Funding Exhausted for $350 Billion Small-Business Paycheck Protection Program; China Records First Ever Contraction in Quarterly GDP on Coronavirus

Apr 17, 2020

First Read

Hits & Takes
By John Lothian & JLN Staff

The John J. Lothian & Company, Inc. application for the CARES Act Payroll Protection Plan has stalled due to the fund being exhausted before my loan/grant could be closed. I received the following in an email: “This morning, the Small Business Administration announced that it has exhausted the funds provided under the CARES Act and is seeking additional funding from Congress.”

So now it is up to Congress to pass additional funds, but the impetus that made the original CARES Act such a bipartisan success is past. The equity markets have stabilized, so the leaders of the Democratic party in Congress are holding up additional funds until they get some changes to the original CARES Act and some other issues. Only God knows when additional funding will be passed and signed into law. I hope soon. Oh, and the $10K CARES Act EIDL grant I applied for first, and which was supposed to show up in three days, is nowhere to be seen.

I received a very nice note from BornTec’s Buck Haworth last night. This is actually about the third such note, as he thanked me after each part of the interviews (Part 1, Part 2) we did with him for the Open Outcry Traders History Project were published. The reason for the note was the incredible response he received from people he knew, had crossed paths with through the years or even people he did not know. There has been a lot of passing along the videos on social media, including Facebook and LinkedIn, that helped generate this response.

Both Buck’s and Jeff Carter’s interviews have been well received and generated sharing and lots of views. The response to Pat Arbor’s video was a little more contentious. One reason we started the project is to help those whose careers were displaced by the end of most open outcry trading. The responses generated from Buck and Jeff’s videos seem to bear out that this is working. People are responding to the stories, the honesty and candor of Buck, Jeff and others, with fondness and pride for having been a part of something so important.

The next video project we are getting ready to launch is “The Path to Electronic Trading.” This was spawned by RJO’s Gerry Corcoran wanting to share the story of his one day working on the trading floor in 1988 and how that influenced RJO’s strategic growth plans with the introduction of technology. Technology was implemented not to move to electronic trading but to improve the flow of orders into and off of the trading floor. The industry had grown too much to support the volume of trading with the century old manual processes.

The first video in the series is the interview with Corcoran. The second is with my former LIT America/First Options representative Ryan McNally pushed me into electronic trading and helped make me a guinea pig, so I wanted to tell his story of starting as a runner and seeing the introduction of technology on the trading floor and jumping on the technology bandwagon.

We have more interviews to conduct, some of which were scheduled for April, and so now are delayed. But there are many stories to tell and we will do our best to find them and include them in the series. If you played a part in the path to electronic trading, feel free to contact me about an interview.

Lastly, we are seeking sponsors for this series. If you are interested, email me. Perhaps this sponsorship can help offset the delay, or worse, of the PPP loan/grant.~JJL


Nasdaq is a class act. They offered very public condolences for the passing of Jaime Ruiz Sacristan, Chairman of the Board, Bolsa Mexicana de Valores, who died Sunday evening. They displayed his picture and condolences on the big screen at their headquarters. Here is a tweet showing it.~JJL

The CFTC has charged Florida resident Alan Friedland and his companies, Fintech Investment Group Inc. and Compcoin, for allegedly scamming investors out of $1.6 million. According to the complaint, Friedland sold his customers “Campcoin,” a cryptocurrency which he promised would give them access to a high-returning FX trading algorithm; you can read more about it in our “Crypto” section today. How’s that for a “Florida Man” story?~MR

CME Group’s bitcoin futures average daily trading volume more than doubled in the first quarter of 2020 compared to the previous quarter. Average daily volume in Q1 was 9,417 contracts. According to The Block Crypto’s Frank Chaparro, the volume growth coincided with a boom of 567 new accounts trading the product at the CME. Trading volumes were sharply lower, however, during the second half of March and into April.~Thom Thompson

The federal court hearing the CFTC’s case against Jitesh Thakkar has continued the case until June 17, 2020. The last we had heard – on January 21 – was that the parties had worked out a settlement agreement that still needed approval by the CFTC commissioners.~Thom Thompson

To go along with the FIA‘s volume announcement that is our lead story in Exchanges, the FIA will hold a webinar on April 22 to provide more information about the trends in futures and options trading volume. You can click here to register.~SR


Henry Paulson: Save globalisation to secure the future; The world will be a very dangerous place if we do not fix multilateral institutions
Henry Paulson – FT
Covid-19 has resulted in more than a deadly pandemic. It has tipped the world economy into its most severe crisis since the Depression. As the virus’s spread slows and governments rebuild, they face another force sweeping in its path: isolationism. The impending battle will pit forces of openness rooted in market principles against those of closure across four dimensions: trade, capital flows, innovation and global institutions.

*****The former Treasury Secretary and Goldman CEO makes a compelling case for not moving to an “isolation” footing.~JJL


CFTC grants brief extensions for rule comments in response to COVID-19 disruptions
Brad Rosen, J.D. – Jim Hamilton’s World of Securities Regulation
The CFTC voted 3-2 to extend certain currently open comment periods in light of disruptions brought about by the COVID-19 (coronavirus) pandemic. The extensions address five separate rules proposed by the Division of Market Oversight (DMO) for which the current comment periods had started earlier in 2020. Commissioners Dan Berkovitz and Rostin Behnam issued sharp dissenting statements which asserted that the extensions were inappropriate and so short in duration so as to lack meaning.

