High Noon Talks to End Global Oil-Price War

Apr 9, 2020

First Read

Hits & Takes
By JLN Staff

Georgia Senator Kelly Loeffler and her husband, Intercontinental Exchange Chairman and CEO Jeff Sprecher, will stop trading individual equities and only invest in exchange traded funds going forward, she announced yesterday. My question is will Jeff liquidate his holdings of ICE and what impact will this have on the way the company is perceived by Wall Street? Also, What does this mean for his future compensation, which would have come in options or grants of stocks? I just have questions, not judgments.

Today we published part one of our interview with Buck Haworth for our MarketsWiki Education Open Outcry Traders History Project series. Buck is a great story of coming into the industry in an unusual manner and one of persistence as he built a career and finally a company amid the growth and dramatic change of the markets. He shares his thoughts on trading, his and others. He talks about his time on the board of the Chicago Mercantile Exchange in the mid to late 1990s, amid the CME preparing to become a for-profit and public company.

I really enjoyed the Jeff Carter interview for his candor. Buck shows even more candor about the realities of being a trader at the CME. HIs interview is not one to miss.

Today is Maundy Thursday in the Christian faith, which reminds me of one of my favorite stories. In my late 20’s, when I was first married and looking for a brokerage job after I decided floor trading was not for me, I interviewed for a job with a Milwaukee stock brokerage firm. They had intensive interviews and testing, including looking at inkblots. But they also gave an ethics test, which asked the same 10 questions eight different ways. Many of the questions focused on drug use, which I have never done.

When the firm called me with the results, they told me my score was 125. I asked if that was good. They said it either meant I was a pathological liar, or very religious. I asked who had the next highest score. They said a used car salesman who sold luxury vehicles in Chicago.

I asked them if I told them that I was playing Jesus in a passion play that Thursday at my church, if that would give them the answer they sought.

At the time, I was on the Board of Deacons for the Glenview Community Church. Every Maundy Thursday, the Deacons would put on a pantomime version of the Last Supper. At the practice the director chose me to be Jesus since I was so big (and had a nice real beard), and he thought most people would be focusing on me on stage as a result of my size. I played Jesus for two years in the GCC Maundy Thursday production. Also, I did not get the Milwaukee broker job. But that was for the better.~JJL


Women In Listed Derivatives sent out an email yesterday noting that Terry Savage, WILD’s 2020 kick off event speaker in Chicago, has released an article with her insights into the Care Act, stimulus checks, filing for unemployment, and paying rent and other bills, and health insurance. Savage writes a weekly personal finance column syndicated in major newspapers by Tribune Content Agency. You can read her column here. ~SR


Buck Haworh – Open Outcry Traders History Project – Part One

Buck Haworth has been a consultant, a CPA, a back office accountant, an exchange audit department executive, a foreign exchange arbitrage desk manager, an exchange member, a scalper, a spreader, an exchange board member and officer, and a technology executive.

He sat down with John Lothian News for an interview for the MarketsWiki Education Open Outcry Traders History Project. He talked to us about starting as an accountant at a big national firm but not being happy with his career trek. His father always loved the stock market, so he turned his attention to the markets. He rejected an opportunity to start at the CBOE with a job for a mere $300 a month, as he had a mortgage and three kids at home.

Instead, he eventually joined trader Ralph Peter in a back office role. After long hours and many projects, he left and joined the Chicago Mercantile Exchange to help build out a professional audit unit. He eventually left the CME to take a job running an FX arbitrage operation, where he got his first taste of the trading floor.

Haworth talked to us about his experiences trading, his role with the board of directors, and the demutualization and inside politics of the CME board. He gives a clear and simple explanation about the realities of the trading floor and why you had to deal with that reality.

This is part one of a two-part interview not to miss.

Watch the video »


Hand Sanitizer Will Be Hard to Find for a Long, Long Time
Gerald Porter Jr. and Edward Ludlow – Bloomberg
Not enough chemicals and plastic containers to meet demand; The health sector is also getting first dibs on production
Companies across the U.S. have noticed that we’re all hunting for hand sanitizer and have started producing more, yet it’s still proving difficult to find and availability is unlikely to improve anytime soon.

*****Who is going to list the hand sanitizer futures market? We need it sooner than later. Where are you, Small Exchange?~JJL


Wanted: People who know a half century-old computer language so states can process unemployment claims
Alicia Lee – CNN
On top of ventilators, face masks and health care workers, you can now add COBOL programmers to the list of what several states urgently need as they battle the coronavirus pandemic. In New Jersey, Gov. Phil Murphy has put out a call for volunteers who know how to code the decades-old computer programming language called COBOL because many of the state’s systems still run on older mainframes.

*****How about Minnesota Fortran? I was OK at programming it on punch cards in college, but am willing to give it a try.~JJL


Most NYC Covid-19 Cases Came From Europe, Genome Researchers Say
Robert Langreth – Bloomberg
NYU scientists analyzed samples from 75 coronavirus patients; Genome sequencers can track how a virus spreads around world
The explosion of Covid-19 cases in the New York City area resulted largely from infected patients who flew in from Europe, genome scientists say. Researchers at NYU Langone Health said they’ve analyzed 75 samples from patients who were diagnosed with Covid-19, the disease caused by the novel coronavirus, at New York-area hospitals last month.

*****It makes sense and would not be any different from what has happened previously when diseases like smallpox spread from Europe to the Americas.~JJL


Dow Jones chief executive Will Lewis to depart; British media executive is leaving Wall Street Journal parent ‘amicably’ after six years
Anna Nicolaou and Mark Di Stefano – FT
Will Lewis is stepping down as chief executive of Dow Jones after six years at the helm of the Rupert Murdoch-owned publisher. According to people with knowledge of the decision, the British media executive is leaving “amicably” from the company, which publishes the Wall Street Journal.

