.ws/3PKe7ZZ

Lloyd’s of London attracts biggest ‘Names’ syndicate since 1990s; Specialist insurance market is looking to rebuild a base among private investors
Ian Smith – Financial Times
/jlne.ws/3xnD6fd

Environmental, Social and Corporate Governance

Melting of polar ice having effect on global timekeeping, research says; Plans to put all clocks back a second may have to be delayed as water flowing into the oceans slows Earth’s rotation
Jana Tauschinski – Financial Times
Climate change caused by human activity may be affecting global timekeeping as the melting of ice sheets in Greenland and Antarctica slows the Earth’s rotation, the latest research says. Scientists have established the slowing effect of ice melt by measuring the changes in Earth’s gravity field, which have been recorded by satellites since 1976. Because the Earth’s rotational speed is not constant and moves out of line with clocks since the world adopted co-ordinated universal time – or UTC – in the 1960s, an extra second has been added periodically. This is known as a “leap second”.
/jlne.ws/43ED0ME

Biden’s oil boom; How fossil fuels thrived despite the White House’s climate policies
Prinz Magtulis, Nichola Groom, Jarrett Renshaw and Moira Warburton – Reuters
The counter-intuitive fossil fuel boom under Biden reflects an awkward truth for his supporters and detractors alike ahead of the November elections, proving that what happens in globally interconnected markets like oil and gas is often well outside the immediate control of the person in the White House. In Biden’s case, Russia’s invasion of Ukraine pushed oil and gas prices so high that many producers worldwide made record profits, not just those in the United States. The global economic recovery that followed the darkest days of the COVID pandemic also rapidly pumped up demand for fossil fuels.
/jlne.ws/3PFDyMu

UK’s greenhouse gas emissions fell 5.4% in 2023 on lower gas use
Susanna Twidale – Reuters
Britain’s greenhouse gas (GHG) emissions fell by 5.4% in 2023, government data showed on Thursday, with less gas used to generate electricity and heat homes.
The country’s target to reach net zero emissions by 2050 will require changes to the way people eat and travel, as well as how electricity is produced. “This decrease in 2023 is primarily due to a reduction in gas demand from the electricity supply and buildings and product uses sectors,” the Department for Energy Security and Net Zero (DESNZ) said.
/jlne.ws/3PH10Zt

India to send teams to Chile seeking lithium and copper assets, source says
Neha Arora – Reuters
India will send two delegations next month to Chile to scout for lithium and copper resources, a government source said, as rapid economic expansion and New Delhi’s efforts to speed up the energy transition stoke demand for critical minerals. Chile is a key target as it is the world’s biggest supplier of copper and the second-biggest producer of lithium, which are essential for electric vehicle batteries and renewable energy systems in the push away from fossil fuels.
/jlne.ws/43AqZaW

Electric Cars Pass the Tipping Point to Mass Adoption in 31 Countries; Once 5% of new-car sales go fully electric, everything changes – according to a Bloomberg Green analysis of transitions underway across four continents.
Tom Randall – Bloomberg
/jlne.ws/43CbiQs

Bonds Got Relabeled. Now Millions of Americans Get Higher Electric Bills; After Bloomberg reclassified certain utility bonds, borrowing costs rose
Andrew Ackerman – The Wall Street Journal
/jlne.ws/3xf1YGa

EU hits roadblocks in reaching green milestone as elections loom; Progress in the fastest-warming continent is thwarted by a constituency fatigued by inflation and trade tensions
Alice Hancock – Financial Times
/jlne.ws/4awj7t9

Oil Giants Plan to Bury Massive Amounts of CO2 in Southeast Asia; After decades of burning carbon, Exxon, Shell and others are looking to lock down the rare places that can absorb it.
Natasha White, Stephen Stapczynski, and Eko Listiyorini – Bloomberg
/jlne.ws/3TU7ff5

China’s Wind Turbine Makers Extend Dominance as Vestas, GE Slip
Bloomberg
/jlne.ws/4aBbYrH

Attacks on Baltimore’s Mayor Are Just Racism in Disguise; What is motivating the backlash against diversity, equity and inclusion efforts is so apparent it almost feels foolish to point out. But we do ourselves no favors if we can’t say the obvious.
Sarah Green Carmichael – Bloomberg (opinion)
/jlne.ws/3Vvy3DI

