Hits & Takes
John Lothian & JLN Staff
Tomorrow is the one year anniversary of my mother’s passing. It happened right in the middle of FIA EXPO, the morning of the last day of the conference. It was a tough day. As I have written before, my nephew Andrew Lothian, who sings under the name Wallace Tallman, wrote a song about his grandmother titled “Dear Marjorie.” He not only wrote and sang the song, but also produced a lyric video about it posted to YouTube. He also wrote this letter about the song on his website.
I am so moved by Andrew’s growth as a songwriter and musician that I have decided to create a music label and publishing company to help his career. The plan includes involving other next generation Lothians in the effort as well.
You will hear more about this in the future. Another reason I am interested in music is that it has a future as an asset class for the market. I want to see how this will work and being part of it will make it easier to understand.
With Nvidia shares looking to extend gains for a 10th consecutive session, their longest streak of advances since a record-setting dash in December of 2016, the Financial Times list of “Best books of 2023 – Technology” by John Thornhill, who selected his must-read titles, is well timed.
Bloomberg’s Tracy Alloway’s Odd Lots column has a story titled “The Stock Market Is Starting to Price In the Impact of a Stronger El Nino.” Just what we needed.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The A4S Summit 2023 is a virtual global gathering to catalyze action on sustainability by the finance and accounting community. Taking place November 27, 2023, ahead of COP 28, the A4S Summit brings together leaders in finance to explore the trends and practical actions that can be taken to build a resilient, sustainable economy. All sessions are available on demand shortly after broadcast for all registered participants. View the agenda and register here. ~SAED
Our most read stories yesterday on JLN Options were:
ETF to Cover $8 Billion in Short Options and the Market Knows It from Bloomberg.
Inside the super hedge funds that have Wall Street running scared from The Times.
Cboe Digital to Launch Margined Bitcoin and Ether Futures on January 11, 2024, Backed by Crypto and Traditional Finance Players from Cboe. ~JB
Subscribe to the JLN Options Newsletter HERE (it’s free).
|To reinforce the function of margin, that is to “protect investors,” Japan Securities Clearing Corporation (JSCC), a group entity of Japan Exchange Group (JPX), that handles clearing of JPX’s derivatives market, has changed its Margin calculation methodology from “SPAN method” to “VaR method” on November 6, 2023
Under the VaR Margin calculation method, there are 2 types of calculation methods, Historical Simulation Method (HS-VaR Method) and Alternative Simulation Method (AS-VaR Method).
HS-VaR method is used for Index Futures/Options (such as our flagship contract Nikkei 225 futures, excluding dividends index futures), Japanese Government Bond (JGB) Futures/Options, Interest Rate Futures (3-Month TONA Futures) listed on Osaka Exchange (OSE), and TOCOM’s Electricity and LNG Futures contracts. On the other hand, AS-VaR method is used for OSE’s Dividends index futures, Precious Metals Futures/Options, Rubber Futures, Agricultural Futures and TOCOM’s Energy Futures (other than Electricity/LNG Futures).
* In JST: JST minus 15 hours = Chicago time.
Chata.ai CEO Kelly Cherniwchan Unveils Chat.ai for Trading at FIA Expo 2023
EXPO 2023 was all about AI, and Kelly Cherniwchan, the CEO of chata.ai, took time away from making his pitch at FIA’s Innovators Pavilion to speak to John Lothian News about his firm and how AI is transforming the trading world.
The Block sold to Foresight Ventures in deal worth $70mn; Singapore venture capital group takes 80% stake in crypto media group
Scott Chipolina and Nikou Asgari – Financial Times
The crypto media group The Block has been sold to venture capital group Foresight Ventures, securing its future after the collapse of FTX revealed it had relied on loans from Sam Bankman-Fried. Singapore-based Foresight said on Monday it would take a majority stake in The Block in a deal that values the US media group at $70mn. The stake had been held by Michael McCaffrey, who resigned as chief executive of The Block last December when it emerged he had borrowed $43mn in undisclosed loans from Bankman-Fried’s Alameda trading company to support the media company and buy property.
****** Always glad to see markets-related media companies get a high valuation.~JJL
The Upending of One of America’s Most Popular Professions; Realtor commissions on home sales could be cut sharply after a federal jury verdict on artificially high fees
Anne Marie Chaker – The Wall Street Journal
Realtors across the country are rethinking their jobs, and some are backpedaling from the profession, fearing that the heyday of their business is over. A court verdict last month stands to radically alter the way real-estate agents are paid for their work, and could result in far lower pay for the 1.6 million men and women who sell homes as their main job or as a side hustle.
****** I could never understand the high percentages real estate salespeople received. As a commodity broker, I was very jealous.~JJL
Monday’s Top Three
Our top story Monday was We’ve Seen the FTX Collapse Before, a column by James Koutoulas for CoinDesk. Second was Financial Fraudsters Have Escaped Justice for Far Too Long, an opinion piece from Ankush Khardori for The New York Times. Third was a tie between the Cboe press release Cboe Digital to Launch Margined Bitcoin and Ether Futures on January 11, 2024, Backed by Crypto and Traditional Finance Players and Bloomberg’s Iceland Girds for Volcanic Eruption That Could Wipe Out Town.
