Griffin’s Citadel Nears Tipping Point on Chicago Exit Over Crime

May 20, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

I have a great story to share. Last night my wife and I attended the Metals dinner, a fundraiser for the Pathway to Adventure Council (PTAC) of the Boy Scouts of America. The flag ceremony included two brothers; the younger one was honored at a previous LaSalle Street fundraising event for having saved his older and much bigger brother’s life by giving him the Heimlich maneuver. Both boys have since become Eagle Scouts and both have participated in the Trading Tech merit badge program that firms around LaSalle Street have put on over the last several years. In fact, both boys earned every single merit badge available to earn.

But here is the good part. The boys found PTAC’s Myriam Herrera last night. She organized the Metals Dinner for PTAC, which raised $485,000 for the Scouts. Because the boys had participated in the Trading Tech merit badge workshops, and Myriam was the physical representation of our industry at all of them, each boy presented her with a mentor pin. Mentor pins are given to an adult that played a significant role in the Scout earning the Eagle Scout rank.

These were the first mentor pins Myriam has ever received, which is very cool and meaningful. But it is also representative of all of you who have donated to PTAC for the LaSalle Street fundraisers over the years or held Trading Tech merit badge workshops. All of that helped mentor these two boys.

Suzanne Cosgrove has changed jobs, joining Wolters Kluwer as a content management consultant in the legal and regulatory group. She had left JLN in December to go to work for Purpose Brand as a senior content writer. Congratulations to Suzanne on her new position.

John Walls, formerly of ADMIS, has been appointed chief information officer of Pivot Bio, a leading microbial nitrogen innovator delivering sustainable, self-fertilizing grain crops. The firm also announced that Lisa Nunez Safarian joined as chief operating officer.

Former CFTC Chairman J. Christopher Giancarlo, has been awarded the rank of Chevalier in the French National Order of Merit by President Emmanuel Macron.

Euronext CEO Stephane Boujnah recapped Euronext’s recent first quarter results in a LinkedIn post saying, “Our strong performance was driven by growth in non-volume related business and in trading activities, cost control as well as the integration of the Borsa Italiana Group. This Q1 performance allows us to upgrade our cost guidance for 2022.”

DePaul University on May 12 put out a press release announcing that Mark Shore has been named executive director of the Arditti Center for Risk Management. The Arditti Center for Risk Management was founded in 2006 to honor the late Fred Arditti, an acclaimed economist with the Chicago Mercantile Exchange. Congratulations, Mark.

The A Leg To Stand On charitable organization that provides prosthetic limbs, appropriately fitted wheelchairs, and braces to children in the developing world is celebrating the 20th anniversary of its founding. Congratulations to C. Mead Wells and his team and board for your great work.

Jeremie Bacon, founder of The Forge, has been profiled in

Marex has joined The London Platinum and Palladium Market (LPPM) as an associate member. The LPPM is a non-profit commodity trading association, founded in 1973, focused on the handling of platinum and palladium metals.

Taraneh Derayati, CEO of Vermiculus Financial Technology is the guest of Patrick Young‘s Exchange Invest podcast titled “A New Code for Market Structure.”

Among the highlights of the FIA Forum: Commodities 2022 to be held June 21-22 in Houston, Texas at The Houstonian from 8 a.m. to 2 p.m., (with no press allowed) are the following:

First there is a panel moderated by Steptoe’s Stacie Hartman on “CFTC & DOJ Enforcement.” The panelists include Clifford Histed, Partner, K & L Gates; Chuck Marvine, Deputy Director & Regional Administrator, Division of Enforcement, CFTC; Greg Mocek, Partner, Allen & Overy; and Anne Termine, Partner, Bracewell.

Secondly, there is a panel titled “Responding to Inquiries from Regulators” with moderator Elizabeth Davis, a partner at McGonigle. The speakers on her panel are Vito Naimoli, Chief Regulatory Officer, ICE; Paul Pantano, Partner, Willkie Farr & Gallagher; Josh Sterling, Partner, Jones Day; Regina Thoele, Senior Vice President, Compliance, NFA; and Andrew Vrabel, Managing Director & Chief Regulatory Officer, CME Group.

Lastly, there is a fireside chat moderated by FIA SVP of Publications, Data & Research Will Acworth titled “Commodity and Energy Market Trends.” The speaker is Jill Cetina, Vice President for Surveillance and Supervisory Risk, Banking Supervision, Federal Reserve Bank of Dallas. It is an event not to miss.

Did you want to learn how to customize your avatar so that your avatar is the same no matter what metaverse you are in? Then just watch the latest video from our friends at Get Real XR. Watch Ed Haravon change himself into his avatar right in front of you.

Can a Bored Ape NFT contract the Monkeypox virus? Asking for a friend.

I am having some problems with my email account. We are in search of a new email provider. If you have some suggestions, let me know. In the meantime, contact me by email at

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


Jerome Kemp is Bullish on DLT to Transform Cleared Derivatives, Enhance FCM Model

Jerome Kemp, the president of Baton Systems, was interviewed by JLN at FIA Boca 2022 about how he moved into his Baton role after retiring from Citi.

Starting as a consultant, he became more involved to the point that he was asked to join the company’s executive committee as president.

Watch the video »


Vermiculus Chairman Nils-Robert Persson on launching during a pandemic and structuring his company for growth

Nils-Robert Persson, chairman of the board of Vermiculus Financial Technology, had no intention of starting a new company after leaving Cinnober in 2019. What happened is he was asked and he couldn’t refuse. “When some of the best people you have ever worked with, and some of the customers you’re extremely proud of working with, come and ask you to start – it’s easy to start again,” Persson told John Lothian News at FIA Boca 2022.

Watch the video »


FIA’s International Derivatives Expo is returning to The Brewery in London this coming 6-8 June. Standing still is not an option in today’s evolving cleared derivatives environment. Without adapting to new products, processes, technologies and regulations, your business won’t meet the needs of tomorrow’s industry. We’re bringing together industry leaders, vendors and policymakers to discuss what’s “now” in derivatives, and what lies ahead. Sign up here.


Barclays Warns Even Fully Collateralized Stablecoins May Be Prone to Downwards Spiral
Tracy Alloway – Bloomberg
There’s a wide variety of horses in the world of stablecoins, and more than one type might be prone to sudden runs. While much attention has been focused on algorithmic stablecoins in the wake of Terra’s spectacular collapse last week, fully collateralized coins like Tether might not prove to be much of a different animal. That’s the warning from Joe Abate, strategist at Barclays Plc, who says that while questions have been swirling over the assets backing the Tether stablecoin, the token might still be prone to a sudden dearth of liquidity and subsequent price spiral even assuming it’s fully collateralized.

******Stable? How about transparent? Really transparent? That is the issue today.~JJL


Is the SEC Unconstitutional?; Also Wells Fargo fake interviews and the continuing Musk Twitter drama.
Matt Levine – Bloomberg
Article I, Section 1 of the US Constitution says: “All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.” One way to paraphrase that is: Federal law is made by Congress. In the modern US, this is not quite true. Some federal law is made by Congress, but quite a lot of federal law is made by government departments and administrative agencies. In many cases, Congress passes fairly general laws, and those laws instruct the relevant agency to write rules implementing the laws, and then the agencies write more specific rules. Sometimes these rules just fill in details in a comprehensive statutory scheme. Other times the agencies have pretty broad mandates to write rules that are in the public interest, and they get to set their own agendas and decide what that means.

****** I don’t know about the SEC being unconstitutional, but I can tell you the Big 10 having 14 teams is unmathematical. Oh, wrong SEC.~JJL


America’s Political Right Has a New Enemy No. 1: ESG Investors; The popular investing strategy is drawing new partisan attacks ahead of the US midterm elections
Jeff Green and Saijel Kishan – Bloomberg
Heading into the hotly contested midterm elections, the American political right has a new rallying cry: Down with ESG. Conservatives have identified the popular investing strategy, which accounts for environmental, social and governance risks, as part of a broader narrative about left-wing overreach and ” wokeness” run amok. Utah Treasurer Marlo Oaks calls it “corporate cancel culture.” Behind the rhetoric lie policies designed to sap the momentum of one of Wall Street’s most successful initiatives in recent years, now worth $35 trillion globally. If it works, it will firmly ensconce ESG in the culture wars, galvanize voters and weaken the resolve of big asset managers to act on climate change and other big, societal issues.