*****Are these comment periods shorter than the one about who controls the CBOT positions for clearing purposes when Eurex US was setting up? That would be short.~JJL


Small business rescue loan program hits $349 billion limit and is now out of money
Thomas Franck and Kate Rogers – CNBC
The Small Business Administration’s rescue loan program hit its $349 billion liit on Thursday and is now out of money as the nation’s top Republicans and Democrats struggle to agree on how to restore its funds.
The SBA website reads that it is “unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time.”

******He goes for the shot, the buzzer rings before he gets the shot away. Too bad, so sad. ~JJL


Mass Transit Faces a Downward Spiral of Reduced Revenue and Ridership; City systems were already strapped for cash. Now they face devastating deficits.
Laura Bliss, Michell Kaske – Bloomberg
Jeffrey Tumlin and his staff at the San Francisco Municipal Transportation Agency spent Saturday, April 4, poring over rosters and route maps. The agency, which operates the Muni system, had already halted service on metro lines and trolley cars in response to social-distancing protocols and a ridership decline of as much as 83% some days, compared with normal levels. Now 30% to 40% of bus operators were expected not to report to work because of sickness or health concerns. Without enough drivers, Tumlin and his staff recognized, citywide bus service would soon be unfeasible.

******Metra ridership in the Chicago area is down 97%. On the upside, there is a lot of legroom available.~JJL


The Crash of the $8.5 Billion Global Flower Trade; As people everywhere cancel events and big cut-flower orders, the ripples reach into Dutch auction halls and Kenyan rose fields.
Zeke Faux, David Herbling, and Ruben Munsterman – Bloomberg
When Meredith Dean pictured her May wedding, she imagined her guests walking through a meadow of wildflowers. The bridesmaids would carry bouquets, the groomsmen would wear boutonnieres, and a circle of flowers would surround Dean and her beau as they exchanged vows. A wall of flowers would serve as a backdrop for photos. Vases of buds would run down the center of long dining tables in a barn in New York’s Catskills. Still more flowers would hang above the dance floor.

*****How about free flowers with every roll of toilet paper bought?~JJL


CryptoMarketsWiki Coin of the Week: Tezos (XTZ)
Tezos has been experiencing a bullish price increase this week. This was possibly spurred on, in part at least, by the positive buzz generated from the Binance.US announcement that it was adding staking support for the altcoin.


Thursday’s Top Three
To add to the “Groundhog Day” (the movie) feeling these days, our top story yet again was How Ronin Capital fell from grace as COVID spread, from Crain’s Chicago Business. Second was The Trade’s Virtu Financial study reveals surge in trading costs globally during March. Third was some good news, at least for some, in Cowen adds forex, commodities and futures to outsourced trading service, also from The Trade.


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Lead Stories

Funding Exhausted for $350 Billion Small-Business Paycheck Protection Program; Congressional Republicans and Democrats disagree over how to replenish the fund
Andrew Duehren – WSJ
Lawmakers again fell short of an agreement on the next round of coronavirus emergency aid Thursday, as a $350 billion loan program for small businesses ran out of money and millions more Americans filed for employment benefits, bringing fresh urgency to the negotiations.

China Records First Ever Contraction in Quarterly GDP on Coronavirus; GDP contraction of 6.8% foreshadows pain likely to be reported world-wide
Jonathan Cheng – WSJ
China’s economy shrank 6.8% in the first three months of 2020 compared with a year earlier, the first such contraction since Beijing began reporting quarterly gross domestic product in 1992.

Gilead drug boosts investor hopes for coronavirus treatment; Early impressions from US study show severely ill patients in clinical trial recovering quickly
Hannah Kuchler and Eric Platt – FT
Wall Street shares are on track for a higher opening on Friday after a report suggested a coronavirus drug developed by Gilead Sciences had shown positive results in a clinical trial, giving investors hope that a treatment could ease the pandemic and open up the global economy.

Hedge Fund Hotshots Suffer Humbling Losses in Coronavirus Chaos
Nishant Kumar and Bei Hu – Bloomberg
Three out of four funds lost money last month amid turmoil;
Dynamic Beta’s Beer says it’s time to take a hard look at fees
Some of the hedge fund industry’s biggest names made history in March — for all the wrong reasons. Firms run by Ray Dalio, Michael Hintze, Adam Levinson and others suffered their worst-ever losses last month, with some funds down as much as 40% as the coronavirus pandemic battered global markets. Overall, three out of four hedge funds lost money, according to preliminary data compiled by Bloomberg.

The Decline and Fall of the Gulf’s Oil Empire Is Looming; Price wars may have little bearing on the inevitable crash in wealth.
David Fickling – Bloomberg
For much of the world, oil wealth is a curse. Endowed with ample reserves of hydrocarbons, the likes of Nigeria, Angola, Kazakhstan, Mexico and Venezuela frittered the benefits away. Only in the Persian Gulf has oil been a nation-building blessing. The discoveries of petroleum in the mid-20th century turned an anarchic, desperately poor region into one of the most affluent places on the planet. Qatar, Kuwait and the United Arab Emirates are all richer than Switzerland. Even Saudi Arabia, Bahrain, and Oman are on a par with Japan or the U.K.

