Libor Exit Plans Set Up Showdown for Firms Versus Regulators

Apr 14, 2020

First Read

Hits & Takes
By JLN Staff

Part 2 of our interview with Buck Haworth for the Open Outcry Traders History Project was published yesterday. Haworth’s straight talk in part two includes more about traders, and why they prefer to be bears rather than bulls. He says floor traders had the “largest concentration of people with ADHD,” which explains why they like bear markets, because they happen faster. He weighs in on broker groups, the CME’s going public, and the hiring and getting rid of Jim McNulty as CEO. If you like the open outcry series, you don’t want to miss either part of our interview with Buck Haworth.

There were a couple of stories we forgot to include yesterday. One was the death of former Chicago Cub second baseman and longtime CBOT member Glenn Beckert. Beckert died at the age of 79. He was a member of the Cubs in the 1960s and early 1970s, including the unforgettable 1969 season.

The second story is one from Lynne Marek of Crain’s, writing about the fall from grace of Ronin Capital from the volatility spurred by the virus outbreak. ~JJL

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Would you like to learn about what the pandemic might mean for cryptocurrencies including bitcoin and stablecoins and others? The law firm K&L Gates would like you to join them for a virtual fireside chat with industry experts on Wednesday afternoon at 3:00 pm Chicago time. Please register here for “COVID-19: A Boom or Bust for Digital Assets, Cryptocurrencies and Stablecoins?” ~Thom Thompson

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Buck Haworth – Open Outcry Traders History Project – Part 2
JohnLothianNews.com

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

In part 2 of his interview with John Lothian News for the MarketsWiki Education Open Outcry Traders HIstory Project, he talks about why traders prefer to be bears and not bulls. He says floor traders are the “largest concentration of people with ADHD” and how this influences them in being bullish or bearish. He tells the story of some traders banging into other traders before the open to get their energy levels up.

He talks about the FBI sting at the CME in the late 1980s, the CME Group going public, and the dynamics on the exchange’s board over hiring and then getting rid of Jim McNulty as CEO, and he speaks candidly about the relationship between brokers and their favorite locals. His work on the board of the CME took up so much time that Haworth lost the feel for floor trading. His efforts to try electronic trading left him with the observation that electronic trading is a video game and floor trading is rugby. He said few people can do both successfully.

In part 2, he continues to offer frank answers to the questions posed to him and says, “Life is not fair, the floor was not fair,” and that we should get over it. Enjoy this second and final part of the interview with Born Technology Co-founder and CFO Buck Haworth.

Watch the video »

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Interactive Brokers donates $5 Million in fight against coronavirus; Interactive Brokers aims to assist efforts on the front-line and accelerate the development of new medicines to fight the coronavirus.
Kiays Khalil – The Trade
Interactive Brokers has committed $5 Million of aid to assist efforts, provide food and support those impacted by the ongoing coronavirus pandemic in the US. The brokerage said that the $5 Million funding will be split to tackle two fronts. Firstly, to provide financial grants to local and national organisations for front-line organisations working to treat patients and contain the coronavirus, and secondly to accelerate the developments of new and existing medicines.
/bit.ly/3aem960

*****Kudos to IB.~JJL

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Trump’s Claim of `Total’ Authority Is Bunk; The Constitution doesn’t delegate absolute power to the president — or to anyone else.
Jonathan Bernstein – Bloomberg
I suppose as a political scientist I can’t avoid the obvious topic: President Donald Trump’s declaration of absolute power in his press conference Monday afternoon. “When somebody is the President of the United States, the authority is total.” (There was more, but that’s the gist.)
/bloom.bg/3baCjye

******I watched this press conference live yesterday and cringed. I am not a Constitutional scholar, but I knew he was wrong.~JJL

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YouTube Sees 75% Jump in News Views on Thirst for Virus Updates
Mark Bergen and Emily Chang – Bloomberg
Executive Mohan says Google unit ‘vigilant’ on misinformation; Video hub pulls #filmyourhospital clips claiming virus is hoax
News viewership on YouTube soared 75% in recent weeks from the same time last year, with millions of people turning to the video site for updates on the coronavirus, Chief Product Officer Neal Mohan told Bloomberg Television.
/bloom.bg/34wcgPK

*****Some good news in the media front, but most Youtube searches were for how to bake bread.~JJL

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Hedge Fund Managers Are Claiming Bailouts as Small Businesses
Katherine Burton and Joshua Fineman – Bloomberg
Loans are part of the $2 trillion package to prop up economy; Consultant warns that seeking aid shows ‘poor moral judgment’
Free money. That’s the enticing prospect hedge funds and other trading firms are pondering after realizing they too might be able to participate in a historic U.S. stimulus package to keep small businesses alive through the coronavirus pandemic.
/bloom.bg/3emzjRq

*****Poor moral judgement at a hedge fund is the wrong metric to use. Which level of hell they will be sent to perhaps is.~JJL

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Monday’s Top Three
Our most read story Monday was Bloomberg’s Peak6 Says Trading Floor Closures Hurt S&P Product Liquidity, in which Peak6’s Neel Shah says volumes are shifting from e-mini S&Ps to options on SPY ETFs. Second was the sad news about Jaime Ruiz Sacristan, Mexico Stock Exchange Chairman Dies After Virus Hospitalization, also from Bloomberg. Third was the shocking story The End of an Era: Microsoft Word Now Flagging Two Spaces After Period as an Error, from Softpedia News.

