Hits & Takes
By JLN Staff
Don’t forget to sign up your interns, new employees or college students for the MarketsWiki Education World of Opportunity Virtual Event on July 22. Click on the image above.
Last night I interviewed Thomas McMahon, longtime New York commodity broker of various exchanges, for the Open Outcry Traders History Project. He was in Singapore, I was in Elmhurst, IL. We shot the interview over Zoom. Thom’s history spans from working as Jesse Livermore’s clerk (Thom bought his Sugar Exchange membership) to trading Carbon Credits using ethereum. When Thom made the jump from clerk to Sugar broker for Cargill, the person who replaced him on the Cargill cotton phones in New York was former CBOT CEO Bernie Dan. There is a lot to share. Stay tuned.
Also, on Wednesday Tom Rinaudo, a longtime CBOT member, sat in our offices for the first interview since the pandemic broke out. JLN Producer Mike Forrester shot the interview, which I conducted again via Zoom on an iPad on a stand where I would normally sit for an interview. It turns out I knew Tom Rinaudo 35 years ago when I was a cub reporter for Commodity News Services in 1984 and was covering the CBOT wheat pit. Rinaudo’s story stirred my memory banks.
Ed Ryan, star of a recent Open Outcry Traders History project video, has been recruited away from Advantage Futures and is now director of institutional sales for StoneX Group Inc. StoneX is the former INTL FC Stone
The headline of the day is from the Wall Street Journal with a story about the Brooks Brothers bankruptcy titled “Two Suitors Compete to Scoop Brooks Brothers Out of Bankruptcy”.
From the NFA: Due to maintenance, the following systems will be unavailable from 8:00 a.m. until 12:00 p.m. CT on Sunday, July 12, 2020: Online Registration System (ORS), BASIC Data Entry, Security Futures Products Training, Online Payments, Online Arbitration Claims, Arbitrator Profile, Arbitrator Training, Employment Application and Profile System, and all Electronic Filings Systems including EasyFile, Exemptions, Questionnaire, and Disclosure Documents. We apologize for any inconvenience.
Have a great weekend and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Save the Date: The LME’s annual Metals Seminar will take place on Monday 19 October 2020. It will be virtual this year, and free. Registration will begin in August, but you can go here for more information. ~SR
T3 Index, the firm that created the SPIKES Volatility Index, today announced the launch of BitVol, a volatility index for bitcoin (BTC). The index measures the expected 30-day implied volatility of the world’s most popular cryptocurrency using tradable bitcoin options prices. You can read the press release in our “Cryptocurrencies” section.~MR
FIA commends European Commission for improvements to EMIR 2.2 Delegated Acts and stresses concerns about timing of equivalence decisions
FIA today responded to the European Commission consultations on EMIR 2.2 Delegated Acts for the criteria for tiering of classifying a third-country CCP as systemically important and comparable compliance for Tier 2 third-country CCPs. The response was submitted jointly with the International Swaps and Derivatives Association (ISDA).
*****Let me boil this down for you. FIA Likes It.~JJL
Sen. Kelly Loeffler says she won’t step down as WNBA owner following BLM backlash
Stephen Proctor – Yahoo
Georgia Sen. Kelly Loeffler, who co-owns the WNBA team the Atlanta Dream, appeared on The Ingraham Angle Wednesday night, where she said she would not give up ownership of the club despite numerous calls for her to do so due to her opposition to Black Lives Matter. After the WNBA announced on Monday that players would wear warm-up jerseys that read “Black Lives Matter” on the front and “Say Her Name” on the back, Loeffler sent a letter to the commissioner on Tuesday denouncing BLM, and she continued to do so Wednesday night.
*****Sen. Loeffler is going to need a new shovel the way she keeps digging the hole deeper with this story.~JJL
Remarks of Commissioner Dawn D. Stump Before the Women in Housing & Finance, Inc.
Once Upon a Time
Before beginning my remarks I would like to note that the views I express today are my own and not necessarily those of the Commission I am proud to serve upon, nor my fellow Commissioners.
*****Commissioner Stump made a strong statement for women and their importance in our economy and economic growth at the bottom of this speech. I would add the same for people of color and also people who don’t fit into a binary world.~JJL
Former chief operating officer for CME Europe joins Capco; David Feltes served as COO of CME Europe from 2012 until 2016 and was previously CEO of proprietary market maker Marquette Partners.
Annabel Smith – The Trade
Technology consultancy Capco has appointed a former chief operating officer at CME Europe as its UK financial markets infrastructure (FMI) practice lead.
***** I love Dave Feltes. Did I write that out loud?~JJL
Starbucks to Require Customers to Wear Masks; Coffee chain’s new mask policy to cover about 8,900 U.S. locations from next week
Heather Haddon – WSJ
Starbucks Corp. SBUX -0.77% will require customers in the U.S. to wear masks at company-operated stores starting next week, as retailers look to keep employees and patrons safe amid rising coronavirus cases in parts of the country.
*****Wear a mask or no caffeine-infused burnt tasting coffee for you.~JJL
CryptoMarketsWiki Coin of the Week: Dogecoin (DOGE)
Trading volumes for DOGE spiked this week due to a series of user-made videos on the popular video app Tik Tok, which encouraged other users to invest in the “joke” cryptocurrency. Global searches for “how to buy dogecoin” quadrupled, according to data from Google Trends.
Thursday’s Top Three
Our top story Thursday was Why ESG investing makes fund managers more money from the Financial Times. Second was In Memory of Christopher L. Culp, from Compass Lexecon, about the financial economist, academic, and expert witness, who recently passed away. Third was Robinhood Has Lured Young Traders, Sometimes With Devastating Results, from the New York Times.
181,051,583 pages viewed; 24,324 pages; 225,273 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,411 pages; 12,479 edits
Griffin Urges Cooperation Toward Uniform U.S. Listing Standard
Katherine Burton – Bloomberg
Ken Griffin, head of the $33 billion hedge fund Citadel, called on U.S., Chinese and other foreign regulators to work together to provide better oversight of foreign companies listed on U.S. exchanges. Recent accounting scandals at foreign companies, including Wirecard AG and Luckin Coffee Inc., underscore the need for robust and uniform auditing standards for foreign companies listed in the U.S., Griffin wrote in an op-ed for Bloomberg Thursday. He also raised concerns over China’s resistance to allowing the Securities and Exchange Commission and Public Company Accounting Oversight Board to inspect foreign-based auditors.