****** Everyone has the right to have enemies. My enemy is stupidity. ~JJL


America, China, Russia and the Avalanche of History; The world doesn’t move in cycles or with a grand design. Echoes of the 1970s remind us that one disaster often begets others.
Niall Ferguson – Bloomberg
Does the arc of history bend toward justice? Or is everything falling apart? Philosophers of history have long sought a cycle of history. Ibn Khaldun offered one version in his “Muqaddimah” (1377): Islam in its infancy has “desert toughness” — but power leads to sedentary habits and luxury, while extravagance leads to fiscal crisis.

***** It all depends on which metaverse you live in how history evolves. One too many Loki and everything is up for grabs.~JJL


This Year, Filing Taxes Will Claim 1,262 American Lives—Sort Of
Andrew Leahey – Bloomberg
I’ve got your attention, so I’ll let you off the hook about the title right away—this isn’t about infected paper cuts, exploding pens, or mailbox mishaps. It takes the average American 13 hours to prepare and file their tax return. The average lifespan in the US is 78.79 years, which works out to about 690,000 hours. With 67 million returns filed per year, that is the equivalent of about 1,262 “lives” per tax season. I’m putting “lost” in quotes because time spent doing something enjoyable is never time wasted and, who knows, at least a few preparers might enjoy the filing process. So what is to be done to stop the bloodshed? Fund the IRS. Embrace technology. Streamline the tax filing process. Shift expectations.

******I know filling out taxes is killing me. Let’s try funding the IRS and see if we can change things.~JJL


At Wells Fargo, a Quest to Increase Diversity Leads to Fake Job Interviews; Black and female candidates are sometimes interviewed after the recipient of a job is identified, current and former employees say.
Emily Flitter – NY Times
Joe Bruno, a former executive in the wealth management division of Wells Fargo, had long been troubled by the way his unit handled certain job interviews. For many open positions, employees would interview a “diverse” candidate — the bank’s term for a woman or person of color — in keeping with the bank’s yearslong informal policy. But Mr. Bruno noticed that often, the so-called diverse candidate would be interviewed for a job that had already been promised to someone else.

****** I think Wells Fargo must have learned this trick from the NFL.~JJL


Thursday’s Top Three
Our top story Thursday, by a long way, was Bloomberg’s The Math Prodigy Whose Hack Upended DeFi Won’t Give Back His Millions. Second was The Financial Times’ Cryptocurrency platform FTX expands into US equities market. Third was the John Lothian News video interview Pat Kenny, “The Most Interesting Man,” in Interesting Times.


MarketsWiki Stats
26,833 pages; 238,524 edits
MarketsWiki Statistics


Lead Stories

Griffin’s Citadel Nears Tipping Point on Chicago Exit Over Crime; ‘Patience is wearing thin,’ billionaire says in interview; Griffin has previously donated millions for policing program
Katherine Doherty, Natalie Wong, and Shruti Singh – Bloomberg
Billionaire Ken Griffin is reaching a tipping point with Chicago, the home to his market maker and hedge fund business, as the city wrestles with rising crime. “We’re getting to the point that if things don’t change, we’re gone,” Griffin, who founded both the hedge fund Citadel and the market-making business Citadel Securities, said Thursday in an interview. “Things aren’t changing.”

If Tesla Isn’t Good Enough for an ESG Index, Then Who Is?; The carmaker’s removal from the S&P 500 ESG Index places in stark relief the broader market’s conflation of the label with sustainability.
Tim Quinson and Saijel Kishan – Bloomberg
Tesla Inc.’s removal this week from an industry benchmark index is raising new questions about what ESG actually means to investors. The strategy, widely seen as favoring industries ostensibly interested in sustainability (of the environmental, social and governance sort), started about two decades ago as a way to protect investors from risks tied to things like global warming, labor violations and discrimination. Since then, it’s morphed into a $35 trillion industry that’s allowed millions of investors to feel as though they’re “doing good.” And now people are confused about what ESG is really supposed to achieve.

Meme-themed, social media-driven ETFs plummet in value; The narrowly focused funds that rely on the wisdom of crowds are failing to deliver this year
Steve Johnson – FT
Reddit’s Wall Street Bets crowd may once have vowed to take meme stocks “to the moon”, instead they and the exchange traded funds that focus on them have been eclipsed by steady, boring earthbound investments. The particularly poor performance of social media-driven, meme-themed ETFs is partly due to favoured constituent stocks such as computer game retailer GameStop, cinema operator AMC Entertainment and electric vehicle maker Rivian badly undershooting.

A $60 Billion Crypto Collapse Reveals a New Kind of Bank Run; Terra’s coins were supposed to be the future of money. But they relied on confidence—which can vanish in an instant.
Zeke Faux and Muyao Shen – Bloomberg
Last fall, on the advice of a friend, Odosa Iyamuosa invested his life savings of $4,000 in a cryptocurrency called Luna. The 28-year-old, who lives in Abuja, Nigeria, researched the coin himself online, and what he found seemed promising. Luna’s price was soaring, thanks to the success of another coin with which it was deeply intertwined, TerraUSD. Some of the crypto industry’s biggest names had already invested, including Galaxy Digital Holdings Ltd., the high-frequency-trading firm Jump Trading, and venture investment arms of the exchanges Coinbase Global Inc. and Binance.

Evening Trading of the Onshore Yuan Has Surged. It Might Get Even Later.; Average daily late-session volume now ten times that in 2017; Shanghai’s lockdown seen as a factor boosting evening trades
Bloomberg News
Yuan trading at night is gaining momentum in China, supporting Beijing’s plans to extend market hours and further its aims to internationalize usage of the currency. Onshore yuan transactions between 6:30 p.m. and 11:30 p.m. local time have reached a daily average of $834 million in May, up from $671 million over the course of last year. That’s almost ten times what was seen back in 2017, when Bloomberg started compiling the data.

FTX US Launches FTX Stocks Offering Trading on US Listed Equities & ETFs
FTX US – PRNewswire
West Realm Shires Services (“FTX US”) and FTX Capital Markets (collectively referred to as “the Company”) today announced the launch of FTX Stocks, an equities trading platform offered through the FTX US trading application. The launch will commence in a private beta phase for select US customers chosen from a waitlist. FTX Stocks offers trading and investing in hundreds of US exchange-listed securities, including common stocks and ETFs, in an integrated experience within the existing FTX US cryptocurrency trading application. To provide transparent trade execution and fair pricing, FTX Stocks will initially route all orders through Nasdaq, and will not receive any payment for order flow. In addition, fractional share trading will be available in select securities.

UK Regulator Scrutinizes Terra Fallout; Recent instability will need to be taken into account: FCA; The watchdog is working with the Treasury to develop new rules
Emily Nicolle – Bloomberg
The UK’s market regulator is paying close attention to the chaos in crypto markets after the implosion of Terra, one of the biggest experiments in decentralized finance. The recent market instability in stablecoins “will absolutely need to be taken into account” when the watchdog starts working with the Treasury to develop and implement new rules for cryptoassets later this year, said Sarah Pritchard, executive director for markets at the Financial Conduct Authority.

Pivot Bio Appoints Operations And Information Executives; John Walls And Lisa Nunez Safarian Bring Deep Agricultural Experience And Commercial Innovation To Pivot Bio
Pivot Bio, the leading microbial nitrogen innovator delivering sustainable, self-fertilizing grain crops, announced today that Lisa Nunez Safarian joins as Chief Operating Officer and John Walls joins as Chief Information Officer. “John and Lisa are joining Pivot Bio at a critical time in our growth trajectory,” said Karsten Temme, Pivot Bio co-founder and CEO. “Their insights and leadership will help guide our journey to providing more and more farmers with access to productive, sustainable innovations and build out our product offerings.”

Crypto Betting Service Polymarket Taps Ex-CFTC Head as Chair After Agency Probe; Online platform paid $1.4 million in Jan 2022 settlement; Giancarlo has had several advisory, board roles in crypto
Sridhar Natarajan – Bloomberg
Just months after settling a probe with a key US regulator, crypto betting platform Polymarket has signed up the former head of that agency as the new chairman of its advisory board. J. Christopher Giancarlo led the Commodity Futures Trading Commission during the Trump administration and is known for his early embrace of crypto and blockchain. The 63-year-old received the ‘CryptoDad’ moniker after a US congressional appearance and even authored a book with that name about the fight for the future of money.

China Stocks Face Big Risk as Thousands of Hedge Funds Near Point Where They Have to Dump Shares; Deepening portfolio losses trigger clauses mandating sales; Rules to protect investors can backfire in falling market
Bloomberg News
China’s almost-trillion dollar hedge fund industry risks worsening the turmoil in its stock market as deepening portfolio losses trigger forced selling by some managers. About 2,350 stock-related hedge funds last month dropped below a threshold that typically activates clauses requiring them to slash exposures, with many headed toward a level that mandates liquidation, according to an industry data provider. Such signs of stress were “close to the historical high,” China Merchants Securities Co. analysts said in a report this month.

