Market Bulls Starved in August During Worst Cross-Asset Selloff Since ‘81

Sep 1, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

To our readers: John is in surgery for a hip replacement as we put the newsletter together this morning. We wish him the best and hope for a speedy recovery. While he wrote some bits below last night, it is worth noting that he has left the lunatics in charge of the asylum and not all comments are his. ~JB

The National Futures Association’s Youtube channel had a new video posted on August 25 titled “We Are NFA – Diversity & Inclusion at NFA” that is well done and speaks well to an organization that walks the walk.

Citadel Securities’ YouTube channel posted a video titled “How does our culture drive constant innovation and success?” that is one of those disintermediated in-house public relations videos that suffers from a lack of credibility (too many softball questions), no follow up questions and a lack of specific examples about what that innovation might be. Zia Ahmed, head of communications at Citadel and Citadel Securities, interviewed Citadel Security Head of Institutional Equity Sales Cory Laing. Instead of pitching a real media organization a story, or making Laing available to a journalist for an interview, Citadel cuts out the troublesome journalist and puts out a video that looks like a news interview, but is really a public relations piece. I get tired of this format, but there is too much airtime to fill on too many channels. I just wonder on whom this media approach works.

The STA newsletter this month includes a review of the new book by CNBC talking head and Senior Markets Correspondent Bob Pisani, “Shut Up & Keep Talking; Lessons on life & investing from the Floor of the New York Stock Exchange.”

Simplex is celebrating CEO Erik Swanson’s 14th year with the firm. Swanson started as a trader and became a head trader and then CEO. JLN interviewed Erik at the OIC conference in San Antonio, Texas.

Cboe Global Markets is looking for a client engagement manager in New York for a hybrid job. This is what Henry Schwartz, Cboe’s vice president, global head of client engagement, data & access solutions had to say on LinkedIn about the position:

“We have a great opening for an individual with options industry experience! Regular interaction with top tier firms and end-users including derivative sales, trading, research teams who value the cutting-edge trading tools and data Cboe Data and Access Solutions creates. Become a part of the most talented options business and technology specialists in the business.”

You can apply for the Cboe job here.

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

*****

Democrat Mary Peltola has beaten former governor of Alaska and U.S. vice-president candidate, Sarah Palin, in a special election in Alaska. We have no comment on their political positions and who is “better,” but it is worth noting that Peltola is the first Alaskan native to be elected to Congress. It has been said all politics is local. It seems Peltola proved it in this case (the state only has one member in the House of Representatives). ~JB

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MWE SHORT: Tom Sosnoff – Change the Game
JohnLothianNews.com

In this video from MarketsWiki Education’s World of Opportunity event in Chicago, Tom Sosnoff, co-CEO of tastytrade, maps out the importance of decision making. Trading is one of the few industries where you have the ability to make an unlimited number of decisions with both emotional and monetary outcomes.

Watch the video »

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Bank of America: Zero-down-payment mortgage for first-time buyers
Rob Wile – NBC News
Bank of America said it is now offering first-time homebuyers in a select group of cities zero down payment, zero closing cost mortgages to help grow homeownership among Black and Hispanic/Latino communities. The option will first become available in certain neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The new mortgage, called the Community Affordable Loan Solution, aims to help eligible individuals and families obtain an affordable loan to purchase a home, the bank said.
/jlne.ws/3AGCcZu

**** What’s the catch? There’s always a catch. ~JB

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As Global Entry Delays Hit 18 Months, Travelers Are Steered to TSA PreCheck; TSA PreCheck plus the Mobile Passport Control app might get you similar benefits—and on the road—in just two weeks.
Martine Paris – Bloomberg
With holiday travel planning in high gear, the US Department of Homeland Security is urging those who mostly fly domestically to apply for TSA PreCheck instead of Global Entry, despite shared benefits. Applications for Global Entry have been experiencing processing times of up to 18 months, according to an alert posted on the DHS’s Trusted Traveler Programs website. This is as a result of a surge in demand for memberships while US Customs and Border Protection continues to clear the backlog from the pandemic lockdowns of 2020. The agency said Trusted Travelers Programs of which Global Entry comprises 80%, surpassed 10 million total members in March, and is expecting another 3.5 million in 2022—the most ever to be received in one year.
/jlne.ws/3ACr9jY

**** I have TSA PreCheck and it is great. I thought I made a mistake by not getting Global Entry. Reading that, I am glad I didn’t bother. Also, a friend told me they have Global Entry and it didn’t help at all when they came through US customs. Anecdotal, though, so your mileage may vary. ~JB

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Here’s What a $2 Million Retirement Looks Like in America
Veronica Dagher and Anne Tergesen – The Wall Street Journal
For many Americans, retirement advice is limited to encouragement to save more or warnings that they haven’t saved enough.
But most people get little guidance or give little thought to what to do with all those savings once they reach this next chapter. Whether they are decades, years, or months from retirement, it can be hard to imagine the life that 401(k) ultimately buys. And it is incredibly difficult to erase the anxiety about whether you are spending too much each year.
/jlne.ws/3RqCjPt

**** 0.1% problems…or…problems I wish I had. ~JB

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Crypto.com accidentally sends woman $10 million instead of $100. She went and bought a mansion.; The crypto exchange only intended to give her a $100
Weston Blasi – MarketWatch
Cryptocurrency exchange Crypto.com mistakenly deposited $10.5 million directly into a woman’s bank account when the platform only intended to give her a $100 refund. According to 7news in Australia, a Melbourne woman received the giant payment back in May 2021, and several months later, Crypto.com discovered its error. “Extraordinarily, the Plaintiffs allegedly did not realize this significant error until some seven months later, in late December 2021,” the Victorian Supreme Court judge James Elliott wrote in a court ruling. The woman, Thevamanogari Manivel, is being sued by the crypto giant for its money back. The only problem: some of it has already been spent.
/jlne.ws/3RnO4Gr

**** 0.000001% problems. ~JB

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Wednesday’s Top Three
Our top story Wednesday was Bloomberg’s The Crypto Innovation Traditional Finance Needs. Second was the job listing from DRW for a compliance program manager. Third was Was King Arthur a Real Person? from Smithsonian Magazine.

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MarketsWiki Stats
26,997 pages; 240,511 edits
MarketsWiki Statistics

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Lead Stories

Market Bulls Starved in August During Worst Cross-Asset Selloff Since ’81
Lu Wang and Denitsa Tsekova – Bloomberg
Investors went hungry in August, denied by Jerome Powell’s Federal Reserve of opportunities to profit like no other month in four decades.
From stocks to bonds and commodities, every major asset slid. The least-atrocious return was a 1.9% loss as shown in a Bloomberg index tracking high-yield corporate bonds. Worse was a 2.2% drop in Treasuries, a 3.9% decline in commodities and a 4.2% slide in the S&P 500.
Rarely has advice not to fight the Fed borne out more severely. The last time the best-performing asset did worse in a month was December 1981.
/jlne.ws/3COw97B

Goldman Sachs is done with COVID in the office
Sophie Mellor – Fortune
Investment banking giant Goldman Sachs is doing away with COVID restrictions. Starting Sept. 6, employees of Goldman Sachs will be allowed to enter the office regardless of vaccination status and will no longer be required to test for COVID-19 or wear masks. “With many tools including vaccination, improved treatments, and testing now available, there is significantly less risk of severe illness,” Goldman said in the memo sent out to all employees. The company cited the Centers for Disease Control and Prevention, which recently relaxed many restrictions including quarantine rules and social distancing requirements.
/jlne.ws/3cywe4I

UK Markets See Worst August in Years and Rout May Continue; Pound posts biggest monthly fall since Brexit vote aftermath; Yields on 10-year gilts jump most ever, credit spreads surge
Naomi Tajitsu and Libby Cherry – Bloomberg
It’s been a brutal summer for UK investors as August saw the biggest sell-off in years for the pound, gilts and corporate bonds. The rout may not be over as Britain grapples with a toxic mix of double-digit inflation and a looming recession. Sterling is already near historic lows after losing almost 5% this month, the most since the aftermath of the Brexit vote in 2016. Government bond yields posted their the biggest monthly jump on record in August.
/jlne.ws/3Tw1r9p

Hopes for Fed Pivot Have Faded, Sapping Stocks’ Momentum
Akane Otani – The Wall Street Journal
Not long ago, many investors thought the Federal Reserve would cut interest rates next year. Now, few do. The shift in thinking around the Fed’s policy direction, spurred by Fed Chairman Jerome Powell’s speech in Jackson Hole, Wyo., last week, is taking the steam out of the summer rally that had helped stocks, bonds and cryptocurrencies bounce back from their lows.
/jlne.ws/3ADtFX1