Cantor Plans Hundreds of Job Cuts in Break From Wall Street
Sridhar Natarajan, Gillian Tan, and Max Abelson – Bloomberg
Reductions are deepest in the industry since virus hit U.S. Lutnick is worried about hit from extended economic downturn
Cantor Fitzgerald is shrinking its workforce, breaking with firms across Wall Street that vowed not to lay off employees during a pandemic that’s unleashed the worst unemployment crisis in decades. The private financial services firm run by Howard Lutnick plans to cut hundreds of jobs across divisions as he seeks to shore up his empire, according to people with knowledge of the matter. That would make the reductions the deepest to emerge among Wall Street’s major firms since the coronavirus outbreak in the U.S.

US crude tumbles to 18-year low as supply overwhelms demand; West Texas Intermediate contract for May delivery loses as much as 9% as expiry looms
David Sheppard – FT
US crude oil prices sank to around $18 a barrel on Friday, the lowest level since 2002, as energy markets struggled to absorb a record glut created by the coronavirus pandemic.

This Isn’t the Flattened Curve We Were Promised; The dying won’t be over anytime soon.
Cathy O’Neil – Bloomberg
“Flatten the curve” has become the mantra of the global effort to contain the coronavirus pandemic. It’s a powerful and immensely valuable image, helping people understand why their sacrifices are necessary to save lives. It’s also wrong in a crucial way: The dying won’t be over nearly as soon as it suggests.

Emerging economies call for more financial help after G20 deal; Middle-income countries plead for assistance as investors face pressure to negotiate
Jonathan Wheatley, Michael Stott and David Pilling – FT
This week’s G20 deal to suspend debt repayments for the world’s poorest countries falls far short of what is needed and ignores the plight of many other developing economies which are also struggling to cope with the coronavirus pandemic, according to a growing number of critics.

Smithfield CEO Says Coronavirus Must Not Stop U.S. Meat Production; ‘The right thing for Americans is that we operate these plants,’ said Kenneth Sullivan, who heads the largest U.S. pork producer
Jacob Bunge – WSJ
The chief executive of Smithfield Foods Inc. said the U.S. cannot allow coronavirus cases to derail meat industry operations, as plant shutdowns across the country cut into food production. Elected officials and the public must recognize meatpacking plants as infrastructure critical to national security, said Kenneth Sullivan, who heads the biggest U.S. pork producer. They must work with meat companies to strengthen safety practices and ensure plants continue to produce bacon, ground beef and chicken breasts, he said.

Fraudsters target those who are self-isolating; UK banks warn customers not to entrust others with contactless cards or Pin numbers
Emma Agyemang – FT
UK Finance, the industry body for UK lenders, has warned self-isolating people to beware of fraudsters looking to steal their money with false offers of help.

Why we may have already seen the peak in oil demand; A sooner-than-expected plateau in global consumption is a risk that can no longer be ignored
Mark Lewis – FT
With the collapse in oil prices triggered by coronavirus prompting a historic agreement between Opec+ to cut supply, some of the market’s leading authorities are already peering through the smoke of the blazing demand crater to try to discern the speed of the recovery beyond.

Gold’s Two Biggest Markets Are Still Stubbornly Disconnected
Jack Farchy, Elena Mazneva, and Joe Deaux – Bloomberg
Refinery closures and grounded flights have widened the spread; Volatility, virus-led logistics have increased trading risk
Gold has rarely been a hotter trade, but the world’s two most important markets remain out of sync. In New York, the price of gold topped $1,750 for the first time in seven years on April 9. In London, it still hasn’t caught up.

Human Activity Makes Droughts Worse—and More Likely to Happen; Weather alone can’t explain the length and severity of recent dry spells.
Leslie Kaufman – Bloomberg
Now we know for sure: human-caused warming played a critical role in creating the mega-drought that’s been drying up the American Southwest for the last two decades.

Man Group Faces Redemptions After $10.7 Billion of Losses
Nishant Kumar – Bloomberg
Losses were concentrated in the firm’s long-only funds; Assets under management fell to $104.2 billion in quarter
Man Group Plc is facing a rise in withdrawals after being hit by $10.7 billion of losses last quarter amid unprecedented volatility in global markets. The investment firm pulled in net new cash and some of its hedge fund strategies made money, but it wasn’t enough to compensate for the drop in performance. Assets under management declined to $104.2 billion from a record $117.7 billion at the end of last year, according to a statement on Friday.

Man Group suffers less than rivals in first quarter; Hedge fund manager reports 11% decline in assets and modest inflows
Owen Walker – FT
Man Group, the world’s largest listed hedge fund manager, proved more resilient than traditional long-only managers during the recent market sell-off, registering an 11 per cent drop in assets and modest inflows in the first three months of the year.

Pandemic Could End Shareholder Supremacy for Good; The coronavirus crisis appears to be transforming how corporate America treats its workers, customers and communities. Can it last?
Joe Nocera – Bloomberg
In 1943, a group of top U.S. businessmen, calling themselves the Committee for Economic Development, began meeting in New York to discuss postwar employment. Sooner or later, they knew, legions of servicemen would be returning home in need of jobs. Forecasters were predicting that up to 30 million people could be unemployed once the war ended, which would plunge the country right back into the depression it had pulled out of only recently.