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MarketsWiki Stats
175,641,582 pages viewed; 24,097 pages; 223,813 edits
MarketsWiki Statistics

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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

Recently updated pages include
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Lead Stories

Libor Exit Plans Set Up Showdown for Firms Versus Regulators
William Shaw and Tasos Vossos – Bloomberg
Businesses have ‘written off’ 2020 to move away from benchmark; Lenders, borrowers are risking legal no man’s land after 2021
Corporate treasurers in crisis-fighting mode look set to miss looming deadlines to abandon the scandal-plagued Libor benchmark, threatening a showdown with regulators powering ahead with reforms.
/bloom.bg/2K0BSed

Risk Manager Is Suddenly a Hot Job; The pandemic spurs boards to seek experts in crisis planning and oversight.
Arianne Cohen – Bloomberg
Twenty years ago, corporate risk managers had near-zero public visibility. Most were back-office staffers who focused on securing insurance for environmental and real estate problems (tornadoes, fires, earthquakes, facilities breaches). Young people didn’t aspire to be risk managers: There were just a dozen small academic programs in the U.S. focused on the career. The pandemic has catapulted the field into prominence almost overnight. “Risk management now has boards’ attention and has been given a seat at the table for input and consideration,” says Al Marcella, president of Business Automation Consultants LLC, a St. Louis-based security assessment firm. Boards are quickly creating risk committees focused on crisis planning and remote work data privacy—and they want a chief risk officer on speed dial.
/bloom.bg/3bkcQCw

Goldman Sees Advanced Economies Shrinking 35% Amid Pandemic
Jason Clenfield – Bloomberg
Advanced economies will shrink about 35% this quarter from the prior three months, four times as much as the previous record set in 2008 during the financial crisis, according to annualized figures from Goldman Sachs Group Inc.
/bloom.bg/3a9nBXc

IMF Says Great Lockdown Recession Likely Worst Since Depression
Eric Martin – Bloomberg
Global growth seen contracting 3% as pandemic spurs shutdowns; Advanced nations to suffer most as India, China eke out growth
The International Monetary Fund predicted the “Great Lockdown” recession would be the steepest in almost a century and warned the world economy’s contraction and recovery would be worse than anticipated if the coronavirus lingers or returns.
/bloom.bg/2yakZLs

China’s Big Oil Urged to Copy Mexican Hedge Amid Price Crash
Bloomberg News
CNPC researcher says drillers should use financial tools; Oil futures can also lock in low prices to build reserves
A researcher at China’s biggest oil company said the country’s drillers should copy the hedging strategies of Mexico and shale firms in the U.S., which use financial derivatives to protect against falling oil prices. Most of China’s oil production is unhedged, leaving the stability of the sector exposed to global market fluctuations, according to Dai Jiaquan, director of the oil market research department at China National Petroleum Corp.’s Economics & Technology Research Institute.
/bloom.bg/3bkeoMQ

How Bank of Japan’s Massive Market Operations Make and Break Investors
Chikako Mogi and Masaki Kondo – Bloomberg
Japanese policy makers are diving deeper into markets; They’re buying up more assets and doling out more loans
Just when it seemed impossible to do more, along came the coronavirus, spurring the Bank of Japan to double-down on its already massive market operations. The BOJ’s presence is now felt in virtually every corner of Japan’s financial markets and its actions continue to shape global money flows. The first quarter of 2020 saw the central bank add a staggering 30 trillion yen ($278 billion) of bonds, stocks and other assets to its balance sheet, on top of which it pumped 35 trillion yen of liquidity into the financial system via operations such as repurchase agreements and dollar loans.
/bloom.bg/3clK30N

Pandemic survival plans: U.S. businesses scramble to conserve cash, boost liquidity
Rajesh Kumar Singh – Reuters
Charlie Straface, president of Norwegian aluminum maker Norsk Hydro’s North American extrusion operations, convenes a coronavirus task force every other day to draw up cost-cutting measures to offset declining revenues and protect the unit’s cash balance during the economic slump related to the outbreak.
/reut.rs/2V8Xew0

