London Metal Exchange’s CEO Is Leaving for a Crypto Custody Firm

Jan 21, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Matt Chamberlain is going blockchain and will step down as CEO of the LME on April 30, 2022, the LME and HKEX announced today. Adrian Farnham, the LME Clear CEO, will become the Interim LME CEO and group head of commodities on May 1, 2022. Good luck Matt.

We are pleased to welcome Abaxx Exchange (Abaxx.Exchange) to the list of John Lothian News sponsors. Abaxx is a new exchange out of Asia with proprietary technology and an interesting story to tell.

“We chose to partner with the John Lothian Newsletter and publications because of his depth and breadth in the key market segments Abaxx will soon be participating in. Abaxx needed access to the authentic trading community that prestige media cannot deliver.”

~Joe Raia
Chief Commercial Officer, Abaxx Exchange

Quantitative Brokers has launched an institutional liquidity tracking tool that allows clients to track market liquidity and quote size in over 20 futures contracts on four global exchanges, The Trade reported.

Broadway is the focus of a Forefront Communications strategy explainer on how Forefront helped Broadway rebrand.

The first trailer for a movie depicting the GameStop stock fiasco has arrived. The movie is titled “GameStop: Rise to the Players.” Here is the trailer.

Do you like this newsletter? Would you be willing to share your opinion with the world about it by giving a testimonial for our website? You can do so HERE. We greatly appreciate your letting the world know how much you like JLN.

I am pleased to announce that I will be able to make the FIA Boca conference and should be at full strength, God willing. I will start my radiation treatments for prostate cancer upon my return home from the Florida conference. This was the recommendation of my doctor. To say the least, I am very pleased. Now, if the virus and politicians cooperate, I will see you in Florida if you are attending the conference.

We will be there with our video team conducting our industry leader interviews. If you are releasing news at that time or want to expound on industry issues, please contact me to set up an interview.

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

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Book “Regtech, Suptech and Beyond” Looks at Technological Solutions for Regulatory Oversight
JohnLothianNews.com

There is a new book out from Risk Books titled “Regtech, Suptech and Beyond.”

The book is a compendium of chapters addressing technology and innovation in regulatory and supervisory oversight in financial services. Different authors explore the emerging best practices in regulatory oversight and financial services that leverage technological solutions.

Watch the video »

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NYSE’s new leader on the three core beliefs that are guiding her
Lynn Martin in Fortune
January 20, 2022 10:00 AM CST
Lynn Martin, president of NYSE, writes that her company is moving “into a future that will demand the best combination of humanity and processing power that we can muster.”
Technology has played a big part in my life since childhood, when my parents brought home a Commodore 64 computer and I began seeing how far my horizons could expand with the help of that machine. That initial exposure to computers turned into a college major, got me my first job, and then created the cornerstone of my career.
/bit.ly/3Kndv8i

***** My family had a Commodore 64 computer too. It was the Osborne computer of my uncle and aunt’s that helped me get my first job, though. That’s what I used to write my resume and cover letters.

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CFTC Chairman Rostin Behnam Announces Executive Staff Appointments
CFTC
Commodity Futures Trading Commission Chairman Rostin Behnam today announced the following executive leadership and communications appointments as he begins his chairmanship. This team will work directly with Chairman Behnam to establish the Commission’s agenda and execute the responsibilities in the CFTC governing statute and other issues facing the agency. Today’s announcement follows Chairman Behnam naming Tanisha Cole Edmonds as the CFTC’s first Chief Diversity Officer. Chairman Behnam plans to make additional staff and leadership announcements very soon.
/jlne.ws/3GNB48d

***** My apologies to the chairman for breaking the news of Steve Adamske’s appointment more than a week ago. Congratulations to the Behnam team.~ JJL

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‘Your great-great-great-grandchildren will still be getting immunized against coronavirus’: This Mayo Clinic doctor says it’s too late to eradicate COVID-19
Quentin Fottrell – MarketWatch
Will we ever live in a world without COVID-19? As the pandemic enters Year 3, many people are wondering if and when COVID-19, the disease caused by SARS-CoV-2, will become endemic. Endemic refers to the observed level of a disease — or the baseline predictable level with seasonal fluctuations like the flu — whereas a pandemic is typically a global public health emergency with an unpredictable level of illness and/or death. That is a long way off, and COVID-19 will always be with us, Dr. Gregory Poland, who studies the immunogenetics of vaccine response at the Mayo Clinic, told MarketWatch and Barron’s in a live video interview on Wednesday.
/jlne.ws/3fGMz5k

***** The flu vaccine we take helps prevent the flu of 1918 from reoccurring. This virus will be with us a long time. We need to learn how to deal with it.~JJL

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How Big Beef Is Fueling the Amazon’s Destruction; The world’s biggest beef producer says it has no tolerance for rainforest deforestation. Bloomberg’s analysis shows that’s not true—and Brazilian law isn’t helping.
Jessica Brice – Bloomberg
São Félix do Xingu is a modern-day Wild West hacked out of Brazil’s Amazon jungle by folks with little to lose. Cattle outnumber people almost 20-to-1 and, after dusk, the cratered, dirt roads fill with big rigs hauling the mammoth trunks of stolen trees. It’s a place outsiders don’t have much reason to visit, where motorcyclists won’t wear helmets because people want to know who is coming and going. Just about everybody knows everybody else, especially Stanisley Ferreira Sandes.
/jlne.ws/3qNtV23

***** This big beef story is peppered with juicy references.~JJL

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Thursday’s Top Three
Our top story Thursday was Crypto Exchanges Will Face More Scrutiny From SEC, Gensler Says, from Bloomberg via Yahoo Finance. Second was FTX US Derivatives Announces Board of Directors, from FTX. Third was BlackRock’s Larry Fink says the old world of work is ‘gone’ and that’s why everyone is quitting, from Business Insider.