Russia Mulls Big Purchases of ‘Friendly’ FX to Stem Ruble’s Rise; Government considers overhaul of reserves amid sanctions; Draft calls for selling yuan holdings later over 3-5 years Bloomberg
Russia is considering a plan to buy as much as $70 billion in yuan and other “friendly” currencies this year to slow the ruble’s surge, before shifting to a longer-term strategy of selling its holdings of the Chinese currency to fund investment.
/jlne.ws/3KDCUey

Fed’s Logan Says Restoring Price Stability Is Number One Task
Catarina Saraiva – Bloomberg
Federal Reserve Bank of Dallas President Lorie Logan, in her first public remarks since taking office last week, said that high inflation must be curbed.
“Our number one priority has to be to restore price stability,” she told a virtual town hall Wednesday hosted by her bank.
/jlne.ws/3B26zLk

There’s a Rush for the World’s ‘Safest’ Dollars, Deutsche Bank Says
Tracy Alloway – Bloomberg
Behold, the rush for the world’s safest dollars! That shows balances at the Federal Reserve’s overnight reverse repurchase agreement facility, or RRP, which have surpassed the $2 trillion dollar level for much of the summer. And while demand for ‘normal’ dollars has of course increased markedly in the same timeframe, with the Bloomberg Dollar Spot Index up around 10% this year, it’s the rush into this particular Fed facility that shows the forceful way in which investors are shifting into safe havens, according to Deutsche Bank AG strategist George Saravelos. That’s happening against a backdrop of a European energy crisis that has sent the euro and risk assets tumbling.
/jlne.ws/3q2lDCq

Will a Renewed Iran Nuclear Deal Mean Cheaper Energy?; A successful deal to restrain Iran’s nuclear program would mean that Washington lifts tough sanctions on Iran’s oil and gas exports. But it may already be too late for that to help this winter.
Steven Erlanger and Stanley Reed – The New York Times
As Russia squeezes Europe on supplies of natural gas and Europe readies an embargo on Russian oil, some are looking for help from Iran. That is, of course, if and when Tehran and Washington agree to revive the 2015 nuclear deal, lifting tough economic sanctions on Iran that have limited its ability to export energy.
/jlne.ws/3cBjavo

Review of Federal Home-Loan Banks Is Planned; FHFA to examine role and structure of nearly $1 trillion network of government-chartered cooperatives
Andrew Ackerman – The Wall Street Journal
The U.S. government is eyeing a potential revamp for the Federal Home Loan Banks, a nearly $1 trillion network of government-chartered cooperatives that provide cheap funding to thousands of banks. The Federal Housing Finance Agency said Wednesday that it would launch this fall a review of the structure and role of the home-loan banks, a 90-year-old system that has drawn scrutiny from current and former policy makers over whether its modern-day activities fully match its original mission of supporting mortgage lending.
/jlne.ws/3TwksbR

These Workers Were the Bosses’ Favorites. Now They Feel Jilted; What’s waiting for people heading back to the office after Labor Day? Jealous looks from the underappreciated colleagues who returned long ago.
Ben Giles – The Wall Street Journal
The prodigal son of biblical lore gets a ring, new sandals and a feast—with fatted calf!—to celebrate his return. For workers just now going back to offices, a more contemporary welcome can include company swag, cold brew on tap and cash bonuses. One thing is the same: the jealous looks from peers who consider themselves more devoted and deserving. Like the young man in the parable, whose brother loyally stays on the family farm and complains that he’s underappreciated, many resuming in-person work now have colleagues who remained on site throughout the pandemic or came back a long time ago. And those colleagues are a little annoyed by the fanfare.
/on.wsj.com/3Q9QdnY

Ukraine Invasion

Don’t underestimate Russia’s military strength, German defence chief warns
Sabine Siebold and Sarah Marsh – Reuters
Germany’s chief of defence has warned that the West must not underestimate Moscow’s military strength, saying Russia has the scope to open up a second front should it choose to do so. “The bulk of the Russian land forces may be tied down in Ukraine at the moment but, even so, we should not underestimate the Russian land forces’ potential to open a second theatre of war,” General Eberhard Zorn, the highest-ranking soldier of the Bundeswehr, told Reuters in an interview. Beyond the army, Russia also has a navy and air force at its disposal, he added.
/jlne.ws/3KI9g84

U.N. team to inspect Ukrainian nuclear plant in bid to avert disaster
Tom Balmforth – Reuters
U.N. nuclear experts are due to visit the Russian-occupied Zaporizhzhia nuclear power plant in Ukraine’s south on Thursday to assess any damage from shelling that has prompted bitter recriminations and global fears of a radiation disaster. Conditions at the nuclear plant, Europe’s largest, have been unravelling for weeks, with Moscow and Kyiv trading blame for shelling in the vicinity. A recent satellite image from private U.S. company Maxar Technologies showed several blackened holes in the roof of a building adjacent to reactors at the plant.
/jlne.ws/3B4Fszm

US war-gamed with Ukraine ahead of counteroffensive and encouraged more limited mission
Katie Bo Lillis and Natasha Bertrand – CNN
In the buildup to the current Ukrainian counteroffensive, the US urged Kyiv to keep the operation limited in both its objectives and its geography to avoid getting overextended and bogged down on multiple fronts, multiple US and western officials and Ukrainian sources tell CNN. Those discussions involved engaging in “war-gaming” with Kyiv, the sources said — analytical exercises that were intended to help the Ukrainian forces understand what force levels they would need to muster to be successful in different scenarios. The Ukrainians were initially considering a broader counteroffensive, but narrowed their mission to the south, in the Kherson region, in recent weeks, US and Ukrainian officials said.
/jlne.ws/3wJHJx4

Russia’s military suffering manpower shortages -U.S. intelligence
Steve Holland – Reuters
The Russian military is suffering manpower shortages as it battles Ukraine and is seeking to recruit contract service members and may even draw in convicted criminals, a U.S. official said on Wednesday, citing U.S. intelligence. Russian President Vladimir Putin signed a decree last Thursday to increase the size of Russia’s armed forces from 1.9 million to 2.04 million as the war in Ukraine enters its seventh month. Moscow has not revealed any losses in the conflict since its first weeks, but Western officials and the Kyiv government say they number in the thousands. “The Russian military is suffering from severe manpower shortages in Ukraine,” the U.S. official said, speaking on condition of anonymity to discuss the downgraded intelligence.
/jlne.ws/3PZLi9n

Sweden sends Ukraine artillery rounds in fresh aid package -Ukrainian defence minister
Reuters
Sweden has provided Ukraine with a new defence aid package containing artillery rounds, Ukrainian Defence Minister Oleksii Reznikov said on Wednesday. “Great news from Sweden: 7th military package with artillery ammo will strengthen #UAarmy,” Reznikov wrote on Twitter, thanking Sweden’s foreign and defence ministers. “Together we will restore peace and security in Europe,” he added.
/jlne.ws/3R7k7e4

Ukrainian Soldiers Say They Are Advancing in the South, but at a Cost; Troops recuperating at a hospital in southern Ukraine say they face fierce fighting in a push toward Kherson
Matthew Luxmoore – The Wall Street Journal
Ukrainian army units pushing toward Kherson in the south are retaking ground held for months by Russia’s invading troops amid extremely fierce fighting, according to Ukrainian soldiers taking part in the offensive. Russian soldiers seemed well equipped and were putting up stiff resistance, the Ukrainians said. “They’re throwing everything against us,” said a 22-year-old Ukrainian soldier who said Russians were fighting with artillery, tanks, helicopters and mortars. “They have a lot of equipment but few men.” Interviews with eight soldiers who took part in fighting—and were being treated for injuries at a hospital behind the front lines—offered the most detailed on-the-ground picture yet from an offensive that Ukraine hopes will help it seize the initiative in the conflict and show its Western backers, and its own people, that its military can take on Moscow’s army and win.
/jlne.ws/3Ra2lHc

Exchanges, OTC and Clearing

Michael Jaeggi moves up to the Management Board of Boerse Stuttgart Group; Oliver Hans resigns from the Group Management Board and concentrates on his responsibilities as Managing Director of Baden-Wuerttembergische Wertpapierboerse
Presse Börse Stuttgart via Mondo Visione
Michael Jaeggi (61) becomes Chief Information Officer (CIO) of Boerse Stuttgart Group as of 1 September and moves up to the Group’s Management Board. In parallel, Jaeggi remains Managing Director of the Group’s subsidiary Boerse Stuttgart GmbH. He leaves the Management Board of the subsidiary EUWAX AG. Michael Jaeggi joined Boerse Stuttgart Group in 2013 and has held various management positions with the Group.
/jlne.ws/3B4UhSs

