Mastercard, Citi, JPMorgan Test Ledger for Settling Bank Money

May 8, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

Today JLN added a skyscraper advertisement from author Robert Khoury for his two books, “How to Intern Successfully; Insight and Actions to Optimize Your Experience” and “Intern Management; Principles for Designing an Exceptional Internship.”

Robert this morning shared with me a story he said reflected a recent conversation we had. The story comes courtesy of Paolo Casula, the head of marketing at Vento CFD. The story goes like this:

A university professor posed a challenge to his students. Each of them had a balloon with their name. The balloons would fall from the ceiling and they would have 5 minutes to find theirs. If everyone found the one with their name, they won… if not, they lost.

          Although they tried with all their energy to find them, no one succeeded. The teacher put the balloons back and told them, “When you catch a balloon, give it to its owner”. The test took less than 3 minutes to complete.

The teacher finished by saying, “Happiness is like these balloons. If each of us looks only for our own, we will never find it. But if we look for others’, we will also find ours.” Exactly the same happens with teamwork in companies. If you help others achieve their goals, others will do the same with you.

Several publications, including the Financial Times and The New York Times, are reporting that FTX customers will get their money back, plus some interest. FTX equity holders are still getting nothing, as in zilch.

The FT reports: “FTX said it had gathered roughly $15bn, mostly from selling venture capital investments made by the exchange and its trading affiliate Alameda Research. The sum is enough to pay 118 cents on the dollar to the 98 percent of creditors who hold $50,000 or less in claims.”

This story is kind of like the Titanic returning to port after sinking.

Speaking of sinking companies, do you remember all those companies that soared in value during the pandemic? The Financial Times is reporting that “Pandemic-era winners suffer $1.5tn fall in market value.”

The FT reported that Zoom, a video-conferencing company, saw its stock rise by 765% in 2020 due to the shift to remote working but has since dropped about 80%, losing over $77 billion in market value. Similarly, RingCentral, another company that benefited from the remote working trend, has lost about 90% of its value amid competition from tech giants like Alphabet and Microsoft. Peloton, known for its exercise bikes, has also seen a dramatic decline, with its shares falling more than 97%, equating to a $43 billion loss in market value since the end of 2020.

The Eleventh Annual Conference on Financial Market Regulation, hosted by the SEC’s Division of Economic and Risk Analysis in partnership with Lehigh University and the University of Maryland, will take place from May 9 to May 10, 2024. This event aims to facilitate discussions among academics, industry professionals, government representatives, and SEC members on issues important to the Commission.

Eurex, in partnership with FTSE Russell, is set to launch futures on the FTSE All-World Index on June 3. This addition enhances Eurex’s growing range of FTSE derivatives, providing investors with a broad product suite that includes FTSE 100 Index Futures and Options, Total Return Futures, Dividend Futures, FTSE Bitcoin Index Futures and Options, and FTSE EPRA Nareit index futures. The FTSE All-World Index, featuring around 4,000 mid-to-large cap stocks, offers extensive diversification options.

The Boy Scouts of America announced yesterday it will rebrand as Scouting America on February 8, 2025, coinciding with its 115th anniversary, to better reflect its commitment to inclusivity. This change marks five years since girls were welcomed into its programs, with over 176,000 female participants now involved, including more than 6,000 who have achieved Eagle Scout status.

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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Our most read stories from our previous edition of JLN Options were:
Stock Market Disaster Hedges Are the Cheapest in Nine Years from Bloomberg.
Exchange operator Cboe launches push to attract retail investors in Europe from Reuters.
BNP Paribas targets hedge funds with equity vol carry options from Risk.net. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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PanXchange founder Julie Lerner never gave up trying to deliver a commodity benchmark product
JohnLothianNews.com

Julie Lerner, the creator and CEO of PanXchange, Inc., was forced to shut down the U.S. commodities platform in December 2023 after she was unable to secure the seven-figure balance expected from the funder. Lerner spoke with John Lothian about the inspiration for PanXchange and her struggles and successes launching several different commodity benchmark products, including sugar, hemp, frac sand, and carbon credits.

Watch the video »

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Warren Buffett saw an AI deepfake video of him that was so good he says he could imagine it tricking him into sending money overseas
Josh Funk – AP via Fortune
Warren Buffett cautioned the tens of thousands of shareholders who packed an arena for his annual meeting that artificial intelligence scams could become “the growth industry of all time.” Doubling down on his cautionary words from last year, Buffett told the throngs he recently came face to face with the downside of AI. And it looked and sounded just like him. Someone made a fake video of Buffett, apparently convincing enough that the so-called Oracle of Omaha himself said he could imagine it tricking him into sending money overseas. The billionaire investing guru predicted scammers will seize on the technology, and may do more harm with it than society can wring good.
/jlne.ws/3wt0lEQ

****** Do you have a safe word? Double check everything!~JJL

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Forbes lists Chicago as the 7th worst city for drivers
Alonzo Small – WGN TV
Chicagoans don’t take criticism well regarding their driving skills, but Forbes recently ranked the ‘Worst Cities To Drive In,’ and like a shot of Malort, it’s not the best. Chicago ranked seventh nationwide because “drivers spend the highest amount of time in traffic among the cities we analyzed, and as a result, drivers spend the most on gas thanks to traffic congestion.”
/jlne.ws/3UOLIF7

****** Our drivers are bad, but our irons and putters are terrific.~JJL

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Tuesday’s Top Three
Our top item Tuesday was Robinhood’s press release, Robinhood Response to Receipt of Wells Notice from the U.S. Securities and Exchange Commission. Second was Commissioner Goldsmith Romero to Speak at the World Economic Forum’s Industry Strategy Meeting 2024, a notice from the CFTC about an event that takes place this morning. Third was a tie between Julie Kerr’s announcement on LinkedIn that she is starting a new position as managing director at HSBC and the CFTC’s announcement, Commissioner Goldsmith Romero to Participate on an Artificial Intelligence Panel at the Asian Pacific American Institute for Congressional Studies’ Legislative Leadership Summit.

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Lead Stories

Mastercard, Citi, JPMorgan Test Ledger for Settling Bank Money
Olga Kharif – Bloomberg
Mastercard Inc. is joining with some of the largest US banks to test shared-ledger technology that would allow the common settlement of tokenized assets such as commercial-bank money as well as Treasury and investment-grade debt securities. The Regulated Settlement Network proof-of-concept will simulate transactions in dollars, Mastercard said in a statement Wednesday. The goal is to make transactions across borders and systems faster and easier, and to reduce the chance of error and fraud.
/jlne.ws/4dsa8LP

FTX Has Billions More Than Needed to Pay Bankruptcy Victims
Steven Church – Bloomberg
Cryptocurrency exchange FTX has amassed billions of dollars more than it needs to cover what customers lost in its November 2022 collapse, setting them up to receive full recoveries, plus interest, a rare outcome in US bankruptcy proceedings. Lower-ranking creditors typically receive just pennies on the dollar for their holdings, but FTX benefitted from a strong rally in cryptocurrencies including Solana, a token heavily backed by convicted fraudster and FTX founder Sam Bankman-Fried. The company has also sold dozens of other assets, including various venture-capital projects like a stake in the artificial-intelligence company Anthropic.
/jlne.ws/4b8ih6I

EDX Markets Launches Singapore-Based EDXM Global; EDXM Global platform to provide members with the most competitive and efficient settlement process; GSR and Virtu Financial are among the first adopters of EDXM Global.
EDXM Global
EDXM Global (EDXMG), a fast-growing digital asset company for institutional customers, announced today the launch of its settlement platform. EDXM Global sets a new standard in the digital asset landscape, streamlining OTC transaction settlements with remarkable speed and reliability. Marking a significant milestone, industry giants GSR and Virtu Financial were the first firms to use the new platform for trade settlement.
/jlne.ws/3ybcizq

TikTok Sues to Block U.S. Ban; Chinese-controlled app claims new federal law violates First Amendment and unlawfully singles out company for punishment
Jacob Gershman – The Wall Street Journal
TikTok said it filed a federal lawsuit Tuesday challenging the constitutionality of a new law that requires a sale or ban of the popular social-media app, setting up a court showdown over national security and free speech in the age of global information wars. The suit, filed directly with a federal appeals court in Washington, D.C., seeks a court order preventing the U.S. from enforcing the bipartisan law signed by President Biden last month. The measure bans TikTok in the U.S. unless its parent company, Beijing-based ByteDance, divests itself of the platform by mid-January.
/jlne.ws/3UPBPXP