ICBC Hackers Used Methods Previously Flagged by U.S. Authorities; Attack stemmed from Lockbit 3.0 ransomware and two tactics targeting users of services managed by Citrix, Treasury says
Justin Baer and Andrew Duehren – The Wall Street Journal
The hackers who infiltrated the New York arm of the Industrial and Commercial Bank of China and disrupted trading in the U.S. Treasury market appeared to exploit three vulnerabilities that had been flagged by U.S. officials earlier this year. In an email sent to financial-services executives and trade groups Monday that was viewed by The Wall Street Journal, Treasury officials said that the ICBC attack stemmed from Lockbit 3.0 ransomware and two tactics that target users of services managed by Citrix, a cloud-computing company.
Asset Managers Warn of Failed Trades as US Market Speeds Up
Greg Ritchie – Bloomberg
Global investment houses are bracing for more failed trades as a result of plans to halve the time it takes to settle American stock transactions to just one day. Around 60% of asset managers fear a higher rate of settlement failures will be the consequence of regulations coming into force in May that will speed up the time it takes to complete a US security trade. That’s according to SIX Group’s Future of Finance report, which polled 343 C-Suite executives at financial institutions from around the world.
Climate Change’s $150 Billion Hit to the U.S. Economy
Amrith Ramkumar – The Wall Street Journal
The U.S. now experiences an extreme weather event in which damages and costs top $1 billion every three weeks. That compares with every four months in the 1980s, when adjusted for inflation, according to the latest installment of the U.S. National Climate Assessment released Tuesday. For the first time, the assessment includes a separate chapter on the economic impacts associated with climate action.
Climate Change’s Effects Are Worsening Across U.S., but Solutions Are in Reach; A major report from the federal government lays out both the far-reaching perils of global warming and the cost-effective fixes that are available today.
Raymond Zhong – The New York Times
The food we eat and the roads we drive on. Our health and safety. Our cultural heritage, natural environments and economic flourishing. Nearly every cherished aspect of American life is under growing threat from climate change and it is effectively too late to prevent many of the harms from worsening over the next decade, a major report from the federal government has concluded.
PE Firms Trapped in China After $1.5 Trillion Betting Spree
Cathy Chan and Preeti Singh – Bloomberg
Private equity firms that amassed more than $1.5 trillion of assets in China in just two decades are now struggling to offload once-promising investments they were counting on for hefty returns. With public markets in a slump and offering unattractive valuations, buyout firms are exploring private sales. But mounting concerns about the risks of investing in mainland China have left so-called secondary buyers demanding discounts of 30% to more than 60%, according to people familiar with the market. Haircuts in Europe and the US are closer to 15%. Many firms are also looking at an alternative strategy, putting off sales by setting up so-called continuation funds to take over holdings for several more years, according to interviews with about a dozen of private equity investors and advisers. That’s also proving challenging.
ICBC Flies Top Executives to US in Race to Contain Hack Fallout
Jordan Robertson, Katherine Doherty and Zheng Li – Bloomberg
Within days of a cyberattack at its US unit, members of Industrial & Commercial Bank of China Ltd.’s management were on a plane. Officials from the world’s largest lender arrived in the US over the weekend in a hastily arranged trip to limit fallout from the incident last week, people with knowledge of the situation said. As they sought to calm markets through a steady stream of discussions and calls, one question remained unanswered: When will the stricken systems start functioning again?
Nowhere Is Safe From Worsening Climate Change, New US Report Warns; A major government report finds climate-fueled dangers like wildfires and heat waves are on the rise across the country. So are efforts to reduce emissions and make communities more resilient.
Kendra Pierre-Louis, Eric Roston, and Zahra Hirji – Bloomberg
The floods, heat waves, storms and fires fed by global warming are getting worse across the US and will pose increasing danger to Americans unless greenhouse gas emissions are cut sharply and swiftly. The tools to do that are available today and are being adopted by communities nationwide, although not quickly enough to avert the crisis, according to a major government report released Tuesday. Called the Fifth National Climate Assessment, the report “is the authoritative, definitive assessment of how our country is doing on climate change,” Arati Prabhakar, the director of the White House Office of Science and Technology Policy, said ahead of its release. Not only does it make clear that “climate change is here,” she said, it also highlights how “America’s stepping up to meet this moment.”
FDIC hires law firm to investigate allegations of ‘toxic atmosphere’; US banking regulator’s chair says it will not ‘turn a blind eye’ to report of harassment and discrimination
Stephen Gandel and Colby Smith – Financial Times
The Federal Deposit Insurance Corporation on Monday hired law firm BakerHostetler to review allegations of widespread sexual harassment, inappropriate behaviour and discrimination at the US banking regulator. In a video message sent to staff on Monday, FDIC chair Martin Gruenberg called the reports “serious” and vowed that the agency would not “turn a blind eye”. He reiterated a previous call for staff with evidence of inappropriate behaviour to come forward.
Wall Street Takes the Subway: Banker Bonuses Set to Decline for Second Year in a Row
Charley Grant – The Wall Street Journal
A weak year for Wall Street businesses is pointing towards a sour bonus season. That’s according to a new survey from compensation consulting firm Johnson Associates. The analysis found that bonuses for investment bankers focused on advising corporate clients are likely to fall 15% to 25% from a year ago, including both cash and stock-based compensation.
FTX Sues Crypto Exchange Bybit to Recover $953 Million in Cash and Assets; The lawsuit is FTX’s latest attempt to recoup assets owed to customers as it grapples with a nearly $9 billion shortfall in deposits
Becky Yerak – The Wall Street Journal
Bankrupt cryptocurrency exchange FTX has filed a lawsuit against Bybit Fintech and two affiliates to try to claw back assets valued at $953 million that were withdrawn shortly before FTX’s November 2022 collapse. The lawsuit, filed Friday in the U.S. Bankruptcy Court in Wilmington, Del., alleges that Bybit’s investment arm, Mirana, “leveraged its VIP connections to pressure FTX group employees to fulfill its withdrawal requests as soon as assets became available.”