Exchanges, OTC and Clearing

Q1 Global Futures and Options Volume Jumps 43.2% to Record 11.41 Billion Contracts
FIA Press Release
Washington, DC—FIA today released data for global futures and options trading in the first quarter of 2020 that shows the total number of contracts traded on derivatives exchanges worldwide rose to 11.41 billion, an all-time quarterly record and an increase of 43.2% over the first quarter of 2019.

Nasdaq Seeks to Head Off Threat of Hundreds of Stock De-Listings
Ben Bain – Bloomberg
Hundreds of Nasdaq Inc. traded companies pummeled by the coronavirus pandemic are poised to get a reprieve from rules that could lead to them getting kicked off the exchange. That’s because Nasdaq wants to give firms whose shares have fallen below $1 more time to bring their prices up before being de-listed. Companies with market values under Nasdaq’s required minimums would also get additional time to rebound, according to a plan the exchange filed Thursday with the Securities and Exchange Commission. Nasdaq asked the regulator to allow the proposal to take effect immediately.

Are Designated Market Makers Really Better in Stressed Markets? Are designated market makers really better in stressed markets? Nasdaq Chief Economist Phil Mackintosh takes a closer look.
Phil Mackintosh – Nasdaq
NYSE’s Designated Market Makers (DMMs) are marketed as a way to intervene in trading, especially on volatile days, to absorb imbalances and to reduce volatility. Data shows that in reality, NYSE DMMs and floor brokers see the majority of dedicated order flow around the open and closing auctions, when liquidity of every stock is more concentrated on its home market. But the story sounds so plausible: A single human being, with control over all the information, should intuitively be better at reducing volatility. Right?

Pandemic Exercises Helped OCC Manage Record Trading Volumes
Options Clearing Corp. held a companywide exercise on pandemic preparation in November, just in time for the coronavirus
Agam Shah – The Wall Street Journal
Options Clearing Corp. saw record-breaking trading volume in March as concern over the coronavirus hit markets. But the OCC, which serves as a guarantor for derivatives, was prepared, having organized a companywide exercise in pandemic preparation last November.

Cboe Equities Update: April 16, 2020
Adam Inzirillo – Cboe
These past few weeks have challenged us all, as the pandemic puts enormous pressure on our healthcare system and continues to undermine our economy. But if the last month has shown our industry anything, it is the importance of our capital markets. We are especially appreciative to regulators and industry participants for coming together to ensure that equity markets remain open and free to continue performing all necessary functions. Balancing this period of volatility while working remotely has also shown us the importance of communication. With that in mind, I wanted to provide a few Cboe updates that I think you’ll find useful.

SGX enhances business processes and encourages greater use of online services amid COVID-19
CDP Customer Service Centre will be closed from 18 April 2020 until further notice. All services will be provided through internet, phone and mail; SGX will minimise face-to-face interaction between investors, member firms and SGX staff.
To ensure public health and safety amid COVID-19, Singapore Exchange (SGX) will close The Central Depository (CDP) Customer Service Centre from 18 April 2020 until further notice. SGX will also refine its processes to cater to the new operating environment, and similarly encourages customers to increase the use of online services.

CME Group to Webcast 2020 Annual Meeting of Shareholders
CME Group
CME Group Inc. (NASDAQ: CME), the world’s leading and most diverse derivatives marketplace, today announced it will host its 2020 annual meeting of shareholders virtually in light of public health concerns due to the coronavirus (COVID-19). As previously announced, the meeting will be held at 10:00 a.m. Central Time on Wednesday, May 6, 2020, but now will only be accessible in an online format.


Why the War on Physical Cash Is a War on Freedom
Tracy Alloway and Joe Weisenthal – Bloomberg
Commerce and payments are increasingly digital. This shift from physical to electronic is one that governments and businesses are eager to accelerate for a host of reasons. But what gets lost when we no longer have access to physical cash? On this episode, we speak with Rohan Grey, President of The Modern Money Network and the research director of the Digital Fiat Currency Institute about how governments can introduce digital currencies that enable electronic commerce, while preserving the privacy protections of physical cash.

Stripe Raises $600 Million as COVID-19 Gives Fintech a Boost
Reuters (via The New York Times)
U.S. fintech startup Stripe Inc said on Thursday it raised $600 million, as companies that provide the online infrastructure for financial and payment services get a boost from the coronavirus pandemic.
Fintech start-ups attracted a flood of investments last year as they pushed digitalization in financial services. The pandemic is accelerating the trend as more customers look to pay without contact and use banking services without stepping into branches, venture capitalists say.

Council Post: Why Smart Regulation Leads To Fintech Innovation
Richie Serna – Forbes
Silicon Valley’s ethos has traditionally aligned with the motto “move fast and break things.” Companies would churn out innovative products and services with impressive speed, with compliance and regulation often a secondary concern.
Transportation, music and television, travel and hospitality — think companies like HomeAway and Airbnb — all these markets (and many more) were turned on their heads by tech innovation and bold visions.


Facebook-Backed Libra Plans Multiple Single-Currency Coins
Kurt Wagner and Olga Kharif – Bloomberg
Cryptocurrency project responding to criticism from regulators; Association says it aims for late 2020 launch of Libra coins
Facebook Inc. and its partners said their Libra cryptocurrency project will now support multiple versions of the digital coins, the majority of which will be backed by individual fiat currencies like the U.S. dollar, as part of changes made to appease skeptical regulators worldwide.