London Makes Up Just 2% of Europe’s IPO Volume So Far This Year
Joe Easton and Lisa Pham – Bloomberg
London is missing out on a rebound in Europe’s initial public offering market, in yet another sign of its waning prospects as a listing destination. Of the $11.9 billion raised via IPOs in Europe this year, just over 2% was in the UK – the lowest in decades, according to data compiled by Bloomberg. That compares to an average share of 31% between 2012 and 2023, the data show.
/jlne.ws/4dyBUqi

One New York Office Building Shows the Stress in the $20 Trillion Commercial Real Estate Market; WeWork and Macy’s and balloon payments, oh my!
Tracy Alloway – Bloomberg
1440 Broadway is a 25-story building at the corner of Broadway and 40th Street in Midtown Manhattan, not far from the bright lights of Times Square and the grubby dishevelment of the Port Authority Bus Terminal. Designed by Starrett & Van Vleck and completed in 1925, its brick and limestone facade is a prime example of classic New York architecture. Today, 1440 Broadway is also emblematic of tensions in the $20 trillion market for US commercial real estate too.
/jlne.ws/3UvJMjl

In Tesla Autopilot probe, US prosecutors focus on securities, wire fraud
Mike Spector and Chris Prentice – Reuters
U.S. prosecutors are examining whether Tesla committed securities or wire fraud by misleading investors and consumers about its electric vehicles’ self-driving capabilities, three people familiar with the matter told Reuters. Tesla’s Autopilot and Full Self-Driving systems assist with steering, braking and lane changes – but are not fully autonomous. While Tesla has warned drivers to stay ready to take over driving, the Justice Department is examining other statements by Tesla and Chief Executive Elon Musk suggesting its cars can drive themselves.
/jlne.ws/3WqFzjI

Renewables provided record 30% of global electricity in 2023, Ember says
Susanna Twidale – Reuters
Growth in solar and wind power pushed renewable generation to a record 30% of global electricity production in 2023, putting a global target to triple renewable capacity by 2030 within sight, a report by think tank Ember said. Cutting fossil fuel use and emissions in the power sector is seen as vital to meeting global climate targets. More than 100 countries at the COP28 climate summit in Dubai last year agreed to triple renewable energy capacity by 2030.
/jlne.ws/3QxRiZW

Earth experienced its warmest April on record as US prepares for brutal summer heat
Julia Jacobo and Daniel Peck – ABC News
Earth has just experienced its 11th straight warmest month on record — a preview of the brutal temperatures forecast for the summer, according to scientists. Last month continued a relentless stretch of record-breaking global temperatures for the planet after it measured as the warmest April on record, according to a monthly climate report by Copernicus, Europe’s climate change service, released on Tuesday.
/jlne.ws/44ziltJ

Hedge Fund Tycoon Loses Ruling Over $40 Million WWII Shipwreck Treasure; Marshall’s firm had sought share of treasure found on seabed; Argentum and South Africa state have since reached settlement
Jonathan Browning – Bloomberg
One of Britain’s top hedge fund managers lost a legal fight over the salvage of $40 million of silver from the wreck of a ship sunk by a Japanese submarine in World War II. The UK’s Supreme Court on Wednesday dealt a blow to a company controlled by Paul Marshall, ruling that South Africa, the silver’s owner, wouldn’t need to get embroiled in a case because it enjoys state immunity.
/jlne.ws/4aaIHTR

The next critical mineral source could be volcanic soup; Geologists are exploring whether magmatic brine can be tapped for dissolved treasure such as lithium, copper and cobalt
Anjana Ahuja – Financial Times
Volcanoes house more than molten rock. Alongside the magma sits a mysterious substance called magmatic brine, a mineral-rich soup that collects underneath both active and dormant volcanoes. Geologists are now exploring whether these deep subterranean pools can be tapped for dissolved treasure such as lithium, copper and cobalt. The extraction could be powered by geothermal energy, leading some scientists to call it “green mining”.
/jlne.ws/3JS3zVn

What should the Bank of Japan do with its huge stock portfolio? The central bank has called time on its ETF buying but has yet to say what it will do with its massive investments
Toby Nangle – Financial Times
The Bank of Japan has, over 14 years, acquired exchange traded funds containing stocks equivalent to about 7 per cent of listed Japanese companies. In March, BoJ governor Kazuo Ueda called time on this aspect of the central bank’s extraordinary monetary easing programme. The bank has yet to announce what it will do with its half-a-trillion-dollar stock portfolio.
/jlne.ws/3USMTn7

Climate change: World’s oceans suffer from record-breaking year of heat
Matt McGrath, Mark Poynting and Justin Rowlatt – BBC News
Fuelled by climate change, the world’s oceans have broken temperature records every single day over the past year, a BBC analysis finds. Nearly 50 days have smashed existing highs for the time of year by the largest margin in the satellite era. Planet-warming gases are mostly to blame, but the natural weather event El Niño has also helped warm the seas. The super-heated oceans have hit marine life hard and driven a new wave of coral bleaching. The analysis is based on data from the EU’s Copernicus Climate Service.
/jlne.ws/3UxJE35

Pricier Insurance Makes Sense as Climate Risk Grows, Chubb CEO Says; Speaking in California, Evan Greenberg says industry has been setting premiums ‘very rationally,’ adding that it didn’t tell people to ‘build magnificent homes in a wildfire zone’
Richard Vanderford – The Wall Street Journal
Surging insurance premiums in regions vulnerable to climate change make sense, and government efforts to hold back those increases won’t work in the long term, Chubb Chief Executive Evan Greenberg said. U.S. states themselves are driving a crisis of insurance availability by blocking insurers from pricing climate change into policies, Greenberg said on Tuesday in San Diego at the RIMS Riskworld conference, an annual gathering of about 10,000 risk and insurance professionals.
/jlne.ws/4b8cON5

Ukraine Invasion

Italy’s president says Russia’s invasion of Ukraine can’t be solved by rewarding Moscow’s aggression
Edith M. Lederer – Associated Press
Italy’s president told the U.N. General Assembly on Tuesday that Russia’s invasion of Ukraine can’t be solved by rewarding its aggression and peace can only come when Ukraine’s sovereignty and territorial integrity are restored. Sergio Mattarella said Italy, which now heads the G7 meetings, and many international partners have come to Ukraine’s defense to support the principle that solidarity must be given to nations attacked by acts that violate international law and the U.N. Charter.
/jlne.ws/4b81YXw

About half of the North Korean missiles Russia fired at Ukraine flew off course and exploded in the air, official says
Chris Panella – Insider
About half of the North Korean missiles Russia has fired at Ukraine have failed, Ukraine’s top prosecutor said, per new reporting. The high reported failure rate raises questions about the quality of North Korean-provided munitions and comes after months of concern about how an arms deal between the two countries could influence the war in Ukraine and North Korea’s own efforts to improve its military capabilities.
/jlne.ws/3wsSTcQ

Ukraine is getting a prototype artillery shell that can strike 3 times as far as regular rounds: report
Mia Jankowicz – Insider
Germany is gearing up to send Ukraine a prototype artillery shell that can travel up to 62 miles, German newspaper Handelsblatt reported.mThat would more than triple the reach of the conventional 155 mm artillery rounds Ukraine is heavily reliant on, depending on what system is used to fire it. Shells fired by a Howitzer can travel around 20 miles, per the Associated Press.
/jlne.ws/3UQrpXX

Ukraine Energy Trader Plans European Expansion to Boost Supplies
Priscila Azevedo Rocha – Bloomberg
The trading arm of Ukrainian energy company DTEK plans to hire more staff and enter the liquefied natural gas market in a bid to forge closer ties with the rest of Europe. D.Trading seeks to add as many as 12 people to buy and sell power, gas and fuels by the end of the year, Chief Executive Officer Ivan Geliukh said in an interview. The firm currently employs about 60 traders in four offices from Kyiv to Amsterdam. Longer term, an LNG desk will also be established.
/jlne.ws/3woXVqK

