Intercontinental Exchange Says Crypto Chief Exits After 4 Months

Apr 25, 2020

First Read

Hits & Takes
By John Lothian & JLN Staff

We finally have the podcast with Christian Hauff, CEO of Quantitative Brokers, about QB’s new Striker product. Striker is an execution algorithm for trading options on futures. This is the type of product that could make it more difficult for the options pits to re-establish themselves after the trading pits re-open in Chicago. If customers find solutions like Striker to meet their needs, especially quantitatively oriented ones, the pits will have a hard time coming back.

We had originally done this interview as a video, but had technical difficulties with the video and so we are publishing it as a podcast.

We also have an interview with Dr. Jessica Hehmeyer, MS, DC, LDN, CNS, about staying healthy during these stressful times. She is the wife of Chris Hehmeyer and I have been a patient of hers. She offers free assessments on Friday, so check out the video and see how you can stay healthy, or even sign up for an assessment. The video was shot remotely, so it is a little different in look and feel from our normal quality and style, but the content is very good.

Speaking of stress reduction, Futures For Kids is having a Virtual Fun Run 2020, a fundraiser and a 5k or 10k run or walk, or a cycle ride (even on a stationary exercise bike) of either 10k or 20K between the dates of 24 April and 10 May.

They delayed the 3rd annual fun run due to the current global pandemic but then decided to make it a virtual run. They hope that by making this a virtual event, and broadening the number of activities included, they will be able to attract more participants from across the futures industry globally.

Illinois Governor JB Pritzker has extended the stay-at-home order for Illinois for another 30 days from April 30th, when his initial order was set to end. Pritzker is looking for some exceptions to the order, so stay tuned.

OCC Chairman Craig Donohue, who is identified in a headline in Crain’s Chicago Business as “Ex-CME chief,” has a home for sale in Kenilworth for $8.75 million. This is the third highest priced home for sale in Kenilworth at the present time. If you want a Lake Michigan lakefront estate, check it out

First farmers were pouring out excess milk production, now they are killing hogs because of processing plant shutdowns.

Cboe is having a virtual annual meeting. I would like to see them have a virtual reality annual meeting, that would be fun. ~JJL


Striker from Quantitative Brokers Brings First Options on Futures Execution Algorithm

Christian Hauff, CEO of Quantitative Brokers, sat for an interview with John Lothian News about the first futures execution algorithm for options. The new offering has become even more essential since the option pits on the trading floors were silenced by the coronavirus outbreak. Here are John Lothian and Christian Hauff discussing Striker from Quantitative Brokers.

Listen to the Podcast here


A Little Stress Relief for the Coronavirus Countdown

In this video feature produced by Mike Forrester, John Lothian News’ Suzanne Cosgrove talks to Dr. Jessica Hehmeyer about staying healthy in the time of COVID-19.

Dr. Hehmeyer, MS, DC, LDN, CNS, is currently offering complimentary 30-minute virtual assessments on Friday afternoons. JLN readers can make an appointment by emailing or by texting 312-967-8000.

Watch the video »


Lysol, Dettol Warn Against Using Disinfectants to Treat Coronavirus
Rebecca Smith – Bloomberg
Lysol and Dettol maker Reckitt Benckiser Plc has stated that “under no circumstance” should its disinfectant products be administered into the human body, through injection, ingestion or any other route. The company issued the advice on Friday morning, after being asked whether internal administration of disinfectants “may be appropriate for investigation or use as a treatment for coronavirus”, amid recent speculation and social media activity.

*****Please do not inject disinfectants into your system. They are poison.~JJL


Las Vegas Mayor Carolyn Goodman wants city to be a “control group” for reopening the country
Christopher Brito – CBS News
Las Vegas Mayor Carolyn Goodman wants the city to reopen amid the coronavirus pandemic, offering up Vegas as a “control group” to measure the effects of lifting restrictions. In a lengthy interview with CNN’s Anderson Cooper, the independent mayor’s remarks drew criticism from other Nevada officials.

*****Who wants to gamble on this petri dish?~JJL


CryptoMarketsWiki Coin of the Week: XRP
The creators of the payment token XRP filed a lawsuit against YouTube (owned by Alphabet Inc.) Tuesday. The suit alleges that YouTube did not address “pervasive and injurious fraud” on its platform. Ripple says YouTube has consistently failed to adequately protect consumers from cryptocurrency scammers on its platform, some of whom misrepresented themselves as Ripple reps – some even impersonated Ripple’s CEO, Brad Garlinghouse (somehow) in order to scam YouTube’s cryptocurrency-interested audience out of their money. XRP is primarily used by banks for cross-border payments.


Thursday’s Top Three
Our top story Thursday was CNBC’s CME boss says his exchange is not for retail investors and it’s ‘no secret’ futures can go negative about Terry Duffy’s remarks on the WTI oil futures contracts. Second was The Financial Times’ ‘Muppets v Sharks’ as retail investors feel pain of negative oil. Third was Zero Hedge Permanently Suspended From Twitter for ‘Harassment’, from Bloomberg, in which the Zero Hedge website shared the name and personal information of a scientist who it said may have knowledge about the source of the coronavirus.