*****Just below is the piece by Ken Griffin.~JJL
Listing on U.S. Exchanges Is a Privilege; Meeting accounting standards set by U.S. regulators is a small price for foreign companies to pay to reap the benefits of American markets.
Kenneth C. Griffin – Bloomberg
Over the past century of global economic integration, the U.S. has emerged as the world’s financial capital: home to the largest investment banks, asset managers and exchanges. This leadership position yields many benefits. Job-creating American companies can avail themselves of a lower cost of capital. The government can readily fund its deficits in times of need. And households have access to an extensive range of investment opportunities — enabling them to put their hard-earned money to work, save for education and retirement, and achieve a better quality of life.
Brussels moves to preserve access to London clearing houses; EU financial policy commissioner says decision will address risks to financial stability posed by Brexit
Jim Brunsden and Philip Stafford – FT
Brussels is to adopt emergency measures to preserve Europe’s access to crucial UK financial market infrastructure after the country’s post-Brexit transition period expires, the bloc’s regulation chief said on Thursday.
‘Let’s All Get Rich’—Teen TikTok Traders Want To Send ‘Joke’ Bitcoin Rival Dogecoin To The Moon
Billy Bambrough – Forbes
The world of bitcoin and cryptocurrencies has been set alight this week by the sudden surge of dogecoin—a “joke” cryptocurrency that’s doubled in value in the last two days thanks videos posted on controversial China-based app TikTok.
A Coffee Chain Reveals Flaws in the Fed’s Plan to Save Main Street; Businesses that want to use the Federal Reserve’s Main Street program cannot, and many that can use it have better options in the private market.
Jeanna Smialek – NY Times
La Colombe, a Philadelphia-based purveyor of fancy coffee and canned draft lattes, has seen its business fall off sharply in 2020 as the coronavirus pandemic shuttered its cafes and closed the upscale restaurants that serve its brew. But the company has fallen through the cracks when it comes to government relief.
Don’t the Markets Know We’re Living in a Disaster Movie? With so much bad news out there, the big rally in the stock market is what’s really scary.
John Schwartz – NY Times
Guys, the stock market is up! Yay? Or should we just scream? I can’t make up my mind. Let’s face it, things are scary. Millions of people have gotten sick, hundreds of thousands have died worldwide and the economy nose-dived.
Goldbugs Take Center Stage in Markets, but the Real Show Is With Energy; With the economy still pinned down by the pandemic, a look at this week’s winners and losers
Paul Vigna – WSJ
It’s getting harder to bet on a strong economic recovery. The wave of states opening up their economies has directly resulted in a wave of new coronavirus infections. This hasn’t become a major issue for the stock market, yet. The Dow Jones Industrial Average is on pace for a small loss this week, but the S&P 500 and tech-heavy Nasdaq Composite are both up on the week.
The Real Test of Europe’s Banks Comes This Fall; Lenders face a rough second half as governments unwind the programs that cushioned the initial blow of the coronavirus crisis
Rochelle Toplensky – WSJ
Second-quarter results from Europe’s banks won’t be great, but it is in the second half that the sector faces its toughest test. Lenders’ profits have already been crushed by the economic fallout of the global pandemic. Yet the true scale of the damage will only start to be revealed over the coming months, as European economies reopen and governments unwind some of their extraordinary support.
Coronavirus’s Worst Impact on Oil Demand Has Passed, IEA Says; Oil prices have traded in a narrow range in recent weeks, held back by worries over upticks in Covid-19 cases
David Hodari – WSJ
The worst effects of the coronavirus on global oil demand have passed but will continue to echo as the market slowly recovers in the second half of 2020, the International Energy Agency said Friday.
Two Suitors Compete to Scoop Brooks Brothers Out of Bankruptcy; A venture between Authentic Brands and Simon Property is considering bidding for retailer, as is WHP Global
Soma Biswas – WSJ
A battle is brewing for control of Brooks Brothers Group Inc., with at least two apparel ventures looking to take over the bankrupt clothing retailer, according to people familiar with the matter.
Indian Bank Hit by Third Huge Fraud; Punjab National Bank, which says a customer defrauded it of $491 million, has been beset by difficulties with borrowers
P.R. Venkat – WSJ
One of India’s biggest state-run banks said it had fallen victim to its third multimillion-dollar fraud in as many years, a stark illustration of the bad debts and weak defenses against misconduct that plague the country’s financial system.
Tropical Storm Warning Issued for New York as Fay Looms
Brian K Sullivan – Bloomberg
First storm warnings for New York and New Jersey since Sandy; Heavy rainfall expected to cause ‘moderate flooding,’ NHC says
Heavy downpours and thrashing wind are in store for the Northeast from Tropical Storm Fay, spinning up off the coast of North Carolina.
Biggest U.S. Banks Set for Worst Quarter Since Financial Crisis
Steven Lubbers – Bloomberg
Pandemic seen sparking another round of loan-loss reserves; Trading revenue again expected to help banks weather crisis
U.S. banks had only a few weeks’ experience with the full-blown pandemic when they last tried to forecast how bad things would get. Now, they’re about to reveal what three more months of Covid-19 did to the industry. Second-quarter results, set for release next week, will probably show that the trends that took hold at the start of the year only intensified: surging provisions for loan losses and slumping consumer spending, with trading gains helping some banks weather the storm.
IEA Warns Oil Demand Recovery at Risk From Virus Resurgence
Grant Smith – Bloomberg
Second-quarter demand estimate boosted by 1.5M barrels a day; Coronavirus still ‘casting a shadow over the outlook’: IEA
The International Energy Agency bolstered its outlook for global oil demand, but warned that the recovery could be derailed by the resurgence of coronavirus.
Starting at $500,000: A Swiss Mountain Vault for Storing Riches; Entrepreneurs plan to build strongrooms in the Bruenig massif
Leonard Kehnscherper – Bloomberg
Long known as a bastion of discrete, secure banking, Switzerland will soon offer the world’s wealthy another choice for storing their prized possessions: rock vaults carved into foothills of the Alps. The idea comes from entrepreneurs in central Switzerland, home of the Bruenig massif, a hulking mountain about 25 miles southwest of Lucerne. “Your treasure chamber in a solid rock massif,” Bruenig Mega Safe AG, the firm building the vaults, says on its website. “The secure place for safekeeping your assets and sensitive data.”