Boerse Stuttgart records August turnover of around EUR 6,8 billion; Securitised derivatives show increase in trading volume compared to the same month of the previous year
Mondo Visione
Based on the order book statistics, Boerse Stuttgart generated turnover of around EUR 6,8 billion in August. Securitised derivatives made up the largest share of the turnover. The trading volume in this asset class increased over 4 percent compared to the same month of the previous year to around EUR 3,3 billion. Leverage products generated turnover of around EUR 2,4 billion. Investment products contributed around EUR 880 million to the total turnover.
/jlne.ws/3R9mVqT

The Spanish stock market trades 19 billion euros in August
BME-X
Monthly Trading Statements For Bme’s Markets.The volume traded in Equities so far this year is 8.6% higher year on year. Fixed-income trading in August amounted to 6.5 billion euros, up 5% from the preceding month. Trading in Futures contracts on the IBEX 35 ® index increased by 8.4% in the first eight months of the year. The Spanish stock market traded 19 billion euros in Equities in August, down 12.1% from rhe same month last year and down 27.8% from July. The number of trades in August was 2.3 million, down 15.5% from August 2021 and 23.4% from the previous month.
/bit.ly/3QbM9nk

EBS Market on CME Globex Notice
CME
Topics in this issue include: Critical Information; Announcements and Additional Resources.
/bit.ly/3Q9eavP

CME Globex Notices
CME
CME Global Market Solutions & Services (GMSS) Topics in this issue include: Critical Updates; Product Launches; Product Changes; Events and Announcements.
/bit.ly/3KACuW8

Equity Options: Changes in Minimum Block Trade Sizes for maturities longer than 2 years
Eurex
The Management Board of Eurex Deutschland took the decision to reduce TES (Trade Entry Service)/Eurex EnLight Minimum Block Trade Sizes (MBTS) for selected equity options with maturities longer than 2 years, effective 5 September 2022.
/bit.ly/3R9S79x

ICE Benchmark Administration Consults on Potential Cessation of ICE Swap Rate® based on USD LIBOR®
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that ICE Benchmark Administration Limited (IBA) has published a consultation on its intention to cease the publication of all ICE Swap Rate®settings based on USD LIBOR®. Following the FCA’s announcement on March 5, 2021, regarding the future cessation and loss of representativeness of USD LIBOR, IBA does not expect sufficient (or perhaps any) input data required to calculate USD LIBOR ICE Swap Rate settings (i.e. data based on eligible interest rate swaps referencing USD LIBOR settings) to be available after June 30, 2023.
/bit.ly/3CWdVkC

Trading Overview in August 2022
JPX
Japan Exchange Group released Trading Overview in August 2022. Cash Equity Market: In August 2022, the daily average trading value for the Prime Market (domestic common stocks) was JPY 2.9820 trillion. The daily average trading value for the ETF market was JPY245.9 billion. Derivatives Market: In August 2022, total derivatives trading volume was 26,206,340 contracts. In August 2022, total derivatives trading value reached JPY 194 trillion. In August 2022, trading volume for the night session and the ratio of the night session were 10,122,553 contracts and 38.6%. In August 2022, total trading volume for Nikkei225 Weekly Options was 100,051 contracts, the highest record.
/bit.ly/3R9Z0I7

“BCS World of Investments” provided access to the precious metals market of the Moscow Exchange
MOEX
Clients of “BCS World of Investments” got the opportunity to buy and sell precious metals on the Moscow Exchange. The Moscow Exchange Precious Metals Market is a convenient way to invest in physical gold and silver with minimal costs and spreads for buying and selling, as well as additional opportunities for portfolio diversification.
/bit.ly/3cGrF8I

Regulatory Division’s Participant Portal; Release Of The Cybersecurity Module
TMX
The Regulatory Division (the “Division”) of Bourse de Montréal Inc. (the “Bourse”) is pleased to announce the release of the new Cybersecurity module on the Participant Portal (the “Portal”). This module, available on September 6, 2022, will facilitate the transmission of the information required by the new Article 3.113 (Notification to the Regulatory Division of a cybersecurity incident) of the Rules of the Bourse in a secure environment. You may access the Portal through the Division’s website.
/bit.ly/3RbuJsk

MIAX Options, Pearl Options and Emerald Options Exchanges – September 1, 2022 Fee Changes
MIAX
Fee Change Alert: The MIAX Options, MIAX Pearl Options and MIAX Emerald Options Exchanges Fee Schedules will be amended on September 1, 2022, pending filing with the SEC.
/bit.ly/3Q7lND3

Straits Times Index (STI) quarterly review – September 2022; One change to the constituents of the STI
SGX
FTSE Russell announces that there will be one change to the constituents of the Straits Times Index (STI), following the September 2022 quarterly review. Emperador has been added to the STI and ComfortDelGro has been removed from the index. The STI reserve list, comprising the five highest ranking non-constituents of the STI by market capitalisation, will be (in order of size) Olam Group, Suntec REIT, Keppel REIT, Frasers Centrepoint Trust and Ascott Residence Trust. Stocks on the reserve list will replace any constituents that become ineligible as a result of corporate actions before the next review. A full list of STI constituents can be found on the website. All constituent changes take effect at the start of trading on 19 September 2022 and the next review will take place in December 2022. The indexes are reviewed quarterly in accordance with the index ground rules and to facilitate the inclusion of eligible IPO stocks. The FTSE ST methodology ensures the indexes accurately represent the investable universe for benchmarking purposes and can be easily replicated as the basis of index-linked products.
/bit.ly/3e2wnxE

Fintech

FX HedgePool Gets Expansion Funding
Colin Lambert – The Full FX
Peer-to-peer matching platform FX Hedgepool has raised $8 million in Series A funding, led by Information Venture Partners (Information VP), with participation from Fidelity International Strategic Ventures (FISV) and NAventures, National Bank of Canada’s corporate venture capital arm. The firm says the investment will accelerate a multi-product strategy aimed at delivering further efficiencies for its growing network of investment managers and banks. In line with its community-centric innovation philosophy, FX HedgePool is also launching the FXHP Innovation Pool, “a community in which leaders in finance collaborate to address industry challenges by pushing the boundaries of technology to revolutionise the world’s largest financial marketplace”.
/jlne.ws/3pZTkV5

Klarna losses triple after aggressive U.S. expansion and mass layoffs
Ryan Browne – CNBC
Klarna on Wednesday reported a dramatic jump in losses in the first half, adding to a deluge of negative news for the “buy now, pay later” pioneer.
The Swedish payments firm generated revenues of 9.1 billion Swedish krona ($950 million) in the period spanning January to the end of June 2022. That was up 24% from a year ago.
/jlne.ws/3Q5kapd

Moving Past the Jurassic Age of Fintech
Ofir Tahor – Finextra
Once upon a time in the financial services industry, when dinosaurs roamed the Earth, there was significant value for technology providers just in being a large, established brand. Big brands used to show stability, strong offerings and ability to scale. However, today many startups offer the same if not better. The premium placed on brand name still exists among some enterprise clients, but it’s long outlived its usefulness, as the gap in capabilities it once signified has evaporated. Instead, we are hurtling forward into an era where product quality will dictate vendor choice for all organizations concerned with maintaining their competitive advantage.
/jlne.ws/3ee9asC

Cybersecurity

South Korean Cybersecurity Experts Play Cat-and-Mouse With the North’s Hackers; Kim Jong Un’s regime has about 6,000 hackers spreading malware from both inside and outside North Korea.
Jamie Tarabay – Bloomberg
Kay Kyoung-ju Kwak, a South Korean cybersecurity researcher, can usually tell when malware emanates from his neighbors to the north: They drop clues in the malicious code that show they understand their adversary. “Sometimes they put a K-pop star name in there,” he says, laughing. “They don’t like BTS.” (Instead, he says, they prefer the all-female ensemble Girls’ Generation.) Kwak says he’s also stumbled across digital evidence of North Koreans illegally downloading South Korean soap operas, presumably to entertain themselves when their shifts end.
/jlne.ws/3cyDNbQ

