IRS Says It Exposed Some Confidential Taxpayer Data on Website

Sep 6, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

John’s surgery went well and he has managed a few ups and down in his recovery. He is awaiting placement for a short term rehabilitation stay of underdetermined length. He is in good spirits and getting stronger. Also, he is more balanced, as before the surgery one leg was longer than the other, but the surgeon fixed that and they are now both equal.

Qontigo has appointed Stephane Degroote as global head of investable products sales, a newly created role. Degroote will be responsible for building Qontigo’s relationships with ETF issuers and positioning the firm’s STOXX and DAX indices as underlyings for new investable products. Currently, Qontigo has EUR 103 billion AUM* in ETFs benchmarked to its indices, including as the leading index provider for Thematic ETFs in EMEA.

Todd Rich shared on LinkedIn that he is starting a new position in business development at Barchart.

Philip Radin shared on LinkedIn, “I’m happy to share that I’m starting a new position as Director, North American Product Strategy at Cboe Global Markets!” He was previously at ICE.

Cboe BIDS Europe was the region’s largest equities block trading platform for the fifth successive month in August, Cboe announced. You can see the exchange’s monthly stats and find out more about the platform here.

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 Financial Times is holding its “Moral Money Summit Asia” this week – from September 7-8. Subtitled “Accelerating ESG Integration to Unlock Value and Drive Progress,” the summit “will analyze what to expect from Asia’s burgeoning ESG market, and how to unlock its potential.” Investors, corporates, policy makers and financiers will share their priorities to accelerate ESG integration and sustainability investment across the APAC region. It will be digital and in-person on day 1 and digital only on day 2. The in-person portion will be held at The Westin, Singapore. You can go here for more information and to register.~SR

SEC Chair Gary Gensler, Commissioners, senior leaders, and staff will participate in The Practising Law Institute’s SEC Speaks Sept. 8 – Sept. 9, 2022, at 5:20 p.m. (EST). The agenda includes essential updates on the current initiatives and priorities of the commission for the coming year. The event will be held via live webcast and in person. You can learn more about it and register here. ~Sally Duros


MWE SHORT: Rolf Andersson – Attention To Detail: High Performance Requires Hard Work

Rolf Andersson of Goldman Sachs is a software architect, and he says that software is taking over the world. But all the competition out there is making it much harder to innovate than it was a number of years ago. You have to have a good idea, plus the stamina and expertise and experience. And a good team.

Watch the video »


The Spread: Options Discovery Episode 7: a Guide to IV Rank and IV Percentile; Lex Luthringshausen Breaks Down Implied Volatility and How to Measure It With JLN’s Alex Teng

In this episode of Options Discovery, Alex introduces different metrics to describe an option’s implied volatility. Alex also sits down with long time trader and options expert Lex Luthringshausen in another Options Discovery interview. Lex describes what IV rank and IV percentile are and how traders use them to inform their trades. He also talks about his background and career.

Watch the video »


Crypto Hacks Have Investors Finally Focusing on Security
Victoria Vergolina – Bloomberg
It can feel as if everywhere you look there’s another crypto hack happening.
By some estimates, major crypto hacks in 2022 have cost the industry nearly $2 billion in stolen tokens. That’s *just* this year. And those headline numbers typically don’t take into account smaller exploits that target individual consumer accounts. So, the real number is even bigger.

**** It seems to me they should have realized this sooner. Crypto hacks are not a new thing.~JB


California Declares Grid Emergency With Power Use at Five-Year High
Mark Chediak and Brian K Sullivan – Bloomberg
California narrowly avoided implementing rotating outages on Monday while officials warned that the state’s power grid will face a bigger test on Tuesday amid a record-breaking heat wave.
The state’s grid operator canceled its grid emergency late Monday evening after deploying supplies that helped keep the lights on even as electricity use soared to its highest level in five years.

**** In Denver, Xcel Energy took remote control of customer thermostats who had installed smart thermostats provided by the power company and turned them down so they cooled less in order to reduce stress on the power grid. Owners were locked out from changing them. I imagine we will be seeing more of that kind of thing as the world heats up.~JB


Enough, Bosses Say: This Fall, It Really Is Time to Get Back to the Office*; After more than two years, corporate leaders say time is up on avoiding in-person work.
Chip Cutter and Katherine Bindley – The Wall Street Journal
Labor Day marks the line in the corporate sand.
Many company leaders say the end-of-summer holiday represents the best chance to finally lean on workers to return to the office this year. After months of encouraging white-collar employees to return, or attempting to coax them back with free pizza, warm cookies and catered lunches, many executives now say they feel emboldened to take a tougher stance. No longer can workers merely come to the office if they so choose; this fall, executives say, attendance is expected and the office resisters will be put on notice. Employers including Apple Inc., Prudential Financial Inc. and BMO Financial Group plan broader September returns at their U.S. offices. Some companies, such as Ally Financial Inc., have sent notes in recent weeks reminding workers to come into the office consistently. Goldman Sachs Group Inc. said it was lifting all vaccination and other requirements to enter most of its offices after Labor Day, eliminating a final barrier to a full return.

**** A part of me misses going to the office and being with my co-workers and hanging out after work on occasion and the vibe of the city around you.~JB


Women Who Stay Single and Don’t Have Kids Are Getting Richer; Forgoing marriage and parenthood has a bigger payoff for American women than men, according to new research.
Molly Smith – Bloomberg
Ashley Marrero isn’t married and doesn’t have kids. And she has a message for women just like her: You can still have it all. The 43-year-old feels a deep sense of satisfaction from her job as a sales representative for a maker of medical devices, which brings her into contact with patients. And she relishes all of the lifestyle and financial freedoms that come with being a single, child-free woman in a well-paying job. That includes an apartment in New York City, a new beach house on the Jersey Shore, and frequent travel for pleasure as well as work.

**** Kids are expensive both in time and money.~JB


Friday’s Top Three
Our top story Friday was the CME Group press release CME Group Executives to Present at Barclays Global Financial Services Conference. Second was The Wall Street Journal’s Here’s What a $2 Million Retirement Looks Like in America. Third was Bloomberg’s Unnamed Public CEO Was the Victim of Catfishing Scheme, Federal Prosecutors Say.


MarketsWiki Stats
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MarketsWiki Statistics


Lead Stories

IRS Says It Exposed Some Confidential Taxpayer Data on Website; Tax agency says error led to posting about some taxpayers with IRAs
Richard Rubin – The Wall Street Journal
The Internal Revenue Service inadvertently posted what is normally confidential information involving about 120,000 individuals before discovering the error and removing the data from its website, officials said Friday. The data are from Form 990-T, which is often required for people with individual retirement accounts who earn certain types of business income within those retirement plans. That typically includes people whose IRAs are invested in master limited partnerships, real estate or other assets that generate income, not those whose IRAs are solely invested in securities.

Oil Royalty and Mineral Companies Sitio and Brigham to Merge in $4 Billion; Tie-Up Deal between Sitio Royalties and Brigham Minerals is one of largest in oil-and-gas industry this year
Benoît Morenne – The Wall Street Journal
Sitio Royalties Corp. and Brigham Minerals Inc. have reached a deal to merge to form one of the largest publicly traded mineral and royalty companies in the U.S., worth about $4 billion, according to people familiar with the matter. The agreement, expected to be announced on Tuesday, is one of the largest tie-ups in the oil patch this year, coming in a period of elevated oil prices intensified by Russia’s invasion of Ukraine.

Russia to Keep Nord Stream Pipeline Shut, Citing Mechanical Problems; Move comes hours after G-7 countries agreed to price cap for Russian crude and raises pressure on Europe as governments race to avoid energy shortages this winter
Georgi Kantchev and Andrew Duehren – The Wall Street Journal
Russia indefinitely suspended natural gas flows to Europe via a key pipeline hours after the Group of Seven agreed to an oil price cap for Russian crude—two opposing blows exchanged between Moscow and the West in an economic war running parallel to the military conflict in Ukraine. Kremlin-controlled energy company Gazprom PJSC said late Friday it would suspend supplies of gas to Germany via the Nord Stream natural-gas pipeline until further notice, raising the pressure on Europe as governments race to avoid energy shortages this winter. Gazprom said it had found a technical fault during maintenance of the pipeline, which connects Russia with Germany under the Baltic Sea. The company said the pipeline will remain shut down until the issue is fixed, without giving any timeline.

Markets Scream Warning Over New UK Prime Minister’s Mammoth Task; The pound has fallen nearly 15% against the dollar this year; Gilt yields are surging as rate-hike expectations shoot higher
Alice Gledhill – Bloomberg
A currency near the lowest in decades, an unprecedented surge in government borrowing costs and record underperformance in domestic stocks — such is the dismal scene in markets that awaits Britain’s next prime minister. The pound, already down nearly 15% this year versus the dollar, just posted its worst monthly performance since the 2016 Brexit vote. Meanwhile, borrowing costs for businesses have jumped after six back-to-back rate hikes by the Bank of England, while expectations of further increases have shot up amid warnings that inflation will spiral further out of control.