Legal Risks From Virus in Reopenings Worry U.S. Business Group
Erik Larson – Bloomberg
Businesses across the U.S. face the possibility of being sued by customers or employees who may be exposed in the establishments to the Covid-19 virus once the economy starts to reopen, the U.S. Chamber of Commerce told hundreds of thousands of members on Monday.
/bloom.bg/34z7j8I

Air Pollution’s Insidious Link to the Pandemic
Akshat Rathi – Bloomberg
Even before the pandemic struck, outdoor air pollution was linked to the deaths of as many as nine million people each year. Now two new studies show that Covid-19 patients are more likely to die if they live in regions with high levels of air pollution.
/bloom.bg/2yfoTCu

JPMorgan braces for losses from ‘fairly severe’ recession; Net income falls by 69% in first quarter as America’s biggest bank ramps up loan provisions
Laura Noonan – FT
JPMorgan Chase’s profits fell by 69 per cent in the first quarter as America’s biggest bank prepared for a “fairly severe recession” by dramatically ramping up loan loss provisions.
/on.ft.com/2K2uYoD

NY Fed Lays Out Plan to Pare Back Repo Liquidity Injections; The bank cited improved money-market conditions
Michael S. Derby – WSJ
Citing improved money-market conditions, the Federal Reserve Bank of New York said Monday it will soon ease back on operations designed to add short-term liquidity to financial markets. The bank made its announcement in a statement that laid out a modified schedule of its repurchase-agreement operations, or repos. These interventions take in Treasurys, mortgages and agency securities from eligible banks and broker-dealers in exchange for de facto loans of cash.
/on.wsj.com/2RBkJvz

‘This Is Going to Kill Small-Town America’; Once the coronavirus reached rural Bristol, N.H., the effect on the local economy was devastating.
David Gelles – NY Times
The coronavirus itself was slow to arrive in Bristol, a lakeside town of 3,300 people. The economic destruction came swiftly.
/nyti.ms/2VFRqJR

Europe’s unbundling regime continues to take hold of buy-side globally
A report from Liquidnet reveals that number of buy-side implementing unbundling policies globally is continuing to grow.; By Hayley McDowell – The Trade
Asset managers are increasingly adopting Europe’s MiFID II unbundling regime for their businesses globally to manage operational processes more efficiently, according to a recent report from Liquidnet.
/bit.ly/34ApQ4t

Wells Fargo first-quarter profit decimated as coronavirus boosts provisions
Reuters
Wells Fargo & Co (WFC.N) first-quarter profit plunged as it set aside billions of dollars to cover potential loan-losses from the coronavirus pandemic. Wells, the fourth-largest U.S. lender, said bit.ly/2ycjhZR on Tuesday quarterly profit fell to $42 million, or 1 penny per share, from $5.51 billion, or $1.20 per share, a year earlier.
/reut.rs/3ba0IUT

Exchanges, OTC and Clearing

Kuwait Stock Exchange Delays Trading Debut on Coronavirus
Abbas Al Lawati – Bloomberg
The Kuwait Stock Exchange is delaying the listing of its shares due to restrictions on work triggered by the coronavirus pandemic. The listing, scheduled for April 19, has been postponed until further notice “due to exceptional circumstances that are imposed by the spread of the coronavirus pandemic,” the bourse said in a statement. Kuwait’s would have been the second stock exchange in the Gulf region to list its shares after Dubai.
/bloom.bg/3a7vnRl

Time is Relativity: What Physics Has to Say About Market Infrastructure
Phil Mackintosh – Nasdaq
Consider this: back in May 2008 astronomers spotted a supernova or exploding star. However, it turned out this star was 88 million light years from Earth. That means the explosion happened 88 million years ago, well before humans roamed Earth, even though from our perspective it “looked” like it just happened.
The same thing happens with trading, although on a much smaller scale.
Think of it as Einstein’s Theory of Special Relativity applied to trading, because what the market actually looks like depends on your position in space. That also makes speeding up the SIP, and protecting speed-bumped quotes, especially difficult.
/bit.ly/2K3hV6k

Request for re-examination of financial statement announcement schedule due to “extension of deadline for submission of securities reports, etc.”
JPX
Today, Tokyo Stock Exchange Inc. (“TSE”) has notified listed companies about the the Financial Services Agency’s announcement regarding their policy to extend the deadline for Securities reports, long-term reports, half-year reports and parent company status as follows.
/bit.ly/3ack8XD

Eurex seeks Hong Kong clearing licence; Bourse has Greater China in its sights after Japan and Singapore licences approved
Aileen Chuang – Risk.net
Eurex is seeking a clearing licence from Hong Kong’s regulator – a move which would allow the European futures giant to onboard local entities for futures and swaps clearing directly.
/bit.ly/3a7J7eT

