Hunger and Blackouts Are Just the Start of an Emerging Economy Crisis

Apr 21, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

David Solomon and Goldman Sachs want to help FTX and Sam Bankman-Fried, especially with their issues with the CFTC, the FT reported. This is very nice of Goldman, and timely, as a couple of publications have reported that the CFTC is primed to hold a roundtable about the FTX proposals the CFTC has asked for comments on. I sent in my comments previously for this. FTX will need all the help they can get to push through their request.

You might be one of those investors who only looks at your statements on a quarterly basis. You might not like what you saw for the performance in the first quarter of 2022, whose second half was dominated by fallout from the Russian invasion of Ukraine. There is some consolation that you are not Norway’s $1.3 trillion sovereign wealth fund, which lost $74 billion in the first quarter. So you have that going for you. And then, you might feel better because you were not Bill Ackman, who is reported to have liquidated (puked out?) his $1.1 billion Netflix position yesterday after the streaming service reported a drop in subscribers. He took a $400 million loss, Reuters reported.

BTW, I don’t own any Netflix shares, but I do own some other streaming services shares I won’t mention right now. They all got hammered yesterday on the Netflix news.

It is back to the cold harsh realities of economics at Goldman Sachs with the end of the “free lunch” employees received during the pandemic. Bloomberg reported that the investment bank is transitioning back to “paid-for-meal” service for breakfast and lunch on April 25.

Bank of America is moving to make credit cards from recycled plastic beginning next year, which means your credit card and the nearby park bench will be cousins.

RSM’s Todd Briggs has been named the company’s North American digital assets audit leader effective May 1, 2022, making him responsible for advancing RSM’s go-to-market and audit business strategies to accelerate audit and assurance services to North American clients that engage in digital asset business activities.

The law firm of Vinson & Elkins has promoted three senior business professionals, including Allan Schoenberg to chief communications officer. Schoenberg is a long-time JLN friend who was the person who encouraged me to try out Twitter many years ago, which led to us adopting it and holding two seminars with which he was involved to educate the industry about it. Vinson & Elkins also promoted Aubrey Bishai to chief innovation officer and Randi Revisore to chief business development officer.

Evidently Patrick Young noticed we were driving traffic to his videos as he just invited me to follow him on LinkedIn for Exchange Invest. It is springtime, maybe a new leaf can be turned.

We have hired Nichole Price as a contractor/intern to help me with JLN. She is a student in Missouri and no relation to any Prices I worked for.

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


Qontigo’s chief executive officer Sebastian Ceria sat down with John Lothian News at FIA Boca 2022, where he discussed the inner workings of creating an index, Qontigo’s role in the ecosystem, and emerging trends within the industry.

Watch the video »


Bosses are demanding employees return to the office, but a new survey shows executives are staying at home themselves
Nicholas Gordon – Fortune
Corporate executives are demanding their employees come back to the office—yet a recent survey finds that the bosses are often staying at home themselves. Or, at least, working somewhere else. After two years of remote work from the COVID-19 pandemic, companies are trying to return to in-person work. Corporate leaders, from Goldman Sachs’ David Solomon to JPMorgan’s Jamie Dimon, are trying to use carrots and, increasingly, sticks to get their employees back to their desks. Even President Joe Biden is exhorting workers to start commuting again, saying that “it’s time for Americans to get back to work and fill our great downtowns again” at his State of the Union address in March.

***** “Do as I say, not as I do” has never been a good strategy. ~JJL


Crypto may be less anonymous and more centralized than you think, expert says
Jennifer Schonberger – Yahoo Finance
One of the major draws for cryptocurrencies and bitcoin (BTC-USD) was its anonymity — being able to exchange payments directly with another party without involving a commercial bank or the government. But one expert says the opposite is happening and we’re actually seeing some degree of centralization. “We could end up rather than having decentralization and more anonymity somewhat paradoxically being led to a world where big corporations, and perhaps central banks have even more visibility into our financial transactions,” Eswar Prasad, economics professor for Cornell University and author of “The Future of Money: How the Digital Revolution is Transforming Currencies and Finance,” told Yahoo Finance Live (video above).

*****My crypto-dar totally can tell who trades crypto. ~JJL


How WALL-E Predicted the Future; The 2008 film depicted a dystopia that has proved surprisingly accurate—although we still live on Earth, at least for now.
Alex Webb – Bloomberg
The latest mission from SpaceX, Elon Musk’s space company, confirmed a suspicion I’ve long held: The 2008 Pixar Animation Studios flick WALL-E is the science fiction movie that best predicted our future. The film depicts an Earth rendered uninhabitable by climate change, with the last living humans obese space tourists who communicate solely via video call and rely on meal replacement smoothies for sustenance. There are eerie similarities to much of our current reality, with extreme weather events rising in frequency, obesity rates soaring, Zoom calls taking over our lives, and the rise of meal replacement firms such as Soylent and Huel.

****** What did WALL-E say about trading soybean futures? That would be interesting to know.~JJL

***** “This is called farming! You kids are gonna grow all kinds of plants! Vegetable plants, pizza plants.” (From WALL-E) ~JB


RSM names Todd Briggs North American Digital Assets Audit Leader
RSM US LLP (“RSM”) – the nation’s leading provider of audit, tax and consulting services focused on the middle market – is pleased to announce that audit partner Todd Briggs has been named the firm’s North American digital assets audit leader effective May 1, 2022. In this role, Briggs is responsible for advancing RSM’s go-to-market and audit business strategies to accelerate audit and assurance services to clients throughout North America that engage in digital asset business activities. Briggs will also collaborate with RSM International member firms to serve RSM’s clients globally.

***** Todd has been in the digital asset movement all along and I can’t think of a better guy to lead RSM’s efforts here.~JJL


Vinson & Elkins Promotes Three Senior Business Professionals; Vinson & Elkins has announced the promotion of three senior business professionals: Aubrey Bishai as Chief Innovation Officer, Randi Revisore as Chief Business Development Officer and Allan Schoenberg as Chief Communications Officer.
Vinson & Elkins
These promotions recognize the significant contributions of these individuals and their teams, and their deep commitment to supporting and leading their respective functions while serving as trusted advisors to firm leaders.