The Other Doomsday Scenario Looming Over Markets; A U.K. fund manager says the big worry isn’t inflation, it’s the Fed reversing quantitative easing
James Mackintosh – The Wall Street Journal
Think inflation is the biggest threat to your investments? Perhaps not: One fund manager that successfully navigated the past two major stock crashes is bracing for an awful end to the year because it fears the Federal Reserve’s quiet exit from bonds. London-based Ruffer LLP is concerned that the accelerating runoff of the Fed’s Treasury holdings will suck liquidity out of the markets—just as rising rates and falling stock and bond prices increase the need for cash to smooth the drop. “It puts a pincer on equities and bonds at the same time,” said Alex Lennard, investment director at Ruffer. It could be “the sort of event you tell the grandchildren about.”

Energy Trading Stressed by Margin Calls of $1.5 Trillion; Exchange requirements to secure trades is sucking up capital; Governments under pressure to provide market with liquidity
Anna Shiryaevskaya – Bloomberg
European energy trading is being strained by margin calls of at least $1.5 trillion, putting pressure on governments to provide more liquidity buffers, according to Norway’s Equinor ASA. Aside from fanning inflation, the biggest energy crisis in decades is sucking up capital to guarantee trades amid wild price swings. That’s pushing European Union officials to intervene to prevent energy markets from stalling, while governments across the region are stepping in to backstop struggling utilities. Finland has warned of a “Lehman Brothers” moment, with power companies facing sudden cash shortages.

World’s Second-Biggest Cryptocurrency to Make Radical Technological Shift
John Quiggin, The Conversation – Science Alert
Amid the continuous noise about cryptocurrencies, it’s often hard to pick out what really matters. However this month, if all goes to plan, the energy-hungry digital sector will undergo its biggest shake-up in years. Ethereum, the world’s second-largest cryptocurrency, is tomorrow expected to start a technology changeover which, once complete, should cause its carbon emissions to plummet by 99 percent.

Wide demand reduction only feasible solution to Europe energy crisis- Equinor
Marwa Rashad – Reuters
Norway’s Equinor (EQNR.OL) believes that a wide-scale demand reduction would be the only feasible short-term solution to Europe’s power crisis if Russia cuts off all gas supply, a senior executive at the energy group told Reuters. Helge Haugane, Equinor’s senior vice president for gas and power, also said that a European Union proposal to impose a price cap on imported gas and gas used to produce electricity would not solve the continent’s underlying problem.

Goldman Sees $2 Trillion Surge in Europe Energy Bills by 2023; Power generation price caps likely in response, analysts say
Allegra Catelli – Bloomberg
Energy bills for European households will surge by 2 trillion euros ($2 trillion) at their peak early next year, underscoring the need for government intervention, according to Goldman Sachs Group Inc. utilities analysts. At their height, energy bills will represent about 15% of Europe’s gross domestic product, the analysts, led by Alberto Gandolfi and Mafalda Pombeiro, wrote in a note dated Sunday.

Shell CEO Prepares Exit After Nine Years in Role; As Ben van Beurden looks to depart next year, potential successors include the head of natural-gas business
Jenny Strasburg – The Wall Street Journal
Shell PLC is laying groundwork to replace longtime Chief Executive Officer Ben van Beurden as the Dutchman prepares to step down after nine years running the London-based energy company, according to people familiar with the matter. Shell executives have told the people close to the company that Mr. van Beurden is preparing to leave next year, the people said, capping a period of continuous change at Shell and within the oil-and-gas industry. Mr. van Beurden earlier presided over Shell’s largest fossil-fuel acquisition in years. More recently he has pledged to reduce the company’s greenhouse-gas emissions and increase its investments in renewable energy.

China’s Economy Won’t Overtake the U.S., Some Now Predict; Slowing growth has dampened expectations that the Chinese economy will be the world’s largest by the end of the decade
Stella Yifan Xie – The Wall Street Journal
The sharp slowdown in China’s growth in the past year is prompting many experts to reconsider when China will surpass the U.S. as the world’s largest economy—or even if it ever will. Until recently, many economists assumed China’s gross domestic product measured in U.S. dollars would surpass that of the U.S. by the end of the decade, capping what many consider to be the most extraordinary economic ascent ever. But the outlook for China’s economy has darkened this year, as Beijing-led policies—including its zero tolerance for Covid-19 and efforts to rein in real-estate speculation—have sapped growth. As economists pare back their forecasts for 2022, they have become more worried about China’s longer term prospects, with unfavorable demographics and high debt levels potentially weighing on any rebound.

Mississippi Crisis Highlights Climate Threat to Drinking Water Nationwide
hristopher Flavelle, Rick Rojas, Jim Tankersley and Jack Healy – The New York Times
Flash floods, wildfires and hurricanes are easy to recognize as ravages of a fast-changing climate. But now, climate change has also emerged as a growing threat to clean, safe drinking water across the country. The deluge that knocked out a fraying water plant in Jackson, Miss., this week, depriving more than 150,000 people of drinking water, offered the latest example of how quickly America’s aging treatment plants and decades-old pipes can crumple under the shocks of a warming world. “There’s a crisis at hand,” said Mikhail V. Chester, a professor of civil, environmental and sustainable engineering at Arizona State University. “The climate is simply changing too fast, relative to how quickly we could change our infrastructure.”

Bed Bath & Beyond Finance Chief Gustavo Arnal Found Dead; The 52-year-old executive had briefed investors days earlier on the retailer’s plans to secure new financing, slash jobs and close stores
Ginger Adams Otis and Ryan Felton – The Wall Street Journal
Bed Bath & Beyond Inc.’s Chief Financial Officer Gustavo Arnal died by suicide Friday after jumping from a New York building. Mr. Arnal, 52 years old, died two days after he had briefed investors on the retailer’s plans to secure new financing, slash jobs and close about a fifth of its namesake stores. The finance veteran had been with the company for about two years. His death leaves Bed Bath & Beyond, which has been searching for a permanent chief executive, with a leadership gap at a time when vendors and investors have been worried about its operations. The company has been facing funding pressures and is undergoing a major overhaul of its strategy.

The Problem With College Is So Much Bigger Than Student Debt; Biden’s plan is a Band-Aid solution to a bigger issue: A low return on tuition for too many people. But there’s still hope for a better system.
Romesh Ratnesar – Bloomberg
About 10 minutes after stepping to the podium of the Roosevelt Room on Aug. 24—having already regaled reporters with stories of wearing baseball spikes to his father’s workplace in Newark, Del., and driving a “nice used car” to his high school prom—President Joe Biden got around to the topic at hand. His administration planned to grant student loan forgiveness to more than 40 million Americans, with at least half seeing their debt wiped away. “We’ll provide more breathing room for the middle class so they’re less burdened by student debt,” he said. “And, quite frankly, fix the system itself.” Biden turned to his secretary of education, Miguel Cardona. “When we came in, we both acknowledged [it] was broken, in terms of … ” The president paused, considered whether to delve into the brokenness of the “system,” and thought better of it. He sighed.

Russia is preparing for ‘energy attack’ on Europe, Zelenskyy warns as major gas pipeline stays closed
Mithil Aggarwal – NBC News
The Kremlin is preparing an “energy attack” on Europe, Ukrainian President Volodymyr Zelenskyy said Saturday, a day after Russian energy giant Gazprom indefinitely suspended natural gas supplies to Germany through the Nord Stream 1 pipeline. “Where Russia cannot do it by force of conventional weapons, it does so by force of energy weapons,” Zelenskyy said in a video address. “Russia is preparing for a decisive energy attack on all Europeans,” he said. His comments came after Gazprom, the state-controlled company with a monopoly on Russian gas exports through the key pipeline, said Friday that it could no longer provide a time frame for restarting deliveries through Nord Stream 1. It said an oil leak meant a pipeline turbine could not run safely and that it could not safely resume operations until all malfunctions had been resolved.

In a Surprise, Russia Says the Gas Pipeline to Germany Will Remain Closed; Nord Stream 1, operated by state-owned Gazprom, won’t reopen Saturday as expected, heightening fears Russia will step up its use of energy to pressure Europe.
Stanley Reed – The New York Times
Gazprom said on Friday that it would postpone restarting the flow of natural gas through a closely watched pipeline that connects Russia and Germany, an unexpected delay that appeared to be part of a larger struggle between Moscow and the West over energy and the war in Ukraine. The Russian-owned energy giant had been expected to resume the flow of gas through the Nord Stream 1 pipeline on Saturday after three days of maintenance. But hours before the pipeline was set to reopen, Gazprom said that problems had been found during inspections, and that the pipeline would be closed until they were eliminated. It did not give a timeline for restarting. The announcement had the hallmarks of a tit-for-tat move. Earlier on Friday, finance ministers for the Group of 7 countries said that they had agreed to impose a price cap mechanism on Russian oil in a bid to choke off some of the energy revenue Moscow is still collecting from Europe.