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MarketsWiki Stats
26,693 pages; 237,134 edits
MarketsWiki Statistics

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Lead Stories

London Metal Exchange’s CEO Is Leaving for a Crypto Custody Firm
Mark Burton and Jack Farchy – Bloomberg
Chamberlain stepping down after about five years at helm; Departure comes amid drop in trading volumes, user backlash
London Metal Exchange Chief Executive Officer Matthew Chamberlain will step down from the world’s biggest industrial metals market to run a blockchain-based asset custodian. Chamberlain, a former banker who was just 34 when he was promoted to lead the LME five years ago, will become CEO of Komainu, a company backed by Nomura Securities, Ledger and CoinShares International. Adrian Farnham, the head of the LME’s clearing house, will become interim CEO when Chamberlain leaves at the end of April.
/jlne.ws/3fIiHFI

LME chief Matt Chamberlain to step down in April
Reuters
London Metal Exchange (LME) Chief Executive Matt Chamberlain will step down in April to pursue interests outside the exchange, it said on Friday.
Chamberlain, a former banker who has been at the LME for nine years, oversaw modernisation of the world’s largest and oldest metal exchange and its foray into cleaning up global supply chains.
/bit.ly/3rBr2R6

Head of London Metal Exchange quits for crypto start-up; Adrian Farnham to take over temporary leadership after chief moves to Nomura-backed Komainu
Philip Stafford and Neil Hume – FT
The head of the London Metal Exchange is stepping down to lead a start-up that safeguards cryptocurrencies for big investors. Komainu, a custody business for digital assets backed by Nomura and billionaire hedge fund manager Alan Howard, on Friday appointed Matthew Chamberlain as its next chief executive.
/jlne.ws/3nMjwBU

SEC Rejects Bitcoin ETF Plan From Anthony Scaramucci’s Skybridge Capital
Allyson Versprille – Bloomberg
Proposal is short of standards to prevent fraud, manipulation; The agency has yet to approve a U.S. spot-Bitcoin ETF
The U.S. Securities and Exchange Commission rejected Intercontinental Exchange’s NYSE Arca proposal for a Bitcoin exchange-traded fund from Anthony Scaramucci’s Skybridge Capital. The First Trust SkyBridge Bitcoin ETF Trust proposal fell short of standards to prevent fraudulent and manipulative practices and to protect investors, the agency said in a filing Thursday. The regulator used similar arguments to deny proposals from Valkyrie Investments and Kryptoin in December.
/jlne.ws/35d4sXB

Fed Takes Key Step in Deciding on U.S. Digital-Coin Issuance
Joe Light, Jesse Hamilton, and Allyson Versprille – Bloomberg
Central bank seeks public feedback on government-backed coin; Issuance seen as having big implications for financial system
The Federal Reserve took a key step in weighing the creation of its own digital currency, a move it said could help ensure the U.S. dollar’s dominance as the central bank grapples with fast-growing private cryptocurrencies and coins issued by other nations.
/jlne.ws/3nKQy5t

The SPAC Ship is Sinking. Investors Want Their Money Back; One of the pandemic’s hottest trades is cooling down, as the hype surrounding ‘blank-check’ companies gives way to reality
Amrith Ramkumar – WSJ
Wall Street’s favorite pandemic bet is taking on water. SPACs, or special-purpose acquisition companies, burst onto the scene in 2020 as the hip way to take Silicon Valley’s hottest startups public. Unlike traditional initial public offerings, SPACs were seen as modern and accessible, allowing any investor to put money into the companies of the future at the same time as professional money managers.
/jlne.ws/3KwPrzV

‘No Amount of Money’ Can Lure Bankers to Hong Kong, Recruiters Say
Ambereen Choudhury and Denise Wee – Bloomberg
‘No amount of money’ can lure some candidates to Hong Kong; AmCham survey finds 44% say they may leave due to travel curbs
Hong Kong’s status as a magnet for international financiers is cratering as firms struggle to coax traders and bankers to move to the once vibrant trading hub. Seeking to fill jobs, headhunters are finding they can only recruit candidates who are already in Hong Kong. The crunch comes as the former British colony is dealing with a growing outflow of expatriates who are frustrated with the city’s strict zero-Covid policies. They’re abandoning a city where low taxes, ease of travel, top class schools and a vibrant night-life once proved a potent lure.
/jlne.ws/3tKgD8v

Morgan Stanley Data Show How Retail Meme Fixation Became a Curse
Joanna Ossinger and Lu Wang – Bloomberg
Figures suggest retail traders have fallen behind the S&P 500; Deteriorating profit-loss could hamper retail-trader demand
Live by the meme, and die by it. That’s the lesson from Morgan Stanley research about how quickly small-time investors went from world-beaters to also-rans in the post-pandemic stock market. Using exchange and public price-feed data, a chart from the bank’s trading desk estimated overall gains and losses to retail traders based on their stock flows over the last two years. While individual investors were comfortably ahead of the S&P 500 for most of 2020, when speculative equities flourished, their results fell below the benchmark a few months into 2021 and remain there.
/jlne.ws/3GTgWSe

Deutsche Bank, Barclays to Open London Offices to More Staff
William Shaw, Stefania Spezzati, and Harry Wilson – Bloomberg
HSBC, Lloyds also says workers in England can return to desks; U.K. government dropped work-from-home guidance on Wednesday
Deutsche Bank AG has told staff it will start bringing more of them back to their desks this month, as large parts of the City of London gear up for bankers to return after months of remote working.
/jlne.ws/3551a8x

Banks in Britain ask staff to return to offices
Lawrence White and Iain Withers – Reuters
Banks including Standard Chartered (STAN.L) and Citigroup (C.N) have told staff in Britain to return to the office, taking advantage of the government’s lifting of work-from-home rules to combat the spread of COVID-19.
/jlne.ws/3fG976n

New York Fed names new head of markets team
Reuters
The New York Federal Reserve said on Thursday it is tapping Michelle Neal to head its markets group, filling a key leadership role as the central bank prepares to reduce its balance sheet — a task that would be executed by the regional arm of the Fed.
Neal, who is currently the chief executive of U.S. operations for LedgerEdge, a distributed ledger technology-powered trading platform, will join the New York Fed in March.
/reut.rs/3rF25nL