***** CCO Allan Schoenberg has a nice ring to it. ~JJL


Wednesday’s Top Three
Our most clicked item on Wednesday was the tweet from former Tudor Investment Corp Co-Founder Peter Borish with the announcement that he and a couple of partners have launched Torsion Technologies, a natural gas-focused CTA. Second was the SEC video Chair Gary Gensler Reflects on One Year at the U.S. Securities and Exchange Commission on YouTube. Third was Looking back at the absolutely unexpected and totally wild origin of 420 from the Los Angeles Times.


MarketsWiki Stats
26,819 pages; 238,254 edits
MarketsWiki Statistics


Lead Stories

Hunger and Blackouts Are Just the Start of an Emerging Economy Crisis
Shawn Donnan, Eric Martin, Andrew Rosati and Jihen Laghmari – Bloomberg
A barrage of shocks is building that’s unlike anything emerging markets have had to confront since the 1990s, when a series of rolling crises sank economies and toppled governments. Turmoil triggered by rising food and energy prices is already gripping countries like Sri Lanka, Egypt, Tunisia and Peru. It risks turning into a broader debt debacle and yet another threat to the world economy’s fragile recovery from the pandemic.

‘Worst crisis since the second world war’: Germany prepares for a Russian gas embargo; Industry and economists say a ban would be catastrophic for the country’s economy, but many companies expect it to happen anyway
Guy Chazan and Joe Miller and Martin Arnold – FT
Rosenthal, one of Germany’s oldest porcelain manufacturers, has seen plenty of disruption in its 140-year history. But nothing has prepared it for this: the threat of a cut-off of natural gas that would bring production of its bone china plates, bowls and vases to an abrupt halt.

Goldman Sachs sought to woo FTX at Caribbean meeting; Solomon offered regulatory help to Bankman-Fried and discussed potential IPO of crypto exchange
Tabby Kinder in Hong Kong and Eva Szalay – FT
Goldman Sachs chief executive David Solomon met billionaire FTX founder Sam Bankman-Fried in March to discuss forging closer ties between the Wall Street bank and the barely three-year-old cryptocurrency exchange valued at $32bn. The meeting, which took place in the Caribbean, according to people familiar with the matter, is the latest sign of the growing influence of crypto companies in the traditional financial services sector.

Hedge funds and brokers take aim at post-Archegos trading reforms; SEC expected to face legal action over rules that would toughen disclosure requirements for swaps
Nicholas Megaw – FT
Hedge funds and finance industry groups are laying the groundwork for litigation that threatens to jeopardise some of the top priorities for reforming markets following the collapse of Archegos, which are being pushed by Gary Gensler, the top US securities regulator. Gensler, chair of the Securities and Exchange Commission, has pointed to the collapse of Archegos Capital Management as evidence of the need for greater transparency in swaps markets. The family office collapsed in early 2021 after using total return swaps to build up a series of highly concentrated bets on share price moves that backfired.

FTX Plan Said to Face CFTC Roundtable Next Month; A proposal from FTX.US on direct derivatives clearing is set to be the focus of public discussion on May 23.
Jesse Hamilton – Coindesk
The FTX proposal to directly clear the trades of its derivatives customers will get an informal hearing on May 23, according to a person familiar with the Commodity Futures Trading Commission’s (CFTC) plan. With the 60-day public comment period coming to an end on May 11, the U.S. regulator will invite representatives of the company and others who have a stake in the decision to a public roundtable, said the person, who spoke on condition of anonymity because the event hasn’t yet been announced. The open discussion will invite public commentary from proponents and critics without carrying the force of a hearing.

Coinbase in Talks to Acquire Turkish Crypto Exchange BtcTurk for About $3.2B: Report
Eliza Gkritsi – Coindesk
Crytpo exchange Coinbase (COIN) is in talks to buy Turkey’s BtcTurk, Bloomberg reported on Thursday, citing a paywalled article by MergerMarket. The deal could be worth around $3.2 billion, MergerMarket’s five sources said, according to Bloomberg. A term sheet has been signed and the company is doing its technical due diligence. At least part of the deal could be a share swap, one of the sources told MergerMarket.

Hong Kong Regulator Isn’t Probing Morgan Stanley Block Trades
Kiuyan Wong – Bloomberg
Hong Kong’s market regulator isn’t investigating Morgan Stanley’s block-trading activities, according to a person familiar with the matter. The Securities and Futures Commission also hasn’t received a formal complaint on the issue from rival Goldman Sachs Group Inc., people familiar said, asking not to be named discussing a private matter.

Goldman Flagged Morgan Stanley Block Trades to H.K.’s SFC: FT
Bloomberg News
Goldman Sachs Group Inc. reported Morgan Stanley to Hong Kong’s financial regulator over a series of block trades by its rival three years ago, the Financial Times reported, citing people familiar with the matter. Goldman alerted the Securities and Futures Commission as part of an “informal” discussion about prices in the stocks of a number of Hong Kong-listed companies that occurred shortly before Morgan Stanley brought blocks of shares to market, FT said. Trades including Wuxi Biologics Cayman Inc. stock are among those flagged and it’s not clear whether the authorities investigated the claim by individuals at Goldman, according to the paper.

Goldman Sachs flagged Morgan Stanley block trades to Hong Kong regulator; Report came during discussion of share price falls that preceded bulk sales by Wall Street bank
Joshua Franklin and Tabby Kinder – FT
Goldman Sachs reported rival Wall Street bank Morgan Stanley to Hong Kong’s financial regulator over a series of block trades, according to people familiar with the matter. Goldman alerted the territory’s Securities and Futures Commission three years ago as part of an “informal” discussion about price drops in the stocks of a small number of Hong Kong-listed companies that occurred shortly before Morgan Stanley brought blocks of shares to market, one of the people said. “It’s noteworthy to file a complaint on a competitor,” the person said.