Europe Girds for Energy Market Turbulence After Russian Gas Cut; Governments in Sweden and Finland announced billions of dollars in guarantees over the weekend to keep power markets functioning
Joe Wallace – The Wall Street Journal
Governments in Sweden and Finland offered billions of dollars of guarantees to utilities to prevent a meltdown in energy trading when markets open Monday after Russia shut down natural-gas flows through a major pipeline to Europe. Traders, analysts and energy executives say prices for natural gas and electricity—already at elevated levels—are likely to jump after state-controlled Gazprom PJSC extended a halt to flows through Nord Stream late Friday. Moscow blamed the suspension on technical problems. European governments described it as an economic attack in retaliation for their support of Ukraine. Officials fear the loss of imports through Nord Stream could lead to a further leap in power prices and saddle utilities with cash payments to energy trading exchanges that they may struggle to meet. A wave of failed payments could undermine financial stability, officials said.

Ukraine Invasion

Shelling Persists in East Despite Shift in Focus to South
The New York Times
Russian shelling killed four Ukrainian civilians in Donetsk Province over the weekend, offering a grim reminder of the continuous battle in the country’s east even as the war’s focus has shifted to the south. The governor for Donetsk, Pavlo Kyrylenko, said on Sunday that two people had been killed a day earlier in the village of Velyka Novosilka, which is about 60 miles west of the regional capital. Shelling also killed one person in the city of Siversk, which is north of Donetsk, and another in the village of Vodiane, Mr. Kyrylenko said. Two people were wounded. Mr. Kyrylenko added in a post on the Telegram messaging app that 797 civilians have died and more than 20,000 have been wounded in the Donetsk region since Russia invaded Ukraine in late February.

Thousands of Civilian Deaths and 6.6 Million Refugees: Calculating the Costs of War
Alan Yuhas – The New York Times
Day after day for 181 days, the grim ledger of Russia’s invasion of Ukraine grows longer with each missile strike, burst of gunfire and report of atrocities. On Monday, the United Nations reported that it had confirmed the deaths of 5,587 civilians, including 149 girls, 175 boys and 38 children whose sex is unknown. At least 7,890 civilians were confirmed to be injured, it said. But those are only the confirmed civilian casualties. The true numbers, U.N. officials concede, are without doubt far higher. The actual toll is probably tens of thousands of civilians. That is the estimate Ukrainian officials have arrived at after months of recovering bodies.

Google’s Plan to Stare Down Fake News on Ukrainian Refugees; Search engine sees growing resentment of refugees in EU; Research shows short educational clips can defuse propaganda
Charlie Hancock – Bloomberg
Alphabet Inc.’s Google is hoping an ad campaign can help prevent misinformation percolating about Ukrainian refugees who fled Russian President Vladimir Putin’s invasion from shaping public opinion. Google is premiering a series of 90-second videos in Poland, Slovakia and the Czech Republic that will seek to educate viewers about how to avoid being manipulated, according to Beth Goldberg, the head of research at its anti-propaganda unit Jigsaw. The spread of misinformation has become a major political issue in the European Union, with watchdogs warning that Russian-affiliated sites and social media accounts are promoting false pro-Kremlin narratives six months into the war.

Russian oil executive dies in fall from Moscow hospital window; Ravil Maganov was chair of Russia’s biggest private oil company, Lukoil, which has criticised Ukraine invasion
Andrew Roth – The Guardian
A senior Russian oil executive has died after falling from the window of a Moscow hospital, months after his company criticised the Russian invasion of Ukraine. Ravil Maganov, the chair of the board of directors of Lukoil, Russia’s largest private oil company, “fell from a window at Central clinical hospital”, the Interfax news agency wrote on Thursday, citing a source. “He died from injuries sustained.” Lukoil said Maganov had “passed away following a severe illness”. The company did not say what Maganov was being treated for.

Ukraine Sees Many Ways to Hurt Russia in Kherson Offensive; A string of small fights is more likely than a massed attack as Kyiv protects its troops
Daniel Michaels and James Marson – The Wall Street Journal
Ukrainian officials say their military’s southern offensive is going slowly. They also say that is precisely the plan. The announcement Monday of a thrust in the south raised hopes that Ukraine could reclaim territory Russia seized early in the war, including the regional capital of Kherson. But success could take many shapes, say officials and Western analysts. Even without quickly regaining much ground, Kyiv can achieve progress by forcing Russia to expose its troop locations and supply bases, take a defensive posture and thereby appear weak or pull troops from other parts of the country. Ukraine can also gain intelligence about Russian formations, vulnerabilities and will to fight.

Ukrainians Are Defending the Values Americans Claim to Hold
George Packer – The Atlantic
I had no business going to Ukraine. The country didn’t need another reporter to cover the war. Ukrainian journalists were already doing that much better than I could hope to, and so were plenty of foreigners. I had never set foot in Ukraine; I spoke neither of its languages; I was, my children told me, too old to be a war correspondent again. It would be completely pointless to get killed over there. But selfishness is an underrated motive among journalists. I told myself and others that Ukraine is the most important story of our time, that everything we should care about is on the line there. I believed it then, and I believe it now, but all of this talk put a nice gloss on the simple, unjustifiable desire to be there and see.

Embattled Nuclear Plant Is Cut Off From Main Power Line After Shelling
Marc Santora – The New York Times
Shelling once again threatened the safe operation of the Zaporizhzhia nuclear power plant, even as United Nations officials expressed cautious optimism that a permanent presence of its inspectors at the plant was helping to lower the risk of a nuclear disaster. The plant lost the connection with its last remaining main external power line after shelling on Friday evening, forcing engineers to rely on a lower-voltage reserve line to power the cooling equipment needed to prevent meltdowns, the International Atomic Energy Agency said in statement. Nuclear power plants must sometimes rely on external power drawn from the grid to cool the reactor cores and spent fuel. If the external power lines are cut, the Zaporizhzhia plant must turn to backup diesel generators, and if those malfunction or run out of fuel, a meltdown becomes possible.

Ukraine’s Zelensky Hails Small Advances in South, East; Officials give most-positive assessment of the battlefield in months but have cautioned advances will be gradual
James Marson and Isabel Coles – The Wall Street Journal
Ukraine President Volodymyr Zelensky and other officials said Ukrainian forces were advancing in the south and east, in Kyiv’s most positive assessment of the military picture in months. “Ukrainian flags are returning where they belong by right,” Mr. Zelensky told a meeting of security chiefs Sunday. Ukraine’s military indicated it had expanded a bridgehead across the Inhulets River in the country’s south, where it launched an offensive last week aimed at squeezing Russian forces out of territory they seized in the early days of their invasion.

For Some Ukrainians, Fear of Homelessness Outweighs Fear of Death; Most people who are evacuated from the war-torn east have nowhere to go and no relatives to stay with
Matthew Luxmoore – The Wall Street Journal
The evacuation van idled outside a housing block in this eastern city, as artillery barrages rang out from Russian army positions less than 2 miles away. In her apartment on the fourth floor, 81-year-old Maria Voronitskaya scrambled to get dressed and pack as the windows shook. “I’m giving you two minutes!” shouted Serhiy Rozhok, a volunteer whose Vostok SOS organization pulls residents out of embattled towns in Ukraine’s east. “We warned you one hour ago that we were coming.” It was the kind of scene playing out across Ukraine’s eastern front line, where Russia’s artillery and air attacks aim to pummel Kyiv’s forces into submission. Ukraine has blunted Russia’s advance in recent weeks, but cities like Bakhmut, now in Moscow’s crosshairs, are living under a bombardment that is showing no sign of abating.

Ukraine’s Naftogaz hopes to supply Europe with gas for next heating season – CEO
Andrea Shalal and Pavel Polityuk – Reuters
Ukraine’s state-owned energy company Naftogaz is working hard to increase natural gas production, and could supply gas to European countries in time for next year’s heating season, chief executive Yuriy Vitrenko told Reuters. Russia’s Ukraine invasion on Feb. 24 and its curbing of gas supplies to Germany and other European countries have prompted efforts to end dependence on Russian energy. Ukraine could fill the gap, Vitrenko said in an interview, if it attracts investment and know-how from Western experts, perhaps through a Marshall Plan like the one that helped Germany rebuild its economy after World War Two.

Exchanges, OTC and Clearing

Sustainable Finance: The Italian Sustainability Week of Borsa Italiana kicks off today; From 5 to 9 September, Italian companies and international investors discuss sustainability topics; 56 listed companies, 3 unlisted companies and the Ministry of Economy and Finance hold over 800 individual and group virtual meetings with 177 investors representing 95 domestic and international investment houses, to discuss their sustainable growth strategies
The sixth edition of the Italian Sustainability Week of Borsa Italiana, part of the Euronext Group, kicks off today and runs until 9 September. The event includes an agenda of virtual public meetings with over 80 speakers who will explore ESG topics during the five-day conference. Space will also be given to experiences of ‘collective engagement’ to support the growth of sustainable finance in Italy. The webinars and roundtables, organised by Borsa Italiana in collaboration with Sustainable Finance Partners, are public and accessible from Borsa Italiana’s website. (See the Italian Sustainability Week 2022 programme).