Imagine There’s No Crypto. It’s Too Easy If You Try; Cryptocurrencies won’t conquer our wallets until they capture more of our imaginations.
Leonid Bershidsky – Bloomberg Opinion
Crypto is seemingly everywhere in 2022. The total market cap of all cryptocurrencies is still above $2 trillion despite some recent losses. In 2021, people spent more than $44 billion on non-fungible tokens, or virtual ownership rights on digital objects — an amount that approached the total size of global art and antique sales in 2020. The notion of “Web 3.0” has firmly attached itself to crypto in the past year or so.
/jlne.ws/3u2A4cX

14 million Americans stopped working because they had COVID-19 or they were caring for someone with the virus
Elisabeth Buchwald – MarketWatch
How big a toll has omicron had on the economy? Economists have been scratching their heads for weeks to estimate the damage the highly contagious COVID-19 variant is causing. The U.S. Census Bureau has some early answers.
/jlne.ws/3AiXKKW

LedgerEdge US operations chief departs for markets head role at Federal Reserve Bank of New York; After less than a year in her role, LedgerEdge’s US chief will leave to oversee the Bank’s markets activities including providing services for monetary authorities and the US Treasury.
Annabel Smith – The Trade
LedgerEdge’s chief executive officer for US operations has left the firm after just seven months to join the Federal Reserve Bank of New York and its head of its markets group. Michelle Neal will be responsible for monitoring and analysing global market developments, executing lender of last resort operations and collateral valuation services, and providing financial services for monetary authorities and the US Treasury.
/jlne.ws/33yxj8n

Credit Suisse fined $9 million by FINRA for several operational failures; The firm has been fined for failing to protect customers’ securities as well as for inaccurately disclosing conflicts of interest.
Wesley Bray – The Trade
Credit Suisse Securities has been fined $9 million by US’ Financial Industry Regulatory Authority (FINRA) for failing to comply with securities laws and rules designed to protect investors.
/jlne.ws/3qMw2mD

Quantitative Brokers launches institutional liquidity tracking tool; The tool allows institutions to track market liquidity and quote size in over 20 futures contracts on four global exchanges, minimising price impact of their orders.
Annabel Smith – The Trade
Trading execution algorithm provider, Quantitative Brokers, has launched a new liquidity tracking tool for institutional investors aimed at helping them achieve best execution. Named Liquidity Tracker, the new tool is free and can be used by institutional investors for real-time analysis to help them minimise the price impact of their orders.
/jlne.ws/3InOhF4

Coronavirus

What If Your Fourth Covid Shot Could Last Forever? Instead of cooking up a new vaccine for each new variant, we could make one vaccine for all the variants.
Mark Gongloff – Bloomberg
One Shot to Rule Them All
Back in August, this newsletter joked about Covid dragging into 2025, because what could be funnier than an endless pandemic, am I right? (The answer is everything: Everything is funnier than an endless pandemic. Eczema is funnier than an endless pandemic.) Then last month, Pfizer’s CEO said he expected the Covid pandemic to drag into 2024, but he was not joking.
/jlne.ws/3nLw7oT

Rising Cases Spark Covid Superspreader Fears in Hong Kong
Jinshan Hong – Bloomberg
A superspreading recycler triggered three days of restrictions; Highest case load since March last year alarms city’s leaders
A rising number of Covid infections in Hong Kong, known for its zealous Covid Zero approach, is unnerving the city’s political and health care leaders. Local cases, while comparatively low, are hitting levels not seen in nearly a year. There are several undetectable chains of transmission. Some infections appear to be coming from unusual sources — including family pets, a scavenger who recycles items from apartment buildings and glancing contact as masked people walk past each other in the subway — showing how difficult it will be to keep the highly transmissible strains at bay.
/jlne.ws/3FMy8Y3

Hamster-to-Human Covid Theory Gains Traction in Hong Kong
Jinshan Hong – Bloomberg
Hong Kong officials said they were more confident about the possibility that pet hamsters are spreading Covid in the city as newly uncovered infections are genetically distinct from the virus initially found in a pet shop clerk.
/jlne.ws/3tJ7zRj

Hong Kong Locks Down Building for Five Days to Curb Omicron
Jinshan Hong and Vinicy Chan – Bloomberg
Hong Kong is locking down about 2,700 residents for five days, the first time it’s closed off an apartment building for more than 48 hours, in the hope of containing a superspreader event that has already led to at least 16 people testing positive for Covid.
/jlne.ws/3nLDEnF

How Omicron’s Milder Infections Are Straining U.S. Hospitals; Evidence points to less severe patient outcomes relative to previous Covid-19 variants, but the magnitude of new cases has driven up hospitalizations
Randy Yeip, Kara Dapena – WSJ
The fast-spreading Omicron variant has fueled a rise in Covid-19 cases to levels far beyond any recorded in the U.S. since the start of the pandemic. But there is a growing body of evidence that infections from the Omicron variant are less severe than previous variants. So why are hospitals in some parts of the country stretched to capacity?
/jlne.ws/33BRbao

Exchanges, OTC and Clearing

LME Management Changes
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) today (Friday) announces that after more than nine years with the business, Matthew Chamberlain, CEO of the London Metal Exchange (LME) and Group Head of Commodities, will be stepping down on 30 April 2022 to pursue career interests outside of the Group. Adrian Farnham, LME Clear CEO, effective 1 May 2022, will become Interim LME CEO and Group Head of Commodities. He will become a member of HKEX Management Committee and report to Group CEO, Nicolas Aguzin. Mr Farnham joined HKEX Group in 2013 and brings more than 30 years’ experience of financial markets and market infrastructure to the role. HKEX will utilise the period ahead of Mr Chamberlain’s departure to select an appropriate Interim LME Clear CEO, to ensure a smooth and effective handover.
/jlne.ws/33EDGqr

Nasdaq’s European Markets Delivered Record Year in 2021
Nasdaq
Solidified Nasdaq position as the leading European listings hub with 219 new equity listings, including a record number of 174 initial public offerings (IPOs), raising a total of EUR 13.4 billion- Retail inflow and large interest in SME trading spurred all-time high levels in equity and derivative trading- Continued to lead in ESG with venture investment in Puro.earth and new product launches
Nasdaq (Nasdaq: NDAQ) announced today that Nasdaq’s European markets delivered a historic 2021 with several all-time highs in its listings and trading businesses across the Nordic and Baltic regions.
/jlne.ws/3qOXhxd