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Lead Stories

Intercontinental Exchange Says Crypto Chief Exits After 4 Months
Olga Kharif and Michelle F Davis – Bloomberg
Mike Blandina succeeded Kelly Loeffler when she entered Senate; ICE veteran David Clifton has been appointed interim CEO
Intercontinental Exchange Inc. said Mike Blandina has resigned as chief executive officer of Bakkt LLC, its majority-owned Bitcoin-futures platform, after four months on the job. Blandina is joining JPMorgan Chase & Co. as head of wholesale payments technology, according to a memo to staff. A JPMorgan spokeswoman confirmed the hiring. He didn’t immediately respond to a request for comment

ICE appoints interim Bakkt CEO; David Clifton replaces Mike Blandina at Bakkt, as he departs after just four months to pursue other opportunities.
Kiays Khalil – The Trade
ICE has selected its former vice president to serve as interim CEO at its digital assets trading and payments platform, Bakkt.

****SR: The ICE press release can be found here.

Why Markets Fear Volatility ‘Fear Gauge’ Is Boosting Turmoil
Joanna Ossinger, Cecile Vannucci, and Yakob Peterseil – Bloomberg
Markets go up and down; the amount they move is their volatility. In normal times, traders like a dose of volatility, and betting on its levels has become a market of its own. But these are not normal times, and worries are growing that extreme financial turbulence may now be feeding on itself. The effects can be seen playing out across stocks, bonds and commodities.

Zimbabwe Virus Lockdown Ravages Bourse as Trading Volumes Crash
Ray Ndlovu – Bloomberg
Share transactions are down by 55% since curbs on movement; Foreigners now account for just a tenth of market activity
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. Traders have abandoned Zimbabwe’s stock market as a lockdown imposed to curb the spread of the coronavirus adds to the strains on an economy that was already contending with severe drought, hyperinflation and a shortage of foreign exchange.

India Brokers Seek Court Protection From Costs of Negative Oil
Upmanyu Trivedi and Nupur Acharya – Bloomberg
Dispute stems from oil-contract settlement at negative prices; Bombay High court will hear the brokerages’ case on April 27
At least three Indian brokerages have petitioned the courts to challenge the settlement of crude oil contracts at negative prices. Motilal Oswal Financial Services Ltd. and PCS Securities Ltd. are appealing to the Bombay High Court, which will hear on April 27 their case against the decision by Multi Commodity Exchange of India Ltd. Religare Enterprises Ltd. has turned to the Delhi High Court, said Ravichandra Hegde, senior partner at Parinam Law Associates and the lawyer representing the brokerages.

Meat-Shortage Risk Climbs With 25% of U.S. Pork Capacity Offline
Deena Shanker, Michael Hirtzer, Jen Skerritt, and Lydia Mulvany – Bloomberg
Concern grows about infected USDA workers; Farmers are culling; Jersey Mike’s preps for shortfalls; Tyson shuts another plant
About a quarter of American pork production and 10% of beef output has now been shuttered, according to the United Food & Commercial Workers, which estimates that 13 U.S. plants have seen closures.

What’s the Point of an ETF That Goes Off-Script? The whole appeal of passive management is its predictability. But to limit the pain of negative oil prices, there’s been some furious reshuffling.
Shuli Ren – Bloomberg
Negative oil prices are like a massive underwater detonation. Inevitably, dead sea animals will come floating to the surface. This week we saw the unraveling of a Singapore-based oil trading firm, which now owes 23 global banks almost $3.9 billion. So you’ve got to wonder who’s next, and if another big whale will go belly up.

Oil world zeroes in on Cushing, Oklahoma; Dramatic crude plunge this week put the humble storage hub in the spotlight
Gregory Meyer – FT
Cushing, Oklahoma, population 7,800, has a steakhouse, a burrito restaurant and a KFC. It also has America’s most important complex of oil storage tanks. The prospect that those monumental tanks might soon be full to the brim rocked global markets this week. The US benchmark oil price plunged below $0 for the first time in history, sparking debate and recriminations across the industry that put the humble city in the spotlight.

Big Oil faces new reality where ‘everything has changed’; US and European energy majors battle demand collapse with moves unthinkable just two months ago
Anjli Raval
Gordon Ballard, head of the International Association of Oil & Gas Producers, has seen many downturns in his 38-year career. But they were all followed by recoveries. This time, he fears, things may be different. “In the past, activity decreased then picked up again — each time, we saw it come back,” he said. “Now it’s not entirely clear if things just come back as normal. Everything has changed.”

Oil price plunge pummels commodity tracker funds; More volatility ahead as US oil storage capacity is depleting, analysts warn
Chris Flood – FT
The plunge in US oil prices into negative territory for the first time in history has aggravated heavy losses across a wide range of commodity exchange traded products for investors gambling on an early recovery in energy consumption.

Buy-side rejects changes to dark trading and SIs under MiFID II review; Initial responses to the MiFID II review consultation reveal that asset managers are keen for a consolidated tape before any major changes to the rules are implemented.
Hayley McDowell. – The Trade
Asset managers have largely rejected huge changes to dark trading and systematic internalisers (SIs) under the MiFID II review, instead urging the EU regulator to establish a consolidate tape.

Switzerland’s central bank suffers record loss in market rout; First-quarter volatility deals $39bn blow to SNB as it steps up fight for Swiss franc
Sam Jones – FT
The Swiss National Bank has suffered its worst quarterly loss since its foundation in 1907, after the impact of the coronavirus pandemic on global markets wiped SFr38.2bn ($39bn) from the value of its reserves in the first three months of the year.

Singapore oil traders rush to reassure clients; Tightening of credit lines after Hin Leong scandal raises prospect of liquidity crunch
Neil Hume and Stefania Palma – FT
Oil traders in Singapore are scrambling to reassure nervous clients they have no exposure to crisis-hit rival Hin Leong and can survive the steep drop in demand caused by coronavirus.