Nodal Exchange Successfully Migrates Natural Gas Open Interest from Nasdaq Futures, Inc.
Nodal Exchange
Nodal Exchange announced today that it successfully migrated natural gas futures and options contracts open interest from Nasdaq Futures, Inc. (NFX) to Nodal Clear, Nodal Exchange’s clearing house, pursuant to the agreement announced in November 2019 whereby Nodal purchased core assets of NFX’s futures and options exchange business. 818,737,500 million British Thermal Units (MMBtu) were migrated this morning to Nodal Exchange. This is the energy equivalent of 240 million MWh and represented about 94,000 lots. Nodal Exchange previously migrated 91 million MWh of power futures and options on February 6, 2020 which represented all of the NFX North American power open interest (except for current month expiries by design).
/bit.ly/3ciBT9c

Fintech

How small businesses can access PPP loans through fintech services
Jennifer Ortakales – Business Insider
As of Sunday, $205 billion in federal emergency funding has been allocated to 820,000 small business loans, based on calculations from ABA Data Bank. But it could take several weeks before business owners see any of it.
Enter the fintech lenders.
/bit.ly/3b93UzP

Is Your Adviser Using Fintech To Better Serve You, or a Larger Roster of Clients?
Matthew C. Peck – Yahoo Finance
Over the past several years, we’ve seen breakthroughs in technology change almost every aspect of our lives — from how we shop, to how we get our news and entertainment, to how we get directions. Even how we ask for a ride.
/yhoo.it/3a7PtL9

Cassini Systems Partners with AcadiaSoft to Help Clients Manage Initial Margin Requirements
Press Release
Cassini Systems, the leading provider of pre- and post-trade margin analytics for derivatives market participants, announced today a new initial margin (IM) partnership with AcadiaSoft Inc., the leading industry provider of risk and collateral management services for the non-cleared derivatives community. Under the agreement, Cassini clients now have automated access to AcadiaSoft’s reconciliation platform, Initial Margin Exposure Manager (IMEM), creating a one-stop shop for IM requirements across cleared and bilateral over-the-counter (OTC) and exchange-traded derivatives transactions.
/prn.to/2Vq1Ay1

Fintech innovation can lead SMEs out of the imminent financial crisis
Sascha Ragtschaa – TechRadar
Cash flow has always been a big challenge for small businesses, but right now it has reached critical mass. The economic impact of the ongoing pandemic has devastated millions of SMEs – and while government help is being established in many countries, it won’t come fast enough to save every firm.
/bit.ly/3bkuSoc

Fintech Company Launches AI Platform To Automate Hardship Relief For Financially Stressed Borrowers
Press Release – Yahoo Finance
Constant, a Maine-based financial technology company, has launched an AI-powered software platform for banks and non-bank consumer lenders that provides faster and more accurate decisions about payment deferrals, loan modifications and other workouts. The solution significantly reduces massive incoming call volume and long wait times caused by COVID-19 financial hardships.
/yhoo.it/34zkJlf

Fintech TransferWise Reveals that 25% of its Cross-Border Money Transfers Are Now Near-Instant, Arriving in Less than 20 Seconds
Omar Faridi – CrowdFund Insider
Kristo Käärmann, co-founder and CEO at London-based TransferWise, a privately-held Fintech firm that allows individuals and businesses to send money abroad at affordable and transparent rates, revealed that 25% of the cross-border transfers facilitated by the firm are now instant.
Earlier this month, the TransferWise team confirmed that there was no disruption in its services due to the Coronavirus (COVID-19) outbreak.
/bit.ly/3b6WrBq

Unlocking TCA; Hermes Investment Management was the recent winner of mid-cap trading desk of the year at The TRADE’s annual awards. Here, head of trading, Daniel Nicholls, tells Hayley McDowell about the asset manager’s process for effective use of transaction cost analysis.
Hayley McDowell – The Trade
It’s no secret that trade or transaction cost analysis (TCA) has become one of the most important components of the buy-side trading desk. In light of market structure changes due to increased regulation and the all-encompassing endeavour for best execution, it has never been more critical for traders to get to grips with in-depth analysis of exactly what has happened with each and every execution.
/bit.ly/34AFlJL

Cryptocurrencies

$5,000 is the Next Logical Target For Bitcoin, Cloud Indicates
Tony Spilotro – Bitcoinist
Bitcoin price has fallen below $7,000 this past week after nearly doubling from the extreme lows set just a few weeks prior. As the leading cryptocurrency begins to fall lower and find support, the next logical targets could be as deep as the $5,000 range.
/bit.ly/2Vt86nx

Stocks and cryptocurrency market take a beating following Easter
Manasee Joshi – Cryptopolitan
Cryptocurrency market and stocks continue to take a severe beating, following an Easter weekend, as both markets struggle to cope up with the far-reaching impact of the pandemic in the United States.
/bit.ly/2VpOhO5