Plaid Co-Founder Takes Aim at Rickety Banking Tech; Even the flashiest fintechs have to rely on banks to do their financial grunt work. William and Annie Hockey think Column can be their bank of choice.
Peter Rudegeair – WSJ
Lots of tech entrepreneurs who strike gold splurge on trophy homes. William Hockey bought a bank. Northern California National Bank lacks the curb appeal of a mansion in Malibu or Marin—its sole branch abuts a sporting-goods store in a squat suburban strip mall in Chico, Calif. Even so, Mr. Hockey, a co-founder of the $13 billion financial-tech startup Plaid Inc., and his wife, Annie Hockey, plunked down about $50 million for NorCal last year, then gut-renovated its operating systems.

Brokerage Boss Detained as Vietnam Stock Slump Deepens
Nguyen Kieu Giang and Harry Suhartono – Bloomberg
Vietnam is stepping up scrutiny of its financial markets as it seeks to burnish its credentials as a destination for international investment. Tri Viet Securities Chief Executive Officer Do Duc Nam and Louis Holdings Chairman Do Thanh Nhan have become the latest in a string of Vietnamese executives to be detained by police, accused of allegedly manipulating stock prices.

Libor Successor on Cusp of Overtaking Eurodollar Futures Market
Bloomberg Tax
SOFR futures volume almost matched eurodollar activity Tuesday; Options referencing SOFR continue to trail eurodollar options
Eurodollar futures, the world’s most widely-traded interest-rate derivatives, are quickly losing market share as activity shifts from Libor to the rate U.S. regulators favor as its successor.

As Brevan Howard’s Gains Mount, Founder Cuts Back On Trading
Nishant Kumar and Donal Griffin – Bloomberg
The Alan Howard era at Brevan Howard Asset Management appears to have come to an end. The veteran investor, whose macro trading prowess made him a billionaire, is no longer managing a significant amount of money for the firm, according to people with direct knowledge of the matter. While Howard had already transitioned out of the day-to-day running of the firm in 2019, he was still managing his own fund, some client money and about a 10th of the capital in the firm’s main strategy as recently as last year.

China passes futures and derivatives law, effective Aug 1 -state media
China passed a futures and derivatives law on Wednesday, state broadcaster CCTV said, marking a further step by the country to strengthen control and manage risks of its derivatives market. The legislature approved the law following a meeting held by the standing committee of the National People’s Congress (NPC), which will be implemented from Aug. 1, according to Xinhua news agency.

China to launch private pensions in bid to unlock vast savings stockpile; Scheme aims to send funds flowing into country’s financial markets
Thomas Hale and Josephine Cumbo – FT
China has said it will launch an official private pension scheme that aims to push more of the country’s vast household savings into the financial market, as the government grapples with an ageing population. Employees in China will be able to contribute up to Rmb12,000 a year ($1,860) to private schemes, which the government said would be adjusted in line with “economic development” and would benefit from preferential tax treatment.

Fired BNP Boss Accused of Emotional Terror Seeks $4 Million; Alleged rant over a trader’s potential error sparked inquiry; Alami rejects allegations of insulting, aggressive behavior
Gaspard Sebag – Bloomberg
A senior BNP Paribas SA banker who denies terrorizing subordinates on the trading floor is claiming $4 million compensation for unfair dismissal. Omar Alami, the then-head of BNP’s equity derivatives sales for Switzerland, Belgium and Luxembourg, was fired in 2019 after an internal report revealed that a rant at a trader he allegedly called “useless” and “incompetent” in front of colleagues over a potential 800,000 euro ($872,000) mistake wasn’t an isolated outburst. The document includes testimony from employees, with Alami accused of “emotional terrorism” and behavior that left one team member with “a feeling of waterboarding,” Aurelie Fournier, a lawyer for BNP, said at the Paris employment tribunal at a hearing last week.

BOE Taps Banks for Funds to Increase Scrutiny of Crypto Assets; U.K. banking regulator concerned about risks in growing market; Crypto is now bigger than subprime mortgages before crisis
William Shaw – Bloomberg
Britain’s banking regulator will tap the commercial institutions it oversees for funds that will help it hire staff to track risks including the growing crypto market. The Prudential Regulation Authority, which is part of the Bank of England, is planning to raise 321 million pounds ($419 million) from the firms it regulates for the year thorugh February 2023. That’s an 8% increase on the previous year.

Bill Ackman sells entire Netflix stake at roughly $400mn loss; Move comes three months after billionaire took position with pledge to focus on ‘long-term horizon’
Nikou Asgari, James Fontanella-Khan and Anna Nicolaou – FT
Bill Ackman has sold his stake in Netflix at a roughly $400mn loss just months after acquiring the position, in the latest blow to the streaming company that saw its market value collapse on Wednesday following a decline in subscribers.

S&P Revamp of Insurer Ratings Draws Criticism; Firm wants to lower creditworthiness of securities it doesn’t rate. Critics say it is a grab for market share.
Leslie Scism – WSJ
When ratings firms tweak the way they determine the creditworthiness of insurers, it is ordinarily a humdrum affair, awash in technical minutia. S&P Global Markets’ latest effort has managed to anger insurance companies, state insurance regulators and rival ratings firms. It has also accomplished the seemingly impossible: a bipartisan protest of its actions on Capitol Hill.

Aite-Novarica Group Announces the Launch of Financial Services CIO/CTO Advisory Practice; Mitch Wein will head up the firm’s practice dedicated to C-level insights, decision support, and networking for IT leaders in banking, payments providers, and securities/investment firms.
Aite-Novarica Group
Aite-Novarica Group, an advisory firm providing mission-critical insights on technology, regulations, markets, and operations to banks, payments providers, insurers, and securities firms, today announced the launch of its Financial Services CIO/CTO Advisory practice.

The Second Wave of the Russian Oil Shock Is Starting; Declining crude output identified by satellite imagery heralds a longer-lasting increase in oil prices.
Javier Blas – Bloomberg
The lights are dimming over the Russian oil industry – literally. The Kremlin is doing its best to conceal the full impact of formal and informal energy sanctions after its invasion of Ukraine. But Moscow can’t hide from the satellites above Siberia that measure the amount of light its oilfields emit as unwanted gas is burned, or flared: The higher the production, the more flaring and the more light – and vice versa.

Ukraine Invasion

U.S Government Sanctions Russian Crypto Miners after IMF Report
Bob Mason – FX Empire
Government and regulatory scrutiny over cryptos have plagued the crypto markets since December. The war in Ukraine and punitive sanctions on Russia have intensified the level of scrutiny. Governments are monitoring crypto movements and investigating any suspicious activity.