Intercontinental Exchange Reports August 2022 Statistics
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology and market infrastructure, today reported August 2022 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at in the Monthly Statistics Tracking spreadsheet. August highlights include: Total average daily volume (ADV) up 6% y/y and total open interest (OI) up 4% y/y; Total natural gas OI up 7% y/y; North American natural gas OI up 15% y/y; NA Basis Market ADV up 26% y/y; OI up 11% y/y.

Trading in US Equity Index Products and Night Session Continues to Grow in August
Taiwan Futures Exchange (TAIFEX) reported a total volume of 28,799,993 contracts with an average daily volume (ADV) of 1,252,174 contracts traded in the month, a decrease of 9.30% year-over-year (YoY) in year-to-date (YTD) volume. Amid staggering growth, YTD volume in Nasdaq-100 Futures and DJIA Futures, grew 86.62% to 922,385 contracts and 24.34% to 629,032 contracts YoY, respectively. In night trading session, the number of contracts traded overnight also rose 43.55% YTD over the same period of 2021, accounting for 29.83% of the market’s total volume. With a steady rise since the start of the year, trading of foreign institutional investors now accounted for 31.82% of the total trading volume YTD, up from 31.58% over the same period of 2021

SIX to Offer Clearing Services for Multilateral Trading Facilities of TP ICAP
SIX, the leading clearing services provider, has partnered with TP ICAP, a leading global markets infrastructure provider, to allow participants of TP ICAP’s markets to clear their UK and EU MTF trades on SIX x-clear. SIX already offers clearing services to 19 different trading platforms, which include both primary exchanges and multilateral trading platforms (MTFs) based in several European countries and the UK. The addition of TP ICAP UK MTF and TP ICAP EU MTF will increase the market coverage of SIX and allow the TP ICAP members to increase their settlement efficiency even further.

CME Group Proposes April 14, 2023 for Fallbacks Conversion of Eurodollar Futures and Options Contracts; Proposal does not apply to Eurodollar futures and options that expire before June 30, 2023; Conversion date aligns with OTC market plans; Market participants invited to provide feedback until September 30; SOFR options to be added to portfolio margining solution
CME Group
CME Group, the world’s leading derivatives marketplace, today announced that based on initial client feedback, it is proposing to convert Eurodollar futures and options open interest into corresponding SOFR contracts on April 14, 2023, under the company’s previously adopted fallbacks plan. Eurodollar futures and options contracts that expire before June 30, 2023 are excluded from this proposal and will continue to trade until their expiry.

Siemens Energy newly included in the DAX; Further changes in MDAX, SDAX and TecDAX
Deutsche Börse Group
STOXX Ltd., the global index provider of Qontigo, has announced changes to the DAX index family effective September 19, 2022. The selection indices DAX, MDAX, SDAX and TecDAX represent the largest companies in the regulated market of the Frankfurt Stock Exchange. They are selected by free float market capitalization and reviewed every three months. In accordance with the Rules Guide to the DAX Equity Indices , the criteria Regular Exit, Regular Entry, Fast Exit and Fast Entry are applied in September.

T7 connectivity options: Implementation of additional options to strengthen the protection of critical information infrastructure; Eurex Circular 085/22 T7 connectivity options: Implementation of additional options to strengthen the protection of critical information infrastructure
Eurex will make mandatory changes regarding data transmission via the T7 trading interfaces. These changes implement regulatory requirements as information transmitted via public communication networks is subject to the risk of unauthorized interception, manipulation, or misuse.

Changes to the List of Volatility Control Mechanism (VCM) Securities
Exchange Participants are advised that with effect from 7 September 2022, 24 securities will be added to the list of VCM Securities while triggering thresholds of 23 existing VCM Securities will be changed, and 14 existing VCM Securities will be removed from the list. Detailed changes to the list of VCM Securities are shown in the Attachment for your information. The revised list of all VCM Securities is also available on the Exchange’s website.

NRI’s Order Management System Directly Connected to TSE CONNEQTOR
Nomura Research Institute, Ltd. (NRI), a leading provider of consulting services and system solutions, and Tokyo Stock Exchange, Inc. (TSE) have agreed to directly connect NRI’s order management system to TSE’s electronic platform for ETFs, CONNEQTOR. NRI provides asset management companies with SmartBridge Advance (SBA), an order management system for securities (OMS), which will be the first OMS directly connected to CONNEQTOR. This direct connection will enable asset management traders to automatically transmit the order data input into SBA to CONNEQTOR and immediately and reliably execute trades with market makers around the world on CONNEQTOR. As a result, it is expected to reduce costs in ETF trading and help asset management companies streamline their business operations.

Moscow Exchange provides non-resident clients with access to the stock market
From September 12, 2022, the Moscow Exchange will provide non-resident clients from countries that are not hostile, as well as non-residents controlled by Russian legal entities or individuals [1] , to make transactions on the stock market . In addition, such clients will be able to make repo/repo transactions with the CCP in shares and bonds. Non-resident clients associated with hostile states that are under the control of Russian legal entities or individuals [1] will be able to make transactions with shares, except for shares of strategic and a number of other enterprises [2] .

Joint Press Release on Steps taken by Exchanges for standardizing the input of the critical data pertaining to compliance by listed entities
Listed entities are required to submit periodical compliance filings to Stock Exchanges within the prescribed timelines as laid down in SEBI Listing Regulations and accordingly, they were mandated to report XBRL based filings for financials from 2015 onwards. Under the aegis of SEBI Market Data Advisory committee (MDAC) constituted to recommend policy measures in areas such as securities market data standardization, access, and privacy, it was deliberated that XBRL would be implemented for all corporate filings.

Circular on the Release of the Rules on Management of Non-ferrous Metal Products for Futures Delivery of the Shanghai Futures Exchange (Amended August 2022)
To better manage the deliverable commodities for non-ferrous metals futures, the Shanghai Futures Exchange has amended the Rules on Registration and Management of Non-ferrous Metal Products for Futures Delivery of the Shanghai Futures Exchange (amended October 2019) in accordance with the General Exchange Rules of Shanghai Futures Exchange and other applicable rules. The added sections on nickel briquette and other amended sections are meant to better address the market and management needs for deliverable commodities.


Fintech R2 Reaches $100 Million Valuation After Google-Led Round
Carolina Millan – Bloomberg
Latin American fintech firm R2 reached a $100 million valuation following a $15 million Series A round led by Google’s Gradient Ventures. Other participants on this round are Femsa Ventures and PayU, as well as prior investors General Catalyst, Adam Neumann’s 166 2nd, and Magma Partners, said co-founder Roger Larach in an interview. It comes amid a tougher environment for startups as US rates rise and tech valuations drop. Startup funding for the region fell in the first quarter.

Debt financings for fintech startups: Are they the new venture round?
Lyle Solomon – FinExtra
In the first seven months of the year, venture capital (VC)-backed businesses in the United States raised close to $15.9 billion in debt through 321 deals, according to Crunchbase data. Startups disclosed over $13.3 billion in debt in 320 acquisitions by the same time in 2021.

UAE Fintech Optasia Steps Up Global Expansion to Target Unbanked
Monique Vanek – Bloomberg
United Arab Emirates-based Optasia plans to grow its financial-services business in Africa, Southeast Asia and Latin America in the next three years, seeking a larger market of under-banked customers. The company already operates in more than 40 nations, offering services such as airtime, data, real-time credit scoring and micro-loans. It’s now considering expanding to Malaysia, Thailand, Colombia, Mexico and Brazil, founder and Chief Executive Officer Bassim Haidar said in an interview.


Cloudflare Blocks Site Linked to Hate After Weeks of Pressure; Kiwi Farms has been tied to multiple doxxing attacks; Rhetoric, ‘specific, targeted threats’ grew in last 48 hours
Shiyin Chen and Cecilia D’Anastasio – Bloomberg
Cloudflare Inc. blocked Kiwi Farms on Saturday, days after hinting it will continue working with the controversial discussion forum despite weeks of pressure. The company has blocked Kiwi Farms content from being accessed through its infrastructure after an escalation in rhetoric and “specific, targeted threats” over the past 48 hours, Chief Executive Officer Matthew Prince said in a blog post.