Hackers Hit Italian Oil Giant Eni’s Computer Network; Eni evaluating consequences, saying they “are currently minor”; Earlier this week energy agency GSE suffered malware attack
Daniele Lepido and Alberto Brambilla – Bloomberg
The Italian oil giant Eni SpA said Wednesday that its computer networks were hacked in recent days and that the consequences so far appeared to be minor. “Eni confirms that the internal protection systems have detected unauthorized access to the company network in recent days,” a company representative said, in response to a query from Bloomberg News. The country’s largest energy company is working with local authorities to assess the consequences of the attack, the representative added.
/jlne.ws/3Q60cuz

The Next Boom In Cybersecurity Companies: Offense
Elizabeth MacBride – Forbes
I’ve had a side interest for the past few years in cybersecurity companies. It started when I was covering entrepreneurs in the Middle East. Israel, one source recently estimate for me, accounts for about 20% of the early-stage cybersecurity market. My reporting suggests that share has increased over the past five years. I’ve written about Eureka, Abnormal Security, the general who helped launch Israel’s cybersecurity industry, and Axionus. One thing the companies shared was that they inhabited the defensive side of the industry — or at least, they told me they did.
/jlne.ws/3QauRqx

Cryptocurrencies

MicroStrategy’s Michael Saylor Sued by DC for Not Paying Income Taxes; District says Saylor fraudulently claimed other residencies; Saylor is best known for adding Bitcoin to balance sheet
Allyson Versprille – Bloomberg
Washington, D.C., is suing MicroStrategy Inc. co-founder and Executive Chairman Michael Saylor — probably best known as the largest corporate buyer of Bitcoin — for tax fraud, claiming that he skipped out on paying more than $25 million in income taxes despite living in the district for more than a decade. According to the lawsuit, which was filed with the D.C. Superior Court’s civil division, Saylor knowingly avoided paying taxes he owed since 2005 by fraudulently claiming to be a resident of other, lower-taxes jurisdictions, including Virginia and Florida. It claims that Saylor lived in a luxury penthouse on the Georgetown waterfront and docked multiple yachts on the district’s Potomac riverfront.
/jlne.ws/3q5iQYQ

Can Crypto Save the Cannabis Industry?; The legal cannabis industry’s problems go much deeper than a lack of access to banking. This piece is part of CoinDesk’s Sin Week.
Cheyenne Ligon and Sage D. Young – CoinDesk
Cryptocurrency has long been held up as a panacea for the U.S. cannabis industry’s well-publicized banking problems. Despite being legal in a growing number of states for either medical or recreational use, cannabis is still illegal under federal law. The resulting regulatory uncertainty has effectively locked the industry out of the traditional financial system. Dispensaries and other cannabis companies have largely been shunned by federal banks and credit card networks, forcing them to hoard cash on-site – a practice that has made them a growing target for violent robberies – or pay exorbitant fees to bank at state-chartered institutions.
/jlne.ws/3Txz3Ub

Then They Fight You: Scenarios for Coming Crypto Regulation
David Z. Morris – CoinDesk
I can’t count how many times over the years I’ve seen someone on Crypto Twitter trot out the old saw that starts with “First they ignore you, then they laugh at you …” Well, be careful what you wish for, because over the past year, we’ve clearly reached the “then they fight you” portion of the quote often misattributed to Mahatma Gandhi. For more than a decade, regulators including the U.S. Securities and Exchange Commission have been imposing only minimal restraints and targeting egregious frauds for prosecution, but otherwise leaving crypto largely to its own devices. But when Gary Gensler was appointed to head the SEC under the Biden administration, he signaled early and often his intention to take a more rigorous approach.
/jlne.ws/3ebJVqW

Binance Froze Russian Gun Maker’s Crypto Assets, Amid Ukrainian Pressure; Vladislav Lobaev, a Russian gun manufacturer, raised $21,000 in crypto for the war in Ukraine before the world’s largest crypto exchange locked down the funds.
Anna Baydakova – CoinDesk
Binance, the world’s largest crypto exchange by volume, froze a wallet related to Vladislav Lobaev, a Russian gun manufacturer who raised funds for the country’s troops in Ukraine, according to a Lobaev representative and blockchain data analysis. While the Ukrainian government did not mention Lobaev or anyone else by name, last week the Security Service of Ukraine (SSU) published a press release saying the agency “blocked a crypto wallet belonging to a Russian citizen who is sponsoring Russian war in Ukraine.” CoinDesk has confirmed that the wallet was Lobaev’s Binance account.
/jlne.ws/3KCnQhh

Bitcoin Miners to Face Thinner Margins as Competition Heats Up; Increase in total computing power reaches eight-month high; Miners are deploying more rigs even with Bitcoin stagnant
David Pan – Bloomberg
Bitcoin miners are likely facing narrowing profit margins even after a break in the US heat wave allows them to turn rigs back on and add new machines they bought during the last bull run. Bitcoin mining difficulty, an indicator of the amount of computing power being deployed to secure the blockchain network and earn rewards in the token, has jumped by 9.26% over the last two weeks, according to data from btc.com. The increase is the largest since January.
/jlne.ws/3Twf6x

‘The Merge’ is happening. Here’s what that means for those in crypto.; A popular cryptocurrency is getting a big change.
Harry Guinness – Popular Science
The cryptocurrency Ethereum, the second-biggest name in cryptocurrency and the most popular by number of trades, is due to undergo its biggest upgrade ever next month. Known as “the Merge,” it will change up how Ethereum runs its operation behind-the-scenes. Specifically, it is shifting away from using something called a proof-of-work algorithm to verify transactions between users to the more environmentally friendly proof-of-stake algorithm. This transition, which has been promised by Ethereum for years, has faced many delays in its rollout.
/jlne.ws/3wLGqh5

Tezos cofounder Kathleen Breitman on 3 things in crypto that will ‘age poorly’
Taylor Locke – FORTUNE
Kathleen Breitman has been called “crypto royalty” for cocreating Tezos—a major blockchain and competitor to Ethereum—back in 2014, reigning as one of the earliest entrepreneurs in the space. And if you ever get a chance to talk to her, you’ll quickly see she’s a straight shooter. In an interview with Fortune, Breitman discussed the recent crypto market hype cycle—and the brutal downturn that followed. And in reflecting, it became obvious how wrong some past predictions about the crypto market had been—certain investments, certain projects. Hindsight, of course, is always 20/20. “People get attention when they start to make predictions about this stuff,” Breitman told Fortune. “But man, a lot of that stuff does not age well.”
/jlne.ws/3AxtTiu

Sam Bankman-Fried says his bailouts of sputtering crypto firms were snap judgments and the results have been mixed
Carla Mozée – Business Insider
Billionaire Sam Bankman-Fried has stepped up this year to throw financial lifelines to struggling cryptocurrency firms and the results have been “mixed,” he told Bloomberg. The ongoing “crypto winter” has slashed the cryptocurrency market’s value, with bitcoin sinking below $20,000 from $68,000, other digital assets crashing, and some crypto-linked companies cracking under the pressure. The CEO of digital asset exchange FTX told Bloomberg in an interview published Wednesday he felt spearheading bailout deals was the right thing to do for the industry. The 30-year-old entrepreneur has been behind about $1 billion worth of deals.
/jlne.ws/3CGVpwK

FASB Crypto Accounting Review Won’t Include NFTs, Certain Stablecoins: Report
Nelson Wang – CoinDesk
The Financial Accounting Standards Board (FASB) is excluding non-fungible tokens (NFT) and certain stablecoins from its cryptocurrency accounting review, the Wall Street Journal reported. On Wednesday, the U.S. board described its criteria for crypto assets that would be covered by a long-awaited rule for companies to account for and disclose their holdings of digital assets. FASB did not name specific crypto assets that would be excluded from the rule. But it said the digital assets addressed by the rule would include those that are intangible, don’t carry contractual rights to cash flows or ownership of goods and services, and those that are fungible, according to the Journal. NFTs are by their very nature non-fungible and may carry rights to underlying assets, while some stablecoins are tangible assets.
/jlne.ws/3AYvK1b

Ticketmaster Partners With Blockchain Firm Dapper Labs to Issue NFTs for Live Events; The ticket giant recently added a digital wallet feature and marketplace to its website.
Elizabeth Napolitano – CoinDesk
Ticketmaster has partnered with Dapper Labs to create live-event NFTs. (Unsplash/Dylan Mullins) A new partnership between Ticketmaster and Dapper Labs’ Flow blockchain will enable event organizers to issue non-fungible tokens (NFT) before, during and after live events. According to a press release, the NFTs will serve as a shareable form of digital memorabilia. Mickey Maher, Dapper Labs’ senior vice president of partnerships, said live-event NFT collectibles will augment fans’ day-of experiences.
/jlne.ws/3COfa5l