Optiver and CME to offer Nasdaq mini options block trading; From 24 January, institutional investors can source direct liquidity from Optiver in Nasdaq options blocks via electronic execution during an extended 23-hour trading day at CME.
Annabel Smith – The Trade
Market maker, Optiver, and derivatives exchange CME Group have set out plans to launch block trading on Nasdaq E-mini options in a bid to help institutional investors manage risk during heightened market volatility.
/jlne.ws/3nMVs1B

NSE top derivatives trading exchange globally
Times of India
For the third consecutive year, India’s leading exchange NSE has been ranked as the world’s top derivatives trading platform, ahead of global giants like Chicago, Nasdaq and B3 of Brazil. Data from Futures Industry Association (FIA), a global derivatives trade body showed that the NSE was ranked the largest exchange in the equity as well as the currency derivatives segments by number of contracts traded in 2021.
/jlne.ws/3qMytWA

The Small Exchange to Offer Options on Futures for Small Precious Metals Product [SPRE]; Launch Marks the First Time Options on Futures are Available from the Small Exchange; Traders of Any Account Size Can Now Access Commodity Markets with Less Risk
The Small Exchange
The Small Exchange, a revolutionary futures exchange offering smaller, simpler products aimed toward retail customers, today announced the launch of Options on Futures for Small Precious Metals [SPRE], available to investors on January 25. This is the first product from the Small Exchange to offer options – they have launched ten futures products in their first 18 months. This offering gives traders of any account size access to the commodity space that has long been ripe with opportunity, but in the past, potentially required too much risk for the everyday investor. By trading options on the SPRE futures product, present day traders now have more flexibility and opportunity to diversify investment, speculate on a smaller scale and manage risk on existing positions.
/jlne.ws/3qJy1by

SGX welcomes Pegasus Asia to Mainboard
SGX
Singapore Exchange (SGX) is pleased to welcome the listing of Pegasus Asia, as part of SGX’s inaugural batch of Special Purpose Acquisition Company (SPAC) listings. Pegasus Asia will be listed on the SGX Mainboard under the stock code “PGU”.
/jlne.ws/3Ikm3Le

Fintech

QB Launches Liquidity Tracking Tool For Real-time Analysis To Help Achieve Best Execution; Free, Open-Source QB Liquidity Tracker Reports Liquidity on 20-plus Futures Contracts, 4 Global Exchanges
Quantitative Brokers
Quantitative Brokers (QB), a leading provider of advanced execution algorithms and data-driven analytics for global futures, options and OTC Fixed Income markets, today launched a free online tool that allows institutional traders to track market liquidity and quote size at a level of transparency and ease never before available. Today’s announcement also marks a new direction for QB, who aims to offer an integrative suite of market microstructure analytics soon.
/jlne.ws/3tJ6vNa

Cybersecurity

U.S. Power Grids Need Stronger Cybersecurity, Top Regulator Says
Naureen S Malik – Bloomberg
FERC pitches new standards to find hackers lurking on networks; SolarWinds breach exposed vulnerabilities of current standards
U.S. power grids need to boost their cyber defenses to find hackers faster to keep them from gaining control over operations, according to the country’s top energy regulator. The Federal Energy Regulatory Commission is proposing to develop standards to monitor devices or equipment on bulk power systems, according to a notice issued Thursday. The proposed standards would seek to find hackers lurking within networks as opposed to current efforts that use a perimeter defense that focuses on trying to keep attackers out of sensitive networks.
/jlne.ws/33SPQfd

Cybersecurity Company ID.me Is Becoming Government’s Digital Gatekeeper
Shawn Donnan and Dina Bass – Bloomberg
If you were writing a techno-thriller, you’d give your hero a backstory like Blake Hall’s. He’s a Harvard MBA, an alumnus of McKinsey & Co.’s ultracompetitive summer associate program, and comes from a family with a proud military tradition. He’s a decorated Army Ranger who saw action in Iraq; his dad was an Army brigade commander; his grandfather fought off a Nazi assault in World War II. Now he’s the co-founder of a cybersecurity company who peppers his conversations with battlefield jargon, offering his mea culpas with pledges to do pushups as self-inflicted punishment. “I feel a moral duty because I still have the DNA of a soldier,” Hall said in an October interview.
/jlne.ws/3AiueVC

Research: Why Employees Violate Cybersecurity Policies
Clay Posey and Mindy Shoss – Harvard Business Review
Last summer, Colonial Pipeline paid a ransom of almost $5 million after a cyberattack created widespread panic over the availability of gasoline across the Southeastern U.S. Just a few weeks later, the world’s largest meat processing company agreed to pay an $11 million ransom in response to a cyberattack that suspended operations at plants across the U.S., Canada, and Australia. Attacks like these have been growing more common for years, and the Covid-19 pandemic has only made matters worse, with the FBI reporting a 400% increase in cyberattacks in the first few months of the pandemic.
/jlne.ws/3qLx82c

CISA warns – upgrade your cybersecurity now to defend against “potential critical threats”
Liam Tung – ZDNet
The US government has urged organizations to shore up defenses “now” in response to website defacements and destructive malware targeting Ukraine government websites and IT systems.
The US Cybersecurity and Infrastructure Security Agency (CISA) has published a new ‘CISA Insights’ document aimed at all US organizations, not just critical infrastructure operators. The checklist of actions is CISA’s response to this week’s cyberattacks on Ukraine’s systems and websites, which the country’s officials have blamed on hackers linked to Russian intelligence services.
/jlne.ws/3fIu3cX

Israeli cybersecurity firms raised record $8.8b in 2021, exports reached $11b
Ricky Ben-David – The Times of Israel
Israeli cybersecurity companies broke a number of new records in 2021, according to the Israel National Cyber Directorate, including funding, exports, and acquisition values.
Local companies raised a record $8.8 billion in over 100 deals last year and 11 of them became unicorns, or private companies valued at over $1 billion, the directorate announced Thursday.
/jlne.ws/3GQlpF8