Hackers Create Traffic Jam in Moscow by Ordering Dozens of Taxis at Once Through App; Attackers attempted to disrupt ride-hailing app service on Thursday, the company confirmed.
Aaron Gordon
Aaron Gordon and Lorenzo Franceschi-Bicchierai – VICE
Hackers created a traffic jam in Moscow on Thursday by ordering dozens of taxis from the ride-hailing app Yandex Taxi to converge on the same location in one of the first known instances of attackers using an app-based taxi company to create chaos on the roads. Video circulated on social media showing a very long traffic jam of taxis along an otherwise lightly trafficked road. The video was then shared by the account @runews where it was retweeted more than 6,500 times as of this writing. A Yandex spokesperson confirmed the incident in a statement to Motherboard. “On the morning of September 1, Yandex Taxi encountered an attempt by attackers to disrupt the service—several dozen drivers received bulk orders to the Fili district of Moscow,” said the Yandex spokesperson.

How critical US sectors are coping with rising cyberattacks
Ines Kagubare – The Hill
The rise in cyberattacks this year has forced many companies in critical sectors to make improvements to their cyber defenses in an effort to secure their networks from hacks.
Such companies are increasing their investments in cybersecurity and seeking to hire more cyber professionals — a task proving to be challenging amid a shortage of cyber workers across industries.

Cymulate snaps up $70M to help cybersecurity teams stress test their networks with attack simulations
Ingrid Lunden – TechCrunch
The cost of cybercrime has been growing at an alarming rate of 15% per year, projected to reach $10.5 trillion by 2025. To cope with the challenges that this poses, organizations are turning to a growing range of AI-powered tools to supplement their existing security software and the work of their security teams. Today, a startup called Cymulate — which has built a platform to help those teams automatically and continuously stress test their networks against potential attacks with simulations, and provide guidance on how to improve their systems to ward off real attacks — is announcing a significant round of growth funding after seeing strong demand for its tools.

This overlooked cybersecurity risk could create an ocean of trouble for us all
Danny Palmer – ZDNET
One of the key components of global trade is also one of the most vulnerable to cybersecurity threats – and if such an attack was successful, it would cause huge disruption with knock-on effects for people around the world. According to the United Nations Conference on Trade and Development (UNCTAD), over 80% of the volume of international trade in goods is carried by sea and that percentage is even higher for developing countries.

Suspected Russian Ransomware Group Hacks Italian Energy Agency; BlackCat gang says it stole 700 gigabytes in data from network; Italy Premier Draghi, officials met Thursday to discuss hacks
Daniele Lepido, Ryan Gallagher and Alberto Brambilla – Bloomberg
A hacker group with links to Russia has claimed responsibility for a recent ransomware attack targeting Italy’s energy industry, amid an escalation the Rome-based government says could be related to the Russian invasion of Ukraine. In a post published on the so-called dark web, the BlackCat group said it stole 700 gigabytes of data from networks controlled by Italy’s GSE energy agency, and threatened to publish the information online if its demands were ignored. The post was accompanied by several images of what appeared to be internal documents. The size of BlackCat’s extortion demand wasn’t immediately clear.

Cyber Security Experts Call For Greater UK Protections For Ethical Hackers
Emma Woollacott, Senior Contributor – Forbes
A group of cyber security experts is calling on the UK government to reform the Computer Misuse Act, saying it fails to protect security professionals. The Act was introduced back in 1990 after BT’s then email system, Prestel, was hacked by journalist Robert Schifreen in an attempt to access the mailbox of Prince Philip. Schifreen – who said he wanted to raise awareness of vulnerabilities – was charged, but acquitted; the new act then made it an offense to access a computer without authorization.


Binance Will Convert Users’ USDC Into Its Own Stablecoin; Automatic balance conversion starts on Sept. 29, exchange says
Stacy-Marie Ishmael and Joanna Ossinger – Bloomberg
Binance, the largest crypto exchange by volume, will start converting any existing user balances and new deposits of USD Coin (USDC), Pax Dollar (USDP) and True USD (TUSD) into the company’s own stablecoin, according to a statement published on Monday. The conversion is scheduled to begin Sept. 29.

El Salvador Had a Bitcoin Revolution. Hardly Anybody Showed Up
Michael D McDonald – Bloomberg
El Salvador President Nayib Bukele took the stage last year to fireworks and AC/DC’s “You Shook Me All night Long,” announcing to a cheering crowd of crypto enthusiasts at a beachside confab that Bitcoin would revolutionize his country. It was November, the digital token had just notched new all-time highs and El Salvador was at the very beginning of its experiment as the world’s first nation to use the cryptocurrency as legal tender. Now, a year into the journey, there are far fewer fireworks. Adoption has moved slowly, and steep declines in Bitcoin’s price from those lofty levels last fall have dampened the early euphoria that swept across the nation. Bitcoin hasn’t replaced El Salvador’s hard currency, the U.S. dollar — it’s not even close — but it also hasn’t brought the financial ruin that some warned of either. Or not yet anyway.

Crypto: Stablecoins scramble for safe havens as sanctions threat escalates
Yahoo! Finance
A major stablecoin issuer is formulating an intricate plan to ensure it always remains beyond the reach of centralised authority after US regulators froze USDC (USDC-USD) funds without warning. The US Treasury’s Office of Foreign Assets Control, (OFAC) strong-armed USDC issuer Circle into freezing over 75,000 USDC in the wake of the Tornado Cash affair. In early August, OFAC swooped on the crypto “mixer” Tornado Cash after allegations that it was used for illicit transactions, such as those by Pyongyang’s infamous hacking outfit, the Lazarus group.

Cryptoverse: Bitcoin’s no longer the king of the swingers
Lisa Pauline Mattackal – Reuters
Bitcoin’s been called a lot of things. Buzzy, beguiling, baffling, even bogus. But never boring. Yet, of late, it’s been eerily subdued. The king of the swingers has been uncharacteristically treading water for days at around $20,000 and hasn’t ventured far beyond that since June. That spells trouble for traders and exchanges that profit from bitcoin’s wild price lurches, and is opening the door to its archrival ether which is preparing to up its crypto game by moving to a meaner and leaner blockchain.

Ethereum Domain Names Top NFTs as Most Traded Asset on OpenSea; A spike in sales catapults ENS domains to the top of the charts as the merge draws near.
Jason Nelson – DeCrypt
ENS domains have taken the top spot as the number one collection on the NFT marketplace OpenSea. Driven by a 170% jump in sales over the past 24 hours, the Ethereum Name Service flipped the Bored Ape Yacht Club in seven-day volume. In the past week, ENS trading volume surpassed 2,305 ETH or $3.76 million, representing a 43% week-over-week increase. The Bored Ape Yacht Club saw a parallel 43% drop to 2,126 ETH.

NFT Software Company Dust Labs Raises $7M During y00ts Release; The announcement came during the high-profile and long-anticipating minting that’s taken the Solana NFT community by storm.
Eli Tan – Coindesk
Sep 5, 2022 at 10:19 p.m. CDT Updated Sep 5, 2022 at 10:35 p.m. CDT A DeGods owner shows off his NFT. (“Archie”) Non-fungible token (NFT) software company Dust Labs has raised a $7 million funding round, announced during the pandemonium for its Solana-based y00ts NFT minting on Monday. Participants in the round include Foundation Capital, Solana Ventures, Metaplex, Jump, FTX Ventures and Chapter One. The investment was a 50/50 split between company equity and its DUST token, a representative told CoinDesk. DUST is a utility token on Solana dubbed as the official currency of the DeGods ecosystem. DeGods is known for its popular eponymous PFP, which is the highest valued collection in the Solana NFT world.


Boris Johnson Bows Out as U.K. Prime Minister, Ending a Tumultuous Three Years in Office; Colorful antics in his final weeks in office virtually ensured the leader remained a lightning rod for controversy
Max Colchester – The Wall Street Journal
Boris Johnson officially ended his three-year tenure on Tuesday by tendering his resignation to Queen Elizabeth II in Scotland, closing out one of the most tumultuous periods in office for a U.K. prime minister in recent history. The voluble British leader was replaced by the former foreign secretary Liz Truss, who won a two-month battle to replace Mr. Johnson after he resigned following a party revolt in early July.

Liz Truss shows little sign she is ready to meet big environmental challenges
Fiona Harvey Environment correspondent – The Guardian
Liz Truss faces a daunting array of environmental crises, from energy supply to sewage spills on British beaches, with little to show that she has the inclination to take them on. Ben Goldsmith, the chair of the Conservative Environment Network, and a longtime green Tory who was a strong supporter of Boris Johnson, said of the UK’s new prime minister and her defeated rival: “Neither Truss nor Sunak has been known for their passion for nature. Neither has made a name for themselves as an environmental leader.”

How the clean energy transition exposes the world to new vulnerabilities
David Dodwell – South China Morning Post
As we begin the transition from fossil fuels towards clean energy, we are in danger of replacing the existential threat of global warming with a new and pernicious vulnerability. A cluster of minerals, such as copper, cobalt, lithium, nickel and rare earths, at the heart of clean technologies is poised to create pressure points – and a suite of challenges for protectionists and the increasingly powerful security community to wring their hands over. This trade-off has been driven home by Russia’s cynical manipulation of natural gas supplies to Europe. As Europe struggles to reduce its reliance on Russian gas, it has been made painfully aware that the transition to non-fossil fuels could take a long time and lead to new areas of weakness.