*****This is an important job. Who wants it?~JJL


Stephen King Is Sorry You Feel Like You’re Stuck In A Stephen King Novel
Terry Gross – NPR
In his 1978 novel The Stand, author Stephen King wrote about a viral pandemic that decimated the world’s population. And he gets it when fans say experiencing the COVID-19 outbreak feels like stepping into one of his horror stories. “I keep having people say, ‘Gee, it’s like we’re living in a Stephen King story,’ ” he says. “And my only response to that is, ‘I’m sorry.’ ”

****** I am stuck in a Stephen King novel and Groundhog Day.~JJL


Wednesday’s Top Three
Our top story Wednesday was Walt Lukken’s Viewpoint: news from the laundry room from the FIA, in which he talks about the resilience of the futures industry and the importance of keeping the markets open. Second was Big trading firms form new crypto accelerator; DRW, Jump Capital, CMT Digital and Volt Capital are locking arms to give young cryptocurrency firms a boost from Crain’s Chicago Business. Third was a repeat of our top story Tuesday, The young and eventful Senate career of wealthy Georgia businesswoman Kelly Loeffler, from the Washington Post.


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Lead Stories

High Noon Talks to End Global Oil-Price War
Anthony Halpin – Bloomberg
As the coronavirus pandemic devastates the global economy, U.S. President Donald Trump, Russian leader Vladimir Putin and Saudi Crown Prince Mohammed Bin Salman are engaged in a high-stakes poker game over ending the oil-price war in a world awash with crude. The risks are steep for all the players as the world’s largest producers hold talks today on an unprecedented accord to rein in production by 10 million barrels a day. The Group of 20 energy ministers weigh in tomorrow.

The $90 Trillion Question Is How to Get People Back to Work
Enda Curran, Frank Connelly, and Suzi Ring – Bloomberg
Governments plan to restart economies with no how-to manual; Rebooting virus-stricken world will require leap in testing
Officials from Rome to Washington are urgently mapping out plans to loosen lockdowns and begin rebooting their economies even as the coronavirus pandemic still rages across swaths of the globe.

IMF chief says pandemic will unleash worst recession since Great Depression
Andrea Shalal, David Lawder – Reuters
The pandemic sweeping the world will turn global economic growth “sharply negative” in 2020, triggering the worst fallout since the 1930s Great Depression, with only a partial recovery seen in 2021, the head of the International Monetary Fund said.

Companies Save Billions in Taxes by Shifting Assets Around Globe; Corporations have found new ways to cut future tax bills after legal changes in the U.S. and Europe
Richard Rubin – WSJ
Multinational corporations are devising new strategies to keep their taxes low, saving billions of dollars by navigating around attempts by the U.S. and European countries to tighten the tax net.

Libor Replacement Grinds Forward After Virus Spotlights Flaws
Emily Barrett, Alyce Andres, and Christopher Maloney – Bloomberg
AARC publishes methodology for shifting between benchmarks; Libor decoupled from rest of market: Jefferies’ Tom Simons
Upheaval in funding markets over the past month has underscored the importance of shifting from Libor to a new benchmark rate — even as the spreading coronavirus pandemic acts as a potential obstacle.

Coronavirus crisis could plunge half a billion people into poverty: Oxfam
Karin Strohecker – Reuters
The fallout from the coronavirus spread that has killed more than 83,000 people and wreaked havoc on economies around the world could push around half a billion people into poverty, Oxfam said on Thursday.

Derivatives Regulator Warns of Fee Scams During Coronavirus Pandemic; The uncertainties caused by events, such as the coronavirus pandemic, create circumstances that swindlers take advantage of, experts said
Mengqi Sun – WSJ
Fraudulent schemes that promise high returns from trading complex financial products—but force victims to pay excessive fees and taxes to collect earnings—increasingly target people working from home or who have lost jobs amid the coronavirus pandemic, a U.S. regulator said. The Commodity Futures Trading Commission said it has received hundreds of complaints about such fee frauds in recent months and warned individual investors should be particularly aware of the schemes, which promise easy ways to make money with no trading experience, the agency said in an advisory note.

Stiglitz Calls for ‘Super Chapter 11’ to Avoid Systemic Collapse; Policymakers need a way to prevent debtors from going under while the economy is on lockdown.
Peter Coy – Bloomberg
Bankruptcy laws were written to help individual companies. They don’t work so well when many get into trouble at once. The companies’ balance sheets are interdependent: Reducing what one owes will weaken its creditors, making it impossible for them to pay their creditors, and so on. Businesses that could have bounced back are forced to liquidate as their court cases drag on.

Opec seeks grand bargain to lift prices amid pandemic; US’s reign as world’s biggest oil producer could end without a deal at meeting this week
Derek Brower, David Sheppard and Anjli Raval and Gregory Meyer – FT
The US’s reign as the world’s biggest oil producer depends on Saudi Arabia and Russia agreeing to slash supply at crucial videoconference meetings on Thursday and Friday.

Virus May Spread Twice as Fast as Earlier Thought, Study Says
Naomi Kresge – Bloomberg
The new coronavirus raced through China much faster than previously thought, a U.S. research team said, suggesting that extremely widespread vaccination or immunity will be necessary to end the pandemic.

USDA Will Investigate Meat-Packer Margins After Beef Price Surge
Mike Dorning – Bloomberg
Members of Congress from cattle regions demanded inquiry; Margins more than doubled after virus outbreak: Farm Bureau
The U.S. Department of Agriculture will investigate a surge in meatpackers’ margins for beef during the coronavirus outbreak that has stirred accusations of market manipulation from some cattle producers.

CME Group hits new record for international average daily volume; International contracts are up 57% year-on-year in the first quarter at CME Group to a record 7.2 million contracts.
Kiays Khalil – The Trade
CME Group has reached a record average daily volume (ADV) of 7.2 million contracts outside of the US in the first quarter this year The derivatives marketplaces’ international contracts are up 57% year-on-year, almost 2 million contracts up from the record 5.3 million contracts traded in the second quarter 2019.