The US has sanctioned crypto-mining firm Bitriver to prevent Russia from bypassing energy export bans
Weilun Soon – Business Insider
The US is adding a cryptocurrency-mining company to its list of sanctions against Russia in an attempt to block avenues of funding for its invasion of Ukraine. The US Treasury said Wednesday it’s lobbing a fresh round of sanctions at some 40 Russian entities and individuals, including bitcoin-mining firm Bitriver and 10 of its subsidiaries in Russia.

Russia Faces New Urgency to Dodge Default, Avoid Wall Street
Jenny Surane, Irene García Pérez and Hannah Levitt – Bloomberg
Russia’s race to avoid default just escalated. The country has been inching closer after JPMorgan Chase & Co., under orders from the U.S. Department of the Treasury, halted interest payments the country owed on two dollar-denominated bonds in recent weeks. The move forced the Russian central bank to make the payments in rubles instead and left it scrambling for ways to sidestep JPMorgan and rival Citigroup Inc. to make good on its debt.

Report: Chinese credit card processor rebuffs Russian banks
China’s credit card processor has refused to work with banks in Russia for fear of being targeted by sanctions over its war on Ukraine, cutting off a possible alternative after Visa and Mastercard stopped serving them, according to the Russian news outlet RBC.

Russia’s propaganda machine is so powerful that many Russians don’t even realize they’re in a disinformation bubble
Erin Snodgrass,Sarah Al-Arshani – Business Insider
Western leaders are urging Russian citizens to access independent and verified news about the ongoing war in Ukraine as Russia ramps up its invasion and corresponding disinformation campaign. On April 6, UK Prime Minister Boris Johnson called on Russians to obtain VPNs in order to access international media outlets. But experts and Russians alike say Johnson’s appeal — and his proposed solution — may not make much of a dent in the course of the war.

Russia defence ministry seeks greater secrecy on military deaths in Ukraine
The Russian defence ministry has proposed that relatives of soldiers killed in Ukraine should have to apply to military rather than civilian authorities for compensation payments, imposing an extra level of secrecy around its war losses.

China Energy Giants in Talks for Shell’s Russian Gas Stake
Bloomberg News
China’s key state-run energy companies are in talks with Shell Plc to buy its stake in a major Russian gas export project, according to people with knowledge of the matter. Cnooc, CNPC and Sinopec Group are in joint discussions with Shell over the company’s 27.5% holding in the Sakhalin-2 liquefied natural gas venture after the European firm said it would exit Russian operations following the Ukraine invasion, said the people, who requested anonymity to discuss private details.

Harvard Law professor says US should liquidate Russia’s foreign reserves and use the money to fund military aid to Ukraine
Jake Epstein – Business Insider
A Harvard Law School professor suggested recently that the US should liquidate Russia’s foreign reserves and use the money to fund Ukrainian military aid. Russia’s central bank may have up to $100 billion in foreign exchange reserves sitting in the US and liquidating the funds may be an “obvious solution” to punishing Russia for its unprovoked war against Ukraine, constitutional law professor Laurence Tribe and Harvard Law student Jeremy Lewin wrote in a New York Times op-ed published on Friday.

Mariupol Could Be the Thermopylae of the 21st Century; The strategic port city in eastern Ukraine could join the list of the most tragic but courageous last stands.
Andreas Kluth – Bloomberg
Remember Azovstal. Some phrase like that could soon take the part of “Remember the Alamo” in Ukraine’s heroic war of self-defense against Russia. Azovstal is a giant steel plant in Mariupol, the city in eastern Ukraine that Russian forces are pounding into submission and, in effect, extinction. In it, a couple of thousand Ukrainian troops, sheltering a smaller number of civilians, are holding out under constant Russian bombing and attacks.

Russian Oil Flows, but Increasingly Under the Radar; An opaque market is forming to obscure the origin of Russia’s oil as more tankers are loaded without a precise destination
Anna Hirtenstein – WSJ
Russia ramped up oil shipments to key customers in recent weeks, defying its pariah status in world energy markets. One increasingly popular method for delivery: tankers marked “destination unknown.” Oil exports from Russian ports bound for European Union member states, which historically have been the biggest buyers of Russian crude, have risen to an average of 1.6 million barrels a day so far in April, according to Exports had dropped to 1.3 million a day in March following the Ukraine invasion. Similar data from Kpler, another commodities data provider, showed flows rose to 1.3 million a day in April from 1 million in mid-March.

Exchanges, OTC and Clearing

Position Limit and Large Trader Reporting Requirements in
Connection with the Initial Listing of Tuesday and Thursday Options
on E-mini® Standard and Poor’s 500 Stock Price Index Futures
CME Group
In connection with the initial listing of the Chicago Mercantile Exchange Inc. (“CME”) Tuesday and Thursday Options on E-mini Standard and Poor’s 500 Stock Price Index Futures (Week 1 through Week 5) contracts (collectively the “contracts”) on trade date Monday, April 25, 2022 (see SER-8963 published on March 31, 2022), please note below and in Exhibit B of CME Submission No. 22-100 the corresponding all-month position limits (Rule 559), aggregation allocations (Rule 559.D) and reportable levels (Rule 561) for the contracts.

Change to the List of Volatility Control Mechanism (VCM) Securities
Exchange Participants should note that, subject to the removal of the stock listed below from the relevant Hang Seng Family of Indexes, the following change will be made to the list of VCM securities with effect from 28 April 2022.

Hong Kong Investor Identification Regime (HKIDR) – End-To-End (E2e) Test And Update Of File Interface Specification
Reference is made to the Exchange circular (Ref. No.: CT/142/21) regarding the implementation of the HKIDR.
E2E Test Session
To allow Relevant Regulated Intermediaries (RRIs)2 to get ready for the implementation of the HKIDR, an E2E Test Session will start between mid-May 2022 and June 2022 and the exact start date of the E2E Test Session will be further announced in mid-April 2022. It is mandatory for all Exchange Participants (EPs) and other RRIs to participate in the E2E Test Session.