Federal Oil Leases Slow to a Trickle Under Biden; President, citing climate change, spurns resources his predecessors relied on to boost U.S. energy production
Timothy Puko and Anthony DeBarros – The Wall Street Journal
The Biden administration has leased fewer acres for oil-and-gas drilling offshore and on federal land than any other administration in its early stages dating back to the end of World War II, according to a Wall Street Journal analysis. President Biden’s Interior Department leased 126,228 acres for drilling through Aug. 20, his first 19 months in office, the analysis found. No other president since Richard Nixon in 1969-70 leased out fewer than 4.4 million acres at this stage in his first term.


Soros-Backed Fund’s Christmas Night Trading Frenzy Led to Arrest; Indictment of Glen Point’s Phillips describes high-stakes hour; It quotes flurry of messages as $725 million nudged the market
Donal Griffin and Nishant Kumar – Bloomberg
As the clock crept toward midnight on Christmas 2017, many London traders headed to bed with bellies full, but in South Africa, Glen Point Capital co-founder Neil Phillips was wide awake. Phillips, 52, a finance veteran backed by billionaire George Soros, wanted to drive the exchange rate between the US dollar and the South African rand below 12.50 so he could make a $20 million wager succeed, according to a US indictment against him unveiled this week. Over a high-stakes hour, he tapped out instructions to an employee at Nomura Holdings Inc. in Singapore, one of the few global hubs where the sun was rising and traders were at their desks.

ASIC bans director of Sterling & Freeman Advisory Pty Ltd
ASIC has banned Wayne Christopher Saman, the sole director of Sterling & Freeman Advisory Pty Ltd (Sterling & Freeman) for a period of five years. Mr Saman was banned because an ASIC surveillance found he was involved in Sterling & Freeman’s contravention of financial services laws. Sterling & Freeman failed to lodge financial statements and auditor reports for the 2019, 2020 and 2021 financial years. ASIC also found Mr Saman was not fit and proper to be involved in a financial services business.

Esma Organises Workshop On Post-Trade Transparency Post Trading
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, will be organising a virtual workshop on post-trade transparency on 11 October 2022, from 9:00 to 17:30, Paris time. This workshop will cover the additional Level 3 guidance on the post-trade transparency information which has to be made public, with particular attention to the reporting fields included in Table 2 of Annex II of RTS 2.

New speech by Julia Leung: Keynote speech at AIMA APAC Annual Forum 2022
A keynote speech entitled “Regulatory perspectives on Hong Kong as the largest Asian hedge fund hub” delivered by Ms Julia Leung at the AIMA APAC Annual Forum 2022 was posted on the SFC website.

SFC suspends Tang Kai Shing for eight months
The Securities and Futures Commission (SFC) has suspended Mr Tang Kai Shing, responsible officer (RO) and managing director of Rifa Futures Limited (Rifa), for eight months from 2 September 2022 to 1 May 2023 (Note 1). The disciplinary action follows the SFC’s sanctions against Rifa over breaches of know-your-client, anti-money laundering and counter-terrorist financing (AML/CFT) and other regulatory requirements between May 2016 and October 2018 (Notes 2 & 3).

Investing and Trading

Windfall Profit Taxes Are Pure Economic Populism; By all means, tax profits. But set the rules in advance, not in retrospect, if you want anybody to invest ever again.
Andreas Kluth – Bloomberg Opinion
Germany’s government just became the latest to ingratiate itself with angry voters by promising a windfall tax on energy companies. One way or another, these levies aim to seize “excess” profits and redistribute them to needy consumers aching from the soaring costs of electricity and heating.

Abortion rights loom larger in investment decisions; After the Supreme Court overturned Roe v. Wade, Alinea, an investing app geared toward young adults, saw a new focus on companies that support reproductive health.
Ephrat Livni – The New York Times
In recent years, funds focused in investments that have a social impact have emerged to bet on start-ups advancing reproductive health and innovation. After the Supreme Court decision in June to overturn the constitutional right to an abortion, individual investors turned their attention to reproductive health care. Almost immediately after the court’s decision, Alinea, an investing app geared toward young adults, saw a new investment focus on companies that support reproductive health, said Alinea’s founders, Eve Halimi and Anam Lakhani.

How to Handle Required Withdrawals From Retirement Accounts
Glenn Ruffenach – The Wall Street Journal
Is there a recommended strategy for taking required withdrawals from retirement savings in this horrible market? I’m a buy-and-hold investor; normally, I would just hunker down, not look at my balances, and ride out this storm. Unfortunately, the Internal Revenue Service makes me sell stocks at the worst time. Any recommendations for this unprofitable task? These questions allow me to tackle several issues involving retirement accounts and required minimum distributions, or RMDs. These withdrawals, of course, are part of the bargain we strike with the government when we open an IRA or similar account: We get decades (if we plan wisely) of tax-deferred growth, but we must start tapping these savings—and paying taxes on the withdrawals—when we enter our 70s.

U.S.-Stock Funds Are Down 17.3% So Far in 2022; After a weak end to August, stock funds are unlikely to be able to close the year in positive territory
William Power – The Wall Street Journal
Fund investors might have to concede that 2022 will be forgettable. The average U.S.-stock mutual fund or exchange-traded fund is down 17.3% for the year to date, through August, according to Refinitiv Lipper data. That includes a 3.5% average decline in August, reflecting the stock market’s reaction to Fed Chairman Jerome Powell’s comments that the central bank will keep raising interest rates to fight inflation, despite recession risk. The advice for fund investors is, of course, to maintain a long-term view. It is unlikely that the stock market—and accordingly, the average stock fund—will be able to post a gain for all of 2022. Meantime, the market’s movements will be all about the Fed and inflation. The S&P 500 and Dow Jones Industrial Average both fell just over 4% in August, mainly because of the end-of-month declines tied to the Fed; the Nasdaq Composite Index fell closer to 5%.

Environmental, Social and Corporate Governance

This city has around 20 days of fresh water left. Officials are racing to find another source
Ella Nilsen – CNN
A city in New Mexico has about 20 days of fresh water left, and officials there are scrambling to find another source to prevent cancer-causing particles from flowing out of faucets. The hillsides around Las Vegas, New Mexico, were scorched by the state’s largest wildfire on record this spring, which burned more than 340,000 acres. Then, an unusually wet monsoon season brought significant summer rainfall — something that would typically be celebrated in the drought-stricken West, but instead has led to disaster-upon-disaster as rainfall washed the charred debris into the region’s water system. Now, one of the city’s two reservoirs is filled with contaminated water that the current filtration system cannot handle. It’s also a health risk — when carbon reacts with high levels of chlorine used to treat water, it can become carcinogenic.

Large parts of Amazon may never recover, major study says; Swathes of rainforest have reached tipping point, research by scientists and Indigenous organisations concludes
Andrew Downie – The Guardian
Environmental destruction in parts of the Amazon is so complete that swathes of the rainforest have reached tipping point and might never be able to recover, a major study carried out by scientists and Indigenous organisations has found. “The tipping point is not a future scenario but rather a stage already present in some areas of the region,” the report concludes. “Brazil and Bolivia concentrate 90% of all combined deforestation and degradation. As a result, savannization is already taking place in both countries. Scientists from the Amazonian Network of Georeferenced Socio-environmental Information (RAISG) worked with with the Coordinator of Indigenous Organizations of the Amazon Basin (Coica) to produce the study, Amazonia Against the Clock, one of the biggest so far, covering all nine of the nations that contain parts of the Amazon.

The ESG Crown Is Slipping, and It’s Mostly the Fund Industry’s Own Fault; Plain-vanilla stock and bond funds are doing better than the socially responsible ones.
Katherine Greifeld – Bloomberg Businessweek
In late 2021, Cathie Wood’s ARK Investment Management introduced its first exchange-traded fund with a socially conscious bent. Less than eight months later, the ARK Transparency ETF was shuttered—the firm’s first-ever closure—and Wood declared on Bloomberg Television that “there was a lot of slapping lipstick on a pig” in the environmental, social, and governance investment industry.

Jackson, Mississippi, Water Crisis Previews a Wetter, Hotter US Future; In the state’s capital, climate change is compounding the problems of decaying infrastructure and entrenched inequality.
Zahra Hirji, Kriston Capps, Ella Ceron, Leslie Kaufman, and Brentin Mock – Bloomberg
The water crisis unfolding in Jackson, Mississippi, was decades in the making: the culmination of crumbling infrastructure, systemic racism and more extreme weather. It’s also a stark warning of trouble to come as climate change piles new stress onto the essential services Americans rely on every day. In addition to warming up the planet by nearly 1.2 degrees Celsius compared to pre-industrial times, climate change is making precipitation events more intense, and therefore more likely to overwhelm strained systems. Lower-income and minority communities such as Jackson — which is 82% Black and where a quarter of residents live in poverty — bear the brunt of the impacts.