Andreessen Says Its ‘Can’t Be Evil’ NFT Licenses Will Help Avoid Legal ‘Ambiguity’; Amid confusion over what IP rights are granted to NFT holders, the VC giant—with help from Punk6529—attempts to standardize options.
Andrew Hayward – DeCrypt.co
NFTs have become a multi-billion dollar industry. Image: Shutterstock In brief Venture capital firm Andreessen Horowitz has released a series of “Can’t Be Evil” licenses for NFT projects to use. The free licenses, created with the help of Punk6529 and others, let projects decide how NFT holders can tap into and commercialize IP. Many popular NFT projects—most notably the Bored Ape Yacht Club—grant holders the right to use their owned images to create and sell derivative artwork and products. However, there are questions over whether such IP licenses are legally durable, or if creators have even misled buyers. Venture capital giant Andreessen Horowitz says it wants to help.
/jlne.ws/3CTg9BD

What is Virtual Land? How NFTs Are Shaping the Metaverse; Virtual real estate is being sold as NFTs across immersive metaverse games and has quickly created a billion-dollar economy.
Kate Irwin – DeCrypt.co
Real estate is often considered to be a good investment—but what about virtual real estate? Non-fungible tokens (NFTs) representing virtual land have become a hot topic since the advent of the metaverse—and there’s gold in them thar digital hills, with some plots of virtual land selling for millions of dollars.
/jlne.ws/3RrKwTD

Politics

Putin propaganda just took an exceptionally strange turn; Winter is coming, is it time to move to Russia?
Gillian Tett – Financial Times
In recent days, the phrase “winter is coming” has been haunting me. That is partly because, like millions of others, I have started watching House of the Dragon, the prequel to Game of Thrones, which had these ominous words as its tagline.
/jlne.ws/3ABRnD5

Russia’s Conspiracy-Theory Factory Is Swaying a Brand New Audience; RT is banned in the US and Europe—but winning friends in the developing world.
Clara Ferreira Marques – Bloomberg Businessweek
It’s the middle of the day in Moscow, and RT, the Kremlin’s 24-hour English-language news channel, is racing through a dizzying lineup. Ukrainian soldiers are abandoning their positions in the besieged Azovstal steel plant, which RT bills as a fatal blow to Kyiv’s war effort. There’s the cautionary story of a British volunteer with the Ukrainian army, who says he was duped. A meeting of Group of Seven foreign ministers prompts a report on the West’s hypocrisy in condemning Russia’s military operations but not Israel’s.
/jlne.ws/3CROz7A

California Crypto Oversight Bill Moves Closer to Becoming Law; Legislation would require crypto businesses to get licensed; Crypto advocates and lobbying groups have opposed the bill
Hannah Miller – Bloomberg
A California bill that would require crypto financial-service businesses to get a special license is now closer to becoming law, with the Assembly voting to approve it Tuesday after the Senate gave it the nod a day earlier. It now heads to the desk of Governor Gavin Newsom, who has until Sept. 30 to sign or veto the bill. If signed into law, the legislation — called the Digital Financial Assets Law — would introduce tighter crypto regulations and more oversight for the industry in California. The bill, which would go into effect January 2025, would require companies like digital-asset exchanges to get licensed with the state’s Department of Financial Protection and Innovation.
/jlne.ws/3D3a85t

Red State Republicans’ War on ESG Will Have Losses on Both Sides; GOP lawmakers in some of the most conservative US states are trying to ban banks and asset managers that consider ESG criteria from their pension funds and municipal markets, but the move might backfire.
Tim Quinson — Bloomberg
The financial consequences for most asset managers and banks from all the anti-ESG rhetoric coming out of the mouths of Republican politicians in the US is almost certain to be minimal—at least for now. Even if money managers who consider ESG criteria were banned from handling public pension funds in states such as Florida, Texas, Oklahoma, and West Virginia—where ESG skepticism is high—a back of the envelope review supports the notion that any business losses would be insignificant relative to the firms’ overall bottom line. Take Florida for example. Governor Ron DeSantis has arguably been the most outspoken basher of environmental, social and governance investing. He said last week that the state’s pension funds will no longer consider ESG criteria when seeking to generate the highest returns possible.
/bloom.bg/3TykQ9F

Break Up the ESG Investing Giants; BlackRock, Vanguard and State Street effectively control each other—and their market competitors. The Clayton Act was made for situations like this.
Dan Morenoff – The Wall Street Journal
Three of the largest investment shops in the U.S.—BlackRock, Vanguard and State Street—have long used their dominance in passive-investment funds to force corporations to comply with their preferred set of environmental, social and governance policies. Their reign, however, may be nearing its rightful end, as America’s law enforcers are waking up to the threats the Big Three pose to investors and the economy. In an Aug. 4 letter to BlackRock CEO Larry Fink, 19 state attorneys general questioned how the company’s ESG advocacy squares with its fiduciary duties to investors. The attorneys general specifically raised whether BlackRock’s “coordinated conduct with other financial institutions”—i.e., the two other investing giants—to demonetize the oil-and-gas industry raises potential antitrust issues.
/on.wsj.com/3KClpLy

Coronavirus: Hong Kong school heads voice concern over fulfilling 3-jab student requirement for full-day classes
South China Morning Post
Several of Hong Kong’s head teachers have voiced concern over difficulties in fulfilling a tougher student Covid-19 vaccination requirement for schools to conduct full-day, in-person classes. The heads of schools also warned on Wednesday of disruption to learning if teaching models had to be switched again, a day after the government announced that secondary full-day classes could only be taught on campus with a 90 per cent third-jab rate among students by November, tightened from the existing two-dose rule. Scientia Secondary School principal Wong Ching-yung said nearly 70 per cent of students at his school had been triple vaccinated, but he had reservations as to whether the 90 per cent mark could be reached in time.
/jlne.ws/3CMF3mn

Regulation

FINRA Promotes Nathaniel Stankard to Executive Vice President and Chief of Staff to the CEO for Regulatory Operations
Ray Pellecchia – FINRA
FINRA announced today that it has promoted Nathaniel Stankard to Executive Vice President and Chief of Staff to the CEO for Regulatory Operations, effective immediately. In this new role, Stankard will be responsible for providing strategic direction on the integration of FINRA’s regulatory operations, and for helping advance FINRA’s unified approach to regulatory policy. Stankard had been Senior Vice President and Senior Advisor to President and CEO Robert Cook, to whom he will continue to report. He will work closely with FINRA’s chief legal officer and the heads of FINRA’s Member Supervision, Market Regulation and Transparency Services, and Enforcement departments to enhance FINRA’s regulatory operations, further develop FINRA’s integrated regulatory program and prepare FINRA for industry and market developments that may require a regulatory response. Stankard will also continue to provide strategic and policy advice to Cook on other aspects of FINRA’s regulatory mission.
/jlne.ws/3B2noWn

The SEC Is Getting Clearer About How It Plans to Regulate Crypto
Nikhilesh De – CoinDesk
Zcash, horizen and stellar might be securities, according to new regulatory filings. We’re starting to get even more clarity about the U.S. Securities and Exchange Commission’s efforts to bring the cryptocurrency sector in line with its existing regulations. For those of you who received the trial daily newsletter last week and want to provide feedback, I fixed the form! Also, I should clarify: That’s a separate product that the CoinDesk regulation team may publish, but it would not replace this newsletter, which would remain a weekly offering.
/jlne.ws/3wLwYdM

Grant Thornton and auditor charged over 2018 audit of iSignthis
ASIC
Grant Thornton Audit Pty Ltd (Grant Thornton) and former Grant Thornton director Bradley Laurance Willot Taylor have today appeared in the Melbourne Magistrates Court charged with failing to conduct the 2018 audit of iSignthis Ltd (ASX:ISX) in accordance with the Australian Auditing Standards. iSignthis changed its name to Southern Cross Payments Ltd (ASX:SP1) in May 2022. Mr Taylor has been charged with five contraventions of s307A(2) of the Corporations Act 2001. As an authorised audit company, Grant Thornton, has also been charged with five contraventions of s307A(1) of the Act.
/bit.ly/3q36VuG