US banks pull back from lending to European companies; JPMorgan, Goldman and BofA have become more cautious over loans, say executives and bankers
Olaf Storbeck, Stephen Morris and Laura Noonan – FT
US banks are pulling back from lending to European companies during the coronavirus pandemic, fuelling concerns that Wall Street may be quietly withdrawing to its home market in a repeat of the last financial crisis.

Oil’s Meltdown Crushes Independent Crude Producers in Nigeria
Elisha Bala-Gbogbo and Emele Onu – Bloomberg
Nigerian lenders also threatened due to $8 billion exposure; Prolonged low crude prices risk sparking a banking crisis
The unprecedented oil price crash is destroying Nigeria’s independent crude producers, firms who between them pump about a fifth of the nation’s supply, and risks inflicting severe pain on the local banks that finance them.

Gold Bars Are Flying 11,000 Miles to New York to Ease Supply Squeeze
David Stringer – Bloomberg
Australia’s Perth Mint has ramped up production of kilobars; Strong retail demand for gold, silver coins amid virus worries
Australia’s largest gold refinery has ramped up production of one kilogram bars to ease the supply squeeze in the U.S. that helped propel a surge in the premium for New York futures. The collapse in air travel that’s grounded passenger jets — frequently used to transport gold products — and virus-related disruptions to some refining capacity has tightened availability of the rectangular bars, typically used to settle the Comex futures contracts.

Ray Dalio Dives Deep Into Money to Explain Changing World Order
Nathan Crooks – Bloomberg
“You need to understand how money, credit, and debt work,” Ray Dalio writes in his latest post in a series previewing an upcoming book he’s titled “The Changing World Order.” The billionaire investor and founder of Bridgewater Associates said he’s working with both historians and political experts to connect pieces of the past together to better understand the future.

Mexico’s cenbank says falling commodity prices complicate stimulus plans in emerging markets
Anthony Esposito – Reuters
Mexico’s central bank governor, Alejandro Diaz de Leon, said in an interview on Thursday that collapsing commodity prices make it harder for emerging market countries to carry out the massive fiscal stimulus plans implemented by some developed economies.


The Godzilla effect: how coronavirus is shaking up Japanese society; Under lockdown-lite, Tokyo’s citizens are rethinking how they live, work and love
Leo Lewis – FT
Japan’s lockdown-lite — an inconsistent, voluntary affair that has shuttered speed-abacus clubs and purveyors of model railways but left foot masseurs and poodle groomers free to ply their trade — has been a busy producer of urban myths.

Maintaining the lockdown and saving the economy are mutually compatible; It is not a matter of protecting people ‘or’ the economy but of protecting people ‘and’ the economy
Martin Wolf – FT
“We can’t have the cure be worse than the problem.” Thus did Donald Trump capture a widely-shared worry. Such a supposed trade-off between the economy and lives is also present in the debate within the British government on when and how to release the country’s lockdown. Michael Gove, cabinet office minister, argues for early reopening. Matt Hancock, health secretary, argues against. Mr Hancock is right: suppressing the virus is the best policy for both health and the economy.

China’s Virus Cases Could Have Been Four Times Official Tally
Bloomberg News
China may have seen 232,000 virus cases in February: Lancet; Study notes that infection measurements changed significantly
Coronavirus cases in China may have been four times higher than officially reported numbers, according to a study published in the Lancet medical journal. Infections would have been 232,000 in China as of Feb. 20 if the calculation of cases confirmed by “clinical diagnosis” had been applied throughout the outbreak, the Lancet reported. That compares to the 55,508 cases announced at the time by the country’s National Health Commission, according to the report.

Why a Second Wave of Covid-19 Is Already a Worry
John Lauerman – Bloomberg
As authorities the world over consider when to lift economy-crippling movement restrictions aimed at curbing coronavirus infections, the fear on everyone’s minds can be expressed in two words: second wave. The concern is that, once quelled, the pandemic will resurface with renewed strength, causing a repeat of rising infections, swamped health systems and the necessity of lockdowns.

Britons Under Lockdown Turn to Alcohol in Record Splurge
Andrew Atkinson – Bloomberg
Official figures Friday confirmed what many Britons have privately known for weeks: The lockdown may keep them out of the pub, but it won’t stop them drinking. Alcohol stores, one of only a few retail sectors allowed to remain open under strict social distancing rules, saw sales surge by almost a third in March – – the biggest monthly increase since records began in 1988. The figure doesn’t include supermarkets, where the vast majority of alcohol is bought.

4 ways to support employees’ mental wellness during the pandemic
Smart managers are keeping their teammates’ well-being top of mind right now.
Alexa James – Crain’s Chicago Business
The COVID-19 pandemic has idled factories, emptied offices and scattered workforces. In this crisis, the front lines are hospital emergency rooms and grocery store checkout lines. Businesses are worried about their employees’ productivity —? and we should be just as worried about their mental health.

Gilead Tumbles After Latest Data Leak on Virus Drug Trials
Robert Langreth and Michelle Fay Cortez – Bloomberg
Drugmaker and doctor involved dispute that trial was a failure; S&P 500 briefly gives up gains after report on China trial
Gilead Sciences Inc. shares were whipsawed for the second time in a week after a summary of a Chinese trial of its Covid-19 drug appeared to show that it was a failure.