US Lawmaker Calls Libra’s Revamp Insufficient
Marc Hochstein – Coindesk
The Libra Association’s watered-down plan to issue digital versions of existing currencies has failed to appease at least one U.S. lawmaker. Rep. Sylvia Garcia, a member of the House Financial Services Committee, said Thursday that the consortium’s revised roadmap “does not address the concerns I raised” in the past.

Crypto custodian BitGo acquires portfolio management platform Lumina
Yogita Khatri – The Block
Crypto custodian BitGo has acquired Lumina, a firm that provides an institutional investor platform for managing crypto portfolios and tracking tax obligations. Announcing the deal on Thursday, BitGo said its clients can now bring data from any exchange or wallet into a single dashboard for a consolidated view of their crypto holdings.

Five Ways Blockchain Tech Can Help Us During This Pandemic
Don Tapscott and Alex Tapscott – Coindesk
Don and Alex Tapscott are the co-authors of Blockchain Revolution and co-founders of the Blockchain Research Institute. Alex’s new book is Financial Services Revolution. Together they wrote the report Blockchain Solutions in Pandemics.

Bitcoin Options Trading Hits One-Month High as Price Turns Bullish
Omkar Godbole – Coindesk
Activity in the bitcoin options market picked up pace on Thursday, as bitcoin’s price jumped above $7,000 and opened the doors for stronger gains ahead of the next month’s reward halving. Daily trading volume in bitcoin options listed on major exchanges – Deribit, LedgerX, Bakkt, OKEx, and CME – rose to $86.4 million on Thursday, the highest since March 16, according to data provided by crypto derivatives research firm Skew.

CFTC charges Florida man for sale of ‘Compcoin’ digital asset in alleged fraud scheme
Yilun Cheng – The Block
The Commodity Futures Trading Commission (CFTC) has charged a Florida resident and his companies for illegally collecting $1.6 million in an alleged leveraged foreign-exchange fraud. According to the complaint, Alan Friedland had defrauded customers through his two companies, Fintech Investment Group and Compcoin. from 2016 to 2018. He allegedly enticed customers to purchase a cryptocurrency called “Campcoin” by falsely advertising that token holders would have access to ART, a supposedly high-returning foreign exchange trading algorithm.

Bitmain rival MicroBT launches 3 new bitcoin miners ahead of halving
Yogita Khatri – The Block
MicroBT, a Chinese bitcoin miner manufacturer which is in a neck-and-neck competition with Bitmain, has launched three new machines. These are WhatsMiner M30S+, M30S++ and M31S+, MicroBT COO Jianbing Chen announced in an online conference on Friday.

Binance Unveils Smart Contract Blockchain But Claims It’s No Ethereum Rival
Paddy Baker – Coindesk
Binance has released a white paper detailing a new smart contract blockchain that it says offers a high-performance base-layer for decentralized apps – but might also be a challenge to Ethereum. The cryptocurrency exchange said Friday that the new Binance Smart Chain (BSC) would work as a smart contract layer running parallel to its existing Binance Chain. The new blockchain is claimed to come with a matching engine capable of fast trade executions and a new consensus mechanism designed to combine fast confirmation times with strong on-chain governance.

Binance is launching a new Ethereum-compatible blockchain
Yogita Khatri – The Block
Binance is set to launch a new Ethereum-compatible blockchainl\; The new blockchain will have BNB as a native token, thus supporting its staking; The move appears to put Binance in direct competition with Ethereum
Crypto exchange Binance is launching a new Ethereum-compatible blockchain, with BNB as a native token.

Circle CEO Claims ‘Explosive’ Stablecoin Demand From Everyday Businesses
Nikhilesh De – Coindesk
Four months after Circle pivoted to stablecoins, the startup’s new business model has received an unexpected boost from the global coronavirus crisis, said co-founder and CEO Jeremy Allaire. U.S. dollar-backed blockchain tokens are surging in popularity around the world, and this time much of the demand is for payments in normal business transactions, not just to move money quickly between cryptocurrency exchanges, Allaire claimed.

Bitcoin’s ‘killer app’ Purse is shutting down, open to acquisition opportunities
Yogita Khatri – The Block
Crypto startup Purse, which allowed people to buy items on Amazon at discount rates using bitcoin and bitcoin cash, is shutting down. Announcing the news on Thursday, San Francisco-based Purse said it will cease operations on June 26. Until then, the firm will continue to offer support for ongoing orders and withdrawals.


Bill Gates, at Odds With Trump on Virus, Becomes a Right-Wing Target; The Microsoft co-founder turned philanthropist has been attacked with falsehoods that he created the coronavirus and wants to profit from it.
Daisuke Wakabayashi, Davey Alba and Marc Tracy – NY Times
In a 2015 speech, Bill Gates warned that the greatest risk to humanity was not nuclear war but an infectious virus that could threaten the lives of millions of people.

US small business rescue fund runs out of cash; Congress has not yet reached a deal to replenish $350bn pot
Courtney Weaver and James Politi in Washington and Laura Noonan – FT
A $350bn US rescue fund for small businesses ran out of cash on Thursday morning after the US Treasury and congressional leaders failed to reach a deal to inject new resources into it. The Small Business Administration said in a note on its website: “The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enrol new PPP lenders at this time.”