Angry Families of Missing Russian Soldiers Want Answers From Putin; Loved ones of thousands of soldiers whose fates are unknown are upset about Moscow’s lack of transparency
Ann M. Simmons and Kate Vtorygina – The Wall Street Journal
Natalia Kruglova last spoke to her husband, Pvt. Ivan Petrov, on Sept. 29. The Russian army conscript told Kruglova he had been ordered back to the front lines in southeastern Ukraine. Then he disappeared. Kruglova wrote to her husband’s commanding officers, the Defense Ministry and even military prosecutors in search of news, but to no avail. Weeks later, the army declared Petrov missing but offered no explanation of what had happened to him.
/jlne.ws/3y6TQI9

Israel/Palestine Conflict

US Pauses Arms Shipment to Israel Over Rafah Invasion Plans; White House holds up delivery of 2,000- and 500-pound bombs; Biden administration worries about damage to urban areas
Jordan Fabian and Galit Altstein – Bloomberg
The US paused a shipment of bombs to Israel over concerns about a potential military offensive on the Gazan city of Rafah, which President Joe Biden opposes, according to a senior administration official. The delivery was supposed to contain 3,500 bombs, split roughly evenly between 2,000-pound (907-kilogram) and 500-pound explosives, the official, granted anonymity to discuss a sensitive matter, said.
/jlne.ws/3QAmcB5

How missiles became the modern weapon of choice; They rarely bring outright victory but can help anti-western actors raise costs for the US and its allies
Jacquelyn Schneider – Financial Times
This year may be the year of the missile. Last month, Iran launched a salvo of approximately 150 of them, many shot down by American and Israeli missiles. This was followed by an Israeli retaliation, and a week or so later, yet another missile volley in response from an Iraq-based (and probably Iranian-linked) militant group. This year has also seen prolific Houthi missile attacks on Middle East international shipping, a large-scale Russian missile campaign targeting Ukrainian cities and energy infrastructure, and Ukrainian ATACMS strikes within Russian-occupied territory.
/jlne.ws/3yimh5S

Benjamin Netanyahu’s dilemma: save the hostages or his government; In one of the biggest gambles of his career, Israel’s premier sent troops into Rafah to raise pressure on Hamas – and buy time
Neri Zilber and Mehul Srivastava and Andrew England – Financial Times
Benjamin Netanyahu waited for months to send troops into Rafah, the southern tip of the Gaza Strip where more than 1mn Palestinians have sought refuge from fighting. When the order finally came on Monday, it was within hours of Hamas finally signalling that it had accepted the outlines of a hostage-for-prisoner ceasefire proposal drawn up with mediators.
/jlne.ws/3WyKa3s

Exchanges, OTC and Clearing

Singapore battles to revive struggling stock market; Hosting a regional exchange is one idea but critics say focus should be on improving corporate governance
Mercedes Ruehl – Financial Times
Singapore is studying proposals to shake up its struggling stock market as the gap between the financial hub’s performance and other regional exchanges widens. Singapore Exchange (SGX) is reviewing a document from the nation’s venture and private capital association, according to three people familiar with the discussions. The Singapore Venture & Private Capital Association (SVCA) includes state funds GIC and Temasek, local and global venture firms, and buyout groups including General Atlantic, Warburg Pincus and KKR.
/jlne.ws/3UJbhY5

ESG Not Perfect, but Still Has Long-Term Merit, Says Expert
Nasdaq
There’s no denying it. As an investing methodology, environmental, social, and governance (ESG) has endured its share of criticism and regulatory scrutiny. However, there’s another side to that coin. Notably, ESG is now viewed as an integral in sustainable investing. Additionally, it’s no longer considered a corporate buzz phrase rooted in aspiration. It’s accessible, tangible, and an increasingly prominent part of the corporate lexicon. Those could be signals that there’s long-term viability for exchange traded funds such as the Invesco ESG Nasdaq 100 ETF (QQMG) and the Invesco ESG Nasdaq Next Gen 100 ETF (QQJG).
/jlne.ws/4dyW17q

SGX Group reports market statistics for April 2024
SGX Group
Broad-based growth in derivatives volumes across equities, FX and commodities; Singapore’s equities market outperforms most Southeast Asian peers. Singapore Exchange (SGX Group) today released its market statistics for April 2024. Derivatives volume across equities, foreign exchange (FX) and commodities rose 36% year-on-year (y-o-y) in April to 24.1 million contracts as trading activity grew, while derivatives daily average volume (DDAV) climbed 23% y-o-y to 1.2 million contracts. Securities daily average value (SDAV) gained 24% y-o-y to S$1.2 billion, outperforming most Southeast Asian markets.
/jlne.ws/3y9XCAJ

Miami International Holdings Reports Trading Results for April 2024; YTD Options and Equities Volumes Reach Record Levels while MGEX Futures Volume Jumps 41.5%
MIAX
Miami International Holdings, Inc. (MIH), a technology-driven leader in building and operating regulated financial markets across multiple asset classes and geographies, today reported April 2024 trading results for its U.S. exchange subsidiaries – MIAX®, MIAX Pearl® and MIAX Emerald (together, the MIAX Exchange Group), and Minneapolis Grain Exchange (MGEX).
/jlne.ws/3UzuYQH

Nodal Exchange achieves second-highest trading volume ever in both power and environmental markets in April
Nodal Exchange
Nodal Exchange today announced new records in power and environmental futures. In power, Nodal set a calendar month record for April with traded power futures volume of 345 million MWh, up 13% from 306 million MWh in April 2023. This is the second highest month ever for Nodal Exchange, only surpassed by the 379 million MWh in February 2024. Nodal continues to be the market leader in North American power futures with 55% share of open interest at the end of April with 1.374 billion MWh open interest representing $128 billion of notional value based on both sides.
/jlne.ws/3QBroEy

Farmer sentiment declines to lowest level since June 2022 amid weakened financial outlook
CME Group
April witnessed a steep decline in U.S. farmer sentiment, as indicated by the Purdue University/CME Group Ag Economy Barometer, which fell 15 points from March to a reading of 99. Both subindexes of the barometer also saw declines: The Current Condition Index dropped by 18 points to 83, while the Future Expectations Index fell by 14 points to 106. April marked the lowest farmer sentiment reading since June 2022 and the weakest current condition rating since May 2020. The sentiment decline was driven by worries regarding the current financial situation on farms and anticipated financial challenges in the coming year. The April Ag Economy Barometer survey was conducted from April 8-12, 2024.
/jlne.ws/4dwULlc

HKEX To Introduce Weekly Stock Options
Hong Kong Exchanges and Clearing Limited
HKEX to introduce weekly contracts on 10 selected single stock option classes by the end of 2024. Spot week and next week contracts will be offered in addition to the existing monthly contracts. HKEX’s Weekly Hang Seng Index Options are among the fastest growing derivatives products with its ADV quadrupled since 2019. Hong Kong Exchanges and Clearing Limited (HKEX) is today (Wednesday) pleased to announce plans to launch weekly single stock options for 10 Hong Kong-listed equities, the latest derivatives market enhancement that will give investors even more choice to manage risks and execute trading strategies.
/jlne.ws/4dyMv4g

Self-Certification: Proposed Amendments To The Rules Of The Bourse To Move To T+1
Bourse de Montreal
On March 25, 2024, the President and Chief Executive Officer of Bourse de Montreal Inc. (the “Bourse”) approved proposed amendments to the Rules of the Bourse to move to T+1. These amendments were self-certified in accordance with the self-certification process as established in the Derivatives Act (CQLR, Chapter I-14.01). The amendments attached hereto will become effective on May 24, 2024, after market close. Please note that the revised articles will also be available on the Bourse’s website (www.m-x.ca).
/jlne.ws/4b6ShZb

05/08/2024 Monthly Volume Report, EEX Group News, EEX Press Release
EEX
EEX Group reports its monthly volumes with the following highlights:
/jlne.ws/4buODYW

Agree to disagree on LSEG’s view on UK consolidated tape for equities
The Trade
Following London Stock Exchange Group’s (LSEG) recent paper which highlighted the challenges presented by a pre-trade equities consolidated tape, Kelvin To, founder and president at Data Boiler Technologies suggests that the argument lacks some important empirical realities that should be taken into account. Last month, the London Stock Exchange Group (LSEG) released a 49-page paper discussing their view on the UK consolidated tape (CT) for equities, in which the exchange attempted to deter the Financial Conduct Authority’s (FCA) consideration of a market-wide request for a pre-trade equities CT. However, while LSEG pointed to the challenges, the paper did not provide constructive suggestions.
/jlne.ws/4dyR5iY