Analysis-Crypto crash leaves El Salvador with no easy exit from worsening crisis
Nelson Renteria, Sarah Kinosian and Rodrigo Campos – Reuters
El Salvador’s big bet on bitcoin, which the Central American nation has been buying since September, has soured in recent weeks as a cryptocurrency rout shaved over a third of the value of the government’s holdings, Reuters calculations show. Under populist President Nayib Bukele, a vocal cheerleader for the currency, El Salvador went all-in on bitcoin, not just becoming the world’s first country to adopt it as a legal tender but also sketching out plans for a volcano-powered crypto mining hub and plans to issue the first sovereign bond linked to the coin.

Mark Shore Named Executive Director of the Arditti Center for Risk Management
Jaclyn Lansbery – DePaul University; Driehaus College of Business
The Arditti Center for Risk Management was founded in 2006 to honor the late Fred Arditti, an acclaimed economist with the Chicago Mercantile Exchange, with the goal of bridging the gap between industry and academia, which Arditti had done as a member of the college’s faculty. Today, DePaul finance alumnus Mark Shore (BUS ’87), a renowned expert on alternative investments and a professional lecturer at the college, hopes to continue that legacy as the center’s newly appointed executive director.

Firm With a Royal Sheen Helped Abramovich Spread His Wealth; MC Peat & Co. helped arrange UK deals for Roman Abramovich; Michael Peat also sat on board of Abramovich’s mining company
Will Louch – Bloomberg
Roman Abramovich’s UK business empire stretched far beyond Chelsea Football Club. Among those who helped build it was an upstart firm with an illustrious name. MC Peat & Co. played matchmaker on several deals over the past decade that paired Abramovich money with small UK firms and worked as a broker for at least three of the companies that the Russian billionaire backed. The firm was set up in 2011, just as Michael Peat left his role as private secretary to Prince Charles and embarked on a new chapter after a career with the Royal household that won him a knighthood. Michael Peat joined the board of Evraz Plc, Abramovich’s steel giant, in 2011 while his then 30-year-old son Charlie ran the new advisory firm.

Elon Musk denies harassment allegations; Billionaire says ‘wild accusations are utterly untrue’ after report that SpaceX paid $250,000 to settle claim
Hannah Murphy – FT
Elon Musk has responded to a media report alleging that SpaceX paid a flight attendant $250,000 to settle claims of sexual harassment against him, saying the “wild accusations are utterly untrue”.

Luna collapse highlights crypto exchanges’ role as gatekeepers; Platforms act as key decision makers on which digital assets are accessible to mainstream traders
Joshua Oliver and Miles Kruppa – FT
The $40bn collapse last week of popular crypto token Luna underscores the crucial role exchanges play as gatekeepers that rule on which digital assets are readily available to mainstream traders. Fierce competition among exchanges has led to a sharp rise in the number of tokens available on platforms that are popular with have-a-go investors.

Death notices for the city are premature; Indicators show urban dynamism is back to near pre-pandemic levels
John Burn-Murdoch – FT
On a Monday evening last month, three FT colleagues and I each travelled across London to convene at a pub quiz in Hackney. We put in a strong performance, finishing second and narrowly missing out on the £350 prize. But I digress. The reason I tell this story is that none of us had been in the office that day, yet we all felt perfectly happy to spend roughly the same amount of money and time on our trips to and from the pub as we would have done commuting to the FT’s central London HQ.

Senior Executives, Board Members Flee Russian Oil Giant Rosneft; Former German Chancellor Gerhard Schr?der is leaving board of state-controlled company, which plays pivotal role in Russia’s economy
Anna Hirtenstein, Joe Wallace – WSJ
Russian state oil giant Rosneft Oil Co. ROSN 2.86% is shedding senior executives and board members, a brain drain that stands to weaken a prime driver of the country’s economy while Moscow wages war on Ukraine. Former German chancellor Gerhard Schröder and Matthias Warnig, a longtime friend of President Vladimir Putin, are leaving the board of directors, the company said Friday.

SEC Probe Looms Over Auditors’ Fastest-Growing Businesses; Potential conflicts of interest increase as profits from nonaudit work soar
Jean Eaglesham, Dave Michaels – WSJ
When the two top executives of a hot electric-vehicle startup made share purchases that later drew scrutiny, they were helped by accounting firm BDO USA, according to the auto company. BDO was also the auditor of the company they ran. The dual roles that BDO played at Electric Last Mile Solutions Inc. ELMS -7.06% are typical of potential conflicts of interest faced by auditors. Relationships like this one are under scrutiny by the Securities and Exchange Commission, people close to the inquiry said.

Federal, New York Officials Look for Public Input on Crypto Regulation; A top White House official said public input is important to help the administration make informed decisions on policies
Mengqi Sun – WSJ
Top officials from the U.S. Treasury Department, the Commerce Department and the New York State Department of Financial Services said that when it comes to the digital assets industry, the involvement of the private sector is crucial—not only for its technological advancement but also to ensure it isn’t being used for nefarious purposes.

A Weak Euro Heads to an Uncomfortable Milestone: Parity With the Dollar; The euro hasn’t fallen below the one-to-one exchange rate with the U.S. dollar for two decades. But as economic risks grow, more analysts predict deeper lows for the shared currency.
Eshe Nelson – NY Times
The list of ailments troubling the eurozone economy was already stark: the highest inflation rate on record, energy insecurity and increasing whispers about a recession. This month, another threat emerged. The weakening euro has raised expectations that it could reach parity with the U.S. dollar.

Ukraine Invasion

G7 Finance Ministers Race to Secure More Ukraine Aid
Alan Rappeport – NY Times
Top economic officials from the world’s advanced economies moved closer toward agreement on a global rescue package for Ukraine on Thursday, with finance leaders negotiating the details of a multibillion-dollar plan to keep the Ukrainian government operating amid Russia’s onslaught. Finance ministers of the Group of 7 nations expressed optimism about the emergency financing deal on the first day of a two-day summit, where they are focused on how to provide aid to Ukraine and exert pressure on Russia while avoiding economic blowback that will slow the global economy. Officials have been consumed with how to contain rising food and energy prices that have some economists worrying about a global recession.

Finland Loses Main Gas Supply After Refusing Payment in Rubles; Fuel accounts for just 5% of the nation’s energy mix; Supplies continue to arrive via pipeline from Estonia
Kati Pohjanpalo – Bloomberg
Russia is cutting Finland off from its natural gas supplies as relations between the two neighbors sour over the Nordic nation’s decision to join defense alliance NATO. Finland is the third European country to lose gas from Russia after refusing to pay for the fuel in rubles. Flows on a main pipeline from the region’s top supplier are set to stop in the early hours of Saturday, according to a filing by Finnish importer Gasum Oy. Poland and Bulgaria had their taps turned off last month for the same reason.

G-7 to Agree More Than $19 Billion in Short-Term Aid for Ukraine; German finance minister confirms amount in Bloomberg interview; G-7 ministers, central bank chiefs concluding meeting in Bonn
Birgit Jennen and Maria Tadeo – Bloomberg
The Group of Seven industrialized nations will agree on more than 18 billion euros ($19 billion) in aid for Ukraine to guarantee the short-term finances of the government in Kyiv, according to German Finance Minister Christian Lindner.

Ukrainian Families Risk Their Lives to Escape Russian Occupation; ‘We knew that if we slowed down or looked back, we could be killed’
Vivian Salama – WSJ
Oleysia Zadko clutched her stomach in the passenger seat, fluids oozing from a hastily sewn bullet wound, as her husband drove through a hilly field in a flight from Russian forces. The Zadkos and their 9-year-old son were in a convoy of vehicles from their village, located about 100 miles from Mariupol, making a dash for safety.

Ukraine Will Fight Until All Russian Forces Are Expelled, Military Intelligence Chief Says; Kyiv must reclaim territory in Crimea and the east effectively seized by Russia in 2014, Maj. Gen. Budanov says
Yaroslav Trofimov – WSJ
Ukraine’s military intelligence chief said the country would keep fighting until it evicts Russian forces from all of its territory—including Crimea and other areas effectively seized by Moscow in 2014—and called for deliveries of longer-range heavy weapons and warplanes from the West to help. “I don’t know any borders except the borders of 1991,” Maj. Gen. Kyrylo Budanov said, referring to the year of Ukraine’s independence from the Soviet Union. “Who can force Ukraine to freeze the conflict? This is a war of all Ukrainians, and if someone in the world thinks that they can dictate to Ukraine the conditions under which it can or cannot defend itself, then they are seriously mistaken.”