It’s America First for Markets, But Not for Long; All signs point to a sea change in an investment regime dominated by the U.S.
John Authers – Bloomberg
It is time for the investment regime to change. That is what happens after a major international financial crisis, and we certainly had one of those earlier this year. We also have a remarkably strong and persistent ancien regime, which has lasted ever since the last crisis and is in need of change. Rates and inflation have been low, inequality has grown, and American assets have massively and consistently outperformed the rest of the world. This chart from London’s Absolute Strategy Research, Ltd., makes clear how strong the current regime is, and how prior recessions led to new regimes:
Execution Risk |; Spike in execution risk threatens futures infrastructure
Andy Ross – CEO, CurveGlobal
It’s not all about the pandemic; but for futures markets participants, it is certainly increasing the stakes. Even before Covid-19 struck, the industry was tackling the complex challenge of transitioning from LIBOR to new risk-free reference rates (RFRs). The crisis has only reinforced the risks as we work towards the 2021 end-date.
Yuan Turns Into Global Risk Bellwether as China Leads Recovery
Srinivasan Sivabalan – Bloomberg
Fizzling dollar is left behind as markets track yuan moves; Chinese currency boosts correlation with euro, global bonds
As the dollar shows signs of exhaustion, the yuan is taking over as the barometer of global risk sentiment. A worldwide rally in stocks, bonds and commodities is decoupling from the U.S. currency, which entered a bearish phase in June and is grinding lower for a fourth month. The rally is increasingly mirroring moves in the Chinese currency as it breaks psychological barriers and builds on its best month since October.
European Commission confirms ‘time-limited’ equivalence for UK CCPs; As the European Commission finalises EMIR 2.2, it has confirmed a temporary equivalence decision for UK CCPs from January 2021.
Hayley McDowell – The Trade
The European Commission has confirmed its intentions to adopt a temporary equivalence decision for UK central clearing counterparties (CCPs) at the end of the Brexit transition period.
World’s Rich Are Spending the Pandemic Weighing Succession
Benjamin Stupples, Marion Halftermeyer, and Patrick Winters – Bloomberg
Billionaires will transfer $2 trillion within next two decades; Surprising how many wealthy lack up-to-date wills, banker says
John Caudwell is thinking a lot about life and death these days. The 67-year-old billionaire philanthropist said he intends to leave most of his wealth to charity, making him aware of the need to plan carefully for how his fortune will be used beyond his own lifetime.
Carnegie Hall Got Rescue Aid, But Not Your Favorite Food Cart; Many microbusinesses were shut out of a U.S. relief program that doled out $521 billion in loans
Saijel Kishan – Bloomberg
Few places illustrate the disparities in coronavirus relief assistance better than New York City. Wall Street firms, top art galleries, and the private-member club Soho House got millions of dollars in federal aid earmarked for small businesses. Evelia Coyotzi, who operates a food cart beneath the tracks of the No. 7 subway line that connects Manhattan to the outskirts of Queens, got nothing.
Don’t Shame Businesses for Taking Government Money; Why criticism of the Payroll Protection Program misses the mark.
Karl W. Smith – Bloomberg
The Paycheck Protection Program, passed into law last spring and transformed into a government program in matter of days, has been under fire almost since its inception. Critics first charged that it was too slow, too complex and failed to get funds to the small businesses that needed it. More recently, as information about recipients has become available, the criticism has focused on the larger companies, wealthy celebrities and politically connected firms that got federal aid.
PC Sales Surge, Boosted by Homebound Workers and Students; Remote working and students at home drove demand as U.S. recorded highest quarterly-shipment volume in over a decade, IDC says
Maria Armental – WSJ
Personal-computer sales rebounded in the June quarter, driven by higher demand from workers and students forced to study and work from home amid the coronavirus, according to preliminary data from two industry-research firms.
Patients Swamp Sun Belt Hospitals With Covid-19 on a Rampage
Jonathan Levin and Emma Court – Bloomberg
Deaths hit records, but efforts to rein in disease are feeble; ‘We’re rearranging deck chairs on the Titanic as we speak.’
The coronavirus pandemic’s merciless march through the Sun Belt is killing record numbers of Americans there, overrunning hospitals and exhausting supplies. But even as some leaders fall ill themselves, they have failed to contain the disease’s spread.
The US is diving into a dark Covid hole — and there’s no plan to get out
Stephen Collinson, CNN
There is no plan. As the US plunges into an ever deeper coronavirus morass, setting record new infection rates and the death curve begins to rise again, there’s no prospect of the nightmare ending for months.
Fauci Calls Pandemic a ‘Worst Nightmare’ Scenario, So Remind Me Again Why States Are Reopening?
Alyse Stanley – Gizmodo
At the Hill’s Future of Healthcare Summit last year, the outlet’s editor-at-large Steve Clemons asked Dr. Anthony Fauci to describe his nightmare public health scenario. His answer: “[A] respiratory borne illness that spreads rapidly, that’s new, mainly, there’s no background immunity in the population, and that almost turns out to be a brand new pandemic influenza.”
I teach public school. I love my students. I don’t want to die.
Elana Rabinowitz – CNN
I am a public school teacher and I don’t want to die. As the question of whether and how to reopen schools in the fall intensifies, with parents and especially politicians expressing their opinions, I want to ask: Has anyone asked what we want to do in the fall?
Time to shut down again? As coronavirus cases surge, a growing chorus makes the case
Griff Witte – Washington Post
They raced to shut down their economies in March, and many opened them just as quickly in May.Now, governors across the country are facing growing pressure from public health experts and local leaders to reimpose stay-at-home orders as the only way to regain control of coronavirus outbreaks that threaten to overwhelm hospitals and send the death count rocketing.
An Unprecedented 14 Million Children Are Going Hungry Due To The COVID Crisis; Three in 10 Black families are struggling to feed their children, and there’s no sign of relief in sight.
Emily Peck – Huffington Post
Nearly 14 million children in the United States went hungry in June, as the economic fallout from the pandemic continued to batter families. That’s an increase of more than 10 million since 2018, and nearly three times the number of children who went hungry during the Great Recession, according to an analysis of Census data released by the Hamilton Project on Thursday.