Fintech

Execs can game sentiment engines, but can they fool LLMs? Quants are firing up large language models to cut through corporate blather
Faye Kilburn – Risk.net
Corporate chiefs are talking as optimistically as at any time in a decade, but not because they’ve unanimously adopted a rosy outlook. Rather, executives these days are ever mindful that machines are listening to what they say. It’s a game that has played out for years between investors using quant models to dissect what’s said on earnings calls, and bosses changing their language in response. For a while the bosses seemed to have gained the upper hand.
/jlne.ws/3UobC12

SoftBank Is Said in Talks to Buy Troubled AI Chip Firm Graphcore; Ongoing discussions with SoftBank have become more advanced British semiconductor startup was once valued at $2.8 billion
Mark Bergen and Ian King – Bloomberg
SoftBank Group Corp. is in talks to acquire Graphcore Ltd., a struggling British semiconductor startup once valued at $2.8 billion, according to people familiar with the deals. The two companies have held discussions over several months but entered into more advanced deal talks recently, said the people, who asked not to be identified discussing private matters. Financial terms haven’t yet been decided and the talks could still unravel, they said. A final agreement isn’t imminent, one person said.
/jlne.ws/3UPcEEB

Microsoft to Invest Over $3 Billion to Build AI in Wisconsin; Company has been on a global spending spree, trying to build infrastructure and goodwill for artificial intelligence
Tom Dotan – The Wall Street Journal
Microsoft said it is investing billions of dollars on artificial intelligence in Wisconsin, the latest stop in a global spending spree to build AI infrastructure and calm fears about the powerful technology. President Biden is scheduled to be in Mount Pleasant, Wis., on Wednesday along with Microsoft President Brad Smith to announce the $3.3 billion investment in a new data center there and training programs to educate locals about AI jobs in manufacturing.
/jlne.ws/3UPUwKJ

AI Risks to Financial Stability Are Already a Central Bank Worry
Bastian Benrath – Bloomberg
Dangers to financial stability posed by the development of artificial intelligence tools are already starting to become a worry, two central bank chiefs told a conference on Tuesday. Asked if there’s “something bad that could happen that you are preparing for” related to the technology, the policymakers from two Asian banking hubs each highlighted possible risks that they’ve identified.
/jlne.ws/4dzkYQb

AI Risks Amplifying ‘Herd-Like’ Behavior in Trading, BOE Says; Remarks underscore growing scrutiny of AI technology
Tom Rees – Bloomberg
A Bank of England policymaker warned that the adoption of artificial intelligence in trading by financial firms might amplify shocks on markets and encourage “herd-like behavior.” Jonathan Hall, external official on the Financial Policy Committee, said on Tuesday that AI programs may seek to evade human control and “learn the value of actively amplifying” a market shock.
/jlne.ws/3JPL03Y

DeepMind Alumni Raise $200 Million Round for Holistic AI
Mark Bergen – Bloomberg
Holistic AI, a new startup in Paris working to leapfrog other generative AI models, has closed the first tranche of a $200 million initial financing round, according to people familiar with the deal. Investors agreed to put in $80 million in equity and $120 million in convertible debt, chiefly for buying computing power, said the people who asked not to be identified because the details aren’t yet public. They said the founding round values the company at $370 million.
/jlne.ws/3QCNabf

OpenAI Inks Licensing Deal With People Magazine Publisher; Partnership will bring more lifestyle content to ChatGPT; Startup has similar deals with Axel Springer, Financial Times
Jackie Davalos – Bloomberg
OpenAI has inked a licensing deal with Dotdash Meredith that will bring the People magazine publisher’s content to ChatGPT and help train the tech startup’s artificial intelligence models. Under the partnership, which was announced Tuesday, OpenAI will be able to display lifestyle and entertainment content in its chatbot from the many websites of one of the largest digital and print publishers in the US. Dotdash Meredith, a subsidiary of Barry Diller’s IAC Inc., will also be able to leverage OpenAI’s models to improve its advertising targeting tool. The companies did not disclose financial terms.
/jlne.ws/4bsKtAT

U.S. Financial Industry to Explore Sharing Ledger Technology for Multiasset Transactions
Amitoj Singh – CoinDesk
Citi, JPMorgan, Mastercard, Swift and Deloitte are among major companies with an interest in financial services teaming up to explore sharing ledger technology by simulating multiasset transactions in U.S. dollars. The research project, titled Regulated Settlement Network (RSN) proof-of-concept (PoC), will explore the potential of bringing commercial-bank money, wholesale central-bank money and securities such as U.S. Treasuries and investment-grade debt to a common regulated venue, according to a statement shared with CoinDesk.
/jlne.ws/44ww1FM

BMLL backs industry cloud migration with move of data lab onto AWS Marketplace; New development will offer participants improved access to data and analytics, helping them to achieve scalability, time to market and remote access.
Wesley Bray – The Trade
The BMLL Data Lab has been made available on Amazon Web Services (AWS) Marketplace, providing market participants flexible access to data and analytics. AWS Marketplace is a digital catalogue with software listings from software and data vendors that helps find, test, buy and deploy products that run on AWS.
/jlne.ws/3WvGAa4

Cybersecurity

Google to use Gemini AI in Threat Intelligence and bolster cybersecurity
Firstpost
On Tuesday, Google unveiled its latest cybersecurity-focused product called Google Threat Intelligence. This new offering, part of the Google Cloud Security portfolio, aims to help cybersecurity professionals get a better understanding of global threats. Leveraging the capabilities of Google’s AI model Gemini, along with insights from Mandiant and VirusTotal, two security-focused subsidiaries, the platform promises to provide valuable insights into threat intelligence.
/jlne.ws/44xdvwV

The Art Of Cybersecurity Governance: Safeguarding Beyond Code
Lydia Zhang – Forbes
In today’s interconnected digital landscape, cybersecurity isn’t only about intricate coding, firewalls and endpoint detection and response software. It transcends technical prowess, encompassing an entire governance ecosystem to ensure an alignment between security programs and business objectives. Welcome to cybersecurity governance, a complex and strategic framework that interconnects security, risk management, compliance and business objectives.
/jlne.ws/4agabYi

Why the Cybersecurity Industry Is Obsessed With AI Right Now; From deepfakes to disinformation, this year’s annual San Francisco gathering of cybersecurity professionals is focused almost entirely on artificial intelligence.
Bree Fowler – CNet
From the hundreds of panels and talks to the often quirky expo floor displays, artificial intelligence and its potential impact on the cybersecurity industry is the topic of choice at this year’s RSA Conference in San Francisco.
/jlne.ws/44FGa31

Cryptocurrencies

Binance CEO pleas with Nigeria to release wrongfully detained ‘crime fighter’ exec
Jeff John Roberts – Fortune
A tense stand-off between Binance and the government of Nigeria took a new turn on Tuesday as the company’s CEO broke his silence about the country’s controversial decision to detain two of its executives, including former IRS agent Tigran Gambaryan. The men were held unexpectedly in February after coming to Nigeria to meet with officials about the crypto exchange’s purported impact on the national currency.
/jlne.ws/3wmqZiD

FTX says most customers will get all money back, less that 2 years after catastrophic collapse
Michelle Chapman – Associated Press
FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that. FTX said in a court filing late Tuesday that it owes about $11.2 billion to its creditors. The exchange estimates that it has between $14.5 billion and $16.3 billion to distribute to them.
/jlne.ws/4bpUHSD

Crypto Trading Firm Wintermute to Provide Liquidity for Hong Kong Bitcoin and Ether ETFs
Helene Braun – CoinDesk
Looking to strengthen its market share in the Asia region, Wintermute will be a liquidity provider to the recently launched Hong Kong-listed spot bitcoin and ether exchange-traded funds, the company announced Wednesday. The London-based firm is partnering with OSL Digital Securities and HashKey HK Exchange, both of which are sub-custodians of virtual asset trading platforms facilitating the operation of the ETFs, according to the statement.
/jlne.ws/4btKWme