Financial Crimes Efforts Get Funding Boost as Part of Ukraine Aid Package; A new military and economic aid package to help Ukraine repel Russia’s invasion includes additional funding for the Treasury’s Financial Crimes Enforcement Network
Dylan Tokar – WSJ
The U.S. Senate on Thursday approved nearly $100 million in funds that lawmakers said would be used to boost efforts to crack down on financial crimes, including through the enforcement of sanctions on Russia and the seizing of assets tied to the country’s invasion of Ukraine. The funds were part of a nearly $40 billion military and economic aid package to help Ukraine repel Russia’s invasion that the Senate passed on Thursday with overwhelmingly bipartisan support. The bill, which will now be sent to President Biden for signing, brings America’s commitment to helping Ukraine to almost $54 billion.

Exchanges, OTC and Clearing

Amendments to CME, CBOT, and NYMEX/COMEX Rule 589.
(“Special Price Fluctuation Limits”) Regarding Behavior of Dynamic Price Fluctuation Limits During the Final Settlement Determination Period of an Expiring Futures Contract
CME Group
Effective Sunday, June 5, 2022 for trade date Monday, June 6, 2022, pending all relevant CFTC
regulatory review periods, Chicago Mercantile Exchange Inc. (“CME”), The Board of Trade of the City of Chicago, Inc. (“CBOT”), New York Mercantile Exchange, Inc. (“NYMEX”) and Commodity Exchange, Inc. (“COMEX”) (collectively, the “Exchanges”) will implement amendments to CME, CBOT, and NYMEX/COMEX Rule 589. (“Special Price Fluctuation Limits”) to codify the behavior of dynamic price fluctuations limits during the final settlement determination period of an expiring futures contract (collectively, the “Rule Amendments”).

EEX Revises 2022 EUA Auction Volume For The Common Europe-Wide Auctions
European Commission
The European Energy Exchange (EEX) has revised the 2022 auction calendar due to a revision of the Europe-wide EUA auction volume under the CAP3 contract in 2022. The change to the volume stems from a correction in the calculation of the deduction from the auction volume of the allowances to be cancelled pursuant to Article 6 of Regulation (EU) 2018/842 of the European Parliament and of the Council. The revised volume will become effective from 7 June 2022.

Nodal Exchange Environmental Markets Hit New Daily Volume And Open Interest Records
Nodal Exchange posted a new daily volume record and established a record level of open interest (OI) for environmental markets yesterday with 10,000 lots traded, while open interest topped 200,000 lots across listed contracts in carbon, renewable energy certificates (RECs) and renewable fuel credits. Yesterday’s daily volume record included 6,650 lots of carbon futures and 3,350 lots of REC futures traded. Nodal Exchange, which has worked with IncubEx since 2018 to build the world’s largest suite of listed environmental products, has seen solid growth across the product group in open interest, a well-known barometer of a market’s growth and status. Open interest in environmental markets on Nodal closed at a record 204,719 lots on May 18, 2022, up 48% from 138,387 lots from the same date a year earlier.

Fixed Income and Equity Index derivatives: A. Change of trading hours on the last trading day for Fixed Income ESG index futures; B. Adjustment of Eurex Contract Specifications for Exchange-for-Physicals for Index Futures (EFP-I) transactions
Eurex Circular 055/22 Fixed Income and Equity Index derivatives: A. Change of trading hours on the last trading day for Fixed Income ESG index futures; B. Adjustment of Eurex Contract Specifications for Exchange-for-Physicals for Index Futures (EFP-I) transactions
The Management Board of Eurex Deutschland took the following decisions with effect from 30 May 2022:
– Change the trading hours on the last trading day for Fixed Income ESG index futures from 08:00-19:00 CE(S)T to 08:00-17:15 CE(S)T
– Align the Contract Specifications for Futures Contracts and Options Contracts of Eurex Deutschland (hereafter: Contract Specifications) and the „T7 Trader, Admin and Clearer GUI – Manual” on the instructions for booking Trade-at-Index-Close (TAIC) transactions for Bond Index and Equity Index futures

Upgrade of Internet Explorer (IE) 11 to Microsoft Edge Browser
As set out in the circular dated 18 March 2022 (Reference: CD/CDCO/DCASS/070/2022), Clearing Participants (“CPs”) that access CCMS via CCMS Terminals are reminded that they MUST complete their Internet Explorer (“IE”) 11 upgrade to Microsoft Edge before 1 June 2022 as stated in the circular mentioned above.

Pricing documentation updates following LME notices 21/111 and 21/153
This Notice informs Members and other interested parties, including users of LME-administered benchmarks, of non-material updates to the LME’s benchmark documentation relating to the Official Prices, Closing Prices, Monthly Average Settlement Prices (“MASPs”) and Notional Average Prices (“NAPs”) benchmark families (“Benchmark Documentation”). The main changes reflect the: (i) introduction of daily price limits across the LME’s Execution Venues; (ii) corresponding introduction of a Disruption Events framework; and (iii) LME’s decision in Notice 21/111 to move Closing Prices permanently to electronic determination, and the LME has also made a small number of further administrative amendments.

Moscow Exchange summed up trading results in April 2022
The total trading volume on the markets of the Moscow Exchange in April 2022 amounted to 88 trillion rubles (95.7 trillion rubles in April 2021).
The number of trading days is 21 (22 in April 2021).

NGX Lauds Immediate Former Chairman, Welcomes Newly Appointed Chairman Of Seplat Energy Plc To The Market
Nigerian Exchange Limited (NGX) hosted members of the Board of Directors and Executive Management of Seplat Energy Plc to a Closing Gong Ceremony to honour the immediate former Chairman, Dr. Ambrosie Bryant Chukwueloka (‘A.B.C.’) Orjiako, and introduce the newly appointed Chairman, Mr. Basil Omiyi, to the market on Thursday, 19 May 2022.

GPW Group: Preliminary Estimated Consolidated Financial Data For Q1 2022; The Warsaw Stock Exchange Group (GPW Group) publishes preliminary estimated consolidated financial data for Q1 2022; The Warsaw Stock Exchange (GPW) as a listed company complies with the “Best Practice for GPW Listed Companies 2021” (“Best Practice 2021”)
The Warsaw Stock Exchange Group (GPW Group) publishes preliminary estimated consolidated financial data for Q1 2022.


Twitter expands content-moderation rules to cover crises like war and disasters.; The new policies are being added even as Elon Musk, who is in the process of acquiring the company, aggressively criticizes its moderation rules.
Kate Conger – NY Times
Twitter said on Thursday that it was adding new policies aimed at combating misinformation about the war in Ukraine and other crises like natural disasters, an expansion of its rules against misleading content. The company announced the new policy even as it is in the process of being acquired by Elon Musk, the billionaire chief executive of Tesla and SpaceX, who has said he intends to do away with Twitter’s content moderation policies.

WhatsApp introduces commercial services as Meta, its parent, seeks fresh revenue.; For a fee, the app will allow businesses to build a custom dashboard so they can chat with customers and offer customer services more easily.
Mike Isaac – NY Times
More than eight years after agreeing to buy one of the world’s largest messaging apps, the company formerly known as Facebook has decided to start making money from it. WhatsApp, the popular messaging service owned by Meta, the parent company of Facebook, said on Thursday that it was opening up commercial services to those who want to use the messaging app to power their businesses. It was WhatsApp’s largest step toward making money from the service, which is used by more than a billion people globally.

Federal Reserve Board Finalizes Rule That Governs Funds Transfers Over The Federal Reserve Banks’ FedNow Service
Federal Reserve Board
The Federal Reserve Board on Thursday finalized a rule that governs funds transfers over the Federal Reserve Banks’ FedNow? Service. The final rule is substantially similar to the proposal from last year, with a few clarifications in response to comments. The FedNow Service is a new 24x7x365 interbank settlement service with clearing functionality to support instant payments in the United States and is expected to be available in 2023. The final rule provides a comprehensive set of rules governing funds transfers over the FedNow Service and provides legal certainty and clarity on the rights and obligations of parties to a transfer over the FedNow Service.