Grocers Hunt for Meat as Coronavirus Hobbles Beef and Pork Plants; Surging consumer demand also tightens supplies; supermarkets brace for shortages
Jacob Bunge, Sarah Nassauer and Jaewon Kang – Bloomberg
U.S. grocers are struggling to secure meat, looking for new suppliers and selling different cuts, as the coronavirus pandemic cuts into domestic production and raises fears of shortages. Covid-19 outbreaks among employees have closed about a dozen U.S. meatpacking facilities this month, including three Tyson Foods Inc. plants this week. Other plants have slowed production as workers stay home for various reasons.

Disease Experts Are Better Than the Covid-19 Contrarians; Yes, epidemiologists, like economists in 2008, got some things wrong. But who said they were infallible?
Noah Smith – Bloomberg
One of the most vexing questions in life is: Should you trust the experts? The fundamental conundrum is that sometimes the experts make big mistakes — think of medieval doctors who killed their patients by bleeding them. But without expertise in a field — economics, epidemiology, meteorology or whatever — it’s very hard to tell when the official wisdom is wrong. In a crisis such as the coronavirus pandemic, where we have to make decisions quickly under incomplete information, this poses a troubling dilemma.

Exchanges, OTC and Clearing

SGX reports 3Q FY2020 net profit of S$138 million
3Q FY2020 Financial Summary
Revenue: S$296 million, up 29% from a year earlier; EBITDA: S$186 million, up 39%; Net profit: S$138 million, up 38%; Earnings per share: 12.8 cents, up 38%
Interim dividend per share: 7.5 cents; All figures are for the year except for figures in brackets, which are for the year earlier, unless otherwise stated. Some figures may be subject to rounding.
Singapore Exchange (SGX) today reported 3Q FY2020 net profit of S$137.5 million (S$99.7 million), with revenues of S$295.8 million (S$228.8 million). EBITDA stood at S$186.2 million (S$134.2 million), while earnings per share was 12.8 cents (9.3 cents). The Board of Directors has declared a dividend of 7.5 cents (7.5 cents) per share, payable on 13 May 2020.

Cboe Global Markets to Host 2020 Virtual Annual Meeting of Stockholders
As previously announced, Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, will
host the company’s 2020 Annual Meeting of Stockholders (Annual Meeting) as a completely virtual meeting. Amidst the coronavirus (COVID-19) outbreak, we
are mindful of our responsibility to do all that we reasonably can to safeguard against the virus. As a precaution and in order to support the health and well-being of our partners and stockholders, this year’s Annual Meeting will be a completely virtual meeting and there will be no physical meeting location.

Zoom Video Communications, Inc. to Join the NASDAQ-100 Index Beginning April 30, 2020
Nasdaq (Nasdaq: NDAQ) today announced that Zoom Video Communications, Inc. (Nasdaq: ZM), will become a component of the NASDAQ-100 Index® (Nasdaq: NDX), the NASDAQ-100 Equal Weighted Index (Nasdaq: NDXE) and the NASDAQ-100 Ex-Tech Sector Index (Nasdaq: NDXX) prior to market open on Thursday, April 30, 2020. Zoom Video Communications, Inc. will replace Willis Towers Watson (Nasdaq: WLTW) in the NASDAQ-100 Index®, the NASDAQ-100 Equal Weighted Index and the NASDAQ-100 Ex-Tech Sector Index (Nasdaq: NDXX) prior to market open on Thursday, April 30, 2020.

Nasdaq, Inc. Prices $500 Million Senior Notes Offering
Nasdaq, Inc. (the “Company”) (Nasdaq: NDAQ) today announced that it priced a public offering of $500,000,000 aggregate principal amount of 3.250% senior notes due 2050 (the “Offering”). The Company expects to use the net proceeds from the Offering to repay short term indebtedness. The Offering is expected to close on April 28, 2020, subject to customary closing conditions.

Nasdaq, Inc. Announces Proposed Senior Notes Offering
Nasdaq, Inc. (the “Company”) (Nasdaq: NDAQ) today announced that it plans to offer, subject to market and other conditions, senior notes (the “Offering”). The Company expects to use the net proceeds from the Offering to repay short term indebtedness.

Intercontinental Exchange Appoints David Clifton as Interim CEO of Bakkt
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, has appointed David Clifton as Interim CEO of Bakkt, the digital assets trading and payments platform that is majority-owned by ICE. Clifton replaces Mike Blandina, who is leaving the company to pursue a new opportunity. Adam White, who was appointed President of Bakkt earlier this year, will continue in his role.

Repo Liquidity as a Solution to (Un)cleared Derivatives Cash Margin Requirements
Frank Odendall – Global Head of Securities Financing Product & Business Development – Eurex
Entities in the scope of phases five and six of the Uncleared Margin Rules (UMR) will need reliable and efficient access to cash in order to manage their daily OTC derivatives collateral obligations. Yes, the current coronavirus pandemic has delayed the deadlines, but the challenge has not disappeared. Impacted firms need to take this time to better prepare for compliance and take the opportunity to put a complete solution in place.

Euronext strengthens its post-trade business with the acquisition of VP Securities, the Danish Central Securities Depository
Euronext today announces it has entered into definitive agreements to acquire c.70% of the shares of VP Securities from its existing owners, the Danish Central Bank and four major Danish financial institutions, Danske Bank, Nykredit, Nordea and Jyske Bank. VP Securities is the Danish Central Securities Depository (CSD), covering fixed income, equity and investment funds, and a key infrastructure helping to finance Denmark’s real economy.