Proprietary traders prioritising FX as rising costs lead firms to trade fewer products and markets; Around two thirds of firms are set to make higher than average investments in 2024, with algo trading tools, connectivity to new markets, and market data the top priorities, according to the latest Acuiti report.
Claudia Preece – The Trade
Around 45% of firms which already trade FX are planning to significantly increase their exposure in the asset class as of next year, an Acuiti report has found. The report focuses on the rising cost of trading, finding that 33% of surveyed respondents are currently reducing their presence in some markets or products as a result, with 29% highlighting that they are trading less overall due to these high costs.
Cboe Digital to launch new Bitcoin and Ether futures; The launch is supported by B2C2, BlockFills, CQG, Cumberland DRW, Jump Trading Group, Marex, StoneX Financial, Talos, tastytrade, Trading Technologies and Wedbush.
Annabel Smith – The Trade
Cboe Digital is set to expand its instrument universe with new margined Bitcoin and Ether futures, due to launch next January. With this move, Cboe Digital is the first US regulated crypto native combined exchange and clearinghouse that enables spot and leveraged derivatives trading on a single platform.
Russia’s laser-guided weapons are being frustrated by low clouds that are stopping them from hitting their targets, UK intel says
Sinead Baker – Business insider
Russian drones that use lasers to identify targets in Ukraine are being frustrated by low clouds, according to British intelligence. The UK Ministry of Defence’s intelligence update on Tuesday assessed the performance of drones that use lasers to spot targets for Russia’s 152mm Krasnopol-M2 artillery munitions.
EU’s Ammunition Goal for Kyiv Never Realistic, Germany Says
Natalia Drozdiak and Katharina Rosskopf – Bloomberg
German Defense Minister Boris Pistorius conceded that the European Union won’t meet a pledge to send Ukraine 1 million artillery shells by the end of March and questioned whether the goal the bloc set itself to help Kyiv beat back Russia’s invasion was always too ambitious. “The one million will not be reached, one must assume that,” Pistorius told reporters Tuesday ahead of talks with EU counterparts in Brussels. “It’s the right question if the one million was ever realistic.”
Kremlin, on U.S. probe into oil sanctions, says Russia acting in own interests
The Kremlin said on Tuesday that Russia was acting in its own interests when asked about a probe by the United States into alleged violations of Western oil sanctions on Moscow. Kremlin spokesman Dmitry Peskov also told a daily conference call with reporters that President Vladimir Putin would hold a meeting on the fuel and energy complex later on Tuesday.
Exclusive-US probes 30 ship managers for suspected Russia oil sanctions violations
Timothy Gardner – Reuters
The U.S. Treasury Department has sent notices to ship management companies requesting information about 100 vessels it suspects of violating Western sanctions on Russian oil, according to a source who has seen the documents.
Kremlin says report on Zelenskiy’s alleged ignorance of Nord Stream attack is ‘alarming’
The Kremlin said on Monday that a Washington Post report that a Ukrainian military officer coordinated the attack on Russia’s Nord Stream pipelines was especially alarming given the newspaper also said Ukraine’s president had not known about it. No one has taken responsibility for the September 2022
Almost no Russian oil is sold below $60 cap, say western officials; Allies discuss ways to ‘toughen up’ key sanction as Moscow circumvents limits on seaborne crude
David Sheppard and Chris Cook, James Politi and Anastasia Stognei – Financial Times
Trader Freepoint Terminates Worker Over Anti-Israel Incident
Devika Krishna Kumar and Alicia Diaz – Bloomberg
Freepoint Commodities LLC has terminated an employee following an incident it described as antisemitic that went viral on social media. The video – which circulated over the weekend on X, the platform formerly known as Twitter – shows a man hanging posters accusing Israel of apartheid and genocide, covering up signs of kidnapped Israelis. In the recording made by a bystander who identifies himself in the video as an American Jew, the person with the posters can be heard telling him to “go back” to his country.
The world must start preparing for peacemaking in the Middle East; A revived and viable process of negotiation requires change on both sides
George Abed – Financial TImes
The horrific scenes on October 7, when Hamas attacked towns in Israel, and the terrible sight of devastated neighbourhoods in Gaza are a far cry from that sunny day in September 1993 when Israeli prime minister Yitzhak Rabin and PLO leader Yasser Arafat shook hands on the South Lawn of the White House. Overseen by a beaming Bill Clinton, this was a historic moment of peacemaking.
Hospitals in north Gaza stop functioning as humanitarian crisis deepens; WHO warns that al-Shifa hospital is ‘nearly a cemetery’ as calls grow for Israel to exercise restraint
James Shotter – Financial Times
All but one of the hospitals in the north of Gaza have stopped functioning, according to the UN, as Israel’s war against Hamas deepens a humanitarian crisis in the Palestinian enclave. Hospitals in Gaza have gradually been forced to stop operating over the past two weeks as Israeli forces advance deep into the enclave and severely restrict supplies of fuel, water and food to the besieged territory.
from drones, jet fighters, naval ships, tanks and soldiers to coordinate troops and weapons
Dov Lieber – The Wall Street Journal
In a cluster of single-story buildings the size of small classrooms, commanders from the Givati Brigade, the main Israeli infantry force in Gaza, watch a bank of screens showing the real-time location of all Israeli and Palestinian forces inside Gaza-information they use to move around troops and weapons and surveillance aircraft like pawns on a chessboard.