Politics

R.F.K. Jr. Says Doctors Found a Dead Worm in His Brain; The presidential candidate has faced previously undisclosed health issues, including a parasite that he said ate part of his brain.
Susanne Craig – The New York Times
In 2010, Robert F. Kennedy Jr. was experiencing memory loss and mental fogginess so severe that a friend grew concerned he might have a brain tumor. Mr. Kennedy said he consulted several of the country’s top neurologists, many of whom had either treated or spoken to his uncle, Senator Edward M. Kennedy, before his death the previous year of brain cancer.
/jlne.ws/4a6qUxn

US revokes licences for supply of chips to China’s Huawei; Move marks Biden administration’s latest effort to target Chinese tech sector
Demetri Sevastopulo – Financial Times
The Biden administration has revoked export licences that allow Intel and Qualcomm to supply Huawei with semiconductors as Washington increases the pressure on the Chinese telecoms equipment company. The move by the US Department of Commerce affects the supply of chips for Huawei’s laptop computers and mobile phones, according to people familiar with the situation.
/jlne.ws/4abkm08

US Election Risks Are Starting to Show Up in Foreign Exchange Markets; Yuan’s 6-to-3-month volatility spread surges to record high; JPMorgan to maintain long dollar exposure through options
George Lei – Bloomberg
Currency markets have started pricing in elevated foreign exchange volatility around the US vote on Nov. 5, even with election day almost six months away. That concern is particularly pronounced in options betting on the Chinese offshore yuan, with the spread between six- and three-month implied volatility for the currency soaring for a second day. The spread rose to 1.20 percentage point on Tuesday, up from 0.73 percentage point on Friday, the biggest increase since 2011 when that information first became available, according to data compiled by Bloomberg.
/jlne.ws/4bsWjuN

UK to Expel Russian Diplomat in Crackdown on Alleged Spying
Joe Mayes – Bloomberg
The UK is expelling a top Russian diplomat, Home Secretary James Cleverly told Parliament, as part of a crackdown on what he said was Moscow’s intelligence-gathering in Britain. The moves included deporting the country’s defense attaché, whom Cleverly said was an undeclared intelligence agent, and stripping several Russia-owned properties of diplomatic status, Cleverly told MPs on Wednesday. The actions come in response to a suspected arson incident in London against Ukrainian-linked properties and other espionage activities in the UK and Europe, he said.
/jlne.ws/4but4I0

The Mexican Bank Behind Alleged Bribes to a Texas Democrat; U.S. federal indictment of congressman alleges payments from billionaire Ricardo Salinas Pliego’s Banco Azteca were used to influence legislation
Jose de Cordoba and Santiago Perez – The Wall Street Journal
Over three decades, Ricardo Salinas Pliego became one of Mexico’s richest men with a mix of political connections and tough tactics. Now, his bank is at the center of a U.S. federal indictment accusing a Texas congressman of accepting bribes. U.S. federal prosecutors say a Mexican bank channeled $238,000 in bribes disguised as consulting fees to Rep. Henry Cuellar (D., Texas) to further the bank’s interests in Washington by influencing U.S. anti-money-laundering legislation, according to an indictment unsealed Friday in Houston. The lender in question was Salinas Pliego’s Banco Azteca, according to a U.S. official.
/jlne.ws/44wvHqE

IKEA, Cohere, Swarovski and UniCredit Chiefs to Appear at WSJ CEO Council; AI, Gen Z, the global economy, and the conflicts in Ukraine and the Middle East are on the agenda for the summit
Hillary Canada – The Wall Street Journal
With wars raging in Ukraine and Gaza, consequential elections happening around the world, and continuing uncertainty about the future of the economy, The Wall Street Journal is convening its annual CEO Council in London to discuss the forces shaping policy, business and the economy. This article will be updated throughout the two-day event which kicks off Wednesday night with U.K. Shadow Chancellor of the Exchequer Rachel Reeves. Out of power for more than a decade, the Labour Party is leading in the polls ahead of a highly anticipated U.K. election. Reeves will explain her party’s plans for the country’s economy and how it will do business with the rest of the world.
/jlne.ws/3ws0E2A

Rich Russians Stuck in Limbo as War Creates Succession Conundrum; Some move back to Russia despite fear of asset seizures; The country’s richest have about $350 billion in wealth
Bloomberg News
For Russia’s elite, passing on family wealth has become more complex than ever. With the war in Ukraine stretching into a third year and the rich getting accustomed to the idea that Russian citizens are no longer welcome in the West, the tried-and-true playbook for transferring fortunes has been effectively vanquished. Even Cyprus and Switzerland – some of the favorite spots of old – have introduced bans on providing management services to family trusts with Russian nationals as trustors or beneficiaries.
/jlne.ws/4aanU2W

Gaza Is China’s New Wedge Issue to Split US From Global South; Beijing criticizes US for sending weapons to the conflict; Both sides have stepped up efforts to grow influence abroad
Michelle Jamrisko, Augusta Saraiva, and Peter Martin – Bloomberg
Last week, a top Chinese diplomat took to the microphones at the United Nations to harangue the US for blocking a resolution that would have backed Palestinians’ bid for membership, saying it had “shattered the decades long dream of the Palestinian people.” The broadside by Ambassador Fu Cong may have just looked like more anti-US rhetoric. But US officials and experts say it fits into a pattern with greater significance – an increasingly active Chinese effort to turn opinion in developing countries against the US since Hamas’s Oct. 7 attack on Israel, using the Gaza war as a wedge.
/jlne.ws/3Qz4c9W

Regulation

US probe finds widespread sexual misconduct at FDIC
Douglas Gillison and Pete Schroeder – Reuters
The Federal Deposit Insurance Corporation must make sweeping changes to address widespread sexual harassment and other misconduct, according to an independent report released on Tuesday that raises questions about the future of the banking regulator’s leadership. The report, prompted by a Wall Street Journal investigation, cited accounts from more than 500 people, including some who alleged FDIC Chair Martin Gruenberg had engaged in bullying and verbal abuse.
/jlne.ws/3JQmEas

Korean Regulator Asks for Investigation Into Hedge Fund Regal
Youkyung Lee – Bloomberg
South Korea’s prosecutors were asked to conduct an investigation into hedge fund Regal Funds Management Pty for alleged capital markets rules violations, according to people with knowledge of the matter. The Securities and Futures Commission referred the matter to prosecutors in December, who haven’t closed the case, the people said, asking not to be identified discussing the probe.
/jlne.ws/4b7MWRD

UK City minister defends right of government to question FCA’s actions; Bim Afolami says there is ‘no danger’ of politicising main financial regulator after chancellor’s criticism of proposed ‘name and shame’ rules
Michael O’Dwyer and Nikou Asgari – Financial Times
City minister Bim Afolami has defended the right of the government to question the actions of the Financial Conduct Authority, adding there was no danger that Downing Street was politicising the UK’s main financial watchdog. “Ultimately regulators are only there by acts of government or acts of parliament, or both,” Afolami told the Financial Times Crypto and Digital Assets Summit on Wednesday.
/jlne.ws/3QAsPTZ

Bill Hwang, Whose Firm Archegos Collapsed in 2021, Is About to Go on Trial; The hedge fund is accused of borrowing money from banks to buy stocks.
Matthew Goldstein – The New York Times
Three years ago, a multibillion-dollar investment firm called Archegos Capital Management blew up with little warning, causing big losses for some Wall Street banks and leading to federal criminal charges against the firm’s founder, Bill Hwang. On Wednesday, Mr. Hwang, 60, who was charged with 11 counts of securities fraud, wire fraud, conspiracy, racketeering and market manipulation, is set to go on trial in Manhattan federal court. If convicted, he could spend the rest of his life in prison.
/jlne.ws/3QCT8sC

Magna Group, LLC; Magna Equities II, LLC; MG Partners, Ltd; Joshua Sason; Marc Manuel; SEC Obtains Final Judgments Against Participants in Illegal Microcap Securities Offerings
SEC
Securities and Exchange Commission v. Joshua Sason, et al, No. 19-cv-1459 (S.D.N.Y filed Feb. 15, 2019)
On May 2, 2024, the U.S. District Court for the Southern District of New York entered final consent judgments against two individuals and their related businesses that participated in illegal microcap securities offerings. Entry of the judgments, and the SEC’s consent to the dismissal of certain fraud claims, resolves all remaining claims in the SEC’s February 15, 2019 complaint against Magna Group, LLC, Magna Equities II, LLC, and MG Partners, Ltd (collectively, the “Magna Entities”), as well as Joshua Sason, the founder and owner of the Magna Entities, and Marc Manuel, the Magna Entities’ former head of research and due diligence. The complaint alleged, among other things, that those defendants participated in the offer and sale of certain securities without a registration statement or any applicable exemption to registration requirements.
/jlne.ws/3UFvUU2