Euronext to acquire Danish CSD to bolster post-trade business; Deal for VP Securities will give the European exchange group a CSD presence in the Nordics and boost its post-trade offering.
Jon Watkins – The Trade
Euronext has agreed to acquire Danish Central Securities Depository (CSD) VP Securities in a move to strengthen its post-trade business and its presence in the Nordics. The price offered for 100% of the shares is EUR150 million, and the deal double’s Euronext’s depositary business in size.

QQQs Tilted for COVID-19 Outperformance; The QQQs are tilted for COVID-19 outperformance — here’s why.
Phil Mackintosh – Nasdaq
It’s easy to think that all large-cap portfolios are the same. But are they? The recent COVID-19 selloff shows how different the Nasdaq-100 is in some important ways that have helped it outperform during the selloff.


Fintechs Boom With Cash-Loving Argentines Stuck at Home
Jorgelina Do Rosario – Bloomberg
Fintechs taking off as demand for accounts surges amid virus; ‘Change we expected over years is happening in weeks:’ Ualá
In Argentina, where cash is king, a strict lockdown to halt the spread of the coronavirus is finally pushing suspicious consumers into formal banking and online payments. Before quarantines began March 20, more than half of all Argentines didn’t have a bank account. Many people — scarred from decades of hyperinflation, seizures and devaluations — instead preferred to make everyday payments in person and in cash. But now that they’re forced to stay home, demand for credit cards, new accounts and wallet apps has surged.

Customer Group Presses Fintech Firm Yieldstreet for Missing Investor Payments
Dawn Lim – WSJ
A buzzy fintech firm that pitches individuals access to investments normally limited to large institutions is under fire from dozens of customers.
The customers are calling on digital-wealth management platform Yieldstreet Inc. for a full explanation of why their investments haven’t paid out as expected.

7 VCs look into the future of fintech
Alex Wilhelm, Natasha Mascarenhas and Arman Tabatabai – TechCrunch
TechCrunch recently asked a number of venture capitalists who invest in fintech to share their thoughts about the state of the industry; they pulled us into the present moment, drawing from their portfolio companies, deal flow and inboxes.
Today, we asked them to look into the future.

Fortress Fintech? These Three Fintechs are Killing it Right Now
JD Alois – Crowdfund Insider
Earlier this week, Crowdfund Insider wrote about the challenges some Fintech lenders are encountering due to the ongoing COVID-19 pandemic. Online lenders in the SME, consumer, and real estate sector are seeing a shift in business as borrowers and investors back away in a market of heightened risk. It has been reported that several high profile online lenders have furloughed and let go of some employees as loan originations have tanked and no one has any idea as to when things will go back to the way it was before. The pre-COVID world is getting smaller in the rearview mirror as a new reality of social distancing, lockdowns and virtual offices are becoming the norm. The enforced behavioral changes have impacted all sectors of the economy but some are benefiting from this systemic shift – and some Fintechs are seeing their businesses boom.


Bakkt boss to leave for JPMorgan – source
Anna Irrera, Noor Zainab Hussain – Reuters
The top boss of Bakkt, Mike Blandina, will leave the cryptocurrency trading platform to join JPMorgan Chase & Co to work in payments, according to a source familiar with the matter. Bakkt’s majority-owner Intercontinental Exchange Inc on Thursday appointed David Clifton as interim chief executive officer to replace Blandina.

A Cryptocurrency Technology Finds New Use Tackling Coronavirus
Sara Castellanos – WSJ
Blockchain technology projects are being developed by companies such as International Business Machines Corp. and Ernst & Young LLC to help with various aspects of the pandemic caused by the novel coronavirus. Employees developing the projects say blockchain could be an efficient way of connecting health-care providers in need of medical equipment with global suppliers they might not otherwise find on their own. The technology could also help validate a person’s immunity to Covid-19, the disease caused by the virus, data that authorities could use to better understand and respond to the pandemic.

Private Securities Trading Joins the Digital Age With Blockchain
Matthew Leising – Bloomberg
Startup Securitize offers trades in venture capital stakes; Firm is using AirSwap’s atomic swap trading technology
The growing wave of financial products being digitized to make trading instant and more secure now includes stakes in private venture capital funds. Blockchain startup Securitize will begin offering instant trading Thursday for private securities linked to five companies that include venture capital funds, according to co-founder and Chief Executive Officer Carlos Domingo.

Ain’t no virus gonna stop the crypto graph-ters
Jemima Kelly – FT
Sometimes it’s not so much the axes themselves of a chart that are evil, but the conclusions drawn from them. With that in mind, do take a look at this tweet and chart from The Economist Intelligence Unit (the “research and analysis division” of The Economist Group, which also publishes The Economist), which was enthusiastically retweeted by a whole bunch of crypto bros and “fintech influencers” earlier this week:

Crypto-friendly Signature Bank’s net income falls 30% in Q1 2020
Yogita Khatri – The Block
Crypto-friendly Signature Bank has reported a 30% drop in its net income for the first quarter of 2020, as compared to the first quarter of 2019. The Q1 2020 net income stood at $99.6 million as compared to $143.5 million in Q1 2019, according to financial results published on Thursday. Signature Bank said the drop in net income is due to an increase in the provision for credit losses of $60.5 million.