ASIC releases July and August 2022 financial adviser exam results
ASIC
ASIC has released exam results from the 18th Financial Advisers Exam cycle, held in July and August 2022. The exam has been continuously conducted by the Australian Council for Educational Research (ACER) since its inception and follows a rigorous process to ensure all candidates in all cycles are held to the same standard. In this exam cycle:
628 advisers sat the July and August exam; 328 (52%) of candidates passed the July and August exam; 76% of candidates were resitting the July and August exam for at least the second time. Overall results: To date 20,148 candidates have sat the exam. Over 92% of candidates who have sat the exam have passed, demonstrating they have the skills to apply their knowledge of advice construction, ethics and legal requirements to the practical scenarios tested in the exam.
/bit.ly/3Be3b05

Important next steps for existing financial advisers who have not passed the exam and their licensees
ASIC
Financial advisers who are eligible for the exam extension but have not passed the exam, have an opportunity before 30 September 2022 to limit the consequences of the fact they have not passed the exam. Financial advisers who have not passed the exam and have had their authorisation to provide personal advice ceased by 30 September 2022 will only need to pass the exam to be eligible for re-authorisation. Financial advisers who have not had their authorisation ceased by 30 September will not only need to pass the exam but will also need to complete a professional year and obtain an approved degree before they can be re-authorised. ASIC recommends that affected financial advisers speak to their licensees as soon as possible to ensure their authorisation to provide personal advice is ceased on or before 30 September, and the Financial Advisers Register (FAR) is updated to reflect this.
/bit.ly/3e8x88x

“An Update on the Global and Domestic Economic Conjuncture” – Summary of Remarks by Mr Edward Robinson, Deputy Managing Director (Economic Policy) & Chief Economist, MAS, at a Citibank Macro Fireside Virtual Event on 1 September 2022; Summary of remarks on the Global and Domestic Economic Conjuncture
MAS
Global Economic Developments: A Narrow Ridge to a Soft Landing. Aggregate demand-supply imbalances continue to engender elevated inflation rates across many economies. However, tighter financial conditions, including from higher policy interest rates, coupled with fresh uncertainties, are imparting a moderating effect on demand among the advanced economies. This should dampen the pace of future price increases but still leave inflation somewhat elevated for a while.
/bit.ly/3CLyh07

SFC’s review shows increasing popularity of online investment services
SFC
The Securities and Futures Commission (SFC) today released the observations and findings from its review of licensed firms providing online brokerage, distribution and advisory services. It also reminded firms of the regulatory standards applicable to them when providing these services.
/jlne.ws/3CIDwNV

Investing and Trading

Jefferies parts ways with US head of outsourced trading; Former head of US outsourced trading previously served at Fidelity Capital Markets, Kensico Capital Management and Tourmaline before joining Jefferies.
Annabel Smith – The Trade
Jefferies’ head of outsourced trading for the US, Brett Liner, has left the firm, according to sources familiar with the matter. Liner and Jefferies have parted ways after five years, with his next move yet to be disclosed. Previously in his career Liner spent two years as a director of equity trading for trading solutions provider Tourmaline Partners, and a combined five years as a trader at JAT Capital and Kensico Capital Management. He spent six years at Shumway Capital Partners as an assistant controller and later as a trader, and four years in trade support at Fidelity Capital Markets.
/bit.ly/3Rc6Pgu

We got an exclusive look at the pitch deck foreign exchange startup FX HedgePool used to raise $8 million from investors
Emilia David – Insider
FX HedgePool founders Jay Moore and Emin Tatosian know the foreign exchange market is messy and inefficient. But many people’s retirement funds depend on an efficient market, so they sought to change that. Their startup, which matches asset managers with other companies to do foreign exchange swaps, raised $8 million from investors like Information Venture Partners, and the venture arms of Fidelity International and the National Bank of Canada. FX swaps — when companies look to exchange their foreign currencies for another in an equivalent amount and then lend to a second party at the same time— are often hampered by the fact that some firms can’t transact with one another. FX HedgePool hopes to eliminate many barriers currently preventing parties from a more direct transaction.
/jlne.ws/3TzgKyf

Jeremy Grantham Warns ‘Super Bubble’ in Stocks Has Yet to Burst; GMO’s co-founder says overvalued equities, bonds and housing will collide with high rates and inflation to cause more pain.
Claire Ballentine – Bloomberg
Famed investor Jeremy Grantham said the “super bubble” he previously warned about has yet to pop, even after this year’s turbulence in the US stock market. The co-founder of Boston asset manager GMO, known for calling market bubbles, said in a note Wednesday that the surge in US equities from mid-June to mid-August fits the pattern of bear market rallies common after an initial sharp decline — and before the economy truly begins to deteriorate. Grantham, 83, sees more trouble ahead because of a “dangerous mix” of overvalued stocks, bonds and housing, combined with a commodity shock and hawkishness from the Federal Reserve.
/jlne.ws/3AZ7XOK

Bed Bath & Beyond Missed the Memes; Also private-equity recruiting, bank return-to-office and crypto exchange error in your favor.
Matt Levine – Bloomberg
My basic view is that if you are a company that has become a meme stock, you should do an at-the-money offering to sell as much stock as you can to retail investors at irrational prices. There are, however, reasonable objections to that view. Two are: 1. You will want to be really careful about disclosure. 2. You will have to get a bit lucky with timing. Bed Bath & Beyond missed its window by like two weeks
/jlne.ws/3Q72TMD

Private Equity Boss Warns of Darwinian Struggle Ahead
Jan-Henrik Foerster and Benjamin Robertson – Bloomberg
If you work at Europe’s biggest listed buyout firm at its US headquarters in Colorado, there’s a constant reminder on the wall. “This is not Wall Street,” says a sign, telegraphing to the firm’s investment professionals what Switzerland’s Partners Group is about: the song, not the singer. Operational improvements, not a trading mentality. “For us it’s a symbol for the tone we want to set—our culture is much more industrial-minded, which is reflected in the campus design of our US headquarters,” Partners Group CEO David Layton told us in a sitdown today. “We are less focused on the transactional side of things and more on building businesses.” Accordingly, the word “deal” is banned at the Swiss firm.
/jlne.ws/3pXCndQ

Blackstone, Carlyle Take Different Sides on Oil-and-Gas Investment; Private-equity firms rethink exposure to conventional energy amid high crude prices and fraught political climate
Miriam Gottfried – The Wall Street Journal
Profits from oil-and-gas production have surged as crude prices hover at elevated levels, but volatile returns and a fraught political climate have created a divide among the biggest private-equity firms about whether investing in the sector is worth the headache. Many public pension funds and endowments that invest in private-equity funds have put pressure on their managers to stop backing producers of fossil fuels and invest more in cleaner sources of energy. The energy market’s boom-and-bust cycles also have translated into poor investment returns over the long term.
/jlne.ws/3cAOEC6

Environmental, Social and Corporate Governance

Mapping US Coastlines May ‘Drive More Equality’ in Climate Adaptation Policy; High-resolution aerial imagery will help find communities most at risk for flooding or urban heat islands, according to a Canadian technology company.
Aaron Clark – Bloomberg
A Canadian technology company is using aerial imagery to build high-precision maps of US shorelines that will be used to help coastal communities adapt to climate change. By cataloguing which neighborhoods have more impervious surfaces like sidewalks and driveways compared to permeable ground with vegetation and trees, policymakers can better predict where heat waves or storm surges are likely to wreak the most havoc, Toronto-based Ecopia AI said. The firm is making the maps for the National Oceanic and Atmospheric Administration as part of a project to support US coastal communities vulnerable to extreme weather.
/jlne.ws/3B2iI2R

Scientists use beavers to create drought and fire-resistant landscapes
CBS News
Jonathan Vigliotti sets out to see firsthand how scientists in California and Utah are using beavers to help create landscapes resistant to drought and fires.
/jlne.ws/3cAG3iB

‘We’re going to pay in a big way’: a shocking new book on the climate crisis
Veronica Esposito – The Guardian
In An Inconvenient Apocalypse, authors Wes Jackson and Robert Jensen style themselves as heralds of some very bad news: societal collapse on a global scale is inevitable, and those who manage to survive the mass death and crumbling of the world as we know it will have to live in drastically transformed circumstances. According to Jackson and Jensen, there’s no averting this collapse – electric cars aren’t going to save us, and neither are global climate accords. The current way of things is doomed, and it’s up to us to prepare as best we can to ensure as soft a landing as possible when the inevitable apocalypse arrives.
/jlne.ws/3wKfvCr