Cybersecurity market to reach $346 billion by 2027
Help Net Security
As per the study of Astute Analytica, the global cybersecurity market is anticipated to grow at a CAGR of 13.40% during the forecast period of 2021 to 2027. The market marked a revenue of $162.9 Bn in the year 2021 and is estimated to reach $346 Bn by the end of the year 2027, with around 2.4 times of growth over the study period.
/jlne.ws/3GRKFe2

Cryptocurrencies

Miller Lite is opening a bar in the metaverse; It’s part of the beer maker’s Super Bowl 2022 ad plan.
Asa Hiken – Crain’s Chicago Business
Miller Lite is building a bar in the metaverse to connect with fans around this year’s Super Bowl—without actually appearing on air during the game. The bar opening in virtual platform Decentraland will be the sole place where fans can watch Miller Lite’s “Big Game” ad.
/jlne.ws/3IndrUb

Most NFTs Are More Like Baseball Cards Than Fine Art; Collectors aren’t just paying crazy prices for blockchain entries. They’re also buying affordable access to communities and the opportunities that come with it. (Ask Eminem.)
Scott Duke Kominers – Bloomberg
Earlier this month, the rap impresario Eminem spent 123.45 units of Ether cryptocurrency — worth over $450,000 at the time — on an image of an ape that looks kind of like him. Earlier this week, Madonna signaled that she, too, might be interested in splurging on an ape cartoon. Sure, celebrities often crave the notoriety that comes with head-scratching spending sprees, but it’s still fair to ask: Ape caricatures? What on earth are they thinking?
/jlne.ws/3fRnC7b

Twitter Users Can Now Add Verified NFTs as Profile Photos
Kurt Wagner – Bloomberg
Twitter Inc. users can now use an NFT as the profile picture on their account, part of a push to allow more users to show off digital art and encourage people to sign up for the company’s subscription product.
/jlne.ws/3GPCteh

Musk Chides Twitter for NFT-Linked Profile Pictures
Charles Capel – Bloomberg
Tesla Inc. Chief Executive Officer Elon Musk lambasted Twitter’s development of profile pictures linked to non-fungible tokens on Friday morning, saying the social media company has the wrong priorities.
/jlne.ws/3AkqqmN

BitMex Founder’s ‘Coconut’ Bribery Claim Just a Joke, Judge Says
Chris Dolmetsch – Bloomberg
When BitMEX co-founder Arthur Hayes was accused in 2020 of allowing money laundering on the cryptocurrency exchange, prosecutors cited a joke he made about using a coconut to bribe officials in the Seychelles, where the company is based, as evidence of his desire to avoid regulation.
/jlne.ws/3GSt4CN

Crypto-friendly Singapore’s bitcoin ATM shutdown takes operators by surprise: ‘We’re still in a shock kind of mood.’
Weilun Soon – Insider
ypto ATMs remain unregulated in Hong Kong, marking a divergence in the cities’ regulatory approaches.
Cryptocurrency ATMs in Singapore ground to an unexpected halt this week, catching the industry by surprise and leaving rival crypto hub Hong Kong in the lead with more than 100 machines in operation. Singapore’s financial regulator, the Monetary Authority of Singapore (MAS), stated on Monday that crypto service providers should not market or advertise such services publicly, including the provision of physical ATMs. Providers are still able to market their services on their own websites and platforms.
/jlne.ws/3rxBtoO

Thailand’s Bitkub plans crypto expansion in SE Asia; Chief plots push into region amid growing trading volumes during pandemic
John Reed – FT
Bitkub, Thailand’s biggest cryptocurrency trading company, plans to expand its operations into other south-east Asian countries this year, said founder and chief executive Topp Jirayut Srupsrisopa.
/jlne.ws/3tJa6Lj

Politics

Trump Deal Faced Widespread Investor Doubt Before Raising $1 Billion; More than a dozen big Wall Street money managers said no to Trump Media, but the Pentwater and Sabby hedge funds are among those that have committed millions.
Matthew Goldstein, Kate Kelly, Kenneth P. Vogel and Maureen Farrell – NY Times
Last month, Donald J. Trump’s fledgling social media company announced that it had lined up $1 billion from 36 investors. The size of the deal, the former president said in the announcement, signaled that his start-up’s plan to end the “tyranny” of Big Tech had significant support. Getting there was no slam dunk.
/jlne.ws/3tF996G

Trump Solicited Hedge Funds, Family Offices for $1 Billion PIPE
Gillian Tan, Layan Odeh and Hema Parmar – Bloomberg
When former President Donald Trump said in December that his nascent media company was raising $1 billion from a diverse group of institutional investors, the announcement was highly unusual in that it omitted the participants’ names.
/jlne.ws/3GZA5Sc

Wall Street Titans Support One of Their Own, David McCormick, in Senate Bid; Stephen Schwarzman and Ken Griffin are among those hosting a March fundraiser for the former Bridgewater CEO
Liz Hoffman – WSJ
David McCormick, the former chief executive of hedge fund giant Bridgewater Associates who is running for the open Senate seat in Pennsylvania, has the backing of some of Wall Street’s biggest names. Stephen Schwarzman and Ken Griffin are among those hosting a fundraiser in March for Mr. McCormick at Paul Tudor Jones’s home in Palm Beach, Fla., according to an invitation viewed by The Wall Street Journal.
/jlne.ws/33BL2ek

Biden Administration Makes Visa Tweaks to Retain Foreign STEM Students; Changes are designed to boost innovation in the U.S. while keeping pace with competitors such as China
Michelle Hackman – WSJ
The Biden administration is making a series of policy changes aimed at easing the path for foreign students and professionals in the fields of science, technology, engineering and math to remain in the U.S. on a long-term basis. The new policies, the likes of which have long been called for by Silicon Valley and other companies, are designed to retain foreign students educated in the U.S. in STEM fields to boost innovation while keeping pace with competitors such as China, senior administration officials said.
/jlne.ws/3InIjUH