KB Securities Selects ICE Index for KB Leverage FANG Plus ETN(H)
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced that KB Securities has selected the NYSE FANG+® Daily 2x Leveraged Index (Interest Rate Adjusted Total Return) for its KB Leverage FANG Plus ETN(H).

FTSE Russell and JPX launch new net zero climate indices: FTSE JPX Net Zero Japan Index Series
New index series consists of the FTSE JPX Net Zero Japan 500 Index and FTSE JPX Net Zero Japan 200 Index and will achieve alignment with net zero emissions pathways by 2050
The indices incorporate multiple dimensions of climate exposure including carbon emissions, fossil fuel reserves, green revenues, climate governance, and carbon performance
Launch underpins FTSE Russell and JPXI partnership to design financial market infrastructure initiatives to promote global sustainable investment
The FTSE JPX Net Zero Japan Index Series adheres to the EU’s Climate Transition Benchmark (CTB) standards, enabling investors to reallocate capital based on the climate credentials and carbon performance of the constituent companies in the index.


Financial Literacy for Gen Z by Gen Z: Apex Fintech Solutions and Zogo Team Up to Take On Investor Education; Strategic alliance provides Apex clients with resources to deliver 450+ specialized bite-sized modules presented in easy to digest lessons
Apex Fintech Solutions Inc. (
Apex Fintech Solutions Inc. (“Apex”), the “fintech for fintechs,” is partnering with Zogo Finance (“Zogo”), the next-generation financial education app, to transform the way investors learn on their own. Originally created by Bolun Li when he was a 19-year-old student, Zogo takes a Gen Z approach to covering a wide range of topics including investing strategies, e-sports, healthcare and insurance—where users can earn gift cards and rewards as they learn. Now the modules will start rolling out even more broadly to investors nationwide through seamless integration into fintech platforms like Fintron and UNest (mutual clients of Apex and Zogo).

OpenAI Project Risks Bias Without More Scrutiny; A test of the high-profile technology Dall-E delivered images that perpetuated gender stereotypes. Scientists say making more data public could help explain why.
Parmy Olson – Bloomberg
The artificial intelligence research company OpenAI LLP wowed the public earlier this month with a platform that appeared to produce whimsical illustrations in response to text commands. Called Dall-E, a combined homage to the Disney robot Wall-E and surrealist artist Salvador Dali, the system has the ability to generate images was limited only by users’ imaginations.

Capitolis makes key hires in preparation for its next stage of growth; Following a successful $110 million Series D funding round, the firm’s investment in its employees reflects its continued momentum.
Wesley Bray – The Trade
Foreign exchange novation platform provider Capitolis has expanded its employee base by 50% compared to the same period last year, as it continues to grow and scale to meet customer demands and ongoing innovation opportunities. This investment in its employees reflects Capitolis’ continued momentum following a recent $110 million Series D funding round, following its successful $90 million Series C funding round last year.


Wall Street eyes cybersecurity, with Goldman Sachs announcing $125 million investment
Beatrice Peterson – ABC News
Growing concerns over cybersecurity vulnerabilities in the United States are prompting record investments from firms to protect critical industries.
FBI Director Christopher Wray said last month that intelligence officials were “concerned” about the possibility of Russian cyberattacks against critical U.S. infrastructure in the wake of Russia’s war with Ukraine.

The Top 25 Women Leaders in Cybersecurity of 2022
The Software Report
The Software Report is pleased to announce The Top 25 Women Leaders in Cybersecurity of 2022. Cybersecurity has grown to become essential across all industries, which means the women that comprise this year’s list, some of the most highly-skilled professionals in the cybersecurity industry, are more important than ever. A majority of this year’s awardees directly serve cybersecurity companies, dedicating themselves to protecting the valuable online assets of their clients in an increasingly digital world.

Texas launches regional SOC for local cybersecurity support
Security Magazine
The Texas Department of Information Resources (DIR) and San Angelo-based Angelo State University (ASU) will partner to operate the pilot Regional Security Operations Center (RSOC), which aims to provide Texas local governments with cybersecurity support.

NATO taps FS-ISAC to lead cybersecurity exercises
Carter Pape – American Banker
The U.S. financial services industry’s largest cybersecurity consortium is leading cyberdefense simulations this week on behalf of the North Atlantic Treaty Organization in what it bills as “live-fire” exercises designed to emulate realistic cyber incidents.


Morgan Stanley Says Crypto Could Become More Widely Used as Currency
Will Canny – Coindesk
Few people use cryptocurrencies to pay for everyday goods because transaction fees are high and merchants don’t accept crypto in payment, but that is changing, Morgan Stanley said in a research report Thursday. The bank notes that payments company Strike recently announced a partnership with point-of-sales supplier NCR and payments firm Blackhawk, which means a large number of U.S. stores and restaurants will soon be able to accept bitcoin payments. Strike’s planned payment system uses the Lighting Network, it added.

I Spoke to the Experts. Bitcoin Isn’t Going to Change.
Peter Coy – NY Times
The people behind Bitcoin, the No. 1 cryptocurrency by market value (and renown), are under heavy pressure to reduce its carbon footprint — the planet-warming emissions from burning fossil fuels for electricity to run the network’s computations, known as mining. I spoke with people on both sides of the argument and came away thinking that Bitcoin is highly unlikely to change its fundamental way of operating.

Coinbase NFT Marketplace Goes Live. Can It Rival OpenSea?
Eli Tan – Coindesk
Crypto exchange Coinbase (COIN) launched the beta version of its long-awaited non-fungible token (NFT) marketplace on Wednesday, allowing a small group of users from a wait-list of 3 million to use the platform for the first time. The marketplace, which was first announced last October, will support Ethereum-based NFT trading, with a social-media spin that could distinguish it from competitors.

First Trust Launches First Trust Indxx Metaverse ETF; An index-tracking ETF that provides exposure to companies that comprise the metaverse industry
Business Wire
First Trust Advisors L.P. (“First Trust”), a leading exchange-traded fund (“ETF”) provider and asset manager, announced today that it has launched a new ETF, the First Trust Indxx Metaverse ETF (Nasdaq: ARVR) (the “fund”). The fund seeks investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of an index called the Indxx Metaverse Index (the “index”) which is designed to track the performance of companies that are involved in offering technologies that assist in creating the Metaverse.