Hottest Commodity in the Oil Industry: Elements by Javier Blas; Record prices for drill pipe slow production and make oil more expensive.
Javier Blas – Bloomberg
The hottest commodity in the oil industry isn’t crude, gasoline, diesel or jet fuel. Nor is it an exotic petroleum feedstock used to make plastics. The hottest commodity goes by the acronym of OCTG, meaning oil country tubular goods — a verbose way to say drill pipe. The benchmark price for drill pipe has surged to a record $4,150 per short ton, a 90% increase from $2,300 a year ago. The bounce may not be as high as some others in the oil industry, but it matters more because of the spillover effect: rising drill-pipe prices mean American shale drillers are increasing production more slowly than expected, and that, in turn, means higher oil prices worldwide.
/jlne.ws/3AZ8eBg

UK Wind Farm Owner to Miss Windfall Profit Despite Subsidy Delay; Orsted hedged power production from Hornsea 2 wind farm; Wind power could help rein in surging UK power prices
Will Mathis – Bloomberg
Renewable energy developer Orsted A/S won’t make a windfall profit from the surging costs of UK power despite delaying the start of a price cap on its latest and largest project off the coast of England. The world’s biggest developer of offshore wind farms has fully commissioned its Hornsea 2 project, which will provide enough electricity for more than 1.4 million homes. Clean power sources like wind could help rein in power costs that are set to soar to record levels this winter. But that can only happen if operators sell power for cheaper than the market prices that are mostly set by expensive gas-burning plants.
/jlne.ws/3AFEZ4Y

China’s treatment of Uyghurs may be crime against humanity, says UN human rights chief
Julian Borger – The Guardian
The outgoing UN human rights commissioner, Michelle Bachelet, has said that China had committed “serious human rights violations” against Uyghur Muslims in Xinjiang province which may amount to crimes against humanity. Bachelet’s damning report was published with only 11 minutes to go before her term came to an end at midnight Geneva time. Publication was delayed by the eleventh-hour delivery of an official Chinese response that contained names and pictures of individuals that had to be blacked out by the UN commissioner’s office for privacy and safety reasons.
/jlne.ws/3ecOrW7

G-7 to Discuss Cap on Price of Russian Oil in Bid to Ease Prices; Yellen and counterparts to discuss proposal on Friday; US, allies hope measure will ease energy market pressures
Josh Wingrove – Bloomberg
Group of Seven finance ministers will hold talks this week on allowing global purchases of Russian oil at a capped price — a gambit that the US hopes will ease energy market pressures and slash overall Russian revenues from crude. Treasury Secretary Janet Yellen and her counterparts will discuss the measure further in a session on Friday, US officials said. The plan would allow purchasers of Russian oil under a capped price to continue getting crucial services — like financing and insurance for tankers. The European Union, UK and Switzerland all plan to ban their companies from providing those services for Russian oil shipments beginning in December.
/jlne.ws/3CNsOpx

Institutions

Bank of Ireland Names Interim CEO As McDonagh Leaves for Credit Suisse; Appointment comes ahead of McDonagh’s exit for Credit Suisse; Irish retail unit head Kelly joined Bank of Ireland in 2007
Morwenna Coniam – Bloomberg
Bank of Ireland Group Plc named Gavin Kelly Interim Chief Executive Officer as it continues to search for a replacement for outgoing CEO Francesca McDonagh. Kelly, the head of the firm’s Irish retail arm, will become CEO and executive director on Sept. 3 as McDonagh exits the bank to join Credit Suisse Group AG. Kelly joined Bank of Ireland in 2007 and has held senior management positions including chief information officer, director of distribution channels and director of consumer banking, the bank said in a statement Wednesday.
/jlne.ws/3R8qxtg

Straits Times Index (STI) quarterly review
FTSE Russell
FTSE Russell announces that there will be one change to the constituents of the Straits Times Index (STI), following the September 2022 quarterly review. Emperador has been added to the STI and ComfortDelGro has been removed from the index.
The STI reserve list, comprising the five highest ranking non-constituents of the STI by market capitalisation, will be (in order of size) Olam Group, Suntec REIT, Keppel REIT, Frasers Centrepoint Trust and Ascott Residence Trust. Stocks on the reserve list will replace any constituents that become ineligible as a result of corporate actions before the next review. A full list of STI constituents can be found on the website.
/jlne.ws/3AHRZXJ

SDI AOP introduces significant enhancements to dataset for investing in the UN’s Sustainable Development Goals
Qontigo
The Sustainable Development Investments Asset Owner Platform (SDI AOP) and Qontigo, its exclusive distribution partner, have announced significant enhancements to the SDI AOP dataset as part of the August 2022 data release. The data analyzes corporate alignment with the United Nations Sustainable Development Goals (SDGs).
The latest data release introduces negative SDG contribution information to identify revenues generated by products and services that are defined as inconsistent with achieving the UN SDGs.
/jlne.ws/3KRMoDf

Wellness Exchange

The Pandemic Erased Two Decades of Progress in Math and Reading
Sarah Mervosh – The New York Times
National test results released on Thursday showed in stark terms the pandemic’s devastating effects on American schoolchildren, with the performance of 9-year-olds in math and reading dropping to the levels from two decades ago. This year, for the first time since the National Assessment of Educational Progress tests began tracking student achievement in the 1970s, 9-year-olds lost ground in math, and scores in reading fell by the largest margin in more than 30 years.
/jlne.ws/3cCJcyt

The U.S. diet is deadly. Here are 7 ideas to get Americans eating healthier
Allison Aubrey – NPR
The data are stark: the typical American diet is shortening the lives of many Americans. Diet-related deaths outrank deaths from smoking, and about half of U.S. deaths from heart disease – nearly 900 deaths a day – are linked to poor diet. The pandemic highlighted the problem, with much worse outcomes for people with obesity and other diet-related diseases. “We’re really in a nutrition crisis in this country.” says Dariush Mozaffarian, a cardiologist and dean of the Friedman School of Nutrition Science and Policy at Tufts University
/jlne.ws/3CMBcp5

COVID cases spike at U of I. Masks are now ‘strongly recommended’ but not mandated in most settings on campus.
Angie Leventis Lourgos – Chicago Tribune
As the fall semester gets underway, COVID-19 cases are surging at the University of Illinois at Urbana-Champaign, which has “strongly recommended” masking to help prevent the spread of the coronavirus but isn’t mandating face coverings in most indoor settings. Nearly a quarter of 1,439 tests reported on Tuesday were positive for the virus, with about 26% of undergraduate students and about 23% of graduate students who were tested having contracted the virus, according to university data. That day, 326 new cases were reported at the university of more than 50,000 students, who began classes Aug. 22. In the last week, just over 1,000 new cases were reported, with a positivity rate of 21%. The positivity rates in late August were much higher than other months throughout the pandemic, though testing was down compared with previous months.
/jlne.ws/3RkXQJe

New Covid-19 Booster Shots for This Fall: What to Know; Shots could become available within days if the CDC greenlights them
Peter Loftus – The Wall Street Journal
U.S. health authorities have authorized new Covid-19 vaccine booster shots, modified to better target recent versions of the Omicron variant as well as the ancestral strain of the coronavirus. The Food and Drug Administration cleared the shots from Pfizer Inc. and its partner BioNTech SE, and from Moderna Inc. for some people who have already received a first series of Covid-19 vaccination. The new shots are being rolled out to bolster people’s protection against the Omicron subvariants BA.4 and BA.5, which appear to evade some of the protection provided by the original vaccines.
/jlne.ws/3Q58lQ2

Fauci Warns of a Bad Flu Season Brewing as He Nears Office Exit; Infectious disease official encourages Covid, flu immunization; Fauci plans to advise on HIV shots, but won’t reestablish lab
Riley Griffin and Jeannie Baumann – Bloomberg
President Joe Biden’s medical adviser Anthony Fauci warned that the US should be prepared for “pretty bad flu season” coupled with continued Covid-19 cases this winter when he’ll be stepping down from his post as the nation’s top infectious disease official. The Southern Hemisphere, which annually sees new strains of flu appear before the North, has already experienced a more severe season than usual, Fauci said Wednesday in an interview, and Americans should get flu shots when they become available.
/jlne.ws/3CNqO0v

Regions

Goldman, Citigroup Tell Clients to Bet Big on Singapore Dollar Investors should buy the local dollar on dips, Citigroup says MAS has tightened policy twice this year to counter inflation
Ruth Carson – Bloomberg
Singapore’s dollar is emerging as the top bet for Wall Street’s biggest banks as wagers the central bank will extend policy tightening bolsters demand for Southeast Asia’s top-performing currency. Goldman Sachs Group Inc. favors the Singapore dollar the most among Asian currencies, along with Thailand’s baht. Citigroup Inc. recommends buying the currency on dips, while RBC Capital Markets says further policy tightening by the Monetary Authority of Singapore — which uses the nation’s foreign exchange as its main policy tool — will only turbocharge its gains.
/jlne.ws/3wI5fuv