FBI Expects a Rise in Scams Involving Cryptocurrency Related to the COVID-19 Pandemic
FBI
Fraudsters are leveraging increased fear and uncertainty during the COVID-19 pandemic to steal your money and launder it through the complex cryptocurrency ecosystem.
People of all ages, including the elderly, are being victimized by criminals through cryptocurrency-related fraud schemes. Developments in cryptocurrency technology and an increasing number of businesses accepting it as payment have driven the growing popularity and accessibility of cryptocurrency. There are not only numerous virtual asset service providers online but also thousands of cryptocurrency kiosks located throughout the world which are exploited by criminals to facilitate their schemes. Many traditional financial crimes and money laundering schemes are now orchestrated via cryptocurrencies.
/bit.ly/2xkrjA1

EU Parliament Considering New Cryptocurrency Watchdog In Regard To Regulatory Hurdles
George Georgiev – CryptoPotato
New regulations for cryptocurrencies are in the making in the EU. Lawmakers are considering creating a new regulatory body after the parliament has published a paper pointing out some legislative “blind spots” concerning the supervision of crypto assets in the European Union.
/bit.ly/2Vv48L1

Fidelity expands liquidity on digital asset platform with ErisX; Fidelity Digital Assets has teamed up with ErisX to provide clients with access to the firm’s spot market as demand for Bitcoin liquidity increases.
Kiays Khalil – The Trade
Fidelity Investments has made moves to expand liquidity on its digital asset platform through a collaboration with cryptocurrency marketplace ErisX. In a statement, both firms said the partnership means Fidelity Digital Assets can now provide access to the ErisX spot market, increasing the breadth of liquidity available to Fidelity’s crypto clients.
/bit.ly/2V87cOo

BUX launches its cryptocurrency investing platform, BUX Crypto
Megha Bhattacharya – IBS Intelligence
Amsterdam-based BUX has announced the launch of its cryptocurrency investing platform, BUX Crypto. The new platform is expected to allow users to trade cryptocurrencies without commission. The platform launch follows the company’s acquisition of Blockport this year.
/bit.ly/2RDMPGD

Cryptocurrencies: DeFi movement growing despite weak cryptocurrency market
Kuek Ser Kwang Zhe – The Edge Markets
Decentralised Finance (DeFi) — a blockchain-enabled ecosystem that, among others, allows users to borrow, lend, trade and make transactions in digital currencies without the need to go through regulatory authorities — has continued to grow despite the current downward trend in the cryptocurrency market.
/bit.ly/2VrkJzA

Binance launches bitcoin options trading on mobile apps
by Yogita Khatri – TheBlockCrypto
Crypto exchange Binance has rolled out trading in bitcoin options, over a month after The Block first broke the story.
The new offering is currently only available on Binance’s latest versions of mobile apps, according to an announcement on Monday. Binance Options allow traders to execute a contract any time before expiry date.
/bit.ly/2XviDRU

***This is not exactly options “trading” since Binance writes all of the options; customers can only go long calls or puts. Binance writes all of the 10-minute and up-to-one-day long options. ~Thom Thompson

Politics

You Had One Job, Governments! If we can’t protect citizens from a pandemic, what are we even doing?
Mark Gongloff – Bloomberg
Around the world, the governments responding best to the Covid-19 pandemic are neither the biggest nor the most authoritarian. They’re just the smartest and nimblest.
/bloom.bg/2yeogco

Governors Team Up to Plan for Reopening, Rebuffing Trump
Christian Berthelsen, Keshia Clukey, and David R Baker – Bloomberg
Two alliances on the coasts represent one-third of the country; N.Y. surpasses 10,000 virus deaths, after 671 more in 24 hours
Some of the nation’s most powerful governors said they would form regional alliances to coordinate reopening schools and businesses after the coronavirus outbreak subsides, setting up a potential clash with the president, who says that he alone has that authority.
/bloom.bg/34z0GDn

Texas Oil Regulator Voices Reservations About Quotas He Touted
Rachel Adams-Heard – Bloomberg
The Texas oil regulator who was among the first to float the idea of OPEC-style supply limits in the Lone Star state now says he has “many reservations” about such measures. Texas Railroad Commissioner Ryan Sitton said he’s not advocating for so-called pro-rationing of oil production but instead only wants the three-person agency to consider it. His remarks come a day before the commission is scheduled to debate imposing output caps for the first time in almost half a century.
/bloom.bg/34AAkRG