H.K. Schools Shut; U.K. Won’t Join EU Vaccine Plan: Virus Update
Hong Kong will close schools again and Australia is tightening inbound travel as governments react to spiking infections. Meanwhile, Japan is forging ahead with steps to reopen the economy even as Tokyo reported a record increase in coronavirus cases.
Florida Deaths Hit Record as Covid-19 Sweeps the Sun Belt
Jonathan Levin – Bloomberg
Florida reported records in both Covid-19 deaths and new hospitalizations Thursday, grim numbers that reflect a new surge in infections sweeping the U.S. from the Southeast to California.
Israel’s Return to Lockdown Offers a Cautionary Tale; Prime Minister Benjamin Netanyahu declared victory prematurely. Now Israelis are rightly angry at the cost of that hubris.
Zev Chafets – Bloomberg
Not so long ago, Israel was considered a coronavirus success story. In May, Prime Minister Benjamin Netanyahu congratulated himself on achieving victory and, with a wide smile, invited Israelis to “go out and have a good time.” That invitation was readily accepted. People who had been locked down for many weeks celebrated with mass parties and grand wedding receptions. Bars, pubs and restaurants reopened to full houses. Few bothered with masks or social distancing. The good times Bibi called for were rolling.
Pathologist found blood clots in ‘almost every organ’ during autopsies on Covid-19 patients
Ralph Ellis and Andrea Kane, CNN
(CNN)Autopsies on people who died of the coronavirus are helping doctors understand how the disease affects the body — and one of the most remarkable findings concerned blood clotting, a pathologist says.
‘Big Mess’ Looms if Schools Don’t Get Billions to Reopen Safely; As President Trump and others push to get students back in the classroom this fall, educators say they need more support and clearer guidelines.
Dana Goldstein – NY Times
Bus monitors to screen students for symptoms in Marietta, Ga.: $640,000. Protective gear and classroom cleaning equipment for a small district in rural Michigan: $100,000. Disinfecting school buildings and hiring extra nurses and educators in San Diego: $90 million.
China Points to Shrimp as Virus Carrier After Salmon Debacle
Virus tested positive on inside and outside packaging; Shrimp from 3 Ecuador plants will be halted for imports
China said samples of imported shrimp tested positive for the coronavirus, raising questions again over whether the pathogen can spread through food or frozen products.
U.S. Daily Cases Top 60,000; Record Texas Deaths: Virus Update
New U.S. virus cases topped 60,000 in a day for the first time. Texas, California and Florida all reported a record number of deaths, while Arizona added 4,057 new cases, the most in six days.
Anthony Fauci: ‘We are living in the perfect storm’; The straight-talking scientist on keeping the peace with Trump and the hunt for a Covid-19 vaccine
Hannah Kuchler – FT
I hear Anthony Fauci before I see him. Out of view of our video call, he asks his tech assistant: “Have you wiped down the table?” The assistant, who has already sprayed down the 79-year-old’s chair, hurries to disinfect the desk. The top adviser on the White House’s coronavirus task force cannot afford to fall ill.
Exchanges, OTC and Clearing
Trading Surge Leads Toronto Exchange Past New York, London
Addison Kliewer – Bloomberg
TMX posted 38% increase in daily average volume through June; Firm is the only Canadian financial stock to gain in 2020
The best-performing financial stock on the Toronto Stock Exchange isn’t a bank. It’s the parent company of the exchange itself, thanks to a jump in equity trading volumes. TMX Group Ltd. is the only member of the S&P/TSX Financials Index to have gained so far in 2020, climbing 19.6%, while its other 24 members are in the red.
LME Starts Publishing Off-Warrant Stock Data
London Metal Exchange
The London Metal Exchange (LME) today proceeds with publishing collated off-warrant stocks data, designed to deliver increased transparency of global metal availability. By providing visibility over a broader set of material, which may potentially be put on LME warrant in the future, the market will be able to trade on the basis of a more holistic supply story, and provide further confidence to market participants in respect of the deep underlying physical liquidity of the LME’s contracts.
Semi-Annual Review Of The OMX Helsinki 25 Index – The New Portfolio Of The OMX Helsinki 25 Index Will Become Effective On August 3, 2020
Nasdaq (NASDAQ:NDAQ) announces today the results of the semi-annual review of the OMX Helsinki 25 index, (Nasdaq Helsinki: OMXH25), which will become effective with the market open on Monday, August 3, 2020.
ASX Is Extending Temporary Emergency Capital Raising Relief To 30 November 2020
On 31 March 2020, ASX introduced temporary emergency capital raising measures (by way of class waivers) to help listed entities affected by the COVID-19 pandemic to raise urgently needed capital. The measures included protections for retail investors. These measures were due to expire on 31 July 2020.
Q&A On Shanghai Stock Exchange Releasing Rules For Refinancing On SSE STAR Market
Today (July 3), the Shanghai Stock Exchange (SSE) officially released the relevant rules for the refinancing on the SSE STAR Market. An SSE official in charge of the business answered the questions about the issuance of the rules.
BOX Exchange: Changes To High Speed Vendor Feed
On Monday, November 23, 2020, BOX Exchange LLC (“BOX”) will launch a new version of the High Speed Vendor Feed (“HSVF”).
DGCX Officially Launches Weekly INR Futures Contract
DGCX has expanded its portfolio of Indian Rupee (INR) Futures Contracts with the introduction of a Weekly INR Futures Contract against the US dollar (USD). The new contract will provide market participants with short-term hedging and arbitrage opportunities and will track the world’s largest pool of offshore liquidity for exchange-traded INR-USD currency products that the DGCX offers.
Nasdaq June 2020 Volumes, 2Q20 Estimated Revenue Capture and Listings Statistics
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for June 2020, as well as quarterly volumes, number of listings and estimated revenue capture for the quarter ending June 30, 2020 on its investor relations website.
Dash Plans Redesigned OEMS Release for Q4; Blaze 7 will feature an enhanced, integrated suite for options volatility traders.
Rebecca Natale – Waters Technology
Dash Financial Technologies will release its newly rebuilt front end, dubbed Blaze 7, in Q4 of this year, and it will feature a new volatility trading product suite.