Opec has ‘disappeared’, says oil veteran Andrew Gould; Ex-Schlumberger boss doubts that a deal to cut supply can be effective, or even agreed
Anjli Raval – FT
Global oil producers are scrambling to secure a supply cuts deal to counter an unprecedented drop in demand triggered by the coronavirus pandemic. But for oil industry veteran Andrew Gould it is a fruitless endeavour.

The coronavirus volunteer army is a welcome sign of charity; Selfish acts like stockpiling are outweighed by myriad kindnesses
Sebastian Payne – FT
Ping went the GoodSam app. I was enrolled in Britain’s volunteer army this week, along with a surprising number of my friends in their thirties. In these dire times, devoting a few hours to delivering supplies and chatting to those trapped in self-isolation feels like something of use.

The pandemic will forever transform how we live; From homeworking to healthcare, Covid-19 has forced society to adapt in ways that should endure
Simon Kuper – FT
“It’s as if we’ve gone from 2020 to 2030 in one weekend,” Dutch educational innovator Christien Bok told the Volkskrant newspaper. Below I’ve tried to capture some of the transformations in western societies since March.

Bill Gates on the global battle with coronavirus
In the first of an FT video interview series on the impact of the pandemic, the co-chair of the Bill & Melinda Gates Foundation speaks to the FT’s Vanessa Kortekaas about how countries need to tackle the virus, why developing countries will be worse affected and how to prevent the world from being caught off guard by another pandemic

A $645 Billion Manager Says Calling the Market Bottom Is ‘A Mug’s Game’
Tom Redmond and Abhishek Vishnoi – Bloomberg
Aberdeen’s head of Asia Young says ‘nobody has the answer’; Mark Mobius, emerging markets investing legend, agrees
The coronavirus market sell-off is probably past its worst, strategists at Morgan Stanley have said. Jeffrey Gundlach sees bigger losses ahead, while Howard Marks went from bearish to more optimistic in a week. For another veteran investor, calls on whether equities have reached a bottom are nothing short of futile.

Exchanges, OTC and Clearing

20 years of ETF trading in Europe; ETF established as standard product for private wealth creation / – The first ETFs in Europe were listed on Xetra on April 11, 2000 / Factsheet from Deutsche Börse shows the development of ETF trading
Deutsche Börse
Exchange Traded Funds, ETFs for short, have been seeing increasing demand from investors for years due to the ongoing trend towards passive investments. Meanwhile, more and more private investors are also using ETFs, for example to build up long-term assets. April 11 marks the 20th anniversary of the launch of the first two products in Europe.

SGX reports market statistics for March 2020
Activities increased across securities and derivatives markets; Continuous COVID-19 news flow drives risk management in all trading sessions
Singapore Exchange (SGX) today released its market statistics for March 2020. As global markets continued to be buffetted by heightened volatility amid the COVID-19 pandemic, investors actively managed their positions on the exchange across asset classes – from equities to foreign exchange (FX) to commodities.

Nasdaq March 2020 Volumes 1Q20 Estimated Revenue Capture and Listing Statistics
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for March 2020, as well as quarterly volumes, number of listings and estimated revenue capture for the quarter ending March 31, 2020 on its investor relations website.

Mandatory PIN procedure for Trading on Behalf (ToB) and for further inquiries
As of 3 August 2020, Eurex will introduce a mandatory PIN authentication procedure for ToB and further inquiries in order to improve the identification of the requesting Exchange Participant. Therefore, the Eurex user attribute PINCode will become mandatory for Eurex with T7 Release 8.1. Thus, newly set up Eurex users require a dedicated PINCode upon T7 Release 8.1. Eurex user set ups before T7 Release 8.1 are permitted without PINCode only until the mandatory PIN procedure is enforced.

LSEG to host annual general meeting virtually; Shareholders at the LSEG have been urged to submit vote electronically, as the UK’s social distancing measures remain firmly in place.
Hayley McDowell – The Trade
The London Stock Exchange Group (LSEG) has informed shareholders that its annual general meeting (AGM) will be held virtually due to the ongoing restrictions on public gatherings.

MSCI postpones entering Kuwait stocks into EM index – Kuwait state news agency
MSCI will postpone entering Kuwaiti companies’ stocks into the its Emerging Markets Index from May to November due to the coronavirus outbreak, state news agency KUNA said on Thursday, citing the Capital Markets Authority.


Fintech Company Survived Ransomware Attack Without Paying Ransom; Finastra, a software company that services banks, opted to take servers offline rather than give in to hackers.
Jordan Robertson – Bloomberg
Hackers silently entered the computer network of London-based banking software maker Finastra in mid-March, as the company was focused on developing emergency plans for operating amid the emerging Covid-19 coronavirus pandemic. Moving with precision and speed, they captured employee passwords and installed backdoors in dozens of servers in critical parts of Finastra’s network.

Zoom Goes From Conferencing App to the Pandemic’s Social Network; Eric Yuan built a tech unicorn in the unflashy business of enterprise communications. Then, suddenly, the world needed it to be something else.
Drake Bennett and Nico Grant – Bloomberg
Like the rest of us, Eric Yuan is taking things day by day right now. The founder and chief executive officer of teleconferencing software company Zoom gets up each morning, after three or four hours’ sleep, and nervously checks the previous day’s capacity numbers to make sure the servers aren’t overwhelmed by traffic. Then he begins the long slog of videoconference calls from his Bay Area home. “It’s too many Zoom meetings,” he says, via Zoom. “I hate that.”

Let FinTech Help Jumpstart The Economy
Nizan Geslevich Packin – Forbes
We are in the middle of a global economic crisis. This crisis, which was triggered in large part by the novel coronavirus, is very different from the 2008 financial crisis in fundamental way—big banks, which were at the epicenter of the 2008 crisis, are now perceived as the safe players in the financial markets that will help us weather the storm. FinTech companies, on the other hand, which are nonbank technology companies that offer financial services, are not perceived quite the same way.