More Than 400 U.S. Officials Sign Letter Protesting Biden’s Israel Policy; The signers, representing some 40 government agencies, reflect growing internal dissent over the administration’s support of Israel’s military campaign in Gaza.
Maria Abi-Habib, Michael Crowley and Edward Wong – The New York Times
More than 400 political appointees and staff members representing some 40 government agencies sent a letter to President Biden on Tuesday protesting his support of Israel in its war in Gaza. The letter, part of growing internal dissent over the administration’s support of the war, calls on the president to seek an immediate cease-fire in the Gaza Strip and to push Israel to allow humanitarian aid into the territory. It is the latest of several protest letters from officials throughout the Biden administration, including three internal memos to Secretary of State Antony J. Blinken signed by dozens of State Department employees as well as an open letter signed by more than 1,000 employees of the U.S. Agency for International Development.
Exchanges, OTC and Clearing
The Latibex Forum celebrates its 25th anniversary by bringing together companies and investors from next Tuesday the 21st
More than 40 listed companies from Latin America and Spain and 70 investors will meet at the benchmark meeting on investment in the region. The panels will address issues such as the macroeconomic situation in the region, investment opportunities, digitalization or sustainable finances. Javier Hernani, CEO of BME and President of the Ibero-American Federation of Exchanges (FIAB, Federacion Iberoamericana de Bolsas) will highlight the role of markets to foster growth in the region. The 25th edition of the Latibex Forum will be held on 21 and 22 November. The event, organised by BME at the Madrid Stock Exchange, will once again be the benchmark investment meeting point between Latin America and Europe. More than 40 listed companies and 70 investors (25% international) will attend the event, where more than 250 meetings have been scheduled.
Keynote address by Tan Boon Gin, CEO, SGX RegCo at Singapore Institute of Directors’; Nominating and Remuneration Committees (NRC) Chapter webinar
Friends and Colleagues: As you are all aware, in 2022 we introduced rules mandating disclosure of board diversity plans and targets. We’ve been clear that we want this to result in greater diversity and renewal. As I have explained on other occasions, those rule changes should be read together with our recent hard-coding of the 9-year cap on director independence which means hundreds of companies will have to appoint new IDs in the coming 1-2 years. Both sets of rules are designed to work in tandem to encourage companies to renew and refresh their boards to ensure that they have the necessary “skills, talents, experience and diversity”.
Nasdaq Completes Migration of the Third U.S. Market to AWS; The Nasdaq GEMX Migration Creates Enhanced Scalability, Flexibility, and Resiliency of the Cloud Enabled Infrastructure while Delivering up to a 10% Improvement in Latency
Nasdaq, Inc. (Nasdaq: NDAQ) today announced it has successfully completed the migration of the core trading system of Nasdaq GEMX, one of Nasdaq’s six options exchanges, to Amazon Web Services (AWS). The new cloud-enabled market infrastructure, which uses AWS Outposts, delivers up to a 10% improvement in latency and the ability to more seamlessly adjust capacity in response to changing market conditions, ultimately delivering a better trading environment for market participants. GEMX processes 12 billion in daily messaging, 71% higher daily message volume than the MRX Options Exchange, which was migrated to AWS last year in December.
Re: ESMA Consultation Paper on Draft Technical advice to the European Commission on fees charged to Tier 1 Third-Country CCPs under EMIR
The Global Association of Central Counterparties (“CCP Global”) is the international association for central counterparties (“CCPs”), representing 42 members who operate over 60 individual CCPs across the Americas, EMEA, and the Asia-Pacific region. CCP Global appreciates the opportunity to respond to the Consultation Paper on Draft Technical advice to the European Commission on fees charged to Tier 1 Third-Country CCPs under EMIR2 (“the Consultation”) issued by the European Securities and Markets Authority (“ESMA”). We support ESMA’s efforts to ensure that “the considerable differences in size and activity across Tier 1 CCPs, including their degree of relevance for the European Union, and therefore the different level of ESMA scrutiny required from one Tier 1 CCP to the other” are reflected in the structure of Tier 1 CCPs fees.
National Stock Exchange of India
As part of our endeavour to spread the message of financial literacy and investor awareness, the National Stock Exchange (NSE) under the aegis of Securities Exchange Board of India (SEBI), along with other market infrastructure intermediaries, has set up a Pavilion ‘Bharat Kaa Share Bazaar’ at the 42nd India International Trade Fair, 2023, which is being held at New Delhi between November 14-27, 2023. Our participation also helps highlight the fact that the securities market in India is well regulated. The theme of the event for this year is “Vaishvik Samridhi Ka Adhaar, Bharat Ka Share Bazar” which is aligned with the G 20 theme of “Vasudhev Kutumbakam”.
Holidays and early closings 2023-2024
The Montreal Exchange
Taiwan Futures Exchange Newsletter
New Breed of Supercomputer Aims for the Two Quintillion Mark; That’s two billion billion operations a second, enough to explore the brain and discover drugs
Scott Patterson – The Wall Street Journal
Inside a vast data center on the outskirts of Chicago, the most powerful supercomputer in the world is coming to life. The machine will be able to analyze connections inside the brain and help design batteries that charge faster and last longer. Called Aurora, the supercomputer’s high-performance capabilities will be matched with the latest advances in artificial intelligence. Together they will be used by scientists researching cancer, nuclear fusion, vaccines, climate change, encryption, cosmology and other complex sciences and technologies.