Fidelity Bulks Up Its Thematic Lineup With Crypto and Metaverse ETFs; FMET, FDIG debut into crowded field of crypto-focused funds; Fidelity also launching metaverse ‘experience’ for new traders
Katherine Greifeld and Isabelle Lee – Bloomberg
Fidelity Investments is launching a pair of crypto-focused exchange-traded funds in a bid to grab flows from rivals that have swooped into the nascent space. The Fidelity Metaverse ETF (ticker FMET) and the Fidelity Crypto Industry and Digital Payments ETF (FDIG) will begin trading Thursday. FMET will primarily invest in companies involved in building out the “future state of the Internet.” FDIG will track blockchain and digital payment processing companies, according to a statement.


Oil Trade Group Drafts Carbon-Tax Proposal That Could Raise Prices at the Pump; Some API members want to delay proposal until after midterm elections, fearing it could alienate Republican lawmakers
Timothy Puko, Ted Mann – WSJ
The nation’s biggest oil industry trade group has drafted a proposal urging Congress to adopt a carbon tax, which would put a surcharge on gasoline and other fossil fuels to discourage greenhouse-gas emissions. The draft proposal was approved by the American Petroleum Institute’s climate committee last month, according to a document reviewed by The Wall Street Journal. The measure must still be approved by the group’s executive committee.

Yellen, Ukraine official walk out of Russia’s G-20 remarks
Fatima Hussein – AP
Treasury Secretary Janet Yellen and Ukraine’s Finance Minister Serhiy Marchenko walked out of a Group of 20 meeting Wednesday as Russia’s representative started talking. Several finance ministers and central bank governors also left the room, according an official familiar with the meetings, who spoke on the condition of anonymity because the event was not public. Some ministers and central bank governors who attended the meeting virtually turned their cameras off when Russian President Vladimir Putin’s representative spoke, the person said.

Hedge Fund Bets Against a SPAC Tied to Trump After Truth Social ‘Disaster’
Jill R. Shah – Bloomberg
Hedge fund Kerrisdale Capital Management is betting against the shell company tied to Donald Trump, wagering that it will fail to get regulatory approval to merge with his media company and take it public. Shares of Digital World Acquisition Corp., a special-purpose acquisition company, have more room to fall, according to a report Wednesday from Kerrisdale announcing its short position. DWAC gave misleading statements in registration documents and the high-profile nature of its potential combination with the former president’s company, Trump Media & Technology Group, is an “ideal way” for regulators to send a message to the broader industry, it said.

Swiss to keep mum on Russian commodity deal sanctions rulings
Switzerland will maintain tight non-disclosure rules as part of its Russian sanctions package and keep conversations with trading houses on their purchases of Russian crude confidential, the government agency in charge of sanctions said on Wednesday. The State Secretariat for Economic Affairs (SECO) had said on Tuesday it would decide case by case whether to curtail traders’ purchases from Russia’s state-controlled companies under European Union sanctions Bern has adopted that limit commodity deals to those deemed “strictly necessary” from mid-May.

Sweden Plans to Speed Up NATO Analysis to Keep Pace With Finland
Niclas Rolander – Bloomberg
Sweden’s Foreign Minister Ann Linde said political parties deliberating a potential application for NATO membership may speed up the process, initially planned to conclude by the end of next month. The talks should be finalized by May 13, Linde said in an interview with Swedish public radio’s Ekot.

China looks to learn from Russian failures in Ukraine
David Rising – AP
With its ground troops forced to pull back in Ukraine and regroup, and its Black Sea flagship sunk, Russia’s military failings are mounting. No country is paying closer attention than China to how a smaller and outgunned force has badly bloodied what was thought to be one of the world’s most powerful armies.


Musk to Judge in Go-Private Tweet Fight: Don’t Muzzle Me
Joel Rosenblatt – Bloomberg
Tesla Inc. chief executive officer Elon Musk told a judge he shouldn’t be prohibited from talking about his fight with the U.S. Securities and Exchange Commission, as shareholders suing him have requested.

SEC Charges Stericycle with Bribery Schemes in Latin America
The Securities and Exchange Commission today announced charges against Stericycle, Inc. for violations of the Foreign Corrupt Practices Act (FCPA) arising out of bribery schemes that took place in Argentina, Brazil, and Mexico. The company has agreed to pay more than $84 million to settle parallel civil and criminal charges related to these schemes, including nearly $28.2 million to settle the SEC’s charges.

SEC Charges Israeli Corporate Insider and Friend with Insider Trading
The Securities and Exchange Commission today charged Israeli citizens Moshe Strugano and Rinat Gazit with insider trading ahead of the January 24, 2018 public announcement that Ormat Technologies, Inc. had signed a definitive agreement to acquire U.S. Geothermal Inc., a geothermal energy company based in Boise, Idaho.

FCA secures £2,000,000 account forfeiture order
QPay Europe Limited, which claims to be a fintech start up offering due diligence and underwriting services, has consented to a court order to give up £2,000,000 held in its name following proceedings brought by the Financial Conduct Authority (FCA) under the Proceeds of Crime Act in the Westminster Magistrates’ Court.

Supervisory Focus Points and Actions in Light of the Losses Resulting from the Default of a U.S. Investment Fund
Financial Services Agency
The Financial Services Agency (“FSA”) worked closely with regulators in the U.K., U.S., and other jurisdictions to analyze the causes that led to Archegos’ failure and the deficiencies in the risk management and governance of firms that were counterparties to Archegos. This letter sets out the observations on the firms’ practices that were identified through these monitoring and analysis, as well as the FSA’s future actions.
The identified issues are not necessarily unique to this case, but can be applied broadly to transactions with hedge funds or family offices and other relevant transactions. It is of great importance to draw lessons from the shortcomings of the firms’ practices observed in this incident in order to prevent similar cases from happening in the future.

SEBI signs MoU with the Manitoba Securities Commission, Canada
The Securities and Exchange Board of India (SEBI) and the Manitoba Securities Commission (MSC) have entered into a bilateral Memorandum of Understanding (MoU) for mutual co-operation, exchange of information and technical assistance.
MSC is SEBI’s counterpart in the province of Manitoba, Canada. The MoU has been signed by Ms. Madhabi Puri Buch, Chairperson, SEBI and Mr. David Cheop,
Chief Executive Officer and Chairperson, MSC. The MoU took effect on April 20, 2022.