Senators’ privileged information does not often result in market-beating returns, Dartmouth research team concludes
Andrea Riquier – MarketWatch
Two U.S. senators who sold stocks just before the March market crash, having received information about the severity of the pandemic that the public didn’t possess, have drawn widespread criticism.
But a new academic paper shows that senators’ trades — both purchases and sales — of stocks mostly underperform the broader market. What’s more, the researchers find that senators’ committee assignments don’t help them realize greater returns on trades in related industries. “Perhaps not surprisingly, we find only limited evidence that senators display stock-picking prowess,” the paper concludes.
/on.mktw.net/2V4jG9O

Trump Declares He Has ‘Total’ Authority to Reopen After Virus
Jennifer Jacobs, Justin Sink, and Saleha Mohsin – Bloomberg
Economic advisers are pushing Trump to weigh shutdown impact; Mnuchin, Kudlow addressed coronavirus task force on Saturday
President Donald Trump declared he has “total” authority to order states to relax social distancing to combat the coronavirus outbreak and reopen their economies, and warned that governors who refuse would face political consequences.
/bloom.bg/3acOTMt

Trump Defends His Coronavirus Record With Anger, and a Video
Justin Sink – Bloomberg
He demands apology from Biden, says governors didn’t do enough; Fauci takes podium to clean up comments from his CNN interview
President Donald Trump declared “everything we did was right” and angrily denounced media reports suggesting his administration had failed to adequately ramp up coronavirus testing or the production of medical supplies in a testy press conference Monday at the White House.
/bloom.bg/3el38Sx

Mexico’s unfolding presidential tragedy; Covid-19 has laid bare the weaknesses of Andrés Manuel López Obrador
The editorial board – FT
Latin America’s leftwing populists have a well-earned reputation as big spenders. Venezuela’s Hugo Chávez, Bolivia’s Evo Morales and Dilma Rousseff in Brazil all drained government coffers to pursue their political dreams. All ended in economic or political ruin.
/on.ft.com/2XyPtRP

Putin seizes crude supply deal to oil relations with Trump; Moscow hopes co-operation in cutting Opec+ accord will drive progress in relations with US
Henry Foy and Katrina Manson – FT
Two and a half million barrels of oil in exchange for a handful of telephone calls might sound like a bad trade but, if it helps him rebuild bridges with Donald Trump, Vladimir Putin will take it.
/on.ft.com/2XLmbQf

Federal Reserve faces blowback over plan to back some cities over others; US central bank makes politically-charged decision to lend only to large localities
Colby Smith in New York and Patrick Temple-West – FT
The Federal Reserve is facing sharp criticism over its plan to provide emergency funding to states and large cities but not smaller localities and organisations that might be facing tougher fights against coronavirus or steeper declines in income.
/on.ft.com/3ee7uL4

Regulation

Former Goldman banker accused in foreign bribery scheme; SEC alleges executive helped pass millions to Ghanaian officials to curry favour for clients
Laura Noonan – FT
A former Goldman Sachs banker helped pass millions of dollars in bribes to Ghanaian officials to curry favour for his clients’ plans to build an electrical power plant, the Securities and Exchange Commission alleged on Monday.
/on.ft.com/2XvHo0l

Details of changes to ASIC regulatory work and priorities in light of COVID-19
ASIC
ASIC has previously stated it would temporarily change its regulatory work and priorities to allow it and regulated entities to focus on the impact of COVID-19. This will include the deferral of some activities and redeployment of staff to address issues of immediate concern, including maintaining the integrity of markets and protecting vulnerable consumers.
/bit.ly/2V8rtTT

ASIC grants relief to industry to provide affordable and timely financial advice during the COVID-19 pandemic
ASIC
ASIC has today announced three temporary relief measures that will assist industry in providing consumers with affordable and timely advice during the COVID-19 pandemic.
/bit.ly/3abFXGW

SEC Charges Former Financial Services Executive With FCPA Violations
SEC
The Securities and Exchange Commission today charged a former executive of a financial services company with orchestrating a bribery scheme to help a client to win a government contract to build and operate an electrical power plant in the Republic of Ghana in violation of the Foreign Corrupt Practices Act (FCPA).
/bit.ly/3b8PiRd

Investing and Trading

Fed Dials Back Frequency of Repo Actions After Market Stabilizes
Alex Harris – Bloomberg
Frequency of overnight actions halved to once per day; Three-month operations to take place every two weeks only
The Federal Reserve will dial back its support for the market for repurchase agreements following signs that the recent upheaval in dollar funding has eased.
/bloom.bg/2V99gpv

There’s No Market Recovery Without an Oil Rally; Even a big OPEC+ deal on production cuts can only do so much in the face of a demand shock. Plus, hog herds and a dash for trash.
Robert Burgess – Bloomberg
At least by recent standards, the S&P 500 Index’s 1.01% drop on Monday wasn’t jaw-dropping. But it was still important, because it showed there’s much more driving equities and other risk assets than just the latest headlines on the coronavirus pandemic. Indeed, equities fell even though the head of the Centers for Disease Control and Prevention said the outbreak has stabilized across the U.S.
/bloom.bg/3a8gC0s