Regulation

Canadian Securities Regulators Seek Input On Proposed Business Conduct Rules For Derivatives Dealers And Advisers
MondoVisione
The Canadian Securities Administrators (CSA) today published for comment the proposed business conduct regime for regulating dealers and advisers in over-the-counter (OTC) derivatives in Canada.
/jlne.ws/3nJoCP4

FINRA Adopts Amendments to Clarify the Application of FINRA Rules to Security-Based Swaps; Effective Dates: February 6, 2022 (Rules 0180, 4120 and 9610) and April 6, 2022 (Rules 4210, 4220 and 4240)
FINRA
FINRA has adopted amendments to its rules to clarify the application of FINRA rules to security-based swaps (SBS):1 FINRA has adopted a new Rule 0180 (Application of Rules to Security-Based Swaps), which, along with conforming amendments to Rule 9610 (Procedures for Exemptions—Application), will become effective February 6, 2022. The new rule replaces the expiring temporary Rule 0180 and generally applies FINRA rules to members’ activities and positions with respect to SBS, with limited exceptions.
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SEC Rejects Bitcoin ETF Plan From Anthony Scaramucci’s Skybridge Capital
Allyson Versprille – Bloomberg
The U.S. Securities and Exchange Commission rejected Intercontinental Exchange’s NYSE Arca proposal for a Bitcoin exchange-traded fund from Anthony Scaramucci’s Skybridge Capital. The First Trust SkyBridge Bitcoin ETF Trust proposal fell short of standards to prevent fraudulent and manipulative practices and to protect investors, the agency said in a filing Thursday. The regulator used similar arguments to deny proposals from Valkyrie Investments and Kryptoin in December.
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SEC Under Pressure to Implement Agenda in 2022, While Democrats Control Congress; After talking up an ambitious agenda, SEC Chairman Gensler is expected to begin implementing changes
Paul Kiernan – WSJ
Securities and Exchange Commission Chairman Gary Gensler spent his first nine months on the job sketching out ambitious plans to tighten federal regulation of Wall Street. Now, the clock is ticking for him to implement his agenda. With Democrats at risk of losing their thin majorities in the House and Senate after November’s midterm elections, the coming months could be critical for Mr. Gensler, whom President Biden tapped last year. If Republicans win either chamber of Congress, they could move to slow Mr. Gensler’s progress.
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ASIC embarks on regtech innovation initiative into poor market disclosure
ASIC
ASIC will be working with five regulatory technology (regtech) entities – Bedrock AI Aus Pty Ltd, DigitalX Limited, Eastern Analytica Pty Ltd, Listcorp Pty Ltd and Pyxta Pty Ltd for the Business Research and Innovation Initiative (BRII) Regulatory Technology (Regtech) Round, dealing with the challenges of corporate disclosure.
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FINRA Fines Credit Suisse Securities $9 Million for Multiple Operational Failures
FINRA
FINRA announced today that it has fined Credit Suisse Securities $9 million for failing to comply with securities laws and rules designed to protect investors, including the Securities and Exchange Commission’s Customer Protection Rule and FINRA rules requiring firms to disclose potential conflicts of interest when issuing research reports. As part of the settlement, FINRA also required Credit Suisse to certify that it has implemented supervisory systems and procedures reasonably designed to comply with the Customer Protection Rule and other requirements.
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FINRA Amends Rule 2251 Regarding Reimbursement Rates for Processing and Forwarding Proxy and Other Issuer-Related Materials
FINRA
FINRA has amended, with immediate effectiveness, the provisions of FINRA Rule 2251 regarding rates of reimbursement for expenses incurred in processing and forwarding proxy and other issuer-related materials.1 As specified in more detail below, the amendments apply the notice and access fees set forth under the rule to the distribution of investment company shareholder reports and further prohibit fees on accounts containing only shares that were transferred to the account holder by the member without charge. These amendments conform Rule 2251 to provisions in the New York Stock Exchange (NYSE) rules approved by the Securities and Exchange Commission (SEC).2
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Stewardship Code : 320 institutional investors have signed up to the Principles for Responsible Institutional Investors as of December 31, 2021
Japan FSA
The Council of Experts Concerning the Japanese Version of the Stewardship Code (Chairman: Professor Hiroyuki Kansaku, University of Tokyo Graduate Schools for Law and Politics) published the Principles for Institutional Investors (Japan’s Stewardship Code, hereinafter referred to as “the Code”) on February 26, 2014.
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Bank Indonesia and Monetary Authority of Singapore Expand Cooperation across Central Banking, Financial Regulation and Innovation
Monetary Authority of Singapore
Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) today signed a Memorandum of Understanding [1] (MOU) to strengthen bilateral cooperation and deepen ties. The MOU reflects Indonesia and Singapore’s joint interest to promote collaboration on projects in relation to payments innovation, and formalise cooperation across an expanded range of central bank and regulatory functions. These include monetary policy, macroprudential policy, financial stability, oversight of the payment and settlement systems, regulatory and supervisory frameworks, and anti-money laundering and countering the financing of terrorism.
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MAS and ABS Announce Measures to Bolster the Security of Digital Banking
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) are introducing a set of additional measures to bolster the security of digital banking, in view of the recent spate of SMS-phishing scams targeting bank customers.
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Investing and Trading