Half of asset managers are focused on speed over volume in their quest to fully capitalise on data, finds report; The research from SIX found that AI came out on top as the biggest enabler to organisational growth along with the findings on data priorities and growth potential.
Claudia Preece – The Trade
As asset managers continue to look for ways to fully capitalise on data, a new SIX report has found that almost half view data velocity as the key challenge in enabling analytics to drive growth. This is more than the number which highlighted volume, or even variety, of data as the key challenges.
OpenAI chief seeks new Microsoft funds to build ‘superintelligence’; Sam Altman expects big tech group will back start-up’s mission to create software as intelligent as humans
Madhumita Murgia – Financial Times
OpenAI plans to secure further financial backing from its biggest investor Microsoft as the ChatGPT maker’s chief executive Sam Altman pushes ahead with his vision to create artificial general intelligence – computer software as intelligent as humans.
Gang says ICBC paid ransom over hack that disrupted US Treasury market
James Pearson – Reuters
China’s biggest lender, the Industrial and Commercial Bank of China, paid a ransom after it was hacked last week, a Lockbit ransomware gang representative said on Monday in a statement which Reuters was unable to independently verify. ICBC, whose U.S. arm was hit by a ransomware attack that disrupted trades in the U.S. Treasury market on Nov. 9, did not immediately respond to a request for comment.
Web browsing data collected in more detail than previously known, report finds; Campaigners warn proliferation of categories describing sensitive professions could leave users open to blackmail
Cristina Criddle – Financial Times
Internet browsing data is being collected and sold in greater detail than previously thought, increasing the likelihood that individuals’ identities can be ascertained from the anonymised information, a new report has found. Web users have for years been grouped by data brokers by traits such as their broad professional sector or interests, inferred from their browsing history. This anonymised information is then sold to advertisers so they can target specific categories, or segments, with personalised marketing.
Cryptoverse: Bitcoin miners make money ahead of ‘halving’
Medha Singh and Lisa Pauline Mattackal – Reuters
Bitcoin miners are making hay while the sun shines. The business has been yanked out of the doldrums by the cryptocurrency’s recent rally – and now mining companies are racing to lock in profits before bitcoin’s “halving”, when rewards for producing the tokens are cut in half.
Texas Battles Wall Street in Threat to State’s Muni Market; Attorney General Ken Paxton wants to put a check on which big banks win business from the state and its municipalities.
Amanda Albright and Danielle Moran – Bloomberg
The annual conference of the Municipal Advisory Council of Texas is typically a pretty low-key affair, with bond industry folks gathering at a sumptuous hotel for cocktails, golf and a bit of networking to help grease the wheels of future deals. But at this year’s event, the dining rooms, deck chairs and fairways of the Las Colinas Resort just outside Dallas were abuzz with speculation about the future of big Wall Street firms in the state. And the name on everyone’s lips: Ken Paxton.
Bank of America’s $1.5 Billion Deal Casts Doubt on Texas Energy ‘Boycott’ Label
Amanda Albright and Danielle Moran – Bloomberg
Bank of America Corp. led a $1.5 billion natural gas bond sale for oil-giant BP Plc just as Texas politicians are deciding whether to punish certain Wall Street banks by labeling them as “energy boycotters” for their climate change policies.
Kerry’s Promise of ‘Millions’ for Climate Damages Criticized by Activists
Jennifer A. Dlouhy – Bloomberg
A US offer of several million dollars to address losses and damages caused by global warming is raising the ire of activists as some nations contend with flooding and other consequences of climate change. US Special Presidential Envoy for Climate Change John Kerry made the offer at the Bloomberg New Economy Forum in Singapore last week, promising – without specifics – that the US would contribute to the new Loss and Damage Fund at the upcoming COP28 summit in Dubai.
Finland accuses Russia of allowing undocumented migrants to cross border; Rise in crossings by Middle Eastern nationals recalls Belarus migrant crisis of 2021
Richard Milne – Financial Times
Finland has said that Russia is allowing undocumented migrants to cross its eastern border, vowing action against what it said was a sharp increase in the number of arrivals. Finland’s border guards said 39 asylum seekers without documents crossed from Russia on Monday and another 21 on Tuesday morning. That compares with a normal weekly total of less than 10.
Taiwan Doubts China’s Xi Will Have the Ability to Invade by 2027
Cindy Wang – Bloomberg
Real Estate Investor Faces SEC Inquiry on WeWork Offer
Patrick Clark – Bloomberg
A real estate investor facing scrutiny from lenders and investors is now the subject of a government inquiry into an offer to buy shares in WeWork Inc. The US Securities and Exchange Commission has sent inquiries to Jonathan Larmore, the founder of Arciterra Cos., about a Nov. 3 press release in which an entity called Cole Capital Funds said it was seeking to buy shares in the coworking company at a significant premium, according to a person familiar with the matter who asked not to be named citing private information. The inquiry includes Larmore’s trading history in WeWork stock and options, the person said.
Gen Z more concerned about finances than any generation in Australia
New research shows Gen Zs are feeling financially stressed, with high levels of debt including Buy Now Pay Later use. New nationwide research released by ASIC’s Moneysmart program today shows for seven in ten (68%) Gen Zs, finances are a major cause of concern, more than any other age group (57% of non-Gen Zs).