Short-Covering Rally in Stock Market’s Toxic Waste Abruptly Ends
Luke Kawa – Bloomberg
The end of last week’s massive rally bodes poorly, UBS says; Nomura: stocks tend to fall 3 months after momentum reversal
Last week’s rally in the S&P 500 was big, eclipsing any in four decades. But for really breathtaking gains, nothing came close to those in the market’s most beaten-up corners. Stocks that distinguished themselves by how hard they fell during March’s rout roared back almost 25%.
/bloom.bg/2V6wInl

Lots of Muni Bonds Are Going to Be Just Fine; It mostly comes down to a question of quality.
Barry Ritholtz – Bloomberg
In an extraordinary attempt to help the economy in the midst of the coronavirus economic downturn, the Federal Reserve’s balance sheet has ballooned to more than $6 trillion.
/bloom.bg/3bbxp4c

Markets and economists are still too upbeat on coronavirus; Sentiment is too bullish, judging by price-earnings ratios and credit spreads
Mohamed El-Erian – FT
The gap between the relatively quick V-shaped recovery that some economists and many market participants predict, and grim coronavirus-driven realities on the ground has narrowed. But the disparity is still significant enough to pose difficult questions for investors.
/on.ft.com/3cjY3b4

Union says 38 confirmed COVID-19 cases at Cargill meat plant cause for closure; Minnesota-based company says it’s doing what it can to keep workers safe
David Bell · CBC News
The union representing some workers at a meat packing plant south of Calgary says there are dozens of confirmed COVID-19 cases at the facility and it should be closed for at least two weeks to come up with a plan.
/bit.ly/2yXFHyl

Institutions

TD Boosts Firewall With Biggest Loonie Corporate Bond of 2020
Esteban Duarte – Bloomberg
Toronto-Dominion Bank said it issued C$3 billion ($2.16 billion) of subordinated bonds in the largest corporate bond sale in Canada on record as it bolsters its position to ride out the coronavirus slump.
/bloom.bg/2yfgoax

ETF Investors Are All-In on Stimulus With $17 Billion Stock Bet
Claire Ballentine – Bloomberg
Funds this month lure $23.3 billion in only seven trading days; Flows come ahead of likely worst earnings season in history
As stocks posted their biggest weekly gain since 1974, skeptical Wall Street veterans shook their heads in amazement. But exchange-traded fund investors did what they always do — they piled in.
/bloom.bg/2JZnm6k

When Can Bond Investors Lie to Banks? Also stakeholder capitalism, going concerns and stay-at-home orders.
Matt Levine – Bloomberg
The thing which is not
The usual way that municipal bonds get issued is that a city or state or agency or university or whatever calls up its investment bankers, and the investment bankers call up a bunch of muni investors and get them to put in orders to buy some of a new bond. Buying newly issued bonds is generally a good way to make a little extra money—muni bonds, like corporate bonds and stocks and most other things, tend to “pop” when they first start trading—so it is good for the investors to get these calls. On the other hand sometimes a new muni deal will struggle to find buyers, so it is good for the investment banks (and the municipalities) if the investors take these calls. It is a business of relationships: The banks like being able to call investors to place deals; the investors like getting the calls to buy lucrative new issues; everyone is better off if they stay friends and work well together.
/bloom.bg/2K6ak6U

Anthony Scaramucci’s Firm Hit Hard by Credit Collapse; ‘The Mooch’ is facing one of his biggest tests as SkyBridge struggles with the poor performance of its hedge-fund managers
Juliet Chung and Gregory Zuckerman – WSJ
Anthony Scaramucci’s SkyBridge Capital LLC was hit by heavy losses in March from a big bet on debt investments and now is considering possible steps after some of its hedge-fund managers prevented SkyBridge and other clients from withdrawing their money.
/on.wsj.com/2V6Nx1q

Anthony Scaramucci denies he’s suing hedge funds over losses
Thornton McEnery – NY Post
Anthony Scaramucci is not in the mood to sue anybody right now. Reports surfaced on Monday that his Skybridge Capital’s flagship fund suffered a 22.5 percent loss last month as markets cratered, and that Scaramucci was considering filing lawsuits against other funds responsible for his losses.
/bit.ly/3babCtx

Covid brings op risk to the fore at Credit Suisse; Jim Barkley, head of non-financial risk, has added pandemics to the long list of threats on his radar
Steve Marlin – Risk.net
Risk managers like to prepare for the worst and hope for the best. For Jim Barkley, global head of non-financial risk at Credit Suisse, it’s an attitude that has served him well. The Swiss bank set up an office of resiliency at the start of the year, designed to pull together various strands of risk, including business continuity management, IT, cyber, and third-party risk.
/bit.ly/34F1LJV