What Happened to European Equities? The UK and the Rest of Europe Have Lost Share of Global Equities Markets. Is a Rebound Possible?
Dan Lefkovitz based – Morningstar Global Markets
European representation within the global equities’ universe has declined significantly, according to new research from Morningstar Indexes. In the new report, authored by Morningstar Indexes Strategist Dan Lefkovitz and coinciding with the twentieth anniversary of Morningstar Indexes, Europe went from a 26% weight within the Morningstar Global Markets Index in 2011 to a 17.1% weight in 2021. The UK saw the largest decline and now represents less than 4% of global equity markets. The word’s 10 largest public companies at the end of 2021 were all-American. Nestle, the largest European company, was #16.
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Your Raise Might Be Stock Investors’ Pay Cut; Inflation and wage pressures are about to rain on investors’ parade
Justin Lahart – WSJ
Corporate profits boomed last year, but U.S. companies might have a hard time generating much of an encore. Earnings season has only just begun, and signs suggest fourth-quarter results will be very good. Analysts polled by Refinitiv estimate that earnings per share among companies in the S&P 500 were up 23.1% versus a year earlier. If the usual pattern holds, the actual growth figure will end up being even higher.
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Ultra-Rich Americans Are Asking BofA’s Katy Knox Some Unusual Questions; The head of Bank of America’s private bank oversees a group managing customers ready to invest at least $3 million. Business is booming, she says.
Katherine Doherty – Bloomberg
These are strange times for even the richest Americans: A pandemic shook the world and yet everything rose in value. Now many are calling up their wealth managers, asking more — and often unusual — questions.
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We are running out of good companies: list more frauds; Ravenous investors need to be fed. Bring back Enron
Tom Braithwaite – FT
This is not an early copy of Social Capital founder Chamath Palihapitiya’s next investor letter. nTo the supporters and stakeholders, Last year I quoted FDR: “The country demands bold, persistent experimentation . . . If it fails, admit it frankly and try another. But above all, try something.” We did. A number of the companies we invested in were non-obvious and didn’t make much sense to our investing peers. But they made money. Not necessarily for someone who bought in at the peak and saw stocks like Clover Health fall 80 per cent. But certainly for us. Today, I want to present an even more non-obvious idea that sounds even crazier and so will be even more successful.
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‘Farms Are Failing’ as Fertilizer Prices Drive Up Cost of Food; Farmers in the developing world say they are curtailing production, which means global hunger could worsen
Jon Emont and Jenny Carolina Gonzalez in- FT
From South America’s avocado, corn and coffee farms to Southeast Asia’s plantations of coconuts and oil palms, high fertilizer prices are weighing on farmers across the developing world, making it much costlier to cultivate and forcing many to cut back on production. That means grocery bills could go up even more in 2022, following a year in which global food prices rose to decade highs. An uptick would exacerbate hunger—already acute in some parts of the world because of pandemic-linked job losses—and thwart efforts by politicians and central bankers to subdue inflation.
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Environmental, Social and Corporate Governance

EU Fractures Dream of Gold Standard for Green Market Investors
Libby Cherry, Greg Ritchie, and John Ainger – Bloomberg
Bloc set to allow some gas and nuclear to be ‘sustainable’; Funds say will undermine standards, create two-tier market
The European Union is ripping up the green investing playbook with plans to allow some gas and nuclear projects to be called sustainable. The bloc is poised to include these kinds of power generation with conditions in its rulebook for sustainable activities, or taxonomy. That’s divided the fund community, as some worry their holdings will no longer be in line with the rules, while others think it’s a necessary compromise to transition to a cleaner economy.
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Coal Soars to $300 a Ton as Asia Scrambles for Power Plant Fuel
ByIsis Almeida, Alfred Cang, and Stephen Stapczynski – Bloomberg
One of the priciest Australian coal cargoes ever sold: traders; Indonesia has released some coal exports after announcing ban
Coal prices are surging as traders in Asia scramble to snatch up winter supply amid fears of delayed deliveries from Indonesia and as a global energy squeeze continues.
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Carbon Offsets Trading Could Go Two Very Different Ways; An over-supplied, lax voluntary market will result in very slow growth in prices, while a carbon removals-only scenario will cause an immediate spike, BNEF research shows
Nathaniel Bullard – Bloomberg
Decarbonization of the global economy will require a planet-sized transformation of industrial sectors and of consumption. There is a limit to what we can do, however. Reaching net zero emissions will almost certainly require actively removing carbon dioxide from the atmosphere.
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China’s Carbon Market May Get Stricter Under a New Proposal
Bloomberg News
Chinese regulators are mulling a deeper cut in new carbon quotas, a move that would make it more expensive to run small and inefficient coal power plants. A Ministry of Ecology and Environment draft plan for carbon allowances for more than 2,000 power firms over 2021 and 2022 proposes that large coal plants will be given 7.9% fewer allowances per megawatt-hour generated, according to a person familiar with the document. The cut is deeper than a 1% reduction proposed earlier. It would be even harsher on coal plants smaller than 300 megawatts, which would see their benchmarks cut by 12%.
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Institutions

Goldman Sachs One Million Black Women and Grameen America Announce $20 Million Partnership to Advance Access to Capital for Black Women Entrepreneurs; New Loan Capital Will Provide Access to Microloans for Low-Income Black Women to Start Small Businesses; Funding Accelerates Grameen America’s New Racial Equity Initiative “Elevating Black Women Entrepreneurs”
Goldman Sachs
Goldman Sachs One Million Black Women and Grameen America today announced a new partnership to advance financial access and inclusion for low-income Black women entrepreneurs. Goldman Sachs will provide $20 million in incremental loan capital to accelerate Grameen America’s new racial equity initiative, Elevating Black Women Entrepreneurs, or Elevate, to bring affordable credit and capital to financially underserved Black women across the United States.
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JPMorgan CEO Jamie Dimon Gets $3 Million Raise to $34.5 Million for 2021; Nation’s biggest bank reported $48.3 billion in net income last year, a third more than the old record
David Benoit – WSJ
JPMorgan Chase JPM -0.85% & Co. is paying Chief Executive Jamie Dimon $34.5 million for a record-breaking 2021, $3 million more than he made in the previous two years. The nation’s biggest bank reported $48.3 billion in net income last year, a 66% increase from the prior year and a third more than the old record. The stock rose 25%, but underperformed the S&P 500 and the KBW Nasdaq Bank Index.
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London Lodbrok Capital Hedge Fund Posts 32% Gain for 2021
Irene Garcia Perez and Nishant Kumar – Bloomberg
Fund helped engineer rejection of Elliott’s bid for Aryzta; Merger arbitrage, reopening trades, energy offer opportunities
Lodbrok Capital LLP’s European Credit Opportunities Fund gained 32% last year thanks to investments on Swiss bakery firm Aryzta AG, U.K. oil services firm Valaris Plc and German industrial property company Deutsche Industrie REIT AG, according to an investor letter.
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Gary Cohn-backed Spac to take lottery operator public in $9.3bn listing; The former Goldman Sachs president had teamed up with ex-KKR dealmaker Clifton Robbins to join the Spac boomAlice Hancock – FT
A blank cheque company backed by Gary Cohn, the former Goldman Sachs president and Trump administration adviser, plans to take a group bidding to run the UK’s National Lottery public in a $9.3bn listing on Wall Street. Allwyn Entertainment, the Czech lottery operator formerly known as Sazka, said on Friday that it intends to list on the New York Stock Exchange via a merger with Cohn Robbins Holdings, a vehicle set up in 2020 by Cohn and Clifton Robbins, a former executive at private equity firm KKR.
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António Horta-Osório attended Euros final during London Covid breach; Banker who quit as Credit Suisse chair over Wimbledon trip watched Wembley match the same day
Owen Walker, Arash Massoudi and Stephen Morris – FT
António Horta-Osório attended the final of football’s European Championship on the same day he breached Covid quarantine rules to watch the Wimbledon men’s tennis final, according to people with knowledge of his movements.
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Regions