Fintech’s uneven new reality has helped some startups, harmed others
Alex Wilhelm, Natasha Mascarenhas – TechCrunch
Fintech startups were hot news before the COVID-19 era, but the pandemic hasn’t bumped the sector out of the headlines. Companies that were pitching optimistic news a few weeks ago are now cutting staff. Others are facing a surge of users trying to find their financial footing in the face of uncertainty. Some fintech shops are sharing data by the heap, while others refuse to disburse even a morsel. And what about all those credit card startups?


Galaxy Digital reports a $32.9M net loss for the final quarter of 2019
Celia Wan – The Block
Crypto merchant bank Galaxy Digital Holding experienced a $32.9 million net loss in the fourth quarter of 2019, according to the latest financial release from the company. The disclosure comes as its stock continues a downward trend that began with its 2019 high last June.

ErisX Advances Strategic Relationship with Fidelity to Expand Access to Digital Assets
ErisX is expanding safe and regulated access to digital assets through familiar investing tools, by collaborating with Fidelity Digital Asset Services, LLC (Fidelity Digital Assets SM ). Fidelity Digital Assets SM can now access the ErisX spot market, increasing the breadth of accessible liquidity available to Fidelity Digital Assets’ customers.

Crypto Trading Volumes Rise in India After Banking Crisis, COVID-19 Lockdown
Omkar Godbole – Coindesk
MUMBAI — India, the world’s second-most populous country, is increasingly embracing cryptocurrencies amid domestic economic issues and the nationwide coronavirus-related lockdown. It started on March 4 when the country’s highest court quashed a Reserve Bank of India (RBI) order dated April 6, 2018, which prohibited banks from providing services to entities dealing with cryptocurrencies. Activity on exchanges immediately picked up.

Reddit is finally adding cryptocurrency, screenshots show
Tim Copeland – Decrypt
Discussion forum Reddit appears to be building a points system that runs on a blockchain, according to a video posted by one Redditor. Redditor MagoCrypto, who according to his profile is a community manager at Unstoppable Domains—which builds censorship resistant websites—uploaded the video yesterday. It appears to show a beta implementation of the system.

Researchers Are Tapping Blockchain Tools in Fight Against Coronavirus
Danny Nelson – Coindesk
A series of ongoing efforts across universities, medical academia, the private sector and even private citizens are harnessing distributed systems in the fight against COVID-19. The projects are attempting to buttress governmental stay-at-home orders that have frozen billions of people in a global effort to flatten the curve. There’s no known cure for COVID-19 and there will be no vaccine against the coronavirus that causes it for at least a year, leaving medical practitioners, researchers and innovators to try and find ways of mitigating its impact – and blockchain boosters are finding new fronts to pitch in.

Genesis Global Trading suspends credit extension after ‘biggest deleveraging’ it has seen in the crypto market
Yilun Cheng – The Block
Genesis Global Trading – the institutional over-the-counter cryptocurrency trading and lending firm – has suspended credit extension after observing the “biggest de-leveraging” it has ever seen. In the latest episode of The Scoop, Genesis CEO Michael Moro claimed that the cryptocurrency credit market is experiencing an unprecedented level of instability due to disappearing arbitrage opportunities following last month’s volatile price swings.

Bitcoin Miner Maker Canaan Lost $148 Million in 2019
Wolfie Zhao – Coindesk
Chinese bitcoin miner manufacturer Canaan Creative has disclosed it made a net loss of $148.6 million for 2019 on a revenue of $204.3 million, reflecting a declining profitability over the past three years. On Thursday, the firm released its first unaudited earning report since it went public in the U.S. last November. Canaan said it sold computing power totaling 10.5 exhashes per second (EH/s), which accounted for roughly 20 percent of the Bitcoin network’s computing power growth last year.

Global Blockchain Devices Market Forecast, 2020-2030 – Increasing Usage of Cryptocurrency as a Mode of Payment Presents Lucrative Opportunities – ResearchAndMarkets.com
The “Blockchain Devices Market Research Report: By Type, Connectivity, Application, End User – Industry Trends Analysis and Growth Forecast to 2030” report has been added to ResearchAndMarkets.com’s offering. As per the report, in 2019, the global blockchain devices market generated a revenue of $300 million and is projected to reach $23.5 billion by 2030, advancing at a 48.7% CAGR during the forecast period (2020-2030).

Dutch Brokerage Platform Launches Crypto Trading Across Europe
Mohammad Musharraf – Cointelegraph
In response to the growing demand for cryptocurrency trading, Dutch retail brokerage platform BUX launched its commission-free cryptocurrency trading platform BUX Crypto. In a statement published April 8, the company announced that BUX Crypto is now available across 25 European countries.

First Mover: Bitcoin Cash’s Halving Was Dull – Bitcoin’s May Be Much the Same
Bradley Keoun, Omkar Godbole – Coindesk
Bitcoin’s upcoming halving – a once-every-four-years reduction in the supply of new units of the cryptocurrency – has got traders, analysts and gawkers abuzz over the potential price impact. German bank BayernLB predicted last year that bitcoin’s halving could drive its price to $90,000, roughly 12 times the current level. Cryptocurrency markets got a sneak preview on Wednesday as a lesser coin, bitcoin cash, went through its own halving. Spoiler alert: There wasn’t much to see.

BitMEX cedes bitcoin futures market dominance as Binance, Huobi, and OKEx inch ahead
Celia Wan – The Block
BitMEX – the marketplace that once dominated the bitcoin derivatives trading market with its perpetual swaps product – has seen its market share slide since March 12’s market sell-off. Data from analytics provider Skew indicates that the crypto derivatives exchange’s daily BTC futures trading volume (perpetual swaps included) dropped significantly on March 14. This was two days after bitcoin’s price fell nearly 50% at one point. Meanwhile, Huobi, OKEx, and Binance have all surpassed BitMEX in daily trading volume during the same period.