VC Firms Raised $21 Billion Last Quarter Despite Pandemic Chaos
Some firms did a lot better than others.
Sarah McBride – Bloomberg
The spreading coronavirus pandemic has slammed tech startups, forcing dozens to shed thousands of jobs. But so far, the venture capitalists that fund them appear to be doing alright, according to a new report—though some funds are faring better than others.
/bloom.bg/3b81CBl

JPMorgan Profit Sinks Nearly 70% As It Braces For Loan Defaults; New York bank run by James Dimon says loan losses rose sharply amid coronavirus shutdowns
David Benoit – WSJ
JPMorgan Chase JPM -4.45% & Co.’s first-quarter profit tumbled 69% and the bank set aside a whopping $6.8 billion to cover potential losses on loans to consumers and businesses struggling to stay afloat during the coronavirus shutdown.
/on.wsj.com/2RCwge7

General Atlantic, Tripp Smith to Launch Roughly $5 Billion Distressed-Investing Fund; The fund will provide financing to companies hit by the novel coronavirus pandemic
Miriam Gottfried – WSJ
Private-equity firm General Atlantic is teaming up with veteran credit investor Tripp Smith to launch a roughly $5 billion fund that will provide financing to companies hit by the new coronavirus pandemic, according to people familiar with the matter.
/on.wsj.com/2RDFF5f

Fund managers want retail investors to embrace gold-backed exchange-traded funds as yellow metal hits 7-year high
Georgina Lee – South China Morning Post
Fund managers are seeking to drum up interest for gold as an asset class among retail investors, as the yellow metal burnishes its reputation as a safe haven amid the coronavirus pandemic.State Street Global Advisors will halve the lot size for its Hong Kong-listed SPDR Gold Shares, the world’s largest gold-backed exchange-traded fund (ETF), to five shares per lot from April 24. Value Partners has pledged to keep the total expense ratio at 0.4 per cent per annum for its ValueGold ETF.The…
/bit.ly/2K6mZqx

Barclays halts new job cuts during coronavirus crisis: memo
Reuters
Barclays (BARC.L) has halted new job cuts while the coronavirus crisis is ongoing, the bank said in an internal memo seen by Reuters on Tuesday.
/reut.rs/34xLYN5

Wells Fargo names Julia Bates technology control executive
Finextra
Wells Fargo & Company (NYSE: WFC) today announced that Julia Bates has been named Technology Control Executive. In this role, Bates will report jointly to Saul Van Beurden, head of Technology, and the Wells Fargo Control Executive to be named. Bates joins the company April 9.
/bit.ly/2XBJ48j

Regions

Mexico’s economy to shrink 7.6% this year: UBS
Reuters
Mexico’s economy will shrink 7.6% in 2020, more than double a previous forecast, and its “policy response to the coronavirus is among the weakest anywhere in the world,” according to UBS.
/reut.rs/2V61mgr

Crisis in Russia Puts $13 Billion of Remittances at Risk
Aine Quinn, Naubet Bisenov, and Helena Bedwel – Bloomberg
Tajikistan, Kyrgyzstan are reliant on remittances from Russia; Lockdowns in Russia’s biggest cities have cut migrant jobs
Russia’s deepening economic crisis is on the verge of spilling into some of the most remittance-dependent economies in the world. Migrant workers from the former-Soviet Union send $13 billion home each year from Russia, where they are allowed to work visa-free. But now that money is starting to dry up due to lockdowns in Moscow and St. Petersburg that have halted construction projects and sapped demand for taxis
/bloom.bg/2K5l1H6

Buying Spree for Coffee, Noodles Overwhelms Philippine Foodmaker
Claire Jiao – Bloomberg
Universal Robina Corp.’s instant coffee and noodles are flying off grocery shelves in the Philippines, but the lockdown in the main Luzon island is disrupting supply chains and limiting its ability to meet orders.
/bloom.bg/2V5GFBa

Brexit

Brexit negotiators try to pick up pieces as talks resume; Coronavirus disruption has put back clock on UK-EU agreement over future relationship
Jim Brunsden – FT
The EU and UK will return to the Brexit fray on Wednesday to figure out how to salvage negotiations on London’s future relationship with Brussels in the face of disruption caused by the coronavirus pandemic.
/on.ft.com/3ciLNYE

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FIA Expo, Asia conferences go virtual for 2020

FIA Expo, Asia conferences go virtual for 2020

First Read SGX Execs See Return to Macro Trades; COVID-Led Push Toward Digitalization Suzanne Cosgrove - John Lothian News In a press briefing, Singapore Exchange Limited (SGX) CEO Loh Boon Chye Thursday said the pandemic has created both challenges and extreme market...

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