LabCFTC to Host Fintech-Focused Virtual Event Series This Fall; Empower Innovation 2020 Will Replace This Year’s Fintech Forward Conference; Project Streetlamp Science Prize Competition Winner to be Announced
The Commodity Futures Trading Commission today announced that LabCFTC will present Empower Innovation 2020, a series of interactive virtual events throughout the fall. The three-part series will facilitate a dialogue among innovators, regulators, market participants, and the public around cutting-edge fintech innovation. In light of the COVID-19 (coronavirus) pandemic, the Empower Innovation 2020 series will be held in lieu of the 2020 Fintech Forward conference.
Fintech accounts tied to Wirecard’s UK arm still have money missing
Marc Shoffman – Business Insider
UK account holders with brands that use Wirecard’s payment services are still waiting for cash that bounced from their accounts when the German fintech firm filed for insolvency. This is despite the fact that Wirecard’s UK arm resumed regulated activity more than a week ago.
Fintech disruptor SoFi wants to become a national bank — again
Riley de León – CNBC
Fintech company SoFi has filed an application for a national bank charter with the Office of the Comptroller of the Currency (OCC), according to a report from Business Insider citing a company-wide email it reviewed. In that email, CEO Anthony Noto said that the personal finance start-up “thought long and hard about embarking on this path, and are proud of what we have accomplished in the last 2+ years to position ourselves to take this next critical strategic step in our development.”
T3 Index to Launch a Bitcoin Volatility Index; “BitVol”
PR Newswire via Yahoo Finance (press release)
T3 Index today announced the launch of ‘BitVol’, a real-time index measuring the expected 30-day implied volatility of BTC, derived from tradable Bitcoin option prices. The BitVol index is model-free and is constructed using the variance swap methodology, a time-tested approach that provides replicability. It is designed to use the full range of option strikes to best capture the market outlook on expected volatility. The index uses T3’s proprietary “Price-Dragging” technique to maximize the stability of the index. These features enable the index to present precise and meaningful information to market participants.
Bitfinex Must Face N.Y. Suit Over $800 Million in Lost Funds
Chris Dolmetsch and Olga Kharif – Bloomberg
Crypto exchange argued state had no authority to pursue case; Court said stablecoin Tether is a security or a commodity
The cryptocurrency exchange Bitfinex must face claims by New York state that it hid the loss of commingled client and corporate funds, a state appeals court ruled Thursday.
A Rare Glimpse Into How Crypto Is Really Used in Venezuela
Leigh Cuen – Coindesk
Over the past two years, many bitcoin believers donated cryptocurrency to initiatives in Venezuela, often holding up the small nation as the pinnacle example of the technology’s potential.
World’s First Collectible Crypto Coin Released in Lithuania
Milda Seputyte – Bloomberg
Lithuania, which is positioning itself as a financial-technology hub for start-ups, rolled out the world’s first crypto coin for collectors. The central bank said Thursday that it’s opening an e-shop for purchases of a digital coin dedicated to the Baltic nation’s 1918 declaration of independence. It advised collectors to sign up before July 23, when it will offer 24,000 tokens based on blockchain technology.
What is Dogecoin?
Robert Hackett – Fortune
A bad investment! But also, more seriously, Dogecoin is a cryptocurrency that was developed as a joke at the end of 2013. The digital coin attracted an online community, largely drawn to its sheer ridiculousness. Dogecoin is based on an old Internet meme that became popular in 2013: Doge, an image of a quizzical Shiba Inu, overlaid with fragments of English in multicolored Comic Sans typeface. The bits of speech—”wow,” “so doge,” “such meme”—narrate a silly, imagined interior monologue of the dog, which gushes with wonder.
Tron Arbitration Challenged in Hostile Work Environment Lawsuit
Ada Hui – Coindesk
A legal challenge is calling on a court to overturn an order allowing the central organization developing the Tron cryptocurrency to privately litigate a lawsuit through arbitration. Richard Hall and Lukasz Juraszek, employees fired from the Tron Foundation last year, filed a writ of mandamus with the First District Court of Appeal in California in San Francisco on June 17 to reverse arbitration in a lawsuit alleging wrongful termination and hostile work practices at BitTorrent, a file-sharing service acquired in 2018 by the Tron Foundation.
New York appeals court sides with state Attorney General as it seeks documents from Bitfinex and Tether
Michael McSweeney and Aislinn Keely – The Block
A state appeals court on Thursday sided with the New York Office of the Attorney General as it seeks documents from crypto exchange Bitfinex and stablecoin operator Tether amid an ongoing investigation “The trial court properly rejected the attempts by respondents to limit petitioner’s lawful authority to protect New York residents,” the ruling stated. Bitfinex told The Block: “We have read the decision issued today by the Appellate Division of the New York Supreme Court, First Department. As we have at all times in this process, we will respect the court’s order. We have no further comment on this matter at this time.”
In virtual hearing, SEC and Kik lawyers trade arguments on summary judgment motions
Michael McSweeney – The Block
A judge heard arguments on Thursday from lawyers for the U.S. Securities and Exchange Commission and tech company Kik over a long-running legal dispute centered around a $100 million initial coin offering (ICO). Thursday’s hearing, overseen via conference call by U.S. Judge Alvin Hellerstein, came months after both the U.S. securities regulator and Kik filed motions for summary judgment in March, as The Block previously reported. Both submissions represented efforts to prevent the long-running legal dispute from going to trial. However, Kik previously said it was willing to do so.
A Rare Glimpse Into How Crypto Is Really Used in Venezuela
Leigh Cuen – Coindesk
Over the past two years, many bitcoin believers donated cryptocurrency to initiatives in Venezuela, often holding up the small nation as the pinnacle example of the technology’s potential. The truth on the ground is much more nuanced. The fintech startup AirTM distributed roughly $300,000 worth of cryptocurrency donations to 60,829 ID-verified Venezuelan e-wallets throughout 2019. The donated crypto came from entities like GiveCrypto, the Electric Coin Company and the artist Cryptograffiti.
What Challenges Affect the Cost of Running a Cryptocurrency Exchange
Frank Edwood – Cointelegraph
The costs of operating a cryptocurrency exchange are significant, but new software has been emerging that can make it more accessible. Running a cryptocurrency exchange comes with a lot of considerations. What are the regulations in the country you operate in? Do you have sufficient liquidity? How will you handle security?