South Korea’s Largest Crypto Unveils New Consensus Algorithm
Jack Martin – Cointelegraph
South Korea’s largest public blockchain project, ICON (ICX), announced its new Loop Fault Tolerance 2.0 (LFT 2.0) consensus algorithm on April 8. The new algorithm claims to make performance improvements in scalability and network bandwidth over the popular Practical Byzantine Fault Tolerance (PBFT) consensus types, without compromising security.

CoinShares Hires WisdomTree Exec as Company Plans Expansion Outside UK
Paddy Baker – Coindesk
CoinShares has hired a former WisdomTree exec to raise international sales as U.K. regulators – the asset manager’s home turf – are set to crack down on crypto financial products. The London-based digital asset manager announced Wednesday it hired Frank Spiteri (pictured), former head of European distribution at WisdomTree – a U.S. financial product provider and $70 billion asset manager – as its new chief revenue officer (CRO).


ABC News: US intelligence warned of China’s spreading contagion in November
Veronica Stracqualursi, CNN
Washington (CNN)US intelligence officials were warning as far back as late November that the novel coronavirus was spreading through China’s Wuhan region and posing a threat to its people and daily life, according to ABC News. The US military’s National Center for Medical Intelligence (NCMI) compiled a November intelligence report in which “analysts concluded it could be a cataclysmic event,” one of the sources of the NCMI’s report told ABC News.

Biden Poised for Democratic Nomination as Sanders Bows Out
Tyler Pager – Bloomberg
Sanders, a democratic socialist, ran on progressive agenda; Pandemic left Democratic presidential campaign in limbo
Joe Biden became the Democratic Party’s presumptive nominee Wednesday after Bernie Sanders ended his presidential run, setting up the former vice president to face President Donald Trump in November.

Federal Medical Aid to States Falls Short, House Report Says
Polly Mosendz, Margaret Newkirk, and Vincent Del Giudice – Bloomberg
Trump says FEMA won’t compete; governors say they are outbid; A global hunt for masks, gowns, gloves, tests and ventilators
The federal government has failed to distribute enough personal protective equipment and medical supplies to states reeling from the coronavirus pandemic, according to a document released Wednesday by the House Committee on Oversight and Reform.

Johnson Improving in Hospital With Extended U.K. Lockdown Likely
Joe Mayes, Alex Morales, and Kitty Donaldson – Bloomberg
Prime minister is sitting up, ‘engaging positively:’ Sunak; U.K. lockdown likely to be extended for weeks: officials
Prime Minister Boris Johnson is heading for a third night in the critical care unit where his condition is improving, as officials draw up plans to extend the lockdown in an bid to control the U.K.’s growing coronavirus crisis.

Sen. Kelly Loeffler and NYSE hubby to liquidate stock amid trading furor
Thornton McEnery – NY Post
Sen. Kelly Loeffler is cashing out to prove that she wasn’t cashing in. The Georgia Republican announced Wednesday that she and her husband, Jeffrey Sprecher, chairman of the New York Stock Exchange, are liquidating their individual stock holdings to combat allegations of illegal insider trading.

Kelly Loeffler says she will stop trading stocks in individual companies
Tia Mitchell, The Atlanta Journal-Constitution
U.S. Sen. Kelly Loeffler says she will no longer invest in stocks for individual companies, an attempt to push past the criticism she faces about transactions made on her behalf during the coronavirus pandemic.

‘Coronabonds’ Could Bail Europe Out, Tie It Together
John Ainger – Bloomberg
Like every other part of the world, Europe is facing an economic crisis, unleashed by a global pandemic. What’s unique in the region is how the crisis has led to a renewed push for a never-before-tried financial tool — now aptly renamed “coronabonds.” While politically divisive, these pooled debt securities could help overcome one of the biggest hurdles faced by the European Union: how to drive more financial integration and risk-sharing across the continent.

US Senate tells members not to use Zoom; Organisation is latest to warn over data security worries on videoconferencing platform
Kiran Stacey and Hannah Murphy – FT
The US Senate has become the latest organisation to tell its members not to use Zoom because of concerns about data security on the video conferencing platform that has boomed in popularity during the coronavirus crisis.

Trump Urged to Limit Patent Rights on Ventilators, Treatments
Susan Decker and Malathi Nayak – Bloomberg
Scientists, lawmakers ask U.S. to consider compulsory licenses; Germany and Canada already limited rights on virus supplies
Medical device makers and scientists around the world are waiving their intellectual property rights to encourage companies to restore depleted stockpiles of emergency equipment and develop new tests and treatments for the Covid-19 pandemic. But it might not be enough.

Republican Senators Want to Help Coal Get U.S. Bailout Money; A group of 17 lawmakers sent a letter calling on the Fed to be “broad and flexible” in its distribution of bailout funds.
Akshat Rathi – Bloomberg
A group of powerful Republican senators wants to make sure the bailout program being administered by BlackRock Inc. on behalf of the federal government won’t leave fossil-fuel companies behind.

Horror in Spain Turns to Anger Against Prime Minister; After a series of missteps, Pedro Sanchez is increasingly being blamed for failing to get a grip on the outbreak.
Todd White, Laura Millan Lombrana, and Rodrigo Orihuela – Bloomberg
Every night at 8 p.m., Spaniards head to their balconies and windows to clap for the healthcare workers risking their lives to save others from the coronavirus pandemic. An hour later, there’s a second wave of noise in some neighbourhoods as people come out with pots and pans.

Durbin, Duckworth want ethanol aid amid pandemic; The biofuel may be controversial to some, but not to Illinois’ U.S. senators, who want a cut of $14 billion set aside to help agriculture in the COVID-19 relief bill.
Greg Hinz – Crain’s Chicago Busines
Winter or summer, good times or bad times, certain things never change in Illinois politics. Like support for ethanol subsidies, which benefit downstate farmers but cut your auto mileage and add to urban pollution.