AVA Labs Will Splash Millions to ‘Brain Merge’ DeFi and Traditional Finance
Paddy Baker – Coindesk
Now that its public testnet is live, Emin Gun Sirer’s AVA Labs wants to invest heavily in building a DeFi space more in its own image. Speaking on Google Hangouts, AVA Labs COO Kevin Sekniqi told CoinDesk the company was focusing its energies on a new grants program, made available through its new venture arm, AVA X, that will provide financing of up to $250,000 to selected projects building with its technology.

Securitize launches peer-to-peer security token trading service
Mike Orcutt – The Block
Tokenized security issuance and trading platform Securitize has launched a new service that it says will make it possible for users to trade tokenized securities peer-to-peer. The service, called Instant Access, is being pitched as a means for exchanging digital securities in a way that is both compliant with regulators and poses “no counterparty risk,” according to the firm.

Cryptocurrency Data Firm Nomics Launches AI-Driven 7-Day Price Predictions
Adrian Zmudzinski – Cointelegraph
Cryptocurrency data firm Nomics announced an artificial intelligence system that makes seven-day cryptocurrency price predictions. Cryptocurrency data firm Nomics is applying artificial intelligence to the often chaotic world of cryptocurrency trading. In an announcement on April 23, Nomics introduced an AI system that makes seven-day cryptocurrency price predictions. The firm claims this makes it the first to share crypto asset price predictions generated by a machine learning (ML)-based AI system.

Bitcoin Messenger Explores Censorship Resistance During Coronavirus Crisis
Leigh Cuen – Coindesk
A new bitcoin privacy technology was born this week, inspired by the politics of the “Great Lockdown.” On Monday, software engineer John Cantrell released a messenger application called Juggernaut. It’s built entirely on top of bitcoin’s scaling layer, the Lightning Network, and offers end-to-end encrypted, onion-routed, peer-to-peer messages.

Cuba’s First Bitcoin Exchange Launches Despite Restrictions
Julia Bahr – Finance Magnates
While crypto is not illegal in Cuba, most businesses keep out of the country due to regulatory uncertainties and US sanctions. Nevertheless, Italian-Cuban entrepreneur Mazzola developed the country’s first decentralized Bitcoin exchange QBita earlier this month, according to market sources.

BitMEX is launching new ether/USD futures, which settle in bitcoin
Yogita Khatri – The Block
Crypto derivatives exchange BitMEX is launching new ether (ETH)/ USD futures contracts on May 5. The new contracts, ETHUSD, allow traders to speculate on the future USD price of ETH. Traders who think that the price of ETH will rise will buy the futures contract, while those who believe the price will drop will sell it.


Fed’s bailout role could put it in political crosshairs; US central bank will disburse potentially trillions of dollars to companies and municipalities
James Politi – FT
The Federal Reserve is facing heavy pressure from lawmakers and watchdogs to fairly implement a rescue plan that could deliver up to $4tn in financial support for corporate America, as the US central bank treads into the politically fraught terrain of crisis-era fiscal policy.

Trump faces backlash for raising ‘disinfectant injection’ idea; Medical community warns of dangers from use of cleaning agent as internal treatment
Clive Cookson – FT
US president Donald Trump has sparked outrage among the medical community by raising the idea that injecting disinfectant or irradiating the body with ultraviolet light might treat coronavirus.

Trump’s Idea to Inject Disinfectant to Kill Coronavirus Alarms Medical Experts
Kristen V Brown and Justin Sink – Bloomberg
President suggests using ‘very powerful light’ on people; Doctor strongly cautions against bleach, disinfectant in lungs
President Donald Trump returned to the lectern Thursday after a government scientist’s presentation about studies showing that sunlight, humidity and disinfectants kill the coronavirus on surfaces — in some cases within seconds. What Trump suggested next later sparked warnings from doctors and manufacturers of household cleaners.

Trump’s Bleach Comment Alarms; Spain Deaths Slow: Virus Update
Bloomberg News
U.S. President Donald Trump’s comments on injecting bleach to kill the coronavirus sparked concern among experts who called it a ‘ridiculous concept’ that would damage the lungs. British Prime Minister Boris Johnson is ‘raring to go,’ but will follow doctors’ advice on returning to work.

House approves $484bn in extra US coronavirus relief funds; Donald Trump to sign bill that adds another $320bn to small business loan programme
Courtney Weaver – FT
Congress has passed a $484bn economic relief package for small businesses, hospitals and coronavirus testing, sending the US government’s fourth stimulus bill since the outbreak to Donald Trump for his signature.

Resentment Grows on Main Street Over Bailout Winners and Losers
Bob Ivry, Sonali Basak, and Emma Kinery – Bloomberg
Businesses are angry big firms got loans meant for them; Eroding faith in fairness threatens repeat of 2008 reaction
Robyn Shultz was waiting for approval of her $40,000 small-business loan last week when the government’s first-come-first-served lending program ran out of cash.

Cohn Says States Deserve Aid in Response to McConnell Reluctance
Erik Schatzker – Bloomberg
Former Trump adviser likens state aid to support for business; McConnell has suggested letting states file for bankruptcy
Gary Cohn, the former top economic adviser to President Donald Trump, said the federal government needs to help cash-strapped states with emergency financing, not leave them to seek more desperate solutions such as bankruptcy.