Musk’s Questions About Twitter Bot Problem Spur Race for Answer; Bot percentages are difficult to calculate, even by Twitter; The rate of spam accounts is unlikely to get Musk out of deal
Daniele Lepido and Maxwell Adler – Bloomberg
Elon Musk has said that his $44 billion purchase of Twitter Inc. hinges on the accuracy of one figure: the number of bots on the platform. That’s triggered a race for answers. Twitter indicates in regulatory filings that the number of automated accounts is less than 5% of the total, but Musk has said he suspects that the number is much larger. If he can demonstrate that Twitter’s figures are inaccurate, the billionaire may attempt to use the information to get out of the deal or negotiate a lower price.

Arthur Breitman On the Biggest Problems In Blockchain Design; Blockchains. What are they good for?
Tracy Alloway and Joe Weisenthal – Bloomberg
We continue to see an explosion of interest and money flowing into the crypto/blockchain space. But recent price declines and the Terra disaster have raised new questions about what the whole point is. So … what is the whole point? What is crypto good for? To get a better understanding of the state of the technology and the market, we speak with Arthur Breitman, the co-founder of the Tezos blockchain. The episode was recorded at the Milken Global Institute Conference in Beverly Hills.


DOJ reverses controversial policy on cybersecurity prosecutions
Monique Beals – The Hill
The Department of Justice (DOJ) on Thursday announced that it would reverse its policy on issuing charges for violations of a federal computer fraud law, saying that it will not prosecute “good-faith security research” efforts.
The department announced the change in enforcement of the Computer Fraud and Abuse Act, defining good-faith research as “accessing a computer solely for purposes of good-faith testing, investigation, and/or correction of a security flaw or vulnerability” without any intention of harming the public.

Cybersecurity researchers no longer will face hacking charges under CFAA
Joseph Menn – The Washington Post
The U.S. Justice Department on Thursday said it would not use the country’s long-standing anti-hacking law to prosecute researchers who are trying to identify security flaws, a move that provides both protection and further validation for a craft still villainized by many officials, companies and the general public.
In a news release and five-page policy statement issued to federal prosecutors, top Justice officials said local U.S. attorneys should not bring charges when “good faith” researchers exceed “authorized access,” a vague phrase from the 1986 Computer Fraud and Abuse Act (CFAA) that has been interpreted to cover such routine practices as automated downloads of Web content.

Why Cybersecurity Is Now A Board-Level Leadership Imperative
JC Gaillard – Forbes
We are not hearing enough about the short tenure of the chief information security officer (CISO). Regular studies place it in the region of two years, and anecdotal evidence from my own network, based on the analysis of the profile of 15 current CISOs, points toward 30 months.
It is often the symptom of serious underlying issues and the cornerstone of long-term stagnation for many cybersecurity practices in large firms. We have to look beyond the most commonly cited reasons: lack of resources, disconnect with management and constant firefighting leading to mental health issues and burnout. All three aspects, in my opinion, point toward the profile of the CISOs themselves.

Defense Cybersecurity: Protecting Controlled Unclassified Information Systems
The Department of Defense (DOD) has reported implementing more than 70 percent of four selected cybersecurity requirements for controlled unclassified information (CUI) systems, based on GAO’s analysis of DOD reports (including a June 2021 report to Congress) and data from DOD’s risk management tools. These selected requirements include (1) categorizing the impact of loss of confidentiality, integrity, and availability of individual systems as low, moderate, or high; (2) implementing specific controls based in part on the level of system impact; and (3) authorizing these systems to operate. As of January 2022, the extent of implementation varied for each of the four requirement areas. For example, implementation ranged from 70 to 79 percent for the cybersecurity maturity model certification program DOD established in 2020, whereas it was over 90 percent for authorization of systems to operate (see table).


Tether Cuts Commercial Paper, Boosts Treasuries Behind USDT; Stablecoin issuer said it continues to reduce commercial paper; Holdings breakdown is from before latest market turmoil
Emily Nicolle – Bloomberg
Tether, the operator of the world’s most used cryptocurrency, said it had reduced the amount of commercial paper in the reserve backing its $74 billion stablecoin, revealing information about its holdings while dollar-pegged assets face tougher scrutiny from regulators. Tether Holdings Ltd. had assets totaling at least $82.4 billion as of March 31, along with $82.2 billion in liabilities relating to the digital tokens it issues, according to an assurance from Cayman Islands-based MHA Cayman.

The Goldilocks crisis may have arrived for crypto; Key player and policymakers must now embrace reform to weed out the bad, while retaining some good
Gillian Tett – FT
Sixteen years ago I often joked that what the financial system needed was a “Goldilocks crisis” — a shock that was just hot enough to force investors and regulators to wake up and see the swelling risks in credit markets, but not so hot that it caused the entire system to burn down. Sadly, back then, that crisis never occurred; instead credit derivatives and subprime mortgage lending continued to explode until they sparked the 2008 crisis that almost did “burn” the financial ecosystem down (until the central banks arrived with those quantitative easing extinguishers.)

Has the Crypto Crash Hurt Your Investments? We Want to Hear About It.; Tell us about your experiences in the volatile crypto market.
David Yaffe-Bellany – NY Times
Over the last two years, a boom in cryptocurrency prices has minted a generation of millionaires, catapulting industry executives and even some regular investors to extraordinary wealth. But lately the crypto market has crashed. Last week, the collapse of a so-called stablecoin helped ignite a broader meltdown, tanking the price of Bitcoin and wiping $300 billion in value from the broader crypto economy. Some investors who had put their life savings into the crypto market lost everything.

Digital-Asset Haven Portugal Ponders ‘Several Models’ for Crypto Taxation; The move may lead to an overhaul of its tax-free crypto regime; ‘The timetable will be as soon as possible’: Fernando Medina
Henrique Almeida and Joao Lima – Bloomberg
Portugal is embarking on a major change of course as it considers levying taxes on cryptocurrencies, signaling a policy shift for one of Europe’s most crypto-friendly destinations. The country’s lack of legislation, combined with its affordable living costs and mild temperatures has attracted a growing number of digital nomads and cryptocurrency companies in recent years. At the moment, Portugal does not tax crypto gains, unless it stems from professional or business activities.

Bitcoin Slump Erodes Fortunes of Would-Be Miners in Thailand; Jasmine Technology’s 7 top investors lose some $1.7 billion; Telecom-turned-crypto firm hit by global plunge, regulators
Yoojung Lee and Anuchit Nguyen – Bloomberg
For Thailand’s market authorities, the rout in Bitcoin has been one of the few tools to cool down the once-unstoppable Jasmine Technology Solution Pcl. The telecom-turned-crypto company has lost more than a third of its value in the past month, cutting its market capitalization to 260 billion baht ($7.6 billion). That tumble also pared the wealth of its seven biggest individual shareholders, who had enjoyed earlier gains after the firm unveiled a plan in July to expand into Bitcoin mining.

Barclays to tether: the test is yet to come; Bolting the stable door after the stablecoin has bolted
Bryce Elder – FT
It’s back at par and on the defensive, but the questions about Tether’s recent detachment from its $1 peg value are not going away. The world’s most popular stablecoin on Thursday posted a letter from MHA Cayman, an offshore outpost of UK mid-tier accountants MHA MacIntyre Hudson, that attests for consolidated total assets of just over $82.4bn. These quarterly updates are a mandatory requirement of Tether’s 2021 settlement with the New York Attorney General and (unlike its peg explainer-of-sorts published on Monday) are mostly new information.

Bored Ape NFT Barred From Sale by Singapore Court After Dispute; Nonfungible token can’t be sold until ownership is resolved; Case may have broad ramifications for digital assets
Joanna Ossinger – Bloomberg
A court in Singapore has issued a freezing injunction preventing the sale of a Bored Ape nonfungible token, in one of the first cases of its kind that could have broad ramifications for digital assets. The NFT, from the famed Bored Ape Yacht Club series, shouldn’t be sold pending the resolution of an ownership dispute after it was foreclosed on as collateral for a loan, a court said. The law does recognize both fungible and non-fungible tokens as a form of property to which court injunctions can attach, and the NFT case is a consistent application of that same principle, according to Hagen Rooke, a partner at law firm Reed Smith LLP in Singapore, who wasn’t involved in the case.


Fed Nominee Michael Barr Supports Rewriting Lending Rules, Cautious on Capital Requirements; President Biden’s pick to regulate nation’s biggest banks spoke at Senate confirmation hearing
Andrew Ackerman – WSJ
Michael Barr, President Biden’s pick to become the government’s most influential bank regulator, told senators that he supports a plan to overhaul how banks lend to lower-income communities and that he would take stock of the financial system before adjusting capital and liquidity requirements. Mr. Barr, a veteran of the Obama and Clinton administrations, faced questioning Thursday from the Senate Banking Committee at a confirmation hearing to serve a four-year term as Federal Reserve vice chairman for bank supervision.