GOP Senator Bought Stock In PPE Company Same Day As Senate Coronavirus Briefing
Sen. David Perdue (R-Ga.) purchased as much as $65,000 in shares of stock in a company that produces personal protective equipment, the same day the Senate held a private briefing about the COVID-19 pandemic, according to new financial disclosures reported by the Atlanta Journal-Constitution on Monday.


FCA makes emergency fundraisings easier for UK-listed companies; Financial regulator announces measures to help businesses through coronavirus disruption
Matthew Vincent – FT
Britain’s financial regulator is making it easier for London-listed companies to raise emergency funds from shareholders, to help them through the coronavirus disruption.

FCA confirms temporary financial relief for customers impacted by coronavirus
The Financial Conduct Authority (FCA) has today confirmed a package of targeted temporary measures to help people with some of the most commonly used consumer credit products.

Sign up to receive FCA coronavirus updates
We’re launching a daily email round-up of FCA coronavirus (Covid-19) news and publications published on our website. Join the list to receive our daily update, launching soon.

ASIC releases new crowd-sourced funding report
ASIC has released Report 657 Survey of crowd-sourced funding intermediaries: 2018-19 (REP 657). The report outlines findings from ASIC’s second industry survey, which tracks the growth and development of crowd-sourced funding (CSF) in Australia.

ASIC to provide additional time for unlisted entity financial reports
ASIC today announced that it will extend the deadline for unlisted entities to lodge financial reports under Chapters 2M and 7 of the Corporations Act 2001 (the Act) by one month for balance dates from 31 December 2019 to 31 March 2020.

ESMA extends MiFID II/MiFIR transparency review report consultation to 14 June 2020
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has decided, in view of the effects of the ongoing COVID-19 pandemic on stakeholders and market participants, to further extend the response date for the consultation on the MiFID II/MiFIR review report on the transparency regime for non-equity instruments and the trading obligation for derivatives to 14 June 2020.

ESMA sets out supervisory expectations on publication of investment funds periodic reports
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, today issues a public statement directed at Fund Managers concerning their obligations to publish yearly and half-yearly reports.

ESMA is Closed for the Easter Holildays
The European Securities and Markets Authority (ESMA) is closed for the Easter holidays from Wednesday 8 April and reopens on Tuesday 14 April.

Members of the U.S. Subgroup of the Intermarket Surveillance Group (ISG) Announce the Establishment of the Cross-Market Regulation Working Group (CMRWG)
FINRA is issuing this Information Notice to inform members of the existence and role of the Cross-Market Regulation Working Group (CMRWG), which was established under the U.S. Subgroup of the Intermarket Surveillance Group (ISG), to focus on ways to reduce unnecessary regulatory duplication.

FINRA Statement on SEC’s OCIE Risk Alerts for Reg BI and Form CRS
On April 7, 2020, the SEC’s Office of Compliance Inspections and Examinations (OCIE) released Risk Alerts for Reg BI and Form CRS. These Risk Alerts set forth OCIE’s expectations for firms’ compliance with Reg BI and Form CRS and provide broker-dealers with information about the scope and content of OCIE’s initial examinations following the compliance date of June 30, 2020. FINRA will take the same approach as set forth in the SEC Risk Alerts when FINRA examines broker-dealers and their associated persons for compliance with Reg BI and Form CRS. This initial approach will focus primarily on assessing whether firms have made a good faith effort to establish and implement policies and procedures reasonably designed to comply with Reg BI and Form CRS. However, as always, FINRA will take action in the event FINRA observes indications of customer harm or conduct that would have violated current standards (e.g., suitability).

FINRA Highlights Firm Practices from Regulation Best Interest Preparedness Reviews
On June 5, 2019, the U.S. Securities and Exchange Commission (“SEC”) adopted Regulation Best Interest (Reg BI) under the Securities Exchange Act of 1934 (“Exchange Act”).1 Reg BI establishes a “best interest” standard of conduct for broker-dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts. The SEC also adopted new rules and forms to require broker-dealers and investment advisers to provide a brief relationship summary, Form CRS, to retail investors.2 The compliance date for Reg BI and Form CRS is June 30, 2020.

SEC Provides Temporary, Conditional Relief for Business Development
Companies Making Investments in Small and Medium-sized Businesses; SEC Permits Business Development Companies to Issue Additional Securities and Invest Alongside Certain Affiliates In Order to Provide Additional Financial Support to their Portfolio Companies
The Securities and Exchange Commission today announced that it is providing temporary, conditional exemptive relief for business development companies (BDCs) to enable them to make additional investments in small and medium-sized businesses, including those with operations affected by COVID-19. BDCs were created to provide capital to smaller domestic operating companies that otherwise may not be able to readily access the capital markets. Today’s relief will provide additional flexibility for BDCs to issue and sell senior securities in order to provide capital to such companies, and to participate in investments in these companies alongside certain private funds that are affiliated with the BDC. Today’s relief is subject to investor protection conditions, including specific requirements for obtaining an independent evaluation of the issuances’ terms and approval by a majority of a BDC’s independent board members.

In Response to Self-Executing Congressional Mandates, SEC Adopts Offering Reforms for Business Development Companies and Registered Closed-End Funds; Rule Amendments Allow Eligible Funds to Use Offering Methods that Have Long Been Available to Operating Companies
The Securities and Exchange Commission today voted to adopt rule amendments to implement certain provisions of the Small Business Credit Availability Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act relating to business development companies and other closed-end funds.

FCM and IB Members—FinCEN issues a special notice in response to the COVID-19 pandemic and updates list of FATF-identified jurisdictions with AML/CFT deficiencies
On April 3, 2020, the Financial Crimes Enforcement Network (FinCEN) issued a Notice to provide additional information to assist financial institutions in complying with their Bank Secrecy Act (BSA) and anti-money laundering (AML) obligations during the COVID-19 pandemic, including the announcement of a direct contact mechanism financial institutions may use to communicate urgent COVID-19 related issues to FinCEN.