Federal Court Orders Defendants to Pay Over $1.7 Million to Settle CFTC Enforcement Action Charging Fraud and False Statements
The Commodity Futures Trading Commission announced that the U.S. District Court for the Southern District of New York entered a consent order of permanent injunction against defendants Simon Jousef of Ontario, Canada and his business, FuturesFX, imposing more than $1.7 million in civil monetary and equitable relief. The injunction and sanctions resolve a CFTC enforcement action filed on September 10, 2019 [See CFTC Press Release No. 8006-19]. The CFTC’s complaint charged the defendants with fraudulently soliciting members and prospective members in the United States and other countries to subscribe to a trading system that included a supposedly “live” foreign exchange (forex) and commodity futures online trading room, educational videos, and online support. The CFTC also charged Jousef with making false or misleading statements to the National Futures Association (NFA).

CFTC Provides Further Relief to Market Participants in Response to COVID-19
The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today announced that it has issued additional targeted no-action relief to futures commission merchants (FCMs) and introducing brokers (IBs) in response to the COVID-19 (coronavirus) pandemic.

Coronavirus (COVID-19) Update—Regulatory Relief for FCMs and IBs
On April 23, 2020, the CFTC issued a no-action letter to futures commission merchants (FCM) and introducing brokers (IB) addressing the net capital treatment of covered loans obtained under the Paycheck Protection Program (PPP) and unpaid FINRA assessment fees. PPP is a component of the Coronavirus Aid, Relief, and Economic Security Act administered by the Small Business Association.

ASIC obtains orders to wind up two financial services companies
The Federal Court of Australia in Melbourne has ordered that Audrn Group Pty Ltd (Audrn) and Optima Lending Solutions Pty Ltd (Optima) be wound up. The Court ordered that Michael Hill and Anthony Connelly of McGrathNicol be appointed as joint and several liquidators of both Audrn and Optima.

Fed’s bailout role could put it in political crosshairs; US central bank will disburse potentially trillions of dollars to companies and municipalities
James Politi – FT
The Federal Reserve is facing heavy pressure from lawmakers and watchdogs to fairly implement a rescue plan that could deliver up to $4tn in financial support for corporate America, as the US central bank treads into the politically fraught terrain of crisis-era fiscal policy.

Investing and Trading

Don’t Try to Prepare for the Next Black Swan. You Can’t; In the age of Covid-19, companies that amassed cash buffers and investors who insured against a market drop are looking smart. The risk is they start believing they can predict the unpredictable.
Jon Sindreu – WSJ
Covid-19 has posed a mind-bending question for companies, investors and policy makers: How to protect against the next extreme “black swan” event? The temptation to find a concrete answer is best resisted.

Rosneft on brink of closing trading arm hit by US sanctions; Russian state oil group starts winding down unit targeted by Washington over Venezuela ties
Henry Foy in Moscow and Neil Hume and David Sheppard – FT
Russian state-controlled oil producer Rosneft is on the brink of closing its trading arm, two months after the unit was placed under US sanctions for handling Venezuelan crude.

Stock Pickers Are Flunking Their Big Moment; The coronavirus crisis has at last brought a market where active investors can shine — provided they make the right bets.
John Authers – Bloomberg
Opportunity Knocks, Covid-19 Edition
For many years, active managers have awaited the return of a “stock picker’s market.” This is one where the skill of investors can show itself to greater advantage. It may just have arrived. Now, all stock pickers have to do is pick the right stocks.

About 150-years of oil-price history in one chart illustrates crude’s spectacular plunge below $0 a barrel
Mark DeCambre – MarketWatch
The formerly unthinkable drop in oil prices below $0 a barrel on Monday is still reverberating through financial markets, as supply overwhelms demand destroyed by the coronavirus pandemic, forcing some energy companies into possible bankruptcy as storage reaches maximum capacity.


Franklin Templeton freezes $3bn in India funds due to coronavirus; US investment group halts withdrawals in move that could rock asset management industry
Benjamin Parkin – FT
Franklin Templeton said it would freeze a number of its fixed income mutual funds in India after the coronavirus pandemic wrought havoc on the country’s bond markets, trapping over $3bn of investor money and prompting fears of turmoil in the asset management industry.

Eurozone bank stress starts to show in funding markets; Lenders’ borrowing costs stretch away from the European Central Bank benchmark
Tommy Stubbington – FT
A closely watched gauge of stress in the eurozone’s financial system has climbed to its highest level since 2012, a sign that the coronavirus crisis has pushed up borrowing costs for banks in the currency bloc.

Insurers face biggest-ever losses, warns Lloyd’s chief; Pandemic could dwarf other disasters such as Hurricane Katrina, John Neal says
Oliver Ralph – FT
Lloyd’s of London boss John Neal has said that the coronavirus pandemic is likely to be the most expensive event in history for the insurance industry, dwarfing other major disasters such as Hurricane Katrina in 2005 and the 9/11 terror attacks.

Billionaire Chris Rokos Reopens Hedge Fund to Raise $1 Billion
Nishant Kumar – Bloomberg
Assets managed by Rokos Capital have risen to $12 billion; The macro hedge fund posted its best-ever returns in March
Billionaire Chris Rokos has reopened his hedge fund to take in fresh capital, according to a person familiar with the matter.

Credit Suisse Traders Still Carry the Bank; The Swiss bank is relying on its trading arm to offset coronavirus-related loan provisions. But that’s a risky position in which to find yourself.
Elisa Martinuzzi – Bloomberg
For a bank that has tried so hard to shed its “Wall Street” image back home, Switzerland’s Credit Suisse Group AG is still hugely reliant on its trading arm. Its first set of earnings since the Covid-19 lockdown is a reminder of just how volatile the securities and lending business can be.