FMA encourages New Zealanders to be aware of investment scams
Financial Markets Authority
The Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko – is reminding New Zealanders to remain vigilant to investment scams as part of Fraud Awareness Week 2023. Fraud Awareness Week 2023 runs from 13-18 November and this year’s focus is about encouraging consumers not to fall victim to investment scams. Nearly $200 million of New Zealanders money has been lost to scams in the last year, figures from the MBIE show.
SFC inaugurates Forum on Sustainability Disclosures
Securities and Futures Commission
The Securities and Futures Commission (SFC) held its inaugural Forum on Sustainability Disclosures today to gather market views on developing a sustainability disclosure ecosystem for Hong Kong, and to build industry preparedness and awareness of sustainability reporting against international standards.
Investing and Trading
Yen Traders See Options Expiry Explaining Surge from Year Low
Carter Johnson, Masaki Kondo and Yumi Teso – Bloomberg
The yen jumped against the dollar in New York trading Monday after touching its weakest point this year, spurring speculation among analysts that it was partly the result of options positioning rather than Japanese authorities stepping into the market. Japan’s currency touched a year-to-date low of 151.91 per dollar, then abruptly strengthened to the 151.21 level before reversing much of the gain. The net result is that the yen was little changed on the day, leaving it down some 13% this year, the worst performance of any Group-of-10 currency.
Fed Supervisors Are Scrutinizing Banks’ Interest-Rate Risks, Barr Says
Ben Bain – Bloomberg
The Federal Reserve’s top bank regulator will tell lawmakers that supervisory officials at the central bank are homing in on risks posed by the state of the US economy. Michael Barr, the Fed’s vice chair for supervision, plans to tell the Senate Banking Committee that supervisors are conducting targeted reviews and working to keep tabs on new products being launched by lenders. The collapses of Silicon Valley Bank and Signature Bank in March exposed gaps in federal oversight and prompted calls from some lawmakers for further scrutiny.
Top Meat Producer JBS Misses Profit Estimates on Eroding Beef Margins
Gerson Freitas Jr. and Clarice Couto – Bloomberg
JBS SA, the world’s largest meat producer, posted third-quarter profit that missed analysts’ estimates as earnings from its North American beef business tumbled. Adjusted profit from JBS’s North American beef unit – the company’s largest business – plunged almost 80% from a year earlier as profit margins narrowed, JBS said Monday in a statement. That undercut results for the Brazilian company, which posted adjusted earnings before items of $5.41 billion reais ($1.1 billion) – a 43% drop from the year-earlier period. Results missed the 5.49-billion real average estimate of analysts surveyed by Bloomberg.
Meta Has More Wall Street Fans Than Ever as Rally Nears 300%
Subrat Patnaik – Bloomberg
For Meta Platforms Inc. bulls, the biggest one-day stock wipeout in history is a fading sight in the rear-view mirror. The Facebook owner’s shares have nearly quadrupled since a low in November last year, which came after a $251 billion crash in February. By one measure, analysts have never been more confident that further gains are ahead.
Nvidia Adds $200 Billion as Winning Streak Set to Match Record
Subrat Patnaik – Bloomberg
Nvidia Corp. shares are poised to extend gains for a 10th consecutive session, their longest streak of advances since a record-setting dash in December 2016, as the world’s most valuable chipmaker updates its artificial intelligence processor.
Stock investors face up to tough reality of higher rates; Fund managers turn to new data sources to woo clients as flows into equity funds dry up
Nicholas Megaw – Financial Times
Glencore sets clock ticking on break-up after sealing $9bn Teck deal; Swiss group plans to merge Teck’s steelmaking coal business with its own assets before spinning off combined unit
Harry Dempsey and Tom Wilson – Financial Times
Glencore-Led Group to Buy Teck’s Coal Business; Deal, one of the industry’s biggest this year, values the business at around $9 billion
Julie Steinberg and Ben Dummett – The Wall Street Journal
The Trillion-Dollar Win Hiding in Your Mortgage; Old fixed-rate loans should be viewed as highly valuable assets after the surge in interest rates
James Mackintosh – The Wall Street Journal
The Fed Has Put Our Housing Market in Jeopardy
Daniel Alpert – The New York Times
Environmental, Social and Corporate Governance
Aon president warns insurers against ‘walking away’ from major risks; Industry should be ‘very careful’ about offloading coverage of cyber attacks and pandemics to public sector
Ian Smith and Robert Armstrong – Financial Times
The president of one of the world’s biggest insurance brokers has warned that the industry should be “very careful” about offloading big global risks such as cyber attacks and pandemics to the public sector, saying that the business might never come back to private firms. Speaking in Bermuda on Thursday at the PwC Insurance Summit, held in association with the Financial Times, Aon president Eric Andersen said the insurance industry needed to be “more aggressive” in absorbing some of the bigger risks coming from areas such as natural catastrophes, sweeping cyber attacks and pandemics. Some in the sector have called for new and expanded private-public partnerships that can share significant losses in these areas.
What to expect during pivotal talks to end plastic pollution; Negotiators will gather in Nairobi, Kenya, from 13-19 November for the latest in a series of talks designed to forge a legally binding global instrument to end plastic pollution.
UN Environmental Programme
The discussions, which represent the third session of what is known as the International Negotiating Committee (INC-3), come with the world weathering what has been described as a plastic pollution crisis. Humanity produces around 430 million tonnes of plastic every year, two-thirds of which quickly becomes waste. Much of that ends up polluting land, sea and air while increasingly working its way into the human food chain. During INC-3, negotiators are expected to discuss an initial draft of a global instrument released earlier this year, to end plastic pollution.