Lawmakers Grill F.D.A. Chief on Baby Formula Oversight Amid Shortages; Dr. Robert Califf, the agency commissioner, is the first administration official to face congressional scrutiny over the infant formula supply crisis.
Christina Jewett – NY Times
House lawmakers hammered Dr. Robert Califf, the head of the Food and Drug Administration, during a budget hearing on Thursday over the agency’s handling of the infant formula shortage exasperating families across the nation. His appearance before a House subcommittee occurred just a day after President Biden invoked the Defense Production Act and authorized the use of planes to ferry baby formula from overseas to boost supply. The agency and the White House have raced in recent days to respond to the public outcry over bare grocery store shelves and concerns that desperate parents were rationing their stock or resorting to possibly risky DIY mixtures to feed their infants.

Billionaire LA Mayor Hopeful Urges State to Refund Huge Surplus; Luxury mall developer Rick Caruso says California should return money from its $98 billion surplus to taxpayers as he vows to fight homelessness and crime
John Gittelsohn and Brian Eckhouse – Bloomberg
Billionaire Rick Caruso, a leading candidate in the race for Los Angeles mayor, supports giving money back to California taxpayers from a record-busting $98 billion surplus, which was bolstered by the state’s highest-earners. “I’d return the money to the taxpayers,” Caruso, 63, said during an interview at The Grove shopping mall, one of a number of high-end properties he’s developed in California. “It’s their money. It’s not the state’s.”

‘Hell No’: Finance Firms Tell Texas They Don’t Boycott Energy; State has asked companies to clarify their energy policies; Firms may lose business in state if deemed to boycott industry
Shelly Hagan, Amanda Albright, and Danielle Moran – Bloomberg
As Texas officials hunt for financial firms hostile to the energy industry, Wall Street is rolling out its fossil fuel bona fides to convince officials not to bar them from doing business with the state. Twenty firms, including JPMorgan Chase & Co. and HSBC, have so far replied to requests from state comptroller Glenn Hegar over the past two months to disclose whether they restrict or prohibit doing business with energy companies by explicitly saying they do not. Bloomberg obtained the letters through a public-records request. One small Dallas-based firm even replied “Hell no.”

US law firm denounced for joining event to mark Hong Kong security law; Davis Polk criticised for agreeing to appear at commemoration of measure used in opposition crack down
Primrose Riordan – FT
US law firm Davis Polk & Wardwell has been condemned for agreeing to participate in a Hong Kong government event to commemorate the city’s controversial national security law. Martin Rogers, the firm’s Asia chair, will appear at an event to mark the second anniversary of the sweeping law, which was introduced in response to pro-democracy protests in 2019 and been used to crack down on opposition in the city.


The Bank Of England’s Risk Management Approach To Collateral Referencing USD Libor For Use In The Sterling Monetary Framework – Market Notice 19 May 2022
Bank Of England
This Market Notice sets out the Bank’s risk management approach to collateral referencing overnight, 1-month, 3-month, 6-month and 12-month USD LIBOR settings for use in the SMF. It forms part of the SMF Documentation for the Bank’s operations under the SMF and should be read in conjunction with the other SMF Documentation, each as supplemented and amended from time to time. This SMF Documentation is available on the Bank’s website. Any capitalised term used in this Market Notice, and not otherwise separately defined herein, shall bear the same meaning as set out in the glossary to the SMF Terms and Conditions. This Market Notice supersedes the relevant sections of the Market Notices published on 26 February 2020, 07 May 2020 and 24 March 2021 related to overnight, 1-month, 3-month, 6-month and 12-month USD LIBOR settings. This Market Notice may be supplemented and amended from time to time.

ComplyAdvantage Publishes New Anti-Money Laundering Guide Designed For Growing Crypto Firms – The New Guide Provides A Practical, Much Needed Resource For Financial Compliance Professionals Working In The Crypto Industry In A Time Of Increased Regulation
ComplyAdvantage, a global data technology company transforming financial crime detection, today announced the release of the company’s new Anti-Money Laundering (AM) Guide for Crypto Firms. Cryptocurrencies are one of the most innovative and fastest growing sectors within the financial services landscape. According to Vantage Market Research, the cryptocurrency market was worth roughly $1,542.9 Million at the end of 2021 and is expected to reach $2,302.5 Million by 2028, with North America projected to dominate the worldwide cryptocurrency market.

ComplySci Appoints New Chief Technology, Chief Product And Chief Legal Officers – Company Adds To Executive Leadership Team As Part Of Rapid Growth And Product Offering Expansion
ComplySci, the leading provider of regulatory technology and compliance solutions for the financial services sector, is continuing to grow its experienced leadership team with three recent appointments. The company has named Helen Johnson as chief technology officer, Robert Keller, CFA, to the position of chief product officer and Eric Przybisiki as chief legal officer.

BIS: Inequality Hysteresis And The Effectiveness Of Macroeconomic Stabilisation Policies
Luiz Awazu Pereira da Silva, Enisse Kharroubi, Emanuel Kohlscheen, Marco Jacopo Lombardi and Benoit Mojon – Mondovisione
Growing economic inequality has become a matter of increasing public and policymaking concern in recent years, driven by the compounded effects of technical change and rapid globalisation not fully offset by anti-poverty and inequality mitigating policies. Resurgent food and energy inflation in 2022 and deep recessions related to the Covid-19 pandemic are aggravating this trend, and some would argue that unconventional monetary policies which have boosted asset valuations and wealth inequality have also reinforced this perception. For their part, central banks can most effectively contribute to a more equitable society by deploying the necessary tools to deliver on their mandated objectives of price and macroeconomic stability.

CFTC Charges Oregon and Illinois Residents and Florida Company in $44 Million Misappropriation in Ongoing Digital Asset and Commodity Futures Fraud; Court Issues Restraining Order that Freezes Assets, Preserves Documents and Appoints Receiver
The Commodity Futures Trading Commission announced today that it has filed a civil enforcement action in the U.S. District Court for the Northern District of Illinois, charging Sam Ikkurty a/k/a Sreenivas I Rao (Ikkurty) of Portland, Oregon, Ravishankar Avadhanam of Aurora, Illinois, and Jafia LLC, a company Ikkurty owns in Florida, with fraudulently soliciting at least $44 million for participation interests in a so-called income fund invested in digital assets and other instruments. The enforcement action also charges the defendants with operating an illegal commodity pool and failing to register as a Commodity Pool Operator.

ESMA Publishes Report On Highly Liquid Instrument
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today published its Final Report (FR) on highly liquid financial instruments for CCP investment policies under EMIR. The Report concludes that further work is to be done regarding the extension of the list of eligible financial instruments to certain public entities and potentially to covered bonds pending further research. ESMA will also pursue further work within the CCP Supervisory Committee to ensure a common supervisory approach regarding CCP investment practices.

ESMA Launches Four Consultations On Ccp Resolution Regime
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today published four Consultation Papers on its proposed Guidelines for the EU central counterparty (CCP) resolution regime

ESMA Encourages Crowdfunding Service Providers To Accelerate Their Transition To The New Regime
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its final report on the relevance of extending the transitional period set out in Article 48 of the Crowdfunding Regulation (CR).

FCA strengthens consumer protection by speeding up removal of firms that do not use their regulatory permission
The FCA is to use new powers to more swiftly cancel or change what regulated activities firms are permitted to do, these are known as permissions. This new power is available following a change in the law allowing the FCA to streamline and shorten the removals process. The FCA will provide a firm with two warnings if it believes it is not using its regulatory permission. The FCA will then be able to cancel the permission, or change it, 28 days after the first warning if the firm has not taken appropriate action.

Investing and Trading

Stocks Have Been Falling. I’m Still Buying Steadily.; Is this is a good time to buy stocks, readers ask? Yes, our columnist says, but only if you can handle further losses and don’t try to outsmart the market.
Jeff Sommer – NY Times
Big stock market losses are nobody’s idea of fun. But they have been happening this year with dismaying regularity. The S&P 500 fell 4 percent on Wednesday, but it’s not just been a bad day here or there, or a bad week. The S&P 500 fell six weeks in a row through May 14, and the declines have been adding up. If you are a long-term investor, you may not want to look at your portfolio right now. The numbers may be unnerving. But I have no choice. I look closely at this data all the time as part of my job, not just at the overall markets but at my own returns from a portfolio made up overwhelmingly of low-cost, diversified index funds that track the total stock and bond markets. What I’m seeing is ugly.