Franklin’s $4.1 Billion Fund Halt Shows Lasting Credit Pain
Anurag Joshi, Nupur Acharya, and Ravil Shirodkar – Bloomberg
Money manager halts withdrawals from India debt funds; Surprise move highlights pockets of stress despite stimulus
Franklin Templeton will wind up $4.1 billion of Indian debt funds after a liquidity crisis compelled the firm to freeze investor withdrawals. The asset manager’s surprise announcement underscores persistent stress in credit markets as the coronavirus pandemic wreaks havoc on the global economy.

Top JPMorgan Fund Touts Big Windfall in Emerging-Market Stocks
Ben Bartenstein – Bloomberg
JPMorgan model for EM stocks hit all-time high last month; Eidelman’s fund has dodged rout by avoiding oil stocks
An investor who’s consistently topped peers betting on stocks in the developing world says the asset class has never looked so promising. Leon Eidelman, whose $7.4 billion JPMorgan Emerging Markets Equity Fund has trounced 96% of peers through five years, said the firm forecasts 18% annualized returns for a basket of some 1,200 developing-nation stocks over the next half decade. The JPMorgan model jumped to an all-time high last month. He says his fund, which has about half its money in China and India, will do even better.

Capital One Says Provisions Tripled on Pandemic, Oil Decline
Jennifer Surane – Bloomberg
Capital One Financial Corp. said it more than tripled the amount of money set aside to cover souring loans, prompted by the coronavirus pandemic and a drop in oil prices during the first quarter.

Biggest Oil ETF ‘Almost Unanalyzable’ After Ditching Disclosures
Katherine Greifeld – Bloomberg
USO will invest in any month of contracts without disclosure; Shorted USO shares tripled between late Feb. to April 21: S3
Figuring out what a stock will do next is never a straightforward affair. But taking a view on the biggest exchange-traded fund tracking oil right now requires levels of understanding that even Wall Street veterans want no part of.

Ex-Pimco Chief Hodge Says Prosecutors Cheated in College Scandal
Patricia Hurtado – Bloomberg
One of the most prominent parents sentenced to prison in the college admission scandal says new evidence shows the real cheaters were the prosecutors.


Mass securitisation as a device for recovery has no economic value; Tweaking pre-pandemic indirect EU subsidies is not the way to rescue struggling businesses
John Dizard – FT
Europe sometimes imports concepts from the US and makes them worse than they were in the first place. Reality TV’s ghastly self-absorption. Eurovision’s cultural homogenisation. Both of those quasi-American creations, though, can be entertaining in their awfulness.

‘Locust-19’ set to ravage crops across east Africa; Second wave of swarms expected just as farmers battle fallout from coronavirus
David Pilling and Emiko Terazono – FT
They are calling it “Locust-19”. A second wave of locusts is about to make a devastating appearance in east Africa, two months after swarms — some billions strong and one the size of Moscow — ravaged crops, and just as the coronavirus outbreak has begun to disrupt livelihoods.

Europe’s Number One Stock Market Is Close to Erasing 2020 Drop
Namitha Jagadeesh – Bloomberg
One European stock market has clawed back most of its losses in 2020, thanks to a heavy weighting of health-care stocks. And it’s not Switzerland. Denmark’s OMX Copenhagen 25 Index on Thursday came within 2% of turning positive for the year. The reason? Roughly half the benchmark’s weighting comes from pharma shares, which have proven more resilient than most in a global economy ravaged by the impact of the coronavirus. Green stocks have also boosted the gauge.

Bank of Japan to Debate Unlimited Bond Buys, Nikkei Reports
Gearoid Reidy – Bloomberg
The Bank of Japan will discuss abandoning its annual 80 trillion yen ($742 billion) annual purchase target for Japanese government bonds at its monetary policy meeting Monday and replacing it with the ability to buy an unlimited amount of bonds, the Nikkei reported.

A $6 Billion Windfall: Mexico’s Massive Oil Hedge Is Paying Off
Lorena Rios and Javier Blas – Bloomberg
A $6 Billion Windfall: Mexico’s Massive Oil Hedge Is Paying Off
(Bloomberg) — Mexico is on track to cash in on a $6 billion windfall once its massive insurance program against low oil prices kicks in following a dramatic plunge in prices, President Andres Manuel Lopez Obrador said on Wednesday.


Brexit talks: who is involved and what is being covered?
Lisa O’Carroll – The Guardian
Brexit talks on the future relationship between the UK and the EU resumed this week after a six-week interruption caused by coronavirus. Over five days and 40 video sessions, 10 negotiating teams were expected to provide an urgent “refocus” before the 30 June deadline for both sides to formally agree to extend the transition period if the UK asks for one.

Brexit: Disappointing progress in trade talks, says Michel Barnier
BBC News
The progress made in post-Brexit trade talks between the UK and EU has been disappointing, Michel Barnier has said. The EU’s chief negotiator said “genuine progress” and a decision on whether to extend the transition period were both needed by June. Mr Barnier, who held talks with UK negotiator David Frost this week, warned that the “clock was ticking”. The two sides will hold further rounds of talks before the end of the transition period in December.

German minister: Coronavirus crisis won’t make Brexit easier
Michelle Martin – Reuters
German Foreign Minister Heiko Maas said the coronavirus crisis would not make Brexit negotiations easier, adding that Berlin would use its EU presidency in the second half of the year to ensure there is a “good result” for both the EU and Britain.

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