Adaptation Is Climate Tech Funding’s Biggest Blind Spot; While billions have poured into startups looking to reduce emissions, very little funding has reached companies looking to help society prepare for climate impacts.
Michelle Ma – Bloomberg
Climate tech venture capital funding has increased dramatically over the last decade, but one sector is consistently overlooked: adaptation. Startups focused on preparing for the impacts of climate change only received 7.5% of global climate tech funding during the period of 2019 to 2020, according to a new report from the Oxford Climate Tech Initiative in partnership with the Skoll Centre at Oxford.
UN predicts 9% rise in greenhouse gas emissions by 2030; Climate action falls vastly short of 45% drop in emissions required to curb global warming
Kenza Bryan – The Financial Times
Global greenhouse gas emissions are rising inexorably to put the world on course for a near 9 per cent rise by 2030 from 2010 levels, according to the latest progress report by the UN scientific body that is the world’s leading authority. While the rise projected by the Intergovernmental Panel on Climate Change is slightly better than the 11 per cent in last year’s assessment, it remains vastly short of the 45 per cent cut needed to limit warming to the 1.5C goal set as part of the Paris Agreement.
To Meet Climate Goals, Gulf Countries Will Have to Overhaul Everything; When Dubai hosts the COP28 climate conference, the tension between Gulf countries’ net-zero targets and reliance on fossil fuels will be front and center.
Nayla Razzouk and Olivia Rudgard – Bloomberg
In Dubai, it’s normal to leave your air conditioning running at all times, even if you go away for weeks. Qatar has the largest air-conditioned outdoor jogging tracks in the world. Across the United Arab Emirates, water is so cheap that some people run the shower just to listen to it. The monarchies that make up the Gulf Cooperation Council – Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain and Oman – built their cities on hot, arid lands, including the world’s largest continuous sand desert. In summer months, temperatures top 50C (122F), contributing to some of the highest levels of per-capita energy use in the world: Qatar ranks first, Bahrain fourth, the UAE fifth and Saudi Arabia 14th. That footprint will grow as the population of GCC countries, including foreign workers, swells from 59 million today to an estimated 84 million by 2100.
Environmental Justice a Key Theme Throughout Biden’s National Climate Assessment
Kristoffer Tigue, Georgina Gustin, Liza Gross, Victoria St. Martin – Inside Climate News
Fashion giants not on track to meet key 2030 water and climate goals
Sarah George – edie
US plans to buy 1.2 million barrels of oil for Strategic Petroleum Reserve
UN predicts 9% rise in greenhouse gas emissions by 2030
Kenza Bryan – Financial Times
Orsted shakes up management team after shelving US projects; Finance and operations chiefs depart as wind developer grapples with rising costs
Rachel Millard – Financial Times
Oil still looks like an easier bet for Latin America than renewables; Political risk stymies region’s wind and solar potential while fossil fuels deliver reliable returns
Michael Stott – Financial Times
The Carbon Brief Quiz 2023
Joe Goodman – Carbon Brief
How to Stop Wind Turbines Killing Bats and Birds; Wind power needn’t be a threat to wildlife.
Lara Williams – Bloomberg
What Happens After the World Reaches Net-Zero Emissions
Many aspects of Earth’s system, including global temperatures, may feel the effects of warming even after net zero is achieved, according to a new study.
Sana Pashankar and Eric Roston – Bloomberg
Japan’s Largest Banks to Buy Back Shares After Profit Soars
Taiga Uranaka and Hideki Suzuki – Bloomberg
Japan’s biggest banks unveiled plans to boost shareholder returns after posting record first-half profits, thanks in part to a cheaper yen. Mitsubishi UFJ Financial Group Inc. announced a $2.6 billion share buyback program on Tuesday after fiscal second-quarter profit tripled. Sumitomo Mitsui Financial Group Inc. raised its full-year net income forecast and said it plans to spend as much as 150 billion yen ($989 million) repurchasing stock. A day earlier, Mizuho Financial Group Inc. boosted its annual dividend guidance along with its earnings target.
Can Barclays move beyond scandal and stagnation? Chief executive CS Venkatakrishnan hopes a strategic review of the business can fix years of troubles at the British bank
Stephen Morris and Harriet Agnew – Financial Times
In July 2015, it seemed like Barclays had reached a nadir. New chair John McFarlane had just brutally fired the bank’s chief executive Antony Jenkins, after a bruising boardroom showdown over his proposed reforms at the genteel Lucknam Park country house hotel in Wiltshire.
‘Super’ multi-manager hedge funds are losing some of their superness; Did Kenny G call the top?
Robin Wigglesworth – Financial Times
The rise of multi-manager hedge funds – and the pay their portfolio managers are systematically harvesting in their seemingly never-ending pod-hopping – is now such a mainstream subject that it’s made it into the Sunday Times. “Inside the super hedge funds that have Wall Street running scared,” is the headline. The article below is pretty good (it’s by Oliver Shah, so not unexpectedly) but, ironically, the top of the multi-manager/multi-strategy phenomenon may already be in.
Fidelity files for Vanguard-style ETF share class; Vanguard’s patent on the ability to offer ETF share classes of mutual funds expired in May
Joe Morris – Financial Times
Fidelity has filed to adopt Vanguard’s ETF multi-share class structure, becoming the third manager to do so. In two filings with the Securities and Exchange Commission, the manager proposed allowing an unspecified number of open-end mutual funds to list ETF shares. Fidelity described the applicable funds as being “in general” actively managed and pursuing a total return investment mandate.