Mnuchin defends US opposition to emerging markets liquidity plan; Trump administration resists issuance of reserve assets to troubled nations through IMF
James Politi – FT
Steven Mnuchin has defended the Trump administration’s opposition to a bid to provide IMF liquidity to emerging markets that are facing capital outflows, saying it would mostly benefit wealthier nations that do not need the support.

Macron warns of EU unravelling unless it embraces financial solidarity; Member states have ‘no choice’ but to set up joint virus recovery fund, French president tells FT
Victor Mallet and Roula Khalaf – FT
Emmanuel Macron has warned of the collapse of the EU as a “political project” unless it supports stricken economies such as Italy and helps them recover from the coronavirus pandemic.

No ‘Business As Usual’ With China After Covid-19, U.K. Says
Kitty Donaldson and Joe Mayes – Bloomberg
Raab says ‘deep dive’ into coronavirus outbreak will be needed; Foreign secretary still welcomes China cooperation on supplies
U.K. Foreign Secretary Dominic Raab said it could no longer be “business as usual” with China when the coronavirus pandemic is over, the latest sign of hardening attitudes toward Beijing as the crisis drags on.

‘Digital Dollar’ Reintroduced by US Lawmakers in Latest Stimulus Bill
Nikhilesh De – Coindesk
The concept of a digital dollar that can be used to provide U.S. taxpayers with stimulus payments to weather the economic recession caused by the COVID-19 pandemic has once again been floated by lawmakers.

Trump’s Coronavirus CEO Death Panel Backfires Hilariously
Jonathan Chait – NY Magazine
The Trump administration has been torn between a faction that takes public-health concerns seriously, and one that wishes to disregard it. The pro-public-health faction has argued that the country cannot resume normal economic activity until the public has some reassurances of safety, which can only be achieved through a combination of widespread testing, tracing, and perhaps effective remedies. The anti-public-health faction either believes the dangers of the coronavirus have been exaggerated, or that the cost of social-distancing requirements is so high that the economy should simply be reopened, regardless of medical danger.

Kelly Loeffler’s Money Is Her Biggest Problem and Her Only Hope
Ed Kilgore – NY Magazine
If you want a post-2020-election scenario that’s perilous fun, consider the possibility that control of the U.S. Senate (crucial to the winner of the presidential race, no matter whom that might be) will hang in the balance as voters in an increasingly polarized Georgia choose a senator in a January 5, 2021 runoff. That could happen, because the election of someone to finish the Senate term of Republican Johnny Isakson, who resigned at the end of 2019, is a special election being conducted by a nonpartisan “jungle primary” on Election Day, November 3, followed by the aforementioned runoff if no one wins a majority. That seems very likely, since there are 14 candidates, including two strong Republicans and one strong Democrat, in the field.


CFTC Charges Florida Man and His Companies in Fraudulent Forex and Digital Asset Scheme
The Commodity Futures Trading Commission today filed a complaint in the U.S. District Court for the Middle District of Florida, charging defendants Alan Friedland of Florida and his Florida-based companies, Fintech Investment Group, Inc. (Fintech) and Compcoin LLC, with fraudulently soliciting more than $1.6 million from their customers in connection with a leveraged or margined off-exchange foreign currency (forex) scheme.

SEC Awards Over $27 Million to Whistleblower; Amounts Awarded to Whistleblowers by SEC Now Exceed $400 Million
The Securities and Exchange Commission today announced an award of more than $27 million to a whistleblower who alerted the agency to misconduct occurring, in part, overseas. After providing the tip to the Commission, the whistleblower provided critical investigative leads that advanced the investigation and saved significant Commission resources.

Working on the Front Lines of Investor Protection – Protecting Senior Investors
There is no higher priority for FINRA than protecting senior investors from financial exploitation. Thus, every year we bring dozens of enforcement actions against brokers who harm senior investors, either through fraud schemes, conversion, churning of accounts, or otherwise. In this post, I want to highlight one pattern we have seen with increasing frequency in which certain brokers have exploited their senior customers.

ESMA issues new Q&A on alternative performance measures in the context of COVID-19
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued a Q&A to provide guidance to issuers on the application of the ESMA Guidelines on Alternative Performance Measures (APM Guidelines) in the context of the COVID-19 pandemic.

ESMA issues new Q&A on alternative performance measures in the context of COVID-19
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued a Q&A to provide guidance to issuers on the application of the ESMA Guidelines on Alternative Performance Measures (APM Guidelines) in the context of the COVID-19 pandemic.

Short selling ban extended across Europe; Restrictions in short selling in Austria, Belgium, France, Greece and Spain have been extended despite warnings of unintended consequences.
Hayley McDowell – The Trade
Five European countries have extended a ban on short selling due to the ongoing coronavirus pandemic, despite warnings from exchanges and hedge funds that the move could harm markets.

Investing and Trading

How to Play Coronavirus Bear Market? Exactly Like the Bull Market; Rather than breaking the habits investors fell into during the bull market, the crisis and economic shutdown have reinforced them
James Mackintosh – WSJ
A standard recession doesn’t just upend the economy. It cleans out the excesses in markets, turning winners into losers and, sometimes, losers into winners.