Red Rock Secured LLC, Sean Kelly, Anthony Spencer, and Jeffrey Ward; SEC Obtains Final Judgment Against Red Rock Secured, Three Executives in $50 Million Scheme Targeting Retirement Account Holders; SEC Obtains $76 million Judgement Against Red Rock Secured and Executives Who Schemed to Defraud Retirement Account Holders
SEC
Securities and Exchange Commission v. Red Rock Secured LLC, Sean Kelly, Anthony Spencer, and Jeffrey Ward, No. 2:23-cv-3682-RGK-PVC (C.D. Cal. filed May 15, 2023)
On April 23, 2024, the United States District Court for the Central District of California entered a final consent judgment against defendants Red Rock Secured (which now operates under the name American Coin Co.), its CEO Sean Kelly, and managers Anthony Spencer and Jeffrey Ward, ordering defendants to pay more than $76.4 million dollars in disgorgement, interest, and penalties. The judgment resolves the SEC’s charges against defendants for their roles in a scheme to defraud retirement account holders out of more than $50 million in connection with defendants’ sales of gold and silver coins between 2017 and 2022.
/jlne.ws/4baeS7e

Power Up Lending Ltd., et al.; SEC Sues Curt Kramer and Three of His Businesses for Acting as Unregistered Securities Dealers
SEC
Securities and Exchange Commission v. Power Up Lending Ltd., et al., No. 1:24-cv-03498 (S.D.N.Y. filed May 7, 2024)
The Securities and Exchange Commission announced today charges against Curt Kramer of Jericho, New York, and his wholly owned businesses Power Up Lending Ltd., Geneva Roth Remark Holdings, Inc., and 1800 Diagonal Lending, LLC (formerly known as Sixth Street Lending LLC), for operating as unregistered securities dealers.
/jlne.ws/4ab0c6z

ESMA publishes latest edition of its newsletter
ESMA
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has today published its latest edition of the Spotlight on Markets Newsletter. Your one-stop-shop in the world of EU financial markets focused in April on the DORA preparations for the European Supervisory Authorities (ESAs) and the industry: the arrangements for the next implementation stage, the consultation on for joint examination teams, and the first recruitments to set up the oversight team.
/jlne.ws/4dpK4RH

ESMA asks for input on assets eligible for UCITS
ESMA
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today publishes a Call for Evidence on the review of the Undertakings for Collective Investment in Transferable Securities (UCITS) Eligible Assets Directive (EAD). The objective of this call is to gather information from stakeholders to assess possible risk and benefits of UCITS gaining exposure to various asset classes.
/jlne.ws/4bw6C1n

UK and Singapore Strengthen Collaboration in Sustainable Finance and FinTech
Monetary Authority of Singapore
The United Kingdom (UK) and Singapore held the 9th UK-Singapore Financial Dialogue in Singapore today. Both countries discussed collaboration opportunities in priority areas such as sustainable finance and FinTech and innovation, and exchanged views on recent developments in non-bank financial intermediation (NBFI) as well as efforts to improve cross-border payment connectivity.
/jlne.ws/3QAPTSw

SFC warns public of Quantum AI for suspected virtual asset-related fraud
SFC – Hong Kong
The Securities and Futures Commission (SFC) today warns the public of suspected virtual asset-related fraud involving an entity operating under the name of “Quantum AI” (Note 1). Quantum AI claims to provide cryptocurrency trading services with its underlying artificial intelligence (AI) technology. The SFC suspects that Quantum AI uses AI-generated deepfake videos and photos of Mr Elon Musk on its website and through social media to deceive the public that Mr Musk is the developer of Quantum AI’s underlying technology.
/jlne.ws/3y8F0AR

Investing and Trading

The meme stock surge doesn’t appear to be the ominous signal it has been
Jared Blikre – Yahoo Finance
Household names that captured investors’ imaginations in 2021 – like GameStop (GME) and AMC Entertainment (AMC) – are surging higher (and lower, in some cases). And while the sudden appearance of meme stock volatility was once a contrary, risk-off warning for stocks in years past, the 2024 surges appear to be signaling a healthy risk appetite for investments.
/jlne.ws/3JOctDo

Stock buybacks hit highest level since 2018
Josh Schafer – Yahoo Finance
Stock buybacks are soaring in a sign that corporate America is bullish on the US economy. Companies have announced share repurchases of more than $383 billion in the last 13 weeks, up 30% from the year-earlier period and the largest sum since June 2018, per research from Deutsche Bank. The total includes Apple’s $110 billion plan, the largest buyback in history.
/jlne.ws/3QCDayu

Cocoa Gains Almost 20% in Two Days as Severe Volatility Persists; Low liquidity leaves prices more vulnerable to big moves; Huge supply shortages have roiled the market this year
Celia Bergin – Bloomberg
Cocoa climbed in New York – adding to its biggest rally since 1999 – as volatility continues to grip the market beset by severe shortages. Futures rose as much as 5.4% on Wednesday and are on course for a two-day advance of more than 19%, reversing last week’s huge slump from a recent record high. Prices are being whipsawed after cocoa’s surge this year raised margin calls, which prompted traders to exit positions and drained liquidity.
/jlne.ws/3USI7Gd

Cocoa’s Dizzying Volatility Is Spilling Into the Coffee Market; Robusta’s market moves are drawing comparisons to cocoa; Marex says both commodities may have drawn big margin calls
Ilena Peng and Dayanne Sousa – Bloomberg
Cocoa and coffee have become intertwined this year, with extreme weather and shortages fueling rallies of both commodities that test the limits of traders. Just like cocoa, the coffee market is facing severe shortages. And, like cocoa, coffee production is concentrated in two countries. More importantly, many major traders deal in both commodities, so soaring cocoa prices are squeezing those market players for cash and forcing them out of coffee trading.
/jlne.ws/3Qxs7H1

Bill Gates Harvests $113 Million In Nebraska Farmland, Takes Out $700 Million In Loans
Margaret Jackson – Benzinga
Over the past six years, billionaire Bill Gates has spent more than $113 million purchasing Nebraska farmland and has taken out two loans totaling $700 million against it. Gates owns about 20,000 acres of farmland in Nebraska, where longtime friend and fellow billionaire Warren Buffett resides. The farmland is held by more than 20 shell companies. Why would one of the world’s richest people need to take out a loan? Many high-net-worth individuals borrow against their assets if they need money they can spend. If Gates sold the assets, he would generate taxable income, according to University of Nebraska College of Law professor Adam Thimmesch.
/jlne.ws/3QAlxzB

M&A will not help with looming copper shortage, warns Barrick chief; Amid BHP approach for Anglo, prolific dealmaker says consolidation does not guarantee more production
Harry Dempsey – Financial Times
Mark Bristow, one of the mining industry’s most prolific dealmakers, has warned that M&A will do nothing to grow the supply of copper that the world needs to go green, as sector leader BHP pursues a £31bn mega-deal for Anglo American. The chief executive of Barrick Gold said miners needed to invest more in exploring for and developing new deposits of the world’s most important industrial metal – needed for power lines, data centres and electric cars – as he dismissed making a rival bid for Anglo American or First Quantum, another copper producer.
/jlne.ws/3UAaOGB

Americans Are Racking Up ‘Phantom Debt’ That Wall Street Can’t Track; Consumers have embraced ‘Buy Now, Pay Later’ products that allow them to pay for purchases in installments, but it’s not clear how many of these loans are out there.
Paulina Cachero and Paige Smith – Bloomberg
/jlne.ws/3UPcCwt

Pandemic-era winners suffer $1.5tn fall in market value; Top 50 biggest stock gainers hit by painful decrease since the end of 2020 as lockdown trends fade
Stephanie Stacey – Financial Times
/jlne.ws/4b5RAiR