Lombard Odier Adds ESG Screens After ‘Shocking’ Cyber Report; Hundreds of companies screened for software vulnerabilities; Analysis found that about 20% are running outdated software
Lisa Pham – Bloomberg
Lombard Odier Investment Managers said the “shocking” results of an analysis into cybersecurity risks lurking in portfolio companies have led it to apply ESG processes far more broadly to protect its funds from losses. The Swiss asset manager is now on a campaign “to push these companies to get their basic cyber hygiene in order,” said Jeroen van Oerle, portfolio manager of Lombard Odier’s Global FinTech fund. The firm wants to treat “cybersecurity risks the same way as we look at climate-related risks, or water usage risks, or corporate governance risks,” he said.

Climate Change Raises New Challenges for Marijuana Farmers
Andrea Bossi – Bloomberg
Both greenhouses and sun-grown crops have their downsides. Two growing options present unique problems. Wildfires and droughts ravaging agricultural land around the world have raised the stakes for cannabis farmers, who must decide whether to cultivate their plants in greenhouses or out in fields.

What Does ESG Need to Work?; High returns for investors. Our author argues that a different approach to ESG can strike a better balance between environmental and social goals and profits.
Michael Oliver Weinberg – Institutional Investor
I write this having been a relative pioneer in environmental, social, and governance investing over the past quarter of a century. I’ve also been a big proponent of ESG, first as a portfolio manager at Soros Fund Management and later at FRM (now Man FRM), Protégé Partners, and APG. For much of the past decade, I’ve also taught on the subject at Columbia Business School and other universities. However, in my view, ESG must be implemented sensibly — hence my preference for optimal ESG (O-ESG) investing. I assert that there is a way to make the world a better place through investing, while simultaneously optimizing profitability for investors. In contrast to George Soros’s early philosophy, in which for-profit investing and impact investing are separate, I believe one can incorporate ESG into a profit-maximizing investment strategy.

How to confront the anti-ESG campaign
Witold Henisz – IR
Henisz of the the Wharton School of the University of Pennsylvania, on why the anti-ESG investing movement is gaining ground, and what can be done to mitigate its impact. The anti-ESG or anti-woke investment movement is following the classic playbook of disinformation and propaganda by creating a false equivalence between the ESG movement and its opponents. In the manner that many of the same funders and politicians sought to discredit climate science, they are now working to discredit efforts to improve the incorporation of climate science and other ESG factors into valuation models used by investors, consultants and corporates. Make no mistake, this is a concerted and organized effort, and it is having a substantive and dangerous impact.

3 types of ESG funds outlined in SEC proposal
Brian Croce – Pensions and Investments
There are three types of ESG funds outlined in the disclosure proposal with varying requirements: Integration funds, which integrate ESG factors alongside non-ESG factors in investment decisions, would be required to describe how ESG factors are incorporated into their investment process. ESG-focused funds, for which ESG factors are a significant or main consideration, would be required to provide detailed disclosure, including a standardized ESG strategy overview table. Impact funds, a subset of ESG-focused funds that seek to achieve a particular ESG impact, would be required to disclose how they measure progress on their objectives.

More Than Half of FTSE 100 Companies Now Have ESG Committees
Board-level progress at top UK companies beats US counterparts; Major FTSE oil, gas and mining companies lead the way
Gautam Naik – Bloomberg
More than half of FTSE 100 companies now have a board-level committee focusing on ESG issues, a sign of their desire to become more sustainable. A dedicated ESG committee can help a company speed up the push toward net-zero goals, lower emissions faster and boost investments in carbon offsets. Better ESG credentials, in turn, can improve a company’s eligibility for ESG-focused funds, raise the liquidity of its shares, and support the stock price. The UK’s governance code requires FTSE 100 companies to have audit, renumeration and nomination committees, but there’s no such stipulation for environmental, social and governance practices. The latest data shows that 54% of FTSE 100 companies have nonetheless set up an ESG committee at board level.


Citigroup Joins Industry Effort to Lend to People Without Credit Scores; Bank is launching two lending pilots through a government-sponsored program that aims to expand credit to wider swath of borrowers
David Benoit and AnnaMaria Andriotis – The Wall Street Journal
Citigroup Inc. is joining a government-sponsored effort to expand access to credit in underserved communities. The bank is launching two pilot programs early next year under the Office of the Comptroller of the Currency’s Project REACh, or Roundtable for Economic Access and Change. One program will issue credit cards to people without credit scores, while the other will make it easier for small businesses owned by minorities, women and veterans to get credit. Banks including JPMorgan Chase & Co., Wells Fargo & Co. and U.S. Bancorp are already working with Project REACh, sharing bank-account data to help approve a wider swath of borrowers for credit cards. Some 50 million Americans lack traditional credit scores, which banks typically require when reviewing applications for all manner of consumer debt.

Stephane Degroote appointed Global Head of Investable Products Sales for Qontigo
Qontigo, a leading provider of innovative risk, analytics, and index solutions, has appointed Stephane Degroote as Global Head of Investable Products Sales. In this newly created role, Degroote will be responsible for building Qontigo’s relationships with ETF issuers and positioning the firm’s STOXX and DAX indices as underlyings for new investable products. Currently, Qontigo has EUR 103 billion AUM* in ETFs benchmarked to its indices, including as the leading index provider for Thematic ETFs in EMEA.

Siemens Energy to be included in DAX
Qontigo’s global index provider STOXX Ltd. has announced changes to the DAX index family, which will become effective on 19 September 2022.
The selection indices DAX, MDAX, SDAX and TecDAX represent the largest companies on the Regulated Market of Frankfurt Stock Exchange. They are selected according to free float market capitalization and are reviewed every three months. In the September review, the DAX index family is reviewed by the Regular Exit, Regular Entry, Fast Exit, and Fast Entry rules, according to the Guide to the DAX Equity Indices.

State Street Global Markets appoints new head of financing solutions for Europe; Incoming head brings considerable experience to the role, having previously served at Société Générale, Royal Bank of Scotland and BNP Paribas.
Wesley Bray – The Trade
State Street has appointed Christian Schuetze as managing director, head of financing solution for Europe, within its global markets segment at State Street Bank International (SSIB). In the newly created role, Scheutze will be based in Frankfurt, reporting to Simona Stoytchkova, senior managing director, board member of SSIB and head of global markets and State Street Digital for Continental Europe.

Sorry Bankers, You’ll Never Have an Easy Life; Bankers and regulators alike pine for a simpler world with fewer rules. But there’s no getting around complexity in this day and age.
Paul J. Davies – Bloomberg Opinion
It seems blindingly obvious: Banks should not trade shares to help investors claim rebates for taxes they have not paid. Yet, in Germany it took a court ruling just last year to confirm this was illegal a decade after the practice was banned. A string of international lenders are still being investigated; last week, German prosecutors raided JPMorgan Chase & Co.’s Frankfurt offices as part of their probe into the scandal — known as “Cum-Ex” — that’s estimated to have cost taxpayers upwards of 10 billion euro ($10 billion).

Wellness Exchange

Shenzhen Tells Most Residents to Stay Home, as Covid-19 Controls Tighten Across China; Move follows similar curbs in Chengdu, with Omicron wave coming at politically sensitive time; ‘Everyone’s on edge’
Raffaele Huang and Rachel Liang – The Wall Street Journal
China’s southern technology hub of Shenzhen is shutting down the city center over the weekend, as more parts of the country tighten Covid-19 controls to battle a new wave of infections just weeks ahead of a high-profile Communist Party congress. Shenzhen officials have suspended subway and bus service in the area and are telling most residents to stay home, as they conduct rounds of Covid-19 testing on Saturday and Sunday for roughly 90% of the city’s 18 million residents. Local authorities said Friday that one person in each household would be allowed to go out for groceries once in that period.

Two decades-long studies link ultra-processed foods to cancer and premature death
Laura Baisas – Popular Science
While this upcoming long weekend may call for celebrations, this time around maybe reconsider breaking out the hot dogs, soda, and pre-packaged snacks. Two large-scale studies link overconsumption of “ultra-processed foods” to an increased risk of a number of ailments, including obesity, cancer, cardiovascular disease, early death, and more. The authors defined ultra-processed food as “industrial formulations made entirely or mostly from substances extracted from foods (oils, fats, sugar, starch, and proteins), derived from food constituents (hydrogenated fats and modified starch), or synthesized in laboratories from food substrates or other organic sources (flavor enhancers, colors, and several food additives used to make the product hyper-palatable).” This definition is based on the NOVA Food Classification System.The paper published on August 31st in The British Medical Journal (BMJ) include two studies, one conducted in the United States and one in Italy.