Save the Date: Target-Date Funds Explained
Planning to retire in 2040? There’s a fund for that. Looking to retire in 2055? There is a fund for that, too.
When investing in your 401(k) or other retirement savings account, target-date funds, also known as life-cycle funds, are one popular option. You pick a fund that is dated around when you plan to retire, and that fund promises to rebalance—that is, shift the risk profile of its investments—as you approach that date.

Investing and Trading

Ackman gives up on Netflix, taking $400 million loss as shares tumble
Svea Herbst-Bayliss – Reuters
Billionaire investor William Ackman liquidated a $1.1 billion bet on Netflix on Wednesday, locking in a loss of more than $400 million as the streaming service’s stock plunged following news that it lost subscribers for the first time in a decade.

Mining Giants Struggle Despite Commodities Price Boom
Thomas Biesheuvel – Bloomberg
The world’s biggest miners had a tough start to the year, struggling to hit production goals and keep costs under control in the face of Covid-19 disruptions and global inflationary pressures. Fresh from record profits, and with many commodities still trading at or near all-time highs, the economic recovery from the global pandemic has been a boom time for the mining industry.

Environmental, Social and Corporate Governance

Bank of America to Make Its Credit Cards From Recycled Plastic
Katherine Doherty – Bloomberg
Bank of America Corp. said it will make all of its plastic credit and debit cards from recycled material beginning next year. All of the cards, which will feature a recycling logo, will be manufactured using at least 80% recycled plastic, Bank of America said in a statement Thursday. The Charlotte, North Carolina-based company said it’s the first U.S.-based bank to make the change across all its debit and credit cards, with the transition intended to reduce greenhouse-gas emissions and energy and water use.

Stripe’s Frontier Fund Shows How Quickly Carbon Removal Has Evolved; The technologies it fosters treat capturing carbon as a societal, not just an industry, problem.
Nathaniel Bullard – Bloomberg
Last week, a new fund went public with its plans to support carbon dioxide removal technologies. The Frontier Fund was set up by payments company Stripe Inc. and is supported by Shopify Inc., both regular backers of innovative approaches to removing atmospheric CO2. Also funding the effort are bigger tech players Alphabet Inc. and Meta Platforms Inc. and the management consultancy McKinsey & Co. Inc.

Hedge Funds’ Disputed ESG Strategy Gets a Thumbs Down From MSCI; MSCI finds no proof that short-selling raises cost of capital; Hedge funds have criticized lack of clear ESG shorting rules
Lisa Pham – Bloomberg
The hedge-fund industry’s claim that short-selling is an effective way to do environmental, social and governance investing is questionable on several levels, according to MSCI Inc.

States Can Spend $6.4 Billion of Infrastructure Fund to Limit Carbon; Electric-vehicle charging stations, bike trails, energy-efficient streetlights and other projects included in transportation guidelines
Katy Stech Ferek – WSJ
State governments will be able to spend $6.4 billion on electric-vehicle charging stations, bike trails, energy-efficient streetlights and other projects under new guidelines issued by the Biden administration for use of federal infrastructure money aimed at reducing carbon emissions.

Meatpacker JBS comes under fire over 50% emissions rise; Environmental study finds Brazilian company’s carbon footprint is larger than all of Italy
Bryan Harris – FT
The carbon emissions of JBS, the world’s largest meatpacking company, soared more than 50 per cent in the past five years, according to new research that lays bare the challenge of reducing greenhouse gases in the global food industry.


FTSE Russell and JPX launch new net zero climate indices: FTSE JPX Net Zero Japan Index Series
FTSE Russell
FTSE Russell, a leading global index, data and analytics provider, JPX Market Innovation & Research, Inc. (“JPXI”) a wholly owned subsidiary of Japan Exchange Group (JPX), and JPX today announced the launch of the FTSE JPX Net Zero Japan Index Series. The new index series consists of two indices, FTSE JPX Net Zero Japan 500 Index and FTSE JPX Net Zero Japan 200 Index. Both adhere to the EU’s Climate Transition Benchmark (CTB) standards, which enables investors to reallocate capital based on the climate credentials and carbon performance of the constituent companies in the index.

Commodities Broker Marex Posts Record Profit on Market Boom; Prices of energy, metals, softs and grains soared last year; London brokerage Marex shelved IPO plans instead buying rivals
Archie Hunter – Bloomberg
London commodities brokerage Marex Group posted a record profit last year as prices for energy, metals and agricultural products soared as economies reopened following pandemic lockdowns. The commodities boom has been a boon for trading houses which thrive on volatility, while brokers who make markets and execute trades also flourished last year. That volatility has soared even higher since Russia’s invasion of Ukraine, pressuring brokers and their clients in the form of margin calls that can abruptly draw on cash reserves.

Reed Hastings, Hedge Funds Dealt Blow After Netflix Miss; Netflix co-founder’s wealth is down 46% so far this year; Company unexpectedly shed subscribers and expects to lose more
Jill R Shah and Hema Parmar – Bloomberg
Reed Hastings’s fortune was already on the decline before Netflix Inc., the streaming giant he co-founded, reported dismal first-quarter earnings. After Netflix shares plunged 35% on Wednesday, his wealth wipeout ranks among the biggest in the world, according to the Bloomberg Billionaires Index.

Goldman Sachs Scraps Free Lunch, Marking End of Pandemic Office Perk
Paulina Cachero – Bloomberg
The days of free lunch are over at Goldman Sachs Group Inc. The investment bank said Tuesday that it’s transitioning back to “paid-for-meal” service for breakfast and lunch on April 25, scrapping a pandemic perk. Goldman also said it was boosting the stipend for meals “out of hours” to $30 from $25, according to a memo obtained by Bloomberg.