Fired Morgan Stanley Banker Sues in UK to Win Her Job Back; Taif Adams says she was ostracized after reporting issues; London judge denied her reinstatement at bank at early hearing
Upmanyu Trivedi and Irene Garcia Perez – Bloomberg
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An ex-Morgan Stanley banker in its credit sales team is suing the lender over allegations she was fired in a “sham redundancy” in retaliation for raising concerns over potential market manipulation.
Work & Management
FTX Employee Recruited by Sam Bankman-Fried Wants $275,000 Bonus
Jonathan Randles – Bloomberg
A former Jane Street trader recruited by Sam Bankman-Fried to assist in FTX’s charitable giving is fighting to get the rest of his 2022 bonus while denying that he had any knowledge of the fallen crypto mogul’s fraud before the company collapsed last year.
London Is Cutting Off Poorer Graduates From Best Jobs, IFS Says
Andrew Atkinson – Bloomberg
More than four in 10 university graduates living outside London are doing jobs that do not require a degree, according to new research that lays bare a growing divide in the economic geography of the UK. The analysis by the Institute for Fiscal Studies shows how an increasing concentration of high-skilled jobs in London is damaging the life chances of those who cannot afford to live in the British capital.
Wall Street workers told to expect another year of smaller bonuses; Payouts for some roles set to fall by 25% as higher interest rates dampen dealmaking and IPOs
Joshua Franklin, Stephen Gandel and Antoine Gara – Financial Times
Wall Street bonuses are set to fall this year by as much as 25 per cent, as investment bankers and money managers feel the pinch from rising interest rates that have damped dealmaking activity and curtailed new stock market listings. An analysis by New York-based pay consultancy Johnson Associates showed that 2023 bonuses across most of Wall Street – from investment banking advisory work to sales and trading and private equity – will on average be either down or flat compared to a year earlier.
Letting People Work From Home Is Good for Companies’ Revenue Growth; A three-year analysis, co-led by Boston Consulting Group, found that sales at ‘fully-flexible’ employers grew at a much faster rate than those that didn’t embrace remote work.
Matthew Boyle – Bloomberg
Companies that allow remote work have experienced revenue growth that’s four times faster than those that are more stringent about office attendance, a new survey shows, adding fuel to the debate over productivity and performance in today’s workplaces.
Hot 2024 Real Estate Trends Feature Wellness Benefits
Jamie Gold – Forbes
Zillow recently announced its six hottest home trends to watch for in 2024. Four of them are wellness related. No one should be surprised by this, as homeowners are increasingly acknowledging and appreciating the links between their living spaces and quality of life. That’s showing up in both home improvement and resale reports.
CBD: what’s the science behind the wellness trend?
The Guardian (Podcast)
Last month the UK’s Food Standards Authority slashed the recommended safe daily intake of cannabidiol (CBD) from 70mg to 10mg. An estimated one in 10 people in the UK have used products containing CBD, and many users believe it can help with ailments such as insomnia, anxiety and pain. But is there any evidence for the supposed benefits, and what’s behind the FSA’s decision? Ian Sample talks to Dr Will Lawn of Kings College University, who has studied the health effects of CBD, to find out
An ‘Unsettling’ Drop in Life Expectancy for Men
Azeen Ghorayshi – The New York Times
The gap in life expectancy between men and women in the United States grew to its widest in nearly 30 years, driven mainly by more men dying of Covid and drug overdoses, according to a new study in The Journal of the American Medical Association. In 2021, women had a life expectancy of 79.3 years, compared with 73.5 years for men, the study found.
China Copper Giant’s Downfall Sealed as Court Accepts Bankruptcy
Maike Metals International Co., once one of the most powerful traders in China’s massive copper market, filed for bankruptcy after more than a year of debt struggles. The firm founded by entrepreneur He Jinbi in the early 1990s was until recently responsible for more than a quarter of China’s copper imports. On Monday, Maike said the Intermediate People’s Court of Xi’an accepted its filing, a step toward a final ruling by the court to wind up the company.
China Mulls $137 Billion of New Funds to Aid Housing Market
China plans to provide at least 1 trillion yuan ($137 billion) of low-cost financing to the nation’s urban village renovation and affordable housing programs in its latest effort to shore up the struggling property market, according to people familiar with the matter. The People’s Bank of China would inject funds in phases through policy banks with the money ultimately trickling down to households for home purchases, the people said, asking not to be identified discussing a private matter. Officials are considering options including the so-called Pledged Supplemental Lending and special loans, the people said, adding that the government may take the first step as soon as this month.
Japan’s Finance Minister says govt will take necessary forex steps as yen tumbles
Tetsushi Kajimoto and Kaori Kaneko – Reuters
Japanese Finance Minister Shunichi Suzuki said on Tuesday that the government would take all possible steps necessary to respond to currency moves, repeating his usual mantra that excessive swings were undesirable.
Catholic Priest Taps His Private-Markets Roots to Advance Missionary Work; Alvaro Ramos, who co-leads an organization that helps poor children in Honduras, has attracted donors such as retired Blackstone Executive Vice Chairman Hamilton ‘Tony’ James
Luis Garcia – The Wall Street Journal
Former asset manager-turned-Catholic priest Alvaro Ramos touts a “private-equity approach to poverty” in his quest to attract attention-and donations-to his charitable youth organization in Honduras. But Ramos’ own life example proved to be an equally, if not more, powerful draw at least to one private-equity donor.