BlackRock Gets Legal Warning Over ESG Funds From Mississippi
Saijel Kishan and Silla Brush – Bloomberg
/jlne.ws/3vmSwQy

Institutions

Short Seller’s Winning Bet Means Permanent Payments to Jefferies
Greg Farrell – Bloomberg
A short seller that bet against a struggling retail chain claims it’s now paying the price: an endless stream of monthly payments to Jefferies LLC, which lent it the shares for the trade more than a decade ago. IsZo Capital can’t close out its short position in Gordmans, a Nebraska-based retailer that filed for bankruptcy in 2017, because Jefferies won’t let it, the hedge fund said in a lawsuit filed late Tuesday in New York state court.
/jlne.ws/3vCaqP6

Banks’ Massive Debt Splurge Brings Its Own Set of Dangers
Leonard Kehnscherper and Abhinav Ramnarayan – Bloomberg
As European and British banks race to repay giant Covid-era loans, they’re having to lean ever more heavily on selling new debt to cover the cost. That flood of supply brings its own dangers. With lenders facing about EUR250 billion ($271 billion) of repayments to the European Central Bank this week, many are turning to so-called “covered” bonds – debt that’s backed by assets such as mortgages – to help fill funding gaps. Rampant demand for corporate credit right now means banks have been able to use these sales to partly replace cheap pandemic loans.
/jlne.ws/49gq1Sv

China’s Big Banks Post Scant Profit Gains as Margins Shrink; Agbank reports 3.9% increase, BOC posts 2.4% gain in profit; China’s banks are struggling to support economy, real estate
Bloomberg News
China’s largest state owned bank posted scant gains in earnings for last year as margins weakened. Net income at Agricultural Bank of China Ltd. grew 3.9% to 269.36 billion yuan ($37.3 billion), it said in a Thursday filing. Bank of China Ltd. reported earnings rose 2.4% to 231.9 billion yuan. The reports followed similar results and margin contractions at peers Industrial & Commercial Bank of China Ltd. and Bank of Communications Co. on Wednesday. The nation’s largest state-owned banks are struggling to maintain growth in the past year as they followed Beijing’s order to help pump up the domestic economy as well as rescue its debt-laden property developers and local governments.
/jlne.ws/3TTXKMR

UBS looks to keep, grow shipping loans in post-merger green overhaul
Simon Jessop – Reuters
UBS will look to increase lending to the shipping sector and run off some loans to fossil fuel clients inherited from Credit Suisse, executives told Reuters, in the biggest test yet of the impact of a mega-merger on banks’ sustainability commitments. The shotgun marriage of Switzerland’s two biggest lenders last year kick-started a complex integration process including weaving together the pair’s variety of environmental, social and governance-related products, pledges and targets.
/jlne.ws/4aQ0aC7

Barclays Says Lost Sex Discrimination Case Is Worth Only £16,000; Lacatus is seeking £1.3 million after employment tribunal win; Bank said it shouldn’t be liable for ex-employee’s health
Katharine Gemmell – Bloomberg
Barclays Plc said an ex-analyst who won a sex discrimination lawsuit against the bank is entitled to £16,000 ($20,200) in compensation, in stark contrast to the £1.3 million payout she’s seeking.
/jlne.ws/4aucasA

Blackstone Plans to Add $25 Billion in India Private Equity Assets Over Five Years; Right time to create such a large portfolio, Asia PE head says; Firm to focus on digital infrastructure, renewables, transport
Baiju Kalesh – Bloomberg
/jlne.ws/4a9Bg0b

Work & Management

How To Manage Grief At Work When You’ve Experienced A Loss
Rachel Montanez – Forbes
Burnout is still a crucial topic, with more than 8 out of 10 employees at risk, according to Mercer’s 2024 Global Talent Trends report. LIFE impacts burnout – that’s what I say in my keynote on the topic. The L in LIFE stands for loss. Stress increases when you’ve experienced a loss, and the chance for burnout rises if combined with organizational contributors like a lack of autonomy or community. Unexpected loss can be incredibly traumatic, and even with fatal conditions, it’s still hard. The death of a loved one has been recognized as the most significant life stressor that we face as humans.
/jlne.ws/3TDZgBq