Environmental, Social and Corporate Governance

Record temperatures expected to continue to drive extreme weather; Heat remains trapped by rising greenhouse gas concentrations despite cooling Pacific Ocean, scientists say
Attracta Mooney, Steven Bernard and Bryan Harris – Financial Times
Extreme weather events around the world are expected to continue owing to high concentrations of greenhouse gases, scientists say, after April marked the 11th straight month at a record global average surface temperature. The temperature for the hottest April on record reached 15.03C, or 0.67C above the 1991-2020 average for the month and 1.58C above pre-industrial levels, according to the Copernicus Climate Change Service.
/jlne.ws/3y761ou

*****Here is the story from Reuters.

How to Fix Rice’s Methane Emissions With a New Business Model; Startup Rize is providing incentives to farmers that can help curtail emissions of a powerful, planet-warming gas.
Michelle Ma – Bloomberg
Rice farming is a surprisingly large source of planet-warming methane. Yet while a solution to tackle emissions has existed for decades, farmers haven’t embraced it. Now, a startup has found a way to get them on board, halving harmful emissions. Singapore-based Rize has raised $14 million in Series A funding, a round co-led by Breakthrough Energy Ventures, GenZero, Temasek and Wavemaker Impact.
/jlne.ws/3JOf2W2

The Fraught Process of Measuring Bank Climate Progress; Most major western banks and asset managers disclose financed emissions, or the greenhouse gas-pollution that they enable. But the metric may be deeply flawed
Alastair Marsh – Bloomberg
By many accounts, the primary yardstick used to measure the finance industry’s progress on climate change is deeply flawed. Pretty much every major western bank and asset manager, including BlackRock Inc., HSBC Holdings Plc and JPMorgan Chase & Co., discloses their financed emissions, or the greenhouse gas-pollution that they enable via the loans and investments they make.
/jlne.ws/3QBZrMO

Brazil Floods Wreak Historic Devastation, With More Rain Coming; Dozens are dead and more than 150,000 homeless in the southern state of Rio Grande do Sul.
Daniel Carvalho, Eric Roston and Philip Brian Tabuas – Bloomberg
Catastrophic floods continue to paralyze the southern Brazilian state of Rio Grande do Sul, with four-fifths of the state – home to 11 million people – affected following torrential rainfall. And more rain is on the way, complicating recovery efforts. As of Tuesday afternoon, 95 people had died, 131 were missing and 159,000 had been displaced, the state government said, while 1.5 million residents have been impacted in some way by the disaster.
/jlne.ws/4aaOZD1

Australia Backs $47 Billion Gas Industry’s Role in Transition; The government aims to develop resources to avoid shortfall; Natural gas to play an important role through 2050 and beyond
Stephen Stapczynski and Ben Westcott – Bloomberg
Australia is calling for the development of new natural gas resources to ensure it remains affordable and the nation continues as a major exporter, the latest shift by the center-left Labor government toward greater support for the fossil fuel. The government will release a long-term framework, called the Future Gas Strategy, to establish gas’s role in the transition to cleaner energy as it looks to meet a target for net zero by 2050. That will open it up to criticism to pandering to the A$72 billion ($47 billion) liquefied natural gas export industry, which argues that the nation faces a domestic shortfall as new projects have been stalled by onerous regulations.
/jlne.ws/4b4KyLi

EU Commission eyeing exemptions for ‘forever chemicals’ ban, Welt reports
Reuters
The European Commission is planning to allow for wide-ranging exemptions from a proposed ban on substances known as PFAS, or “forever chemicals”, to protect key industries, German newspaper Welt reported on Wednesday. Citing a letter by Commission President Ursula von der Leyen to the EVP European parliamentary group, Welt reported that the commission would propose exemptions for the chemicals’ use in the bloc’s digital and environmental transformation as well as for the EU’s drive to achieve “strategic autonomy”.
/jlne.ws/3WwIFCQ

Industry Concerns Help Drive Restrictions on ESG Investing
Zina Hutton – Governing
/jlne.ws/3WvFhIc

Zambia’s Currency Plunges to Record Low as Drought Saps Economy; Nation has been involved in drawn-out debt restructuring; IMF to consider request to increase financing to Zambia
Matthew Hill and Taonga Mitimingi – Bloomberg
/jlne.ws/4b84vRp

Royal Society and academics clash over influence of oil and gas industry; Three-centuries-old institution rebuffs call to declare fossil fuel companies culpable for global warming
Kenza Bryan – Financial Times
/jlne.ws/4b6x9m9

Society Watch: How cities like Mombasa are at a sharp end of a plastic pollution crisis
Mark Hillsdon
/jlne.ws/3y4UBkS

Twenty-Five Years After Maryland Deregulated Its Retail Energy Market, a Huge Win Looms For Energy Justice Advocates. Senate Bill 1 adds new consumer protections and regulatory oversight to Maryland’s retail electricity and gas markets to protect Marylanders, especially low-income residents, from being preyed on by energy vendors.
Aman Azhar – Inside Climate News
/jlne.ws/4dvYHmf

Exxon to Move Tech Center to Houston, Shut New Jersey Campus
Kevin Crowley – Bloomberg
/jlne.ws/4dpzcDn

Institutions

JPMorgan Limits Segantii Exposure Amid Insider-Trading Case
Gillian Tan and Bei Hu – Bloomberg
JPMorgan Chase & Co. is limiting dealings with Simon Sadler’s Segantii Capital Management Ltd., the Asian hedge fund giant charged with insider trading by authorities in Hong Kong, according to people familiar with the matter. The New York-based lender won’t engage with Segantii on new block trades and initial public offerings globally, said the people, who asked not to be identified discussing a private matter. The bank will also refrain from activities such as adding new positions with the hedge fund or providing it with more financing.
/jlne.ws/3WwH9Ra

UK Lender TSB to Cut 250 Roles, Shut 36 Branches on Online Shift
Tom Metcalf – Bloomberg
TSB is closing 36 bank branches and expects to cut 250 roles as the lender continues to shift services online. The closures will begin in September and continue through May, according to its website. The bank also expects a net reduction in roles as it streamlines its operations.
/jlne.ws/3UyTC3X

Deutsche Bank’s DWS inflated client asset inflows by billions of euros; Frankfurt-listed asset manager included low-fee advisory assets in its calculations for years
Olaf Storbeck and Harriet Agnew – Financial Times
Deutsche Bank’s asset manager DWS inflated the amount of money it won from clients by billions of euros through an accounting approach that it failed to disclose for years, and which fed into executive bonus calculations. Quarterly results for the Frankfurt-listed company, in which Deutsche Bank holds an 80 per cent stake, last month showed for the first time how it included so-called advisory mandates in its overall assets under management and annual flows.
/jlne.ws/3QzKMlo

Goldman Sachs names ex-Dallas Fed chief Robert Kaplan as vice chairman
NY Post
Goldman Sachs appointed the former president of the Federal Reserve Bank of Dallas, Robert Kaplan, as its vice chairman on Tuesday. Kaplan’s new role at the David Solomon-led Wall Street behemoth adds an influential former policymaker and Goldman alum to its management committee.
/jlne.ws/4bxw9r3

UBS Names New Heads of Real Estate, Debt in Australia
Harry Brumpton – Bloomberg
UBS Group AG has made a slew of leadership appointments in its debt capital markets and real estate advisory businesses in Australia and New Zealand. The Swiss bank named Cameron Lofstedt global co-head of sovereign, supranational and agency business DCM, an addition to his existing role covering AUD/NZD fixed income syndication, the bank said Wednesday in an internal memo obtained by Bloomberg News.
/jlne.ws/44AVqhO

Work & Management

Andreessen Horowitz partner says Google is an ‘amazing example’ of employing people in ‘BS jobs’: ‘Half the white-collar staff probably does no real work’
Eleanor Pringle – Fortune
Google might be among corporate America’s favorite success stories, but some people aren’t convinced Big Tech is operating as efficiently as it could be. Indeed, according to one Silicon Valley insider, half the white-collar workers at the tech behemoth aren’t even doing “real work.” The idea that Big Tech overhires talent to have them on hand for future projects-and ensure they stay out of the hands of rivals-isn’t a new one.
/jlne.ws/44zJ5dJ