BlockFi is looking to hire a CFO ahead of possible IPO in 2021
Frank Chaparro – The Block
Crypto lender BlockFi is looking to snap up a veteran corporate financial professional to spearhead a possible public market debut in 2021. According to a recent job posting, the company is seeking a chief financial officer with over 15 years of experience in corporate finance with a background in financial markets and the public markets. The person would manage investor relations and “guide and position the finance team for late-stage investment, acquisition, and/or IPO.” BlockFi chief executive officer Zac Prince told The Block the firm could go public as early as the second half of 2021.
Coinbase Plans First-Ever Investor Day Amid Talk It May Go Public
Brady Dale – Coindesk
Coinbase has scheduled its first-ever investor day for Aug. 14, amid rumors that the crypto exchange is exploring a public stock listing. It is unclear, however, whether the virtual event is related to the rumored efforts to go public. A Coinbase spokesperson confirmed the meeting is coming but said it was meant simply “to facilitate a wider understanding of cryptocurrencies and blockchain technology.”
Bitcoin Miner Maker Canaan Drops 3 Directors in Possible Boardroom Coup
Paddy Baker – Coindesk
Directors of Canaan Creative, a publicly listed bitcoin miner manufacturer, were suddenly dropped from the company’s business registry, prompting speculation of a power grab. The company’s official Chinese business registry now lists Nangeng Zhang as the company’s sole director. Zhang’s title has also changed from chairman and general manager to executive director and general manager. He joined Canaan as CEO in 2015.
Brave Software and NYIAX Announce Partnership Utilizing Blockchain
Julia Bahr – Finance Magnates
Brave Software, makers of the Brave browser which combines privacy with a blockchain-based digital advertising platform, and NYIAX, an upfronts marketplace and contract management exchange by volume and users, today announced a partnership that will enable advertisers to connect with consumers in a way that prioritizes personal choice and respects new privacy legislation.
The Supreme Court Puts Trump in His Place; He’s like all other presidents in one way: He’s not above the law.
Timothy L. O’Brien – Bloomberg
If you’re the president of the United States, you don’t stand above the law. But if you’re a member of Congress seeking the president’s personal records in order to exercise oversight of the executive branch, you better not overreach. That, essentially, is how the Supreme Court ruled in a pair of opinions released Thursday morning. Both cases, Trump v. Vance and Trump v. Mazars, involved efforts to gain access to President Donald Trump’s tax returns, bank documents and bookkeeping records. Trump’s lawyers and the Justice Department contended that the president didn’t have to comply with the subpoenas — and could block his financial advisers from complying — because the requests were overly intrusive and undermined the sweeping immunity from criminal investigations any president should enjoy while in office.
Trump Heading to Covid-Stricken Florida for Political Fundraiser
Justin Sink and Jennifer Jacobs – Bloomberg
President ramping up public appearances ahead of election; Trump also plans to highlight drug-interdiction program
President Donald Trump is heading to coronavirus-stricken Florida as he ramps up public appearances ahead of the election. But the trip Friday for a political fundraiser and an anti-drug-trafficking event seems certain to be overshadowed by surging cases of the virus that has killed more than 4,000 Floridians.
TikTok Teens Try To Trick Trump Campaign, Again
Shelly Banjo and Misyrlena Egkolfopoulou – Bloomberg
Users retaliate over Trump’s threatened ban of video app; Thousands flock to App Store to give campaign app bad ratings
The TikTok-tivists are at it again. Thousands of users of the popular video app flocked to the Apple App Store in the last few days to flood U.S. President Donald Trump’s 2020 campaign app with negative reviews. On Wednesday alone 700 negative reviews were left on the Official Trump 2020 app and 26 positive ones, according to tracking firm Sensor Tower.
Facing Two Crises, Trump Goes AWOL; The president has no plan to contain the virus or revive the economy. Will voters care?
Jonathan Bernstein – Bloomberg
There are only two numbers from this week you need to know if you want to understand the presidential election: 1.3 million and 59,886. That’s the number of new applications for unemployment insurance last week and (by one estimate) the number of new coronavirus cases from Thursday. They’re both disastrous figures for the nation — and for President Donald Trump, who has no apparent plan to deal with either.
Americans want to be free to be stupid; Resistance to Covid-19 restrictions stems from the pioneer spirit
Elizabeth Cobbs – FT
Nothing highlights local peculiarities like a global pandemic. The US has 4 per cent of the global population and 25 per cent of infections from a virus that began half a world away.
CFTC Charges California and Colorado Residents in Ongoing Multimillion-Dollar Ponzi Scheme
The Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the Eastern District of California charging a number of individuals and entities with operating a $14.5 million binary options and retail foreign currency (forex) Ponzi scheme. Charged in the complaint are California-based defendants John D. Black and his affiliated entities Financial Tree (d/b/a Financial Tree Trust), Financial Solution Group (d/b/a Financial Solution Group Trust), and New Money Advisors, LLC, and his associates Christopher Mancuso and Joseph Tufo. The complaint also charges Colorado-based defendants John P. Glenn and his law firm, The Law Firm of John Glenn, P.C. In addition, the complaint names seven relief defendants who received funds from the scheme to which they have no lawful entitlement.
UK watchdog seeks record fine for Deloitte audit of Autonomy
Huw Jones – Reuters
Deloitte should be fined a record 15 million pounds ($19 million) for “serious and serial failings” in its audit of technology company Autonomy, a lawyer for Britain’s accounting watchdog told an independent tribunal on Thursday.
ESMA updates its opinion on ancillary activity calculations
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, published today an updated Opinion on ancillary activity calculations. The opinion provides the estimation of the market size of commodity derivatives and emission allowances for 2019.
ESMA publishes Guidelines on Securitisation Repository Data Completeness and Consistency Thresholds
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its final report on the Guidelines on securitisation respository data completeness and consistency thresholds. The Guidelines provide clarity for market participants and securitisation repositories (SRs) on the accepted levels of No-Data (ND) options contained in the securitisation data submitted to SRs.