Goldman Sachs Joins a Growing List of U.S. Banks Raising Sterling Debt; Bank of America, Wells Fargo came to market earlier this week; U.S. lenders are seizing on favorable pound borrowing costs
Colin Keatinge and Tasos Vossos – Bloomberg
U.S. banking giant Goldman Sachs Group Inc. is following Bank of America Corp. and Wells Fargo & Co. in raising sterling debt just days after reporting earnings. The New York-based bank is offering notes due in 7.5 years, according to a person familiar with the matter, who isn’t authorized to speak publicly and asked not to be named. It’s the lender’s first sale in the currency since June, when it raised 900 million pounds ($1.18 billion), according to data compiled by Bloomberg.

David Einhorn’s Greenlight Capital has closed its London trading operations; The hedge fund will still maintain a presence in London and will continue to produce research analysis focused on European markets.
Will Canny – The Trade
Greenlight Capital, the firm founded by renowned hedge fund manager David Einhorn, has closed its London trading operations, the firm said in a quarterly update letter to investors, seen by The TRADE. The fund’s London-based subsidiary ceased trading operations at the end of the quarter, the letter said. The firm will continue to have a presence in London and to produce research analysis focused on European markets, it added.

Bank of America appoints new FICC e-trading and market structure lead; Incoming executive spent the last 10 months at Bloomberg, after nearly nine years as a financial journalist.
Annabel Smith – The Trade
Bank of America has appointed a new vice president of electronic trading and market structure for its fixed income, currency and commodities (FICC) business. Robert Mackenzie Smith joined the bank in April to lead its market structure and electronic trading content for FICC, according to his social media page.

Wellness Exchange

Shanghai allows 4 million out of homes as virus rules ease
Associated Press
Shanghai allowed 4 million more people out of their homes Wednesday as anti-virus controls that shut down China’s biggest city eased, while the International Monetary Fund cut its forecast of Chinese economic growth and warned the global flow of industrial goods might be disrupted.

Shanghai’s Covid Lockdown Leads to Logistics Disarray, With Quarantined Truckers, Piled-Up Containers; Transport of goods into one of China’s biggest manufacturing and export hubs has almost ground to a halt
Liza Lin and Yang Jie – WSJ
Zhu Zhongtao, a Shanghai-based truck driver, was hauling a load of supplies urgently needed by a local manufacturer in a nearby city when he was unexpectedly sent to quarantine. Driving from Shanghai, the center of China’s current Covid-19 outbreak, Mr. Zhu was stopped at a toll gate when trying to enter a county in nearby Wenzhou, said Zhou Chenguang, Mr. Zhu’s employer. There, he was asked to show three different health declarations to prove he was Covid-free and hadn’t passed virus hot spots in the past two weeks. He also underwent an on-site Covid test and his result was negative. The driver had met all the requirements to enter the county, Mr. Zhou said.

How to Stop Superspreader Events Without Masks
Donald K. Milton, Edward A. Nardell and David Michaels – NY Times
At every stage of the pandemic, a disproportionate number of infections have been traced to a relatively small number of gatherings, also known as superspreader events. The recent Gridiron dinner, after which over 70 people tested positive including members of the Biden administration, is just the latest example.


China Buys Cheap Russian Coking Coal as World Shuns Moscow
Bloomberg News
China more than doubled imports of steel-making coal from Russia in March, procuring the fuel at a discount as other nations move to ban deliveries due to the war in Ukraine.

How Does Japan Intervene in Currency Markets?
Lily Nonomiya – Bloomberg
The yen’s rapid decline against the U.S. dollar this year has traders and analysts speculating that Japan might intervene directly to support its currency for the first time in more than two decades. Stepping in to buy yen and sell dollars would be an extraordinary move for a country that’s long been criticized by trading partners for tolerating or even encouraging a weak yen to benefit its exporters.

Myanmar Exempts Most Foreigners From Currency Conversion Rule; Exemption applies to local carriers, special economic zones; Junta to approve kyat-rupee conversion along Indian border
Khine Lin Kyaw – Bloomberg
Myanmar’s military government exempted most overseas nationals and entities from compulsorily converting foreign currencies into kyat after international push back over the move.

Cnooc shares soar on Shanghai debut after US delisting on security grounds; Chinese offshore oil and gas producer completes China’s biggest IPO this year
William Langley, Thomas Hale and Hudson Lockett – FT
Shares in China National Offshore Oil Corporation jumped as much as 44 per cent on their Shanghai debut as the oil and gas producer completed the country’s biggest stock market listing of the year after being forced to delist in the US over national security concerns.

Israel Adds Yuan to $206 Billion Reserves in ‘Philosophy’ Change
Daniel Avis – Bloomberg
Israel’s central bank has made the biggest changes to its allocation of reserves in over a decade, adding the Chinese yuan alongside three other currencies to a stockpile that last year exceeded $200 billion for the first time ever. Starting this year, the currency mix will expand from the trio of the U.S. dollar, the euro and the British pound to include the Canadian and Australian dollars as well as the yen and the yuan, which is also known as the renminbi. The additions mark a change in the Bank of Israel’s “whole investment guidelines and philosophy,” Deputy Governor Andrew Abir said in an interview.

‘Panicked’ Russians withdrew $9.8 billion in FX from banks in March
Russian households withdrew foreign currency worth $9.8 billion from their accounts in March and banks cut new corporate lending by around one third, the central bank said on Wednesday, as western sanctions over events in Ukraine spooked consumers.

Norway’s Sovereign Wealth Fund Lost $74 Billion in First Quarter
Lars Erik Taraldsen and Stephen Treloar – Bloomberg
Norway’s $1.3 trillion sovereign wealth fund, the world’s biggest, lost $74 billion in the first quarter after Russia’s invasion of Ukraine and lockdowns in China roiled markets. The Oslo-based fund lost 5.2% on stocks, where it has the bulk of its investments, and 4.8% on fixed income, according to a statement on Thursday. Its unlisted real-estate holdings gained 4.1%, though they account for less than 3% of its investments.


Freezing Order — Bill Browder on the trail of dirty Russian money; The financier-turned-activist’s thriller-like memoir has a fresh urgency in the face of Putin’s war on Ukraine
Andrew Jack – FT
Bill Browder made a fortune in the “wild east” of 1990s Moscow through identifying and investing in undervalued companies, using smart researchers to spot diversion of funds, generating publicity and pressure on boards to reform and drive up the share price, and then selling.

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The Spread

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