Sal Khan Explains Key Charts About Economic Inequality; A Khan Academy video guide to the data on income, wealth and other disparities.
Kevin J. Delaney – NY Times
This article is part of “The America We Need,” a Times Opinion series exploring how the nation can emerge from this crisis stronger, fairer and more free. Read the introductory editorial and the editor’s letter.
As part of our new series on how America can emerge from the coronavirus crisis fairer and more resilient, Times Opinion created a partnership with Khan Academy to produce educational videos that explain economic inequality.

Flood of Saudi Oil Looms as U.S. Drillers Face Supply Glut; Tankers carrying roughly seven times the normal monthly amount are coming to America, threatening U.S. energy prices and production
Collin Eaton and Russell Gold – WSJ
A fleet of tankers full of Saudi oil is slowly making its way to the U.S. Gulf Coast, threatening to worsen an already historic oversupply of crude.

Record flows into junk bond funds after Fed move; Eclipses previous record by almost 50% as investors want what the central bank is buying
Richard Henderson and Eric Platt – FT
Investors poured a record $10.5bn into junk bond funds in the week ending Wednesday, after the Federal Reserve shocked markets by pledging to support the debt.

Payment holidays are messing with America’s $2.2tn mortgage machine; ‘Warehoused’ loans could go into default before they can be sold
Laura Noonan – FT
The US Federal Reserve made a dramatic move to calm the US home-loan market last month, announcing plans to buy mortgage-backed securities in unlimited amounts to ease tensions caused by the coronavirus pandemic.

Oil trader Hin Leong races to restructure billions in debt; HSBC and ABN Amro top list of banks owed almost $4bn by Singapore family-run group
Neil Hume and Stephen Morris – FT
HSBC, ABN Amro and Société Générale are among a group of banks owed almost $4bn by Hin Leong, the Singapore oil trader scrambling to restructure its finances as a brutal downturn hits energy markets.

Loeb slams Fed move into junk bonds; Hedge fund manager says US central bank is offering a reprieve to those who took on excessive debt
Ortenca Aliaj – FT
Daniel Loeb, the billionaire hedge fund manager, has blasted the Federal Reserve for extending its assistance to the junk bond market where companies owned by private equity groups often raise capital, saying it is “fraught with moral hazard on several fronts”.

Morgan Stanley Sees the Wealthy Sticking With Cash; The bank’s clients want more clarity on the economy before diving back into risk assets.
Brian Chappatta – Bloomberg
Count Morgan Stanley’s wealth-management clients among those who aren’t entirely convinced that the worst of the market turbulence is over. The bank was the last of the top Wall Street firms to report first-quarter earnings, and its results Thursday were largely more of the same. It posted its best trading performance in more than a decade, helping to soften the blow across other divisions. The one area that Morgan Stanley could provide further insight was a peek into the minds of wealthy individual clients. It didn’t disappoint.

Rich-Investor Site Finds Fraud in $89 Million of Ship Debt
Claire Boston and Gillian Tan – Bloomberg
YieldStreet found ‘inconsistencies’ after borrower default; Platform lets investors bet on esoteric deals backed by assets
YieldStreet Inc. has become a go-to site for the mass affluent looking for the kind of investments normally reserved for billionaires and hedge funds. One such investment in marine finance has turned out to be a suspected fraud.

U.S. Is Expected to Lead a Contraction in Global GDP This Year
Alexandre Tanzi and Wei Lu – Bloomberg
America will represent 31% of worldwide slump, IMF data show; Growth will rebound in 2021, with 5.8% expansion, IMF says
Few countries in the world have been spared from the devastating economic consequences of the coronavirus outbreak. But no economy will have a bigger impact on global growth than the U.S.

Coffee Supply Isn’t Safe With Harvest Threats in Latin America
Marvin G Perez, John Quigley, and Isis Almeida – Bloomberg
Fears mount over labor shortages in Peru, Colombia, Brazil; ‘Entire families are leaving,’ cooperative manager says
The coronavirus pandemic has upended life in unprecedented and countless ways. Now it may be coming for your coffee. Bank closures, reduced working hours, hampered mobility and fears of contagion on farms have all raised serious concerns that there won’t be enough laborers to collect coffee beans for harvests that will soon get underway. The pressure is especially acute in Colombia, Brazil and Peru, which account for almost two thirds of world output for the smooth-tasting arabica beans.


Activist hedge fund Engaged to give director fees to corporate employees
Svea Herbst-Bayliss – Reuters
Activist investor Engaged Capital will donate roughly $500,000 in fees its executives would have earned for serving on public companies’ boards this year to those corporations’ employees, the hedge fund’s founder Glenn Welling told Reuters.

Goldman Sachs gets boost to prime brokerage business as hedge fund balances increase; Equities and fixed income financing rose in the first quarter at Goldman Sachs, as hedge funds increase balances.
Joe Parsons – The Trade
Goldman Sachs has reported gains from its division catering to hedge funds in the first quarter, as revenues from equities and fixed income financing totalled over $1 billion.

Amundi strikes front-to-back alliance with CACEIS to further roll out outsourced trading service; Front-to-back partnership and outsourced trading service with CACEIS at Amundi marks the first to be offered by a major buy-side firm.
Joe Parsons – The Trade
European asset management giant Amundi has struck a partnership with Luxembourg-based custodian CACEIS for a new front-to-back office solution that will aid the rollout of its outsourced trading service.