Wellness Exchange

If Pigs Get Bird Flu, We Could Be In for a Real Nightmare; H5N1 has already spread to an alarming number of mammals. If it reaches pigs, it’s more likely to mutate into something that could threaten humans.
F.D. Flam – Bloomberg
The bird flu outbreak among dairy cows continues to generate alarm, despite reassuring news that pasteurized milk is unlikely to infect anyone with H5N1. Scientists can’t stop worrying about a nightmare scenario: that the virus will get into pigs and, from there, spark a human pandemic. Pigs “are the perfect vessels through which an even more virulent strain could emerge,” said Nirav Shah, principal deputy director of the Centers for Disease Control and Prevention at a May 2 briefing by the Council on Foreign Relations.
/jlne.ws/3wrStTW

Just One Human Is Infected by Bird Flu in the US. More Cases Are Likely
Jessica Nix, Riley Griffin and Jason Gale – Bloomberg
It’s spreading rapidly among cows. It’s also infecting skunks, mountain lions and red foxes. Yet as the highly contagious avian flu affects mammals across the US, just one human case has been reported so far. But that’s probably only because there is extremely limited testing of people underway to detect it. State governments and farm owners have kept Centers for Disease Control and Prevention teams from conducting on-the-ground investigations that would offer a fuller picture of the prevalence of the virus in humans.
/jlne.ws/4dyHubW

The Wolves of the FDIC; A scathing audit reveals how union rules preserved a culture of misconduct at the federal bank regulator.
The Editorial Board – The Wall Street Journal
The FDIC tapped law firm Cleary Gottlieb Steen & Hamilton last autumn to investigate employee complaints of workplace misconduct. More than 500 individuals, mostly current employees, reported “experiences of sexual harassment, discrimination, and other interpersonal misconduct” to the firm’s hotline. We realize that not all accusations may be true, but 500 is nearly one in 10 FDIC employees.
/jlne.ws/3UQDKLG

Regions

US weighs upgrade for Vietnam to ‘market economy’ status
David Lawder and David Brunnstrom – Reuters
U.S. President Joe Biden’s bid to draw Vietnam closer as a strategic ally will clash head-on with his desire for union workers’ votes on Wednesday as the Commerce Department hears testimony on whether to designate Vietnam as a “market economy”. The move, opposed by U.S. steelmakers and Gulf Coast shrimpers but backed by retailers and other business groups, would reduce the punitive anti-dumping duties set on Vietnamese imports because of its current status as a non-market economy with heavy state influence.
/jlne.ws/3WwIurd

Gold bars are selling like hot cakes in Korea’s convenience stores and vending machines
Lee Ying Shan – CNBC
Aside from ramen and sausages, South Korea’s convenience stores have a new popular item on the menu – gold bars. The country’s largest convenience store chain, CU, has been collaborating with the Korea Minting and Security Printing Corporation (KOMSCO) to offer customers mini gold bars – and they’re selling like hot cakes.
/jlne.ws/3y74PBf

Explainer: Shell’s Singapore refinery sale and its market significance
Trixie Sher Li Yap – Reuters
Oil giant Shell said on Wednesday that it has agreed to sell its Bukom refinery in Singapore – one of the world’s largest oil refining and trading centres – to a joint venture of Indonesian chemicals firm PT Chandra Asri and global trading house Glencore, culminating a process that began last year.
/jlne.ws/3WxNr2T

Taiwan April exports up less than expected, but shipments to US hit record
Reuters
Taiwan’s exports rose less than expected in April, hurt by weak demand from China although robust demand for artificial intelligence-related products had shipments to the United States surging to a record. The Finance Ministry said it expects stable growth in exports for the first half of the year, adding demand created by new technologies reliant on AI and high-performance computing would offset the impact of high interest rates and geopolitical tensions on the global economy.
/jlne.ws/3yihhOC

US revokes licences for supply of chips to China’s Huawei; Move marks Biden administration’s latest effort to target country’s tech sector
Demetri Sevastopulo – Financial Times
The Biden administration has revoked export licences that allow Intel and Qualcomm to supply Huawei with semiconductors as Washington increases the pressure on the Chinese telecoms equipment company. The move by the US Department of Commerce affects the supply of chips for Huawei’s laptop computers and mobile phones, according to people familiar with the situation.
/jlne.ws/4abkm08

Angola agrees deal with Chinese state bank to ease debt crunch; Africa’s second-biggest oil producer unlocks cash from a Chinese-controlled account to pay interest on a crucial loan
Joseph Cotterill – Financial Times
Angola is using an unusual deal with China to relieve a debt crunch in Africa’s second-biggest oil producer by unlocking cash from a Chinese-controlled account to pay interest on a crucial loan, its finance minister said. Vera Daves de Sousa told the Financial Times the southern African nation had agreed with the China Development Bank, the country’s largest single creditor, to release cash held as collateral for a multibillion-dollar loan.
/jlne.ws/44v5GrN

Sweden cuts interest rates as Europe diverges from Fed; Krona falls against dollar after Riksbank trims main rate to 3.75%, its first reduction for eight years
Richard Milne and Martin Arnold – Financial Times
Sweden’s central bank cut interest rates for the first time in eight years as European monetary policymakers diverge from the US to support their economies even if it comes at the expense of their currencies. The Riksbank reduced its main interest rate by 0.25 percentage points to 3.75 per cent on Wednesday, the first time it has loosened policy ahead of the US Federal Reserve this century.
/jlne.ws/4dxLauM

Royal Society and academics clash over influence of oil and gas industry; Three-centuries-old institution rebuffs call to declare fossil fuel companies culpable for global warming
Kenza Bryan – Financial Times
A clash between Britain’s 363-year-old Royal Society and more than 2,000 UK academics has escalated over the national academy of scientists’ refusal to attribute the role of oil and gas companies in climate change. The academics had expressed their concerns about the influence of fossil fuel companies on scientific research in a letter last year to the Royal Society, founded in 1660 as a fellowship that included the likes of Isaac Newton.
/jlne.ws/4b6x9m9

South African rand slips as risk sentiment sours
Reuters
South Africa’s rand weakened against the dollar early on Wednesday, pulled down by souring risk sentiment. At 0726 GMT, the rand traded at 18.58 per dollar , 0.38% softer than its previous close.
/jlne.ws/3yli7dq

Zambia’s kwacha hits record low against U.S. dollar
Rachel Savage and Chris Mfula – Reuters
Zambia’s kwacha currency hit a record low against the U.S. dollar on Wednesday, touching 27.30 to the dollar amid hard currency shortages and a punishing drought that has led to power cuts in the southern African copper producer.
/jlne.ws/3JSLmqL

Miscellaneous

Inside Wytham Abbey, the £15 Million Castle Effective Altruism Must Sell; It has 27 bedrooms and 18 bathrooms and has connections to both Queen Elizabeth I and Silicon Valley billionaires.
Sarah Rappaport – Bloomberg
The manor house cheekily known as the Effective Altruism Castle is finally hitting the market-with its sellers willing to take what amounts to a loss. Effective Ventures Foundation bought Wytham Abbey in April 2022 for £14.9 million ($18.6 million) with grants from Open Philanthropy, whose funders include billionaire Facebook co-founder Dustin Moskovitz. The purchase initially stirred controversy that a charity dedicated to the most efficient use of money for the maximum good was buying one of the finest manor homes in England-and later for Effective Ventures’ connections to crypto swindler Sam Bankman-Fried.
/jlne.ws/4bqE8WI

The Gap Between the Price You See and What You Pay Is Getting Worse; A mass unbundling of charges creates more surprise fees when it’s time to pay
Rachel Wolfe – The Wall Street Journal
Surprise fees are widely hated, but they are still sneaking onto the bottom of bills for everything from concert tickets to dinners out. More companies are unbundling the cost of their goods and services, retail analysts say, tacking on 3% for swiping a credit card or adding a little extra for gas. With Live Nation Entertainment facing scrutiny over its ticketing process, singer Maggie Rogers recently urged her fans to buy tickets to her next show at the box office “like it’s 1965” to avoid fees, even showing up at one herself. The Cure’s Robert Smith, meanwhile, convinced Live Nation Entertainment subsidiary Ticketmaster to offer some fee refunds.
/jlne.ws/3UQBeoN

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The Stock Market Has Rarely Been This Sleepy

Lead Stories The Stock Market Has Rarely Been This Sleepy Gunjan Banerji - The Wall Street Journal It's eerily calm out there in the stock market. The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices...

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