Abu Dhabi Stock Exchange Taps Ex-Bank of America MD for Advisory Role
Nicolas Parasie – Bloomberg
Abu Dhabi’s stock market has hired former Bank of America Corp. Managing Director Kay French as adviser to the bourse’s new chairman.
French spent more than a decade at Bank of America in Abu Dhabi, and worked with sovereign wealth funds and other government-related entities, according to her LinkedIn profile.
/jlne.ws/3Qbeom2

Pakistan emits less than 1% of the world’s planet-warming gases. It’s now drowning
Rachel Ramirez and Angela Dewan – CNN
Pakistan was already struggling when the devastating monsoon rains hit. This year, economic and political crises have converged in the South Asian nation of more than 230 million, as food and fuel prices soared and former leader Imran Khan was forced from office. Now its reeling with the worst floods in living memory. Swaths of Pakistan are now underwater after experiencing the heaviest rains on record with little reprieve since mid-June. Some areas have seen five times their normal levels of monsoonal rain. More than 1,100 people have died and 33 million people are impacted — that’s more than the population of Texas. Torrents of water have smashed through entire villages and farmland, razing buildings and wiping out crops.
/jlne.ws/3CMZUWG

Hedge Funds Help Australia’s Wealth Manager Trounce Markets; Future Fund’s macro strategies returned 20% in year to June 30; Chairman Costello warns market volatility is far from over
Matthew Burgess – Bloomberg
Australia’s sovereign wealth fund avoided the bulk of the losses seen in global markets over the past year, largely thanks to bets on hedge funds that got a kicker from rampant inflation. The Future Fund recorded a 1.2% loss in the year to June 30, according to a statement Wednesday. While that’s the A$194 billion ($133 billion) fund’s worst annual performance since the financial crisis, it beat the 17% slump in global stocks over the same period after ramping up alternative strategies like macro hedge funds and inflation-linked infrastructure assets.
/jlne.ws/3RcZai0

China’s Love of Local EVs Is Bad News for Foreign Carmakers; Buyers in the world’s biggest electric vehicle market are overwhelmingly shifting toward homegrown brands.
Bloomberg Businessweek
For the past four decades, Western automakers have enjoyed a welcome lift from Chinese car buyers, who were drawn to the foreign brands’ quality and cachet. That allowed sales in the Asian nation to become a sizable piece of European and US automakers’ revenue and growth plans. But as China’s car buyers quickly shift away from traditional gasoline- and diesel-powered cars and toward electric vehicles, that could be changing. Homegrown auto manufacturers now command the lion’s share of new-energy vehicle (NEV) sales, leaving global giants such as Volkswagen AG and BMW AG at risk of being left behind in the world’s biggest EV market.
/jlne.ws/3Q5x4na

Qatar to Tap Global Hydrogen Market With $1 Billion Plant; Project will make ammonia, which can be converted to hydrogen; ThyssenKrupp, Consolidated Contractors to build plant
Walid Ahmed and Verity Ratcliffe – Bloomberg
Qatar plans to build a $1 billion plant to make blue ammonia, a fuel that can be converted into hydrogen by countries looking to reduce their carbon emissions. While nascent, the worldwide market for ammonia is expected to grow as it can be shipped and converted into hydrogen, which is considered a clean fuel because it doesn’t produce carbon dioxide. Ammonia can also be burned to produce electricity or used as a fertilizer.
/jlne.ws/3wOrG11

Surging Grain Prices Keep Kenyan Inflation at Five-Year High; Annual inflation quickened to 8.5% from 8.3% in July; Inflation has breached the central bank’s ceiling since June
David Herbling – Bloomberg
Kenyan inflation accelerated for a sixth successive month in August as price pressures from a prolonged drought persist and a slump in the shilling raised the cost of imported goods. Consumer prices rose 8.5% from a year earlier, compared with 8.3% in July, the Kenya National Bureau of Statistics said in an emailed statement Wednesday. That matched the median of four economists’ estimates in a Bloomberg survey.
/jlne.ws/3R86XNP

Pakistan Inflation Hits 47-Year High Before Full Impact of Flood; Nation facing food shortages after deadly floods damage crops Increase in fuel tax, power tariff to drive inflation higher Ruchi Bhatia and Faseeh Mangi – Bloomberg
Pakistan’s inflation accelerated for a sixth straight month to hit a fresh record in August, with the deadly floods risk jolting prices further. Consumer prices rose 27.26% last month from a year earlier, according to data released by the government Thursday. That compares with a median estimate for a 26.6% rise in a Bloomberg survey of economists and a 24.93% jump in July. Pakistan’s inflation is the highest since May 1975, according to Zeeshan Azhar, analyst at Foundation Securities Pvt. citing central bank data.
/jlne.ws/3wM6xVh

Pemex Oil Trading Head Leaves Ahead of Key Talks With Buyers
Lucia Kassai and Amy Stillman – Bloomberg
Armando Mejia Sanchez, the head of crude oil at the trading arm of Mexico’s state-owned oil firm Pemex, is retiring, according to people with knowledge of the situation. Mejia, who was appointed to the role at Pemex’s PMI unit in 2019, will be temporarily succeeded by Celina Torres Uribe until a permanent replacement is announced, said the people, who asked not to be identified as the moves haven’t been made public. A Pemex representative didn’t immediately respond to a request for comment. Mejia couldn’t immediately be reached for comment.
/jlne.ws/3AGWFNT

Miscellaneous

Student Loan Forgiveness Means a Rethink of Higher Education
Romesh Ratnesar – Bloomberg
About 10 minutes after stepping to the podium of the Roosevelt Room on Aug. 24—having already regaled reporters with stories of wearing baseball spikes to his father’s workplace in Newark, Del., and driving a “nice used car” to his high school prom—President Joe Biden got around to the topic at hand. His administration planned to grant student loan forgiveness to more than 40 million Americans, with at least half seeing their debt wiped away. “We’ll provide more breathing room for the middle class so they’re less burdened by student debt,” he said. “And, quite frankly, fix the system itself.” Biden turned to his secretary of education, Miguel Cardona. “When we came in, we both acknowledged [it] was broken, in terms of … ” The president paused, considered whether to delve into the brokenness of the “system,” and thought better of it. He sighed.
/jlne.ws/3RbrDoc

See the scale of Pakistan’s flooding in maps, photos and videos
The Washington Post
“Apocalyptic.” “Unprecedented.” “A monsoon on steroids.” Officials have struggled to put into words the scale of the flooding that has destroyed large parts of Pakistan. More than 1,000 people have died, and tens of millions more have been affected by months of incessant rain. The flooding turned catastrophic over the past few weeks as monsoon season rainfall overwhelmed low-lying areas near the Indus River. Water spilled from its banks into the surrounding plains, destroying infrastructure and homes. Maxar Technologies released satellite images of the city of Rojhan, in the state of Punjab, before and during the floods that showed entire communities cut off.
/jlne.ws/3eaRYEe

Many Developed Countries View Online Misinformation as ‘Major Threat’
Stuart A. Thompson – The New York Times
Nearly three-quarters of people across 19 countries believe that the spread of false information online is a “major threat,” according to a survey released on Wednesday by the Pew Research Center. Researchers asked 24,525 people from 19 countries with advanced economies to rate the severity of threats from climate change, infectious diseases, online misinformation, cyberattacks from other countries and the condition of the global economy. Climate change was the highest-rated concern for most countries, with a median of 75 percent of respondents saying it is a major threat. Misinformation trailed closely behind, with a median of 70 percent deeming it a major threat.
/jlne.ws/3Kz4fyq

Twitter Launches an Edit Button for Paying Subscribers
Kurt Wagner – Bloomberg
Twitter Inc. is launching an edit button for the first time, after years of debate both internally and externally as to whether such a feature was a good idea for a product known for making posts go viral. The edit feature will soon be available to users who pay $4.99 per month for a subscription to Twitter Blue. Edit Tweet, as the feature will be called, will let users make changes to their tweet for up to 30 minutes after it’s originally published. Tweets that are edited will carry a label, and others on Twitter will be able to click on the label to see prior versions of the post. https://bloom.bg/3CSouVZ

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