Investing and Trading

Millennials Are Getting Stung by Back-to-Back Global Crises
Catherine Bosley, Max Reyes, and Jeff Green – Bloomberg
‘They’re walking a tight rope’ with ‘cliffs on either side’; Age group has relatively low levels of net worth, real income
Aviv Russ feels like the cards have been stacked against his generation — and he’s not wrong. Russ is a millennial, the infamous cohort of people born between 1981 and 1996. He graduated from Boston-based Emerson College in 2009, just as the Great Recession gutted the jobs market for years.

Deaths Expose Fears for Strength of U.S. Food-Supply Chain
Isis Almeida and Lydia Mulvany – Bloomberg
Three Tyson, JBS employees were reported to have died; That’s fueling worries about supply disruptions as plants idle
Some of the workers who help produce America’s food are starting to die because of the coronavirus. At least three people who worked at plants owned by top U.S. meat packer Tyson Foods Inc. and a local unit of Brazil’s JBS SA were reported to have died from the pandemic. Companies including Cargill Inc., Sanderson Farms Inc. and Perdue Farms Inc. have also reported infections. Smithfield Foods Inc. has 80 cases at a facility in South Dakota.

Uranium enters bull market after Covid-19 hits supply; Prices rebound from March lows after miner Kazatomprom slashes production
Neil Hume – FT
The price of uranium, the radioactive material used to fuel nuclear power stations, has entered a bull market following another big hit to supply.

Muni bond issuers and investors call for rapid relief from the Fed; City of San Francisco complains that coronavirus fears have turned market ‘crazy’
Colby Smith and Patrick Temple-West – FT
State and city governments have joined investors in pushing the US Federal Reserve and the White House for specific measures to support the $4tn municipal bond market, which has been shaken by the recent downturn.

Wall Street calls time on the shale revolution; US fracking has survived dramatic price wars before but the latest shock is different
Derek Brower – FT
A decade of shale drilling has transformed US energy. The country’s oil output has more than doubled, cutting its dependence on foreign supplies, while an abundant supply of cheap natural gas has enticed power plants to switch from dirtier coal and helped lower US carbon emissions.

Gold bugs vindicated by coronavirus rally; Prices have jumped 9% while pandemic has hurt other markets
Henry Sanderson – FT
Kevin Kelly, a former Air Force fighter pilot in Scottsdale, Arizona, has been telling anyone who would listen since 2008 to buy gold and silver in preparation for the next crisis. This year, some have finally taken his advice.

Bank of England to directly finance extra government spending; Move allows ministers to spend more in the short term to combat coronavirus without tapping the gilts market
Chris Giles and Philip Georgiadis – FT
The UK has become the first country to embrace the monetary financing of government to fund the immediate cost of fighting coronavirus, with the Bank of England to directly finance the state’s spending needs on a temporary basis.

Caffeinated conservation: Colombian farmers switch coca for coffee to protect wildlife
Oliver Griffin – Reuters
In a clearing around his modest smallholding, farmer Arcadio Barajas stands before a sea of coffee plants, cloaked in the shadow cast by a wall of verdant forest that covers the San Lucas mountains of northern Colombia.

Exclusive: Wall Street firm dangled up to 175% returns to investors using U.S. aid programs
Lawrence Delevingne – Reuters
A New York investment firm pitched wealthy investors in recent days on a way to make returns of 22% to 175% using U.S. government programs designed to help Americans keep their jobs and boost the coronavirus-stricken economy, according to a marketing document seen by Reuters.

Cresco plans to hire 250 in state for weed shops; The cannabis company is targeting workers laid off from the restaurant and hospitality industries.
John Pletz – Crain’s Chicago Business
As the coronavirus claims jobs by the thousands in restaurants, hotels and retail, marijuana company Cresco Labs is putting out the “help wanted” sign. The company, which just won approval for a shop in River North and has designs on a bigger dispensary in Wrigleyville, says it plans to hire 250 people in Illinois for its retail operations.


British Bank Bosses Rush to Pledge Pay to Coronavirus Charities
Harry Wilson and Stefania Spezzati – Bloomberg
Winters, Rose, Horta-Osorio, Quinn, Staley forgo some money; BOE demanded restraint on bonuses and dividends a week before
Britain’s top bank bosses rushed to pledge big chunks of their pay to coronavirus charities, stung by criticism that they hadn’t made the same sacrifices as investors or front-line staff.

Covalis targets $500m fund to profit from market turmoil ; Sharp swings in stock prices are throwing up opportunities, says hedge fund founder
Laurence Fletcher – FT
London-based investment firm Covalis Capital is planning to raise $500m for a new portfolio to take advantage of sharp stock market moves, the latest fund to spot opportunities in the coronavirus-driven turmoil.

Investors pull EUR22bn from European ETFs in worst month for funds; BlackRock, DWS and UBS among managers with the biggest outflows in March
Chris Flood – FT
Europe’s rapidly expanding exchange traded fund industry suffered its worst month on record in March as stock markets across the region fell sharply in response to the economic disruption caused by the coronavirus pandemic.

JPMorgan temporarily halts small business loans outside federal scheme; Biggest US bank only accepting applications for $350bn Paycheck Protection Program
Laura Noonan and Eric Platt – FT
JPMorgan Chase has temporarily stopped accepting applications for small business loans outside the government’s Paycheck Protection Program, the bank told the Financial Times on Wednesday.

’50 cent’ fund bags $2.6bn from buying protection against collapse; London-based Ruffer cashes in on trades linked to volatility index and other assets
Joe Rennison – FT
The London investment fund nicknamed “50 cent” for purchasing cheap protection against sharp falls in stock prices made roughly $2.6bn on a series of trades in March, offsetting losses stemming from the global sell-off sparked by coronavirus.