‘Govt should abolish STT to encourage new investors to start trading’; The investment industry will benefit if the Securities Transaction Tax is abolished, says Nikhil Kamath, co-founder of Zerodha, as part of his FY23 Budget expectations
Press Trust of India
Market experts on Thursday said the government should consider relieving traders of the Securities Transaction Tax on equity trade in the Union Budget, which will be presented by the finance minister on February 1. The move is expected to boost the capital markets and encourage new investors to start trading, they added.
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China Vows ‘No Mercy’ in Battle Against Corruption, Big Tech
Bloomberg News
Alibaba shares plummet, dragging down stocks in Hong Kong; Anti-corruption body cites disorderly expansion of capital
China vowed to curb the influence of technology companies and root out corruption tied to the “disorderly” expansion of capital, a sign that authorities may expand a regulatory crackdown that erased more than $1 trillion of market value last year.
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Thai Cops Raid Pork-Storage Plants as Disease Worsens Shortage
Randy Thanthong-Knight – Bloomberg
Authorities in Thailand are cracking down on the hoarding of frozen pork meat amid shortages that have helped trigger the doubling of prices. Over the past week, Thai police have raided two cold-storage facilities, in Songkhla and Chanthaburi provinces, each holding more than 200,000 kilograms of pork, the government said. Another warehouse near Bangkok was also found to be hoarding more than 5,000 kilogram of meat.
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Covid Surge Ruins Foreign Appetite for Philippine Stocks
ByIan C Sayson – Bloomberg
Overseas investors are again withdrawing from Philippine equities, turning net sellers in the past five sessions as the nation’s daily Covid cases hit unprecedented levels. Foreign funds have pulled out $26.7 million so far in January after months of consecutive buying that reached a record $1.72 billion in December. “Foreigners are fickle and sporadic, going in and out of the market because we lag the region in vaccinations, and infections have blown up,” says Cristina Ulang, a strategist at First Metro Investment. “It’s locals who are supporting the market above 7,000 on bets infections have peaked,” Ulang added. The Philippine Stock Exchange Index fell 0.3% to 7,218.69.
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Buyout Frenzy Is Loading U.K. Household Names With Junk Debt
Abhinav Ramnarayan – Bloomberg
Leveraged buyouts add debt to balance sheets of U.K. companies; Morrisons deal to push sterling high-yield market to record
Leveraged buyouts are flooding the U.K. with more junk debt than ever — and that’s bad news for the finances of some of the country’s best-known companies.
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PBOC’s Pledge to Open Tool Box Puts Focus on Less-Known Options
Bloomberg News
Deposit rates, FX purchases seen as potential options; Structural tools, ‘window guidance’ could lead to more lending
A pledge by China’s central bank to open its monetary policy tool box wider to spur an economy under strain has fueled debate over its next move. With the People’s Bank of China having already cut interest rates and the ratio of cash banks must hold in reserve, economists are betting authorities will turn to some of their lesser-known tools and adopt structural policies to boost credit expansion and domestic demand. That’s on top of traditional measures, such as rate cuts, which are still on the cards too.
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Palm Oil Ends at New Record High on Growing Concern Over Supply
Eko Listiyorini – Bloomberg
Palm oil climbed to a fresh record high on persisting concerns over supplies in top growers Indonesia and Malaysia and a rally in rival soybean oil. Futures for April delivery jumped 2.6% to close at 5,322 ringgit ($1,272) a ton in Kuala Lumpur, posting a fifth straight week of gains and taking its weekly advance to 7.4%. Soybean oil, palm’s closest substitute for food and fuel, increased for a fifth day in Chicago.
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The Fertilizer Crisis Is Getting Real for Europe Food Prices
Yuliya Fedorinova, Megan Durisin, and Veronika Gulyas – Bloomberg
Farmers may have to use fewer nutrients or pass on the costs; Gas crisis, export restrictions hit nitrogen fertilizer supply
As Europe’s farmers prepare to spread fertilizers on fields after winter, sky-high nutrient prices are leaving them little choice but to use less and try to pass on the cost down the food chain.
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Miscellaneous

The Charismatic Developer and the Ponzi Scheme That Suckered San Diego; Gina Champion-Cain was a pillar of the local business community. But her successful image and lavish lifestyle were fueled by a fraud.
Chris Pomorski – Bloomberg
In late 2012, Kim Peterson, a San Diego real estate developer and lawyer, got a call from a friend and colleague named Gina Champion-Cain. Peterson was in his 60s; in 1982 he left behind a high-profile criminal defense practice in Chicago to build shopping centers, pharmacies, and luxury homes. With his wife, Laurie, he lived in a stylish Mediterranean villa with views of the Pacific and traveled on his own plane. In business circles, Peterson was known for probity and sound judgment. Through mutual acquaintances, he’d met Champion-Cain, roughly 15 years his junior, around 2005. They became close, playing golf at the exclusive Rancho Santa Fe country club where they were members and dining together with their spouses. Now she had an investment opportunity to tell him about.
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