FINRA Encourages Firms to Notify FINRA if They Engage in Activities Related to Digital Assets
For the past two years, FINRA has encouraged firms to keep their Risk Monitoring Analyst (formerly known as a “Regulatory Coordinator”) informed if the firm, or its associated persons or affiliates, engaged, or intended to engage, in activities related to digital assets, including digital assets that are non-securities.1 FINRA appreciates members’ cooperation with this request and is encouraging firms to continue to keep their Risk Monitoring Analyst abreast of their activities related to digital assets until July 31, 2021.
Investing and Trading
M-ELO (Still) Has the Best Markouts
Phil Mackintosh – Nasdaq
Many investors have a long-term outlook as well as a unique, slow alpha trading signal. If that’s the case, trading costs can be minimized by slowly accumulating positions without signaling or holding up the market.
There Are Extortion-Backed Bonds Now; Also Robinhood, liquidity, Kanye for President and corporate parody videos.
Matt Levine – Bloomberg
I want to read the risk factors here: International investors bought bonds backed by the crime proceeds of Italy’s most powerful mafia, according to financial and legal documents seen by the Financial Times.
Triple-Leveraged Tech ETF Suffers Exodus After 200% Surge
Claire Ballentine – bloomberg
ProShares UltraPro QQQ set for worst weekly outflows in decade; The $6.8 billion fund has lost almost $500 million in the span
A triple-leveraged ETF that tracks some of the world’s biggest technology companies is poised for its worst week of outflows in a decade after soaring more than 200% from its March low.
Some personal finance lessons from the pandemic.
Jing Wei – NY Times
When you’re essentially confined to your house for weeks, you have a lot of time to think. Paul B. Brown, in an essay for The Times, says that after thinking most about the health and safety of his friends and family, he found himself obsessing about his own finances: Like so many others, he had a big problem.
Stocks Generate Big Gains and Bigger Questions; A powerful rally during drastically deteriorating economic conditions has left the market richly valued and facing great uncertainty.
Conrad de Aenlle – NY Times
Consider this opportunity: You can invest in a stock market that is greatly overvalued now but that could be only slightly overvalued next year if a lot of good things happen — during a time when a lot of bad things are happening.
Investors Posted Returns So Great They Seemed Wrong; Bets running from coolers and campers to cloud computing helped three mutual funds trounce the S&P 500 in the second quarter.
Tim Gray – WSJ
Returns on some types of mutual funds have been so lofty they look like typos. Small-capitalization growth funds rose an average of nearly 54 percent in the second quarter, for example, making up for big losses in the market downturn of February and March.
Local Finances Are Troubled, but Fund Investors May Still Profit; High-grade municipal bond portfolios have been among the best places to find income.
Carla Fried – NY Times
Record unemployment and the coronavirus recession are wreaking havoc with the cash-flow prospects for many municipal bond issuers.
File Your Taxes, Even if You Can’t Pay; The IRS is the most powerful creditor in the country. When you owe taxes, blowing off your filings has immediate consequences that get worse the longer you ignore them.
Laura Saunders – WSJ
No matter how stressed or financially stretched you are this year, file tax forms with the Internal Revenue Service by July 15. Not doing so will only make your bad situation worse.
The Ultra-Rich Lost Out in the Last Recession; A new economic study finds that income inequality across countries declined between 2008 and 2013.
Ferdinando Giugliano – Bloomberg
The “elephant chart” has been the most influential graph of the past decade in economics. It showed that in the 20 years before the financial crisis, global income growth largely benefitted two groups of people: the middle classes of emerging markets, such as China, and the ultra-rich around the world. Meanwhile, the middle and lower classes of Western Europe and North America saw their incomes stagnate.
Wall Street Gets the Flack, But Tech CEOs Get Paid All the Money
Anders Melin and Cedric Sam
July 10, 2020
Rightly or wrongly, Wall Street CEOs are still excoriated as greedy fat cats who exemplify everything that’s wrong with executive pay. But look around corporate America these days, and you’ll find any number of executives, particularly in tech, taking home far more than those bankers ever made—even during the boom years before the financial crisis—without a fraction of the scrutiny or the outrage.
Environmental, Social and Corporate Governance
Major Covid-Related Emissions Drop Still ‘No Cause for Cheer’; A new report shows an 18% reduction in greenhouse gases year over year, but at a big economic cost.
Eric Roston – Bloomberg
Greenhouse gas emissions in the U.S. fell 18% below last year’s level in the three months ending June 15, reflecting an economy sharply hobbled by the Covid-19 pandemic, according to a new report by research firm Rhodium Group.
Policy and Investment Failures Doomed the Biofuel Revolution; To reignite the industry, biofuels need the type of government incentives that allowed solar and wind companies to flourish, analysts say.
Todd Woody – Bloomberg
The mood was celebratory on a humid June evening in 2011 as a red-and-white Gulfstream G450 belonging to Honeywell International Inc. took off from a New Jersey airport at sunset on a history-making flight to Paris.
IEA warns rise in Covid-19 cases ‘casting a shadow’ over oil recovery; Global oil supply fell by 2.4m barrels a day in June to a nine-year low
Anjli Raval – FT
The resurgence of coronavirus cases in several parts of the world is “casting a shadow” over the oil market’s nascent recovery, the International Energy Agency has warned.
US asset managers set to fight proposals on ESG investments; Funds say Department of Labor rule would hamper ability to incorporate ethical principles into pension portfolios
Billy Nauman – FT
Asset managers are gearing up for a battle with the Trump administration over a new proposal that threatens investors’ ability to incorporate environmental, social and governance principles into pension portfolios.
Wells Fargo Readying Thousands of Job Cuts to Start in 2020
Hannah Levitt – Bloomberg
Tens of thousands of positions may ultimately be eliminated; Move may test vows by U.S. banks to keep staff amid pandemic
Wells Fargo & Co., the largest employer among U.S. banks, is preparing to cut thousands of jobs starting later this year, potentially setting a bleak precedent for an industry that’s been resisting mass layoffs as the coronavirus pandemic worsens.
Hedge Funds Duel in Bankruptcy Court Over McClatchy Newspapers;Alden Global Capital faced off against a pair of rivals trying to win the publisher of The Sacramento Bee and more than two dozen other papers.
Marc Tracy – NY Times
A battle of the hedge funds is brewing in the bankruptcy auction of the McClatchy Company, one of the nation’s largest and most decorated newspaper chains, pitting Chatham Asset Management and Brigade Capital Management, both debt holders in the chain, against a newcomer to the proceedings, Alden Global Capital.