What Is a Bear Market? As the S&P 500 Skids, How Bad Could It Get?; The S&P 500 is almost 20% below its record, a level that would place it in a bear market for the first time in more than two years
Caitlin Ostroff – WSJ
The benchmark S&P 500 stock index is falling, flirting with what investors call bear-market territory. If you’re just tuning in or watching your retirement savings shrink, here’s what you need to know about the grizzly decline. What is a bear market? Stocks enter a bear market when widely followed indexes such as the S&P 500 or the Dow Jones Industrial Average sink 20% from their high points. There is nothing official about the determination. The designation is a shorthand way for Wall Street to mark when markets have taken a tumble. It also gives investors a moment to reflect on how the current action in markets compares to previous downdrafts.

American Stores Have Too Much of the Wrong Stuff; Chains such as Walmart, Kohl’s and Target are stuck with goods and apparel customers wanted months ago
Jinjoo Lee – Bloomberg
Consumers, rejoice. This could be the year of clearances and deals. Retailers reporting earnings this week have seen a surge of inventory as they found themselves carrying too much stuff that consumers no longer want so much of, including basic apparel, home appliances and furniture. Ahead of last holiday season, retailers ordered with plenty of cushion in mind to prevent empty shelves. Now a so-called bullwhip effect could be in store.

A Stocks Rescue Is the Last Thing the Fed Wants; Unlike during previous selloffs, the central bank needs share prices to fall enough to influence consumer behavior.
John Authers – Bloomberg
Of Bear Markets and Corrections
Another messy day’s trading in New York left the S&P 500 at its lowest closing level for the year, down almost 19% from its high in early January. The end of the week will bring an interesting test of whether investors are comfortable pushing the index down to a 20% decline, which would satisfy the popular definition of a bear market.

Private Equity Can Lap Up British Businesses Again; UK companies are a lot more affordable for dollar-based funds, and resistance to bids may be less intense
Chris Hughes – Bloomberg
The stars could be aligning for private equity to launch a fresh shopping spree in the UK. That would see the second half of this year revive the post-Brexit buyout boom that culminated in the £9.8 billion ($12.2 billion) deal for Wm Morrison Supermarkets Plc last October. Rising valuations eventually ended last year’s British dumpster dive. But sharp falls in the shares of what was already a relatively cheap UK market have seen deal flow creep back up. On Thursday, domestic repairs firm HomeServe Plc agreed to be bought by Brookfield Asset Management for £4.6 billion including assumed net debt. HomeServe shares had tumbled so much that the offer didn’t match their pre-bid one-year high despite its 71% premium.

That Bacon, Chicken and Beef Won’t Get Cheaper Anytime Soon; It’s getting just too pricey to raise the world’s livestock herds as war, droughts and disease hammer farmers.
Megan Durisin, Jen Skerritt, and Michael Hirtzer – Bloomberg
Producing the world’s meat has rarely been this expensive. In southern Calgary, Don Lowe, who’s been a cattle rancher for 40 years, had hoped to expand his herd of 800 beef cows this year, but with feed prices skyrocketing, he’s struggling to hang on to the animals he has. Across the ocean in East Yorkshire, England, pig farmer Kate Moore says the upkeep of her 32,000-strong herd is becoming exceedingly hard. “It’s horrendous,” said Moore, who is now is chalking up a loss of about £60 ($75) per animal because of the soaring cost of feeding and taking care of them. “There’s no light at the end of the tunnel at the moment. The British pig industry will never be the same.”

What are investors supposed to trust in now?
Merryn Somerset Webb – FT
I’m not often glad I am no longer the young person in the room. This month I am. If you have only been knocking around in markets for, say, 15 years, you are seeing the collapse of everything that you have been told is true and have also observed to be true about markets.

Battered Stock Traders Brace for $1.9 Trillion Option Expiration
Lu Wang – Bloomberg
Stock traders still clinging on after this week’s vicious drop in US benchmarks had better tighten their grip — OpEx is back to whip up more turmoil. The monthly expiration of options tied to equities and exchange-traded funds is notorious for stirring up volatility, and the next event takes place on Friday. Traders will close old positions for an estimated $1.9 trillion of derivatives while rolling out new exposures, all with the S&P 500 on the brink of a bear market.

Environmental, Social and Corporate Governance

Elon vs ESG; The latest Musk brouhaha shows the messy reality of ESG
Robin Wigglesworth – FT
The latest ESG version of the S&P 500 index has a notable absentee, who took the exclusion with his customary grace. At face value, it would seem mad to not have Tesla — the world’s dominant maker of electric cars — in the environmental, social and governance-focused version of the world’s most influential equity index. It is for many the first ESG-friendly stock they’d be able to name.

Analysis: Musk’s ESG attack spotlights $35 trillion industry confusion
Simon Jessop and Ross Kerber – Reuters
Elon Musk’s rejection of environmental, social and corporate governance (ESG) scores as a “scam” highlights how Wall Street’s hottest investment trend that encompasses some $35 trillion in assets means different things to different people. The chief executive of Tesla Inc (TSLA.O) lashed out on Wednesday against S&P Global Inc (SPGI.N) after the electric car maker was dropped from its flagship ESG index while it added some companies whose activities are harmful to the environment, such as oil and gas producers.


Sexual misconduct case rocks $47bn asset manager GoldenTree; Dispute with sacked executive details litany of misconduct as well as information about how partners’ investments are structured
Mark Vandevelde, Sujeet Indap, Robert Smith – FT
Sexual misconduct allegations at a prominent New York asset manager have ignited a multimillion-dollar legal dispute that offers a revealing insight into the inner workings of the business. GoldenTree Asset Management, a hedge fund that manages $47bn of credit market investments on behalf of public pension funds and other institutional clients, fired its chief operating officer William Christian at the beginning of 2020.

Wellness Exchange

What’s Going on With the Testing Requirement for Travel?; The requirement to test for Covid before flying to the United States is hated by many travelers and the U.S. travel industry. But the government shows no sign of getting rid of it.
Heather Murphy – NY Times
As countries, including Canada and Britain, have lifted their Covid testing requirements for vaccinated visitors in recent months, some Americans are irate that they still have to show a negative test to board a flight back to the United States. Jason Miller, a 37-year-old software engineer who lives in Texas, is so frustrated with the rule that he recently sent letters to the White House and several lawmakers and began encouraging others to do the same. “I support the C.D.C., still wear a N95 mask when in crowds and when I travel,” he said. But, he no longer feels that the rule provides value, in large part because “the testing has not stopped variants from entering the country.”

Shanghai Finds First Covid-19 Outside Quarantine in Six Days; Three infections found in community as total cases also rise; Beijing reports slight increase in daily cases to 62
Peter Vercoe – Bloomberg
Shanghai found the first cases of Covid-19 outside of quarantine in six days, raising questions about whether the easing of the city’s lockdown will be impacted. Total infections in the Chinese financial hub rose to 858 on Thursday from 719 on Wednesday, with three found outside of government quarantine. Authorities started to ease the lockdown — which had confined residents to their homes and curtailed business activity — earlier this week after the city hit a milestone of three days of zero community transmission.

To Save Humanity, Listen to the Microbes; Preventing more pandemics hinges on better understanding the billions of tiny pathogens circulating in nature.
Brian Bremner – Bloomberg
When a respiratory virus sweeps away almost 15 million lives in two years, as Covid-19 has, according to a May 5 World Health Organization estimate that includes indirect deaths, it’s a ­savage hit to humanity. A single microbe has destabilized health-care systems, unbalanced economies, and confounded government leaders worldwide. Even as we cope with the Covid crisis, nature keeps throwing new challenges at us, ranging from an outbreak of rare viral monkeypox to an unexplained run of child hepatitis. It’s a humbling moment for Homo sapiens, accustomed as we are to doling out crushing blows to other life forms rather than having them rock our own.


Ex-Julius Baer banker boosts hiring to target Asia’s ultra-rich
Business Times
ALI JAMAL, a former Julius Baer Group banker, is building out the Asia operations of his wealth-management firm that targets the ultra-rich. Lawrence Lua, former global head of DBS Group Holdings’s private bank, was hired as chairman of Azura’s Singapore branch to lead business in South-east Asia, the firm said in a statement. Azura plans to continue hiring locally, with the Singapore team making up about 1/3 of its total headcount within the next few years. Azura, which currently has 40 employees globally, has added more than 20 professionals since the start of 2021 from firms including Credit Suisse Group, Barclays and UBS Group.