Wellness Exchange

The world’s broken market for medicines; Record shortages of common drugs have countries scrambling for alternatives while patients skip treatments
Ian Johnston and Amy Borrett – Financial Times
Part way through her 23-year-old son’s chemotherapy, Kristin Caparra was told that one of the drugs key to his treatment – methotrexate – was running out. Used at high doses in cancer care, the drug is part of common chemotherapy to treat paediatric cancers. There is often no good alternative to the treatment. The shortage led Caparra’s son to miss a dose of methotrexate for treatment of a rare, malignant bone cancer at Pennsylvania Hospital in Philadelphia. Caparra immediately contacted elected officials and cancer organisations, one of which helped arrange an alternative source. For other patients, shortages can mean switching to less effective drugs and facing worse outcomes.
/jlne.ws/3TUliBe

Regions

China Property Crisis Is Rippling Through Its Biggest Banks; Asset quality worsened in residential and corporate segments; Banks post scant profit growth as interest margins erode
Bloomberg News
China’s protracted property downturn is eroding the balance sheets of the nation’s largest state banks as their bad loans creep up. Bank of Communications Co. reported Wednesday that its property bad loan ratio jumped to 4.99% at the end of last year from 2.8% a year earlier. While the balance of its overdue mortgages slipped, the special mention loans for the segment – a leading indicator of soured loans – jumped 23% to 9.88 billion yuan ($1.4 billion).
/jlne.ws/49k5I6u

Dalio Says China Must Fix Debt Problems or Face ‘Lost Decade’; Billionaire recommends China deleverage, ease monetary policy; References CCP slogan ‘great changes unseen in a century’
Krystal Chia – Bloomberg
Ray Dalio warned that China should cut its debt and ease monetary policy or face “a lost decade.” The billionaire founder of Bridgewater Associates said in a nearly 5,000-word post on LinkedIn that he agrees with Chinese President Xi Jinping’s warning of a 100-year period of unprecedented change and recommends the country take steps to manage its debt problem.
/jlne.ws/3xfhqSE

Japan PM Kishida says appropriate for BOJ to keep easy policy
Leika Kihara – Reuters
Japanese Prime Minister Fumio Kishida said on Thursday it was appropriate for the central bank to maintain accommodative monetary conditions. The government will continue to coordinate closely with the Bank of Japan to ensure wages continue to rise and the economy makes a complete exit from deflation, he said.
/jlne.ws/3xaPNdn

Miscellaneous

DraftKings Shares Slump on News NCAA Wants to Ban College Prop Bets; Federal and regulatory scrutiny weigh on the share price; College player prop bets made up 1.4% of total wagers in 2023
Peyton Forte – Bloomberg
DraftKings Inc. shares tumbled on Wednesday after NCAA President Charlie Baker announced he is pushing to ban college proposition betting, a popular type of side wager that allows gamblers to bet on an event or statistical outcome that’s not directly tied to the final result of a game. The company’s stock closed down 6.8% after slumping as much as 8.8%, leading mobile sports betting peers including FanDuel parent Flutter Entertainment PLC and MGM Resorts International lower. Baker announced that the National Collegiate Athletic Association is working with state legislators to remove college prop bets across the country, saying the organization is “drawing the line on sports betting to protect student-athletes and to protect the integrity of the game.”
/jlne.ws/3vwkyJi

‘Princess of Wahaha’ Looks to Revive a Fortune Down $18 Billion
Venus Feng – Bloomberg
For about two decades, Kelly Zong Fuli operated in the shadows of her father, beverage tycoon Zong Qinghou – once China’s richest man. His death last month is now thrusting the woman known as the “Princess of Wahaha” into the spotlight. It won’t be easy for the 42-year-old heiress, who’s poised to take over an empire fighting for relevance. Sales at the family’s Hangzhou Wahaha Group Co. have fallen in an increasingly competitive market, and another beverage tycoon has become China’s wealthiest person: Nongfu Spring Co.’s Zhong Shanshan.
/jlne.ws/3vlL8F3

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