Ashmore’s contrarian streak costs it dearly during first quarter; Emerging markets specialist suffers setbacks on bets including Lebanon and Argentina
Tommy Stubbington and Anna Gross – FT
Ashmore has grown into one of the world’s largest asset managers dedicated to emerging markets, under the uncompromising leadership of its founder and chief executive, Mark Coombs.

Banks Have $13 Billion of Junk Debt They Can’t Wait to Sell
Ruth McGavin and Tatiana Darie – Bloomberg
Takeover financing agreed in benign conditions pre-pandemic; Closed market leaves banks to stump up funding themselves
For banks sitting on a pile of high-risk debt they’ve been unable to sell, the full return of Europe’s junk debt market cannot come too soon. Amid the upbeat mood that prevailed before the coronavirus struck Europe, banks agreed to provide nearly $13 billion of bonds and loans to support acquisitions. They planned to sell this debt to eager investors–only to see the markets slam shut.

European Banks Seek to Avert Stashing Billions for Bad Loans
Nicholas Comfort, Steven Arons, and Sonia Sirletti – Bloomberg
Predicting quick rebound can lower first-quarter, future costs; ECB has signaled support for assumptions of recovery this year
European banks are seeking to avoid setting aside billions of euros to cover bad loans after the coronavirus outbreak, in a departure from U.S. competitors collectively taking a $25 billion hit.

After market storm, hedge funds launch to catch the recovery wave
Olga Cotaga and Maiya Keidan – Reuters
At least eight European hedge funds are launching portfolios betting on a recovery in corporate debt and emerging markets after the coronavirus pandemic triggered the biggest market rout in a generation.


Hong Kong orders banks to grant unprecedented six-month loan repayment holiday to help small businesses survive slump
Enoch Yiu – South China Morning PostHong Kong’s monetary authority has instructed all banks in the city to grant a six-month loan repayment holiday to small and medium-sized enterprises (SMEs), in an unprecedented intervention aimed at helping them survive its worst business slump in decades, as the city’s retail, property and services industries struggle to recover from the coronavirus pandemic.The intervention by the Hong Kong Monetary Authority (HKMA) – the first such by the de facto central bank since its founding in 1993 – …

Italy to launch retail bonds for coronavirus funding; Product aimed at ordinary savers will be earmarked for health spending
Tommy Stubbington – FT
Italy’s government is turning to ordinary savers to help raise the funds to pay for its response to the coronavirus crisis. The country’s Treasury said on Thursday it would launch a new bond next month aimed at retail investors, with the proceeds earmarked for health spending and measures to shield the economy from the impact of the pandemic.

Saudi Arabia, Russia Hint at Further Action to Stem Oil Rout
Robert Tuttle – Bloomberg
Nations ‘prepared to take further measures’ if necessary; Aramco announces swift start with output at 8.5m b/d on May 1
Saudi Arabia and Russia signaled they may be open to further output cuts after the latest OPEC+ deal to curb global oil supplies failed to stem crude’s downward spiral. The two nations will “continue to closely monitor the oil market and are prepared to take further measures jointly with OPEC+ and other producers if these are deemed necessary,” Russian Energy Minister Alexander Novak and his Saudi counterpart Prince Abdulaziz bin Salman said in a joint statement published after a phone call.

Europe’s ‘Big and Hungry’ Family Investors Mean Safer Dividends
Lukas Strobl and Kasper Viita – Bloomberg
Family stakes, cash-flow cover predict resilient dividends; Firms on AlphaValue shortlist defy trend of scrapping payouts
As companies scramble to suspend shareholder payouts to survive the pandemic, one group in Europe stands out as particularly resilient: those steered by family owners.

The Global Airline Shutdown Has a Surprise Victim: Gold Miners
David Stringer – Bloomberg
Newmont working with competitors, suppliers to charter planes; Closures could see metal flown 10,000 miles to be refined
The collapse in commercial air travel amid global coronavirus restrictions has an unexpected casualty — gold miners looking to transport their metal to refineries. Producers typically rely on regular airline services to ferry mined metal — called dore — from remote operations to the specialist plants that separate out the precious metals and craft them into bars or coins.


Brexit: UK will refuse any transition extension request
BBC News
The UK will refuse to extend the Brexit transition period, even if the EU requested a delay, Downing Street says. A spokesman said any extension would keep the UK bound by EU rules when it instead “needs flexibility” to deal with coronavirus. The transition period, due to end on 31 December, was intended to allow the two sides to negotiate a trade deal.

Brexit negotiators try to pick up pieces as talks resume
Jim Brunsden – FT
The EU and UK will return to the Brexit fray on Wednesday to figure out how to salvage negotiations on London’s future relationship with Brussels in the face of disruption caused by the coronavirus pandemic. Michel Barnier and David Frost, the two chief negotiators, will have their first official contact since Mr Barnier, leading the EU team, announced on March 19 that he had tested positive for Covid-19. Mr Frost, his UK counterpart, went into self-isolation soon afterwards after displaying symptoms.


How coronavirus infected publishing
Amol Rajan – BBC
Lenin had it about right when he said: “There are decades where nothing happens; and there are weeks when decades happen.” In recent weeks, several decades’ worth of disruption and, frankly, obliteration has come to the UK’s newspapers and magazines. Indeed, it’s hard to overstate the impact of coronavirus on the sector.

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