A Looming Contest For Unenviable Bank CEO Jobs; Two U.K. lenders could get new leaders next year. Barclays and Lloyds have their problems, but the former offers any new CEO more opportunity.
Elisa Martinuzzi – Bloomberg
Plans for a change of leadership at two of Britain’s major banks could hardly be better timed. The economic shock of the pandemic, plus the uncertainty around Brexit, will probably demand a strategic reset at both Lloyds Banking Group Plc and Barclays Plc
Traders Bet on Rally for China’s Markets; Investors are piling into exchange-traded funds tracking Chinese companies
Gunjan Banerji – WSJ
A dramatic rally in shares of Chinese companies has unleashed a frenzy of trading activity, with many investors positioning for an even bigger advance. The Shanghai Composite rose for eight consecutive trading days through Thursday, climbing 16.5% over that stretch—the largest eight-day percentage gain since May 2008 and the biggest eight-day point gain since June 2015, according to Dow Jones Market Data. The index handed back a fraction of those gains on Friday, declining 1.9%.
With SoftBank Rally, Masa Son Adds $12 Billion to Fortune
Venus Feng and Tom Metcalf – Bloomberg
Founder’s net worth has more than doubled from a low in March; SoftBank rally eases pressure as 40% of Son’s stake is pledged
SoftBank Group Corp. founder Masayoshi Son has enjoyed a $12 billion renaissance the past three months, easing the pressure on his intricately engineered personal finances.
Harley-Davidson to cut hundreds of jobs as part of turnaround strategy
Rajesh Kumar Singh – Reuters
Harley-Davidson Inc (HOG.N) on Thursday said it will lay off 500 employees this year as part of new Chief Executive Jochen Zeitz’s efforts to revive the struggling motorcycle maker.
Morgan Stanley And EY Top financial Advisers In Asia-Pacific During H1 2020, Finds GlobalData
Morgan Stanley and Ernst & Young (EY) have emerged as the top mergers and acquisitions (M&A) financial advisers in the Asia-Pacific region during the first half (H1) of 2020, based on deal value and volume, respectively, according to GlobalData, a leading data and analytics company.
China State Funds Start Selling in Warning Sign for Stock Rally
PICC slumps 7.4% as national pension fund plans to cut holding; Chinese stocks have added $1 trillion in value this week
China acted to cool the speculative frenzy in its $9.5 trillion stock market, ending a euphoric eight-day surge that had fueled worries of a new bubble in the making.
U.K. House Prices Drop Most Since Financial Crisis in Lockdown
Adeola Eribake – Bloomberg
Second-quarter decline was biggest since 2009, Halifax Says; Mortgage lender sees further declines in second half of year
Residential property prices in the U.K. fell by the most since the global financial crisis from April through June, according to mortgage provider Halifax.
Johannesburg Gold Stocks Slay Records as Virus Bolsters Bullion
Adelaide Changole – Bloomberg
Sector has raced up 90% this year; DRDGold up almost fourfold; Central bank steps continue to boost bullion: Anchor’s Tsatsi
The red-hot rally in gold prices driven by investor concern about the coronavirus pandemic and its impact on the global economy has propelled South African gold stocks to record-slaying highs.
Britain committed to agree principles on Brexit deal in July talks
Britain said on Friday it was committed to working hard to agree underlying principles for a post-Brexit deal with the European Union in talks this month.
Brussels proposes EUR5bn Brexit crisis fund to break EU budget deadlock; Charles Michel’s draft plan offers countries facing an economic shock an emergency reserve
Mehreen Khan and Jim Brunsden – FT
EU countries facing a Brexit economic shock are in line to get access to a EUR5bn crisis reserve, under a draft plan from the president of the European Council that is designed to end a deadlock over the bloc’s recovery fund and long-term budget.
U.K. Says ‘Significant Differences’ Remain in Post-Brexit Talks
Joe Mayes and Ian Wishart – Bloomberg
The U.K. said talks with the European Union on their post-Brexit relationship continued to make little progress as both sides stepped up preparations for their final separation at the end of the year. “Significant differences still remain between us on a number of important issues,” a U.K. government spokesperson said after the latest round of discussions between EU negotiator Michel Barnier and Britain’s David Frost. “The U.K. remains committed to working hard to find an early understanding on the principles underlying an agreement.”
EU’s Michel proposes five billion euros Brexit emergency fund
Gabriela Baczynska – Reuters
European Council President Charles Michel said on Friday that EU talks with Britain on their new relationship were “not easy” and countries, regions and industries will face disruptions from 2021 whether there is a new pact or not. Laying out his compromise proposal for a multi-billion-euro economic stimulus for the EU to recover from the coronavirus pandemic, Michel said a new Brexit “adjustment reserve” of 5 billion euros ($5.64 billion) was also needed to “counter the unforeseen consequences” of Britain’s departure.
U.K. Won’t Join EU Vaccine Program in Latest Brexit Test
Joe Mayes – Bloomberg
The U.K. will not join the European Union’s coronavirus vaccine program, according to a person familiar with the matter, in the latest test of its independent approach after Brexit. Boris Johnson’s government considered opting in to the program, through which the bloc is spending more than 2 billion euros ($2.3 billion) on research into a vaccine. The Daily Telegraph reported ministers were concerned about “costly delays” in the program due to distribution talks, citing government officials it didn’t identify.
No-deal Brexit will raise cost of UK household staples, say retailers
Lisa O’Carroll – The Guardian
The cost of household staples, ranging from meat and cheese to school uniforms and drinking glasses, will substantially increase if there is no Brexit trade deal, British retailers have warned. With just six months to go before the UK leaves the EU entirely by exiting the single market and the European customs union, retailers fear further damage to a sector already reeling from the coronavirus crisis, with 5,600 job losses announced on Thursday from Boots and John Lewis alone.
The Value of My $150,000 MBA Is Now in Question; We thought we were on top of the world. Now my MBA class and I are reassessing our futures.
Sonali Basak – Bloomberg
When I decided a few years ago to spend $150,000 on an MBA while a reporter at Bloomberg, I had an ambitious goal: be the best financial reporter the world has ever seen. This degree, I thought, would help me better understand the workings of Wall Street. It would also give me a leg up in an industry still dominated by white men and plagued by job losses.