How to live pain-free, by the A-listers’ osteopath
Peta Bee – The Sunday Times
James Davies has so many A-listers and elite athletes on his books that I begin to lose count as he casually reels off a list of his clients while pummelling my back. Among those he has helped to beat bad backs, muscle pain or joint problems are Kylie Minogue and Joe Wicks (“I was at his house last night”), David Beckham (“the nicest person you could meet; I count him as a friend”), Eva Mendes, Lenny Henry and Phoebe Waller-Bridge. He has worked as an official therapist for the Team GB Olympic team, treated Linford Christie, Mo Farah and Eilish McColgan, dozens of Premier League footballers and top rugby players. Tomorrow he is to see David Jason.

Looking for the Next Pandemic (and Seeing It Everywhere)
Drew Armstrong – Bloomberg
Hi, it’s Drew in New York. There’s an interesting set of pneumonia cases in Argentina that has some health experts on the lookout. Last week, health officials in Argentina announced an unnerving situation: They found a small cluster of people with pneumonia whose cause was unknown, and at least four of the patients were dead. The details of the cases, which are still unfolding, sounded hauntingly like Wuhan, China, in those early days in 2020 before Covid had a name. If and when there is a new pathogen that starts a future pandemic, the report out of Argentina is a likely template for what the first warnings will look like.


Germany to Make ‘Billions’ Off Energy Firm Levy, Scholz Says; Says he’s certain Europe’s No. 1 economy can avoid blackouts; Plan envisages recouping company profits above a threshold
Steven Arons – Bloomberg
Germany’s government expects to receive a large revenue boost by tapping windfall profits generated by energy companies if they keep benefiting from disruptions in Europe’s electricity market, Chancellor Olaf Scholz said Sunday. Germany will take in “many, many billions” of euros under the scenario and would use the revenue to help consumers hit by rampant inflation, Scholz said in an interview with broadcaster ZDF on Sunday. The government will use “earnings that exceed a threshold at companies that don’t have such high production costs and give it back to the citizens,” Scholz said. He also expressed confidence that Europe’s biggest economy won’t face power blackouts.

China’s Extreme Drought Is Pushing the Country to Rely Even More on Coal
Amy Gunia – TIME
Extreme weather events have struck countries around the world this summer, and China is no exception. Forest fires erupted in the Southwestern city of Chongqing in late August amid a weeks-long heatwave—the worst the country has faced in decades. Record low rainfall has driven an unprecedented drought along the Yangtze, China’s longest river. Then suddenly this week, the same Southwest region that’s been devastated by scorching temperatures and drought for most of the summer, saw more than 100,000 people evacuated due to flood risk. Like elsewhere in the world, weather made worse by climate change has put pressure on China’s energy system. Some environmentalists worry this will further prolong the world’s largest greenhouse gas emitter’s reliance on coal, which still makes up more than half of its energy mix.

Russia Signals Opposition to OPEC+ Oil-Production Cut; Group of oil producers is expected to keep levels steady at its meeting Monday
Benoit Faucon and Summer Said – The Wall Street Journal
Russia doesn’t support an oil-production cut at this time, and it is likely OPEC+ will keep its output steady when it meets Monday, people familiar with the matter said, as Moscow maneuvers to thwart Western attempts to limit its oil revenue following its invasion of Ukraine. Russian opposition to a production cut highlights a debate within the Organization of the Petroleum Exporting Countries and Moscow-led allies, collectively known as OPEC+, as oil consumers globally brace for a showdown this winter with the Kremlin over the price of its crude. Oil prices soared above $100 a barrel after Russia invaded Ukraine, hurting Western consumers and filling Moscow’s coffers. Saudi Arabia, the group’s biggest exporter, floated the idea recently that the alliance could consider reducing output. OPEC members such as the Republic of Congo, Sudan and Equatorial Guinea have said they are open to the idea, as they are already pumping as much as they can and oil prices have fallen in recent weeks. An OPEC+ production cut often lifts prices.

The UK energy crisis is a burden of war; Assistance must be bold and target the vulnerable first
Martin Wolf – Financial Times
Desperate times call for desperate measures. The UK has rightly supported Ukraine’s cause in its war with Vladimir Putin’s Russia. Today’s soaring gas prices are as much a weapon in Putin’s fight as missiles directed at Ukraine and, like them, they will kill. It would be a crime and a folly to let the domestic costs of the war fall disproportionately on the least well off. Solidarity in sharing these burdens is obligatory. So, too, is willingness to shed shibboleths. In wartime, markets are not sacrosanct. Price controls, even rationing, must be on the table. The price of natural gas is nearly 5 times what it was a year ago. The result is a distributional shock, a terms of trade shock (since the UK is a big net importer of gas), an overall price shock, with inflation likely to hit 20 per cent, and a contractionary shock to gross domestic product.

Germany Agrees on Gas Relief Package for Businesses, Consumers; Berlin’s nearly $65 billion aid package comes after Russia cuts off all gas deliveries to the country via its key Nord Stream pipeline
William Boston – The Wall Street Journal
Germany unveiled its third energy crisis relief package this year to shield consumers from soaring prices over the winter, a day after Russia indefinitely suspended gas deliveries to Europe’s largest economy. The new measures—worth 65 billion euros, equivalent to $64.7 billion—had been flagged before Russian gas giant Gazprom PJSC cut deliveries via its Nord Stream natural gas pipeline. The package represents Berlin’s latest attempt to shield Germany from the fallout of Russia’s economic war on the West and rising inflation in general. “Russia is no longer a reliable supplier of energy,” German Chancellor Olaf Scholz said on Sunday as he unveiled the package.

Russian Economic Optimism Is Based on Suspect Data; Western skepticism over Moscow’s claims on Ukraine is mostly absent regarding Russia’s economy
Josh Zumbrun – The Wall Street Journal
In the early weeks of Russia’s invasion of Ukraine, the U.S. and European allies rolled out wave upon wave of economic sanctions. As part of Moscow’s response, the Russian Federal State Statistics Service (known as Rosstat) and other government agencies halted publication of many economic statistics. Regular reports on imports and exports, debt, monthly oil production, banking, airline and airport passenger volumes, and so on, simply disappeared. But then, as the war dragged on, something strange happened. Media coverage noted Russia’s economy was holding up much better than expected. Key pieces of evidence included Russia’s gross domestic product only dropping 4% in the second quarter from a year earlier, and its unemployment rate hitting a record low of 3.9%.

Sweden announces emergency support for energy producers as EU considers action; Companies face rapidly rising collateral demands, prompting policymakers to warn of ‘financial stability threat’
Richard Milne in Strömstad, Alice Hancock and Henry Foy in Brussels, and David Sheppard in London – Financial Times
Sweden will give emergency liquidity support to electricity producers as its prime minister warned that Russia’s decision to halt gas deliveries to Europe could place its financial system under severe strain. Magdalena Andersson said on Saturday that the government would offer hundreds of billions of kroner in funding to electricity producers, who have seen the amount of collateral they must post with exchanges balloon in response to soaring gas and power prices and increasing volatility.


How to Share Your Smartphone Location With Loved Ones—Not Big Tech; Apple’s Find My and Google Maps have become a new kind of social network. Just be sure you know who can find you on a map, and what they do with that info.
Nicole Nguyen – The Wall Street Journal
Tracking friends and family members on a map was once considered Big Brother-style surveillance. Sharing our location with loved ones on services such as Apple’s Find My and Google Maps is now normal, even if those people are far, far away. I was in the creeped-out camp when live location sharing came on the scene, but I’ve come around. It’s convenient. Instead of asking, “Where are you?” I just look for a floating head in the Find My app.

A Boss Ordered All Workers Back to the Office a Year Ago. He Has No Regrets.; Hundreds quit after Mat Ishbia required UWM employees to be at their desks five days a week. ‘Without question, it’s been worth it.’
Chip Cutter and Katherine Bindley – The Wall Street Journal
Last summer, a Michigan company decided all employees needed to return to their desks five days a week. A year later, the executive who made that call said he has no regrets. “Not one second did I second-guess this decision. Not for one instance,” said Mat Ishbia, CEO of mortgage lender UWM Holdings Corp. The company employs more than 7,000 people in Pontiac, Mich., a suburb of Detroit. “Without question, it’s been worth it.” The decision—made before many other companies asked workers to return—came at a cost. Roughly 500 employees quit United Wholesale Mortgage over the policy, Mr. Ishbia said. Those who did typically departed for other jobs six to 12 months after the mandate. Some of those employees indicated in exit interviews they left UWM because they wanted to work more from home, he said.

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China commodity trader woe a setback for Glencore

China commodity trader woe a setback for Glencore

First Read Hits & Takes John Lothian & JLN Staff Congratulations to Larry Tabb. STA announced Larry as the 2022 Dictum Meum Pactum (DMP) Award recipient. Here is a success story for you. The Greenwood Project placed four interns at Goldman Sachs this summer...

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