US banks fret over fine print in small business rescue plan; Executives fear legal and balance sheet risks from participation in coronavirus response programme
Robert Armstrong in New York and Brendan Greeley – FT
Legal ambiguity and uncertain financing arrangements are continuing to curb US banks’ enthusiasm for taking part in the federal government’s rescue plan for small businesses affected by coronavirus, even as congressional leaders discuss expanding the programme from $350bn to $600bn.

Index Ventures Seeks Opportunities in Crisis With $2 Billion for New Funds; The VC firm thinks battle-tested startups will go on to outperform.
Sarah McBride – Bloomberg
While the startup economy reels from the coronavirus-fueled crisis, deep-pocketed investors still have money to spend. Index Ventures has raised about $2 billion for two new funds, the venture capital firm plans to announce Thursday.

UBS Flags Jump in Profit as Swiss Banks Bow on Dividends
Alfred Liu and Marion Halftermeyer – Bloomberg
UBS, Credit Suisse to defer half of the payouts until the fall; UBS earnings beat estimates, says capital ratios on target
Switzerland’s largest banks bowed to pressure to delay dividends even as UBS Group AG reported a surprise jump in first-quarter profit that suggests lenders so far are benefiting from volatility in the wake of the coronavirus pandemic.

Target-Date Funds Held a Nasty Surprise for Retirees; Portfolios aimed at reducing risk as owners approach retirement still had a lot in stocks.
Sabrina Willmer – Bloomberg
As the bull market soared, investors in America’s 401(k) retirement plans increasingly entrusted their savings to a one-stop kind of investment. All they had to do was pick a fund that corresponded with their retirement date. Presto, they had an age-appropriate mix of stocks and bonds.

Credit Suisse Will Delay Half of Dividend Payments Amid Virus
Bloomberg News
Credit Suisse Group AG said its board will propose to pay half of its 2019 dividends this month and distribute the rest later this year, following a request from Switzerland’s financial regulator.


U.K. Likely to Extend Virus Lockdown by Weeks, Officials Say
Alex Morales and Kitty Donaldson – Bloomberg
Officials say they don’t yet have evidence to relax rules; U.K. partial lock down, with most shops closed since March 23
The U.K. is likely to extend its partial lock down by weeks as it seeks to contain the spread of coronavirus, according to two government officials familiar with the plan.

Saudis Take Big Stakes in European Oil Companies; Move comes as world’s top oil-producing nations attempt to prop up falling crude pricess taken stakes in recent weeks.
David Hodari, Summer Said and Rory Jones – WSJ
Saudi Arabia’s sovereign-wealth fund has amassed stakes worth roughly $1 billion in four major European oil companies, according to people familiar with the matter, buying assets it perceives as undervalued in a market depressed by the coronavirus pandemic and low oil prices.

IMF, World Bank Face Deluge of Aid Requests From Developing World; Scores of countries are asking for bailouts and loans from financial institutions with $1.2 trillion to lend
Josh Zumbrun and David Harrison – WSJ
The health of the global economy comes down to a race between money flooding out of emerging markets amid the coronavirus pandemic and the efforts of the International Monetary Fund and World Bank to pump money back in.

China seeks to contain new coronavirus ‘silent carriers’
China took new measures on Wednesday to try to prevent asymptomatic “silent carriers” of the new coronavirus from causing a second wave of infections, as the country reported another modest rise in confirmed cases.

Germany tightens rules on foreign takeovers
Germany’s government agreed on Wednesday to tighten rules to protect domestic firms from unwanted takeovers by investors from non-European Union countries.


Brexit: UK plan to agree trade deal by December is fantasy, says EU
Daniel Boffey – The Guardian
Boris Johnson’s plan to seal a deal with Brussels on the future relationship with the UK by the end of December has been described as “fantasy land” by EU officials, as a leaked letter revealed the scale of the bloc’s inability to function during the coronavirus pandemic. The European council headquarters, where member states’ positions are coordinated, is only able to hold one daily video conference due to a lack of facilities. The capacity to carry out work is 25% of what it would usually be.

UK economy already flatlining before coronavirus, figures reveal
Phillip Inman – The Guardian
The British economy went into reverse in February as GDP growth declined by 0.1%, even before the onset of the coronavirus pandemic that brought the country to a halt. Analysts said the figures would bear little relation to those for March, which were likely to show a much steeper fall in activity and the economy entering a deep recession. On a three-month rolling basis, the economy grew by 0.1% between December and February.

Lockdown Leaves Britain Dreading When the Money Runs Out
Jill Ward and David Goodman – Bloomberg
For Graham Lancaster, the owner of a real estate agency in the English county of Kent, the alarm will go off in three months. Britain is headed into its peak of the coronavirus outbreak, and companies and households are busy doing the math to see how long they’ve got before the money runs out, just as they are across Europe. The difference is that the U.K. economy, vaunted by the government and Bank of England as flexible and resilient, already entered a new era of uncertainty after the country left the European Union just weeks before the pandemic hit.


Broadway Closure Extended to June on Coronavirus Worries; Many in industry expect it to take even longer before the lights are on again
Charles Passy – WSJ
Broadway theaters will remain dark through June 7 because of the coronavirus pandemic, but industry professionals said it might be weeks, if not months, after that date before shows can open.

Desert Locust Outbreak at Crisis Point, Industry Body Says
Samuel Gebre – Bloomberg
Horn of Africa nations bear brunt of worst plague in decades; Coronavirus pandemic hampers efforts to contain growing swarms
A desert-locust plague in the Horn of Africa has reached critical proportions, according to Gro Intelligence, a privately funded commodity data and analysis service.

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Past JLN Newsletters

CME to permanently close most trading pits

CME to permanently close most trading pits

First Read $40,626/$300,000 (13.5%) Anonymous ++++ Hits & Takes John Lothian & JLN Staff Without fanfare or amplification from its executives, the CME Group shut the books on most -- but not all -- of its floor trading history Tuesday afternoon with the...

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