Palm Oil’s Slump Set to Deepen After Indonesia Lifts Export Ban; Prices may slide to 5,000 ringgit a ton by July-August: Savola; Demand from top buyers India and China has weakened recently
Eko Listiyorini and Pratik Parija – Bloomberg
Palm oil has lost a major pillar of support after top producer Indonesia lifted a ban on exports, paving the way for prices to slump further as supply builds and demand languishes. Futures were already lower this week on expectations Indonesia’s ban would be short-lived, and late Thursday President Joko Widodo said that exports can resume from May 23. This is after considering improvements in domestic supply and prices, as well as the 17 million workers in the industry, he added.

There’s One Way to Wean India Off Russian Weapons; Switching to Western platforms is too expensive. Instead the country needs to do the hard work of developing a viable domestic defense industry.
Mihir Sharma – Bloomberg
The Indian government’s unwillingness to condemn Russia forcefully for its invasion of Ukraine seems to have woken up leaders in Washington to a long-simmering problem: how to wean the Indian military off its dependence on Russian arms. According to Bloomberg News, the U.S. government is considering a $500 million defense package for India, to finance the purchase of US weapons systems.

Chinese Developers Get State Help to Tap Bond Market; Country Garden, Longfor and Midea Real Estate are making use of credit derivatives to help get new deals done
Rebecca Feng – WSJ
China is helping some stronger developers tap the domestic bond market, the latest move to support the ailing property sector amid a broader economic slowdown. With the industry in crisis, markets in mainland China and abroad are mostly shut to privately owned developers. The new deals address that problem by packaging some bonds with credit derivatives, so that buyers are shielded against the risk of default. The initiative follows other measures, including a cut by the central bank in mortgage rates for first-time home buyers, and easing in different regions for things like down payments and home-purchasing restrictions.

Pimco Among Firms Set to Start Debt Talks With Sri Lanka; Creditor group includes country’s two largest reported holders; Central bank chief hints that legal adviser pick to come soon
Ben Bartenstein – Bloomberg
A group representing Sri Lanka’s creditors has expanded to about 20 firms, people with knowledge of the matter said, with the defaulting country expected to start readying an advisory team soon. Pacific Investment Management Co., T. Rowe Price Group Inc. and BlackRock Inc. belong to the group representing some of its largest creditors and restructuring talks are expected to start soon, the people said, requesting anonymity ahead of a formal announcement. AllianceBernstein LP and Wellington Management Group are also members. The creditor group represents significant holdings. BlackRock and Pimco are the two largest reported holders of Sri Lankan sovereign debt, data compiled by Bloomberg show.

Sri Lanka Hunts for Cash to Pay Oil Traders for Crude and Fuel; Prime minister says government seeks cash for Russian oil; Tanker with Vitol gasoline cargo is waiting to discharge
Elizabeth Low, Anusha Ondaatjie, and Asantha Sirimanne – Bloomberg
Sri Lanka is trying to come up with cash to pay for oil that’s been sitting on tankers off its coast, amid the south Asian country’s worst economic crisis in a generation. Unloading procedures for one cargo of gasoline have begun but the ship cannot berth yet because there’s no space for it to do so, according to the harbor master at the port of Colombo. Meanwhile, Prime Minister Ranil Wickremesinghe said the government is also trying to find the cash to complete a rare purchase of crude oil from Russia.

ECB to force UK-based investment banks to relocate staff, trading
Too many global investment banks continue to serve euro zone clients out of London and the European Central Bank plans to force them to relocate senior staff and trading activity to the bloc, ECB supervisory chief Andrea Enria said on Thursday. The ECB has long battled the industry’s biggest players, who are reluctant to relocate activities after Brexit, despite explicit demands by the ECB, which supervises the bloc’s biggest financial institutions. In a sign that patience is wearing thin, Enria said the ECB will issue “binding decisions” to key investment firms, prescribing action on a case-by-case basis.

Turkey’s Chief Inflation Statistician Quits in Latest Departure
Beril Akman – Bloomberg
An official in charge of compiling Turkish inflation statistics has stepped down, the latest prominent departure at an institution that’s facing harsh criticism over the reliability of its economic data. The Turkish Statistical Institute said Cem Bas resigned as head of the department of price statistics for health reasons. Furkan Metin, who previously oversaw the digital transformation and projects department at the agency known as TurkStat, has replaced Bas, who’ll remain on staff in a lower-profile role.

Now the EU’s Largest Wheat Crop Is at Risk From Record Heat; Share of wheat in good or very good condition declines to 73%; That adds to weather woes in other major wheat growers like US
Megan Durisin – Bloomberg
France’s wheat crop is deteriorating as record heat across the European Union’s top grower adds to global grain-supply woes. The share of the country’s soft-wheat crop rated in good or very good condition fell to 73% as of May 16, putting ratings below this time last year, according to the latest FranceAgriMer data. A dry, hot streak across France is draining soil moisture during a vital period for the crop’s development, with weekend temperatures expected to swelter above 35 degrees Celsius (95 degrees Fahrenheit) in many cities, forecaster Meteo France said in a note.

Qatar Offers Germany LNG From Its US Plant Starting in 2024
Michael Nienaber, Arne Delfs, and Verity Ratcliffe – Bloomberg
Germany can expect to receive liquefied natural gas in 2024 from Golden Pass, a new facility in the US in which Qatar Energy is a stakeholder. Qatar’s Sheikh Tamim Al Thani and German Economy Minister Robert Habeck signed a joint declaration of intent on Friday which is supposed to seal an energy partnership between the two countries.

Eat Fruit, Call Mom to Ease Price Pain, Bank of America Tells South Africa
Adelaide Changole – Bloomberg
South Africans seeking respite from high inflation and looming price increases should consider going vegan, drinking less alcohol and avoiding bread, according to Bank of America. While the inflation rate held steady near the ceiling of the central bank’s target range of 3% to 6% in April, the “pain points” for annual and monthly price increases were in the costs of meat products, fats and oils and alcoholic beverages, Tatonga Rusike, BofA’s sub-Saharan Africa economist, said in a note. Increases in the prices of bread and cereals are still to come, he said.

Italy imports more Russian oil to feed refineries despite EU embargo plan; Refinery in Sicily forced to buy more oil from Russia in unintended consequence of sanctions
Harry Dempsey and Silvia Sciorilli Borrelli – FT
Italy has increased its imports of Russian crude despite EU efforts to end ties to Russian energy in an unintended consequence of western sanctions against the Kremlin.


This Genius Inventor Is Taking on Dinosaurs, Global Warming and Pizza; “Hello World” meets former Microsoft Chief Technology Officer Nathan Myhrvold, who is trying to solve a lot of the world’s mysteries all at once.
David Nicholson – Bloomberg
Former Microsoft Chief Technology Officer Nathan Myhrvold is a chef, astrophysicist, paleontologist and inventor who is trying to out-engineer the climate crisis. On this episode of “Hello World,” Bloomberg visits his lab to see how he’s solving some of the world’s thorniest mysteries, attacking some of its biggest problems, and making the best pizza anywhere.

Teen Tracking Musk’s Jet Says He’s Now Tailing Zuckerberg, Too; ‘He tracks us on Facebook. This kid is tracking him back.’
Paulina Cachero and Anders Melin – Bloomberg
The teenager who rocketed to internet stardom for tracking the whereabouts of Elon Musk has now zeroed in on another billionaire: Mark Zuckerberg. Even though Facebook parent Meta Platforms Inc. spent almost $27 million last year to keep its chief executive officer safe, 19-year-old Jack Sweeney said in an interview Thursday he’s “pretty confident” he identified the tech tycoon’s private jet based on where it has traveled. “I find it interesting that he tracks us on Facebook, so it’s fun that this kid is tracking him back,” Sweeney said.

We visit more than 100 financial news websites daily (Would YOU do that?)

The Spread

Bears Picked Right Stocks to Short With Declines Twice the S&P’s

Observations & Insight Editor's Note: The JLN Options Newsletter will not be published on Monday, July 4 in observation of the Independence Day holiday. Have a great weekend! Lead Stories Bears Picked Right Stocks to Short With Declines Twice the S&P's Lu Wang...

Past JLN Newsletters

Crypto: ‘Blockchain is hype’ – MPs warned

Crypto: ‘Blockchain is hype’ – MPs warned

First Read Hits & Takes John Lothian & JLN Staff Today we have two videos from my coverage of FIA's IDX in London, which I conducted in the Eurex branded lounge area outside The Brewery's doors. The first is with FIA Europe Head Bruce Savage, whom I literally...

Pin It on Pinterest

Share This Story