Hits & Takes
By JLN Staff
Good morning from Chicago. One of the biggest challenges of the virus outbreak is forecasting when things will return to normal enough for large events to be held again. That assumes that things will return to normal, which in itself is a good question.
Will major league baseball return this summer? How about little league baseball for the kids? How about corporate events to inform, educate and market to clients? When will they return?
The next big conference for the industry is IDX in early June. Another big event that some of the more young and adventurous in the industry have attended in the past was just cancelled, and it is later in the summer: Burning Man in the California desert, scheduled for August 30 to September 7 was cancelled
Corporate and fundraising events will continue to be pushed into the fall. There will be many cancelled this year because there aren’t enough venues to hold a year’s worth of events in one quarter of the year. And a second wave of coronavirus is expected in the fall, which will present renewed issues for events.
The logical expectation is that there will be no large scale events that bring people from all over the country or the world together until there is a vaccine to protect people from the virus.
The issue here is not flattening the curve, the issue is surviving the virus. I for one, with my pre-existing medical conditions, would be loath to attend any events until the risk of exposure is minimized. And I know I am not alone as someone with medical challenges.
The other side of this coin is that the younger and more able to survive the virus are those more likely to attend future events. There will be a power shift in the industry to younger people as a result. Our Millennial colleagues will be ascendant. The boom for baby boomers will have lost its boom. The torch will finally be passed.
One final thing today, I want to thank the Futures Industry Association board of directors for cancelling the Boca conference. It was the right thing to do and it was before all the information was available about the breadth of the virus outbreak. The FIA saved this industry from facilitating death by cancelling Boca, which would have forever put a stain on the event for the future. The FIA did the right thing, and I thank them for it. ~JJL
The Spread: Far From Business As Usual
This week on The Spread – Eurex adds new options on an MSCI index, Craig Donohue is re-elected chairman of the OCC’s board of directors, phishing scammers use fake COVID-19 alerts, and more.
Produced by Mike Forrester.
Loh Boon Chye: Singapore Exchange Expands as Asia Market Grows
Since FIA Boca didn’t take place this March, John Lothian News posed our questions to Loh Boon Chye, the CEO of SGX, from afar, and he responded in this video shot in mid-March. Even in a slow growth environment in the midst of COVID-19, he believes the Asian sector is poised to grow faster than the rest of the world, and SGX has been building a multi-asset exchange over the years to take part in that growth. The exchange reorganized its business in July 2019 into four business and sales units: equities; the newly-formed fixed income, currency and commodities unit; and the data connectivity and index business. Singapore is Asia’s largest foreign exchange trading center, and SGX is seeing a merging of liquidity between its FX futures suite and over-the-counter FX. Loh also talked about the exchange’s alliances with the Tel Aviv Stock Exchange and Nasdaq, and the expansion of its index capability and presence in the U.S.
The Virus Should Wake Up the West; The job of government is to protect its citizens. The pandemic reveals that key institutions in Europe and the U.S. are no longer up to the job.
John Micklethwait and Adrian Wooldridge – Bloomberg
In 1651, a gentleman scholar who readily admitted that “fear and I were born twins” published one of the great books on government. Thomas Hobbes had survived the notoriously bloody English Civil War by fleeing to France — and his great philosophical concern was personal safety. Life in a state of nature was, he observed, “solitary, poor, nasty, brutish and short” because people were always fighting. So, he argued, citizens should contractually give up their freedoms to a ruler who could offer them protection. The state’s legitimacy depended on it fulfilling that contract and keeping its citizens safe, a revolutionary idea at a time when kings, like his former pupil Charles II, claimed their position came by divine right. For Hobbes, who also managed to survive the Great Plague in 1665-66 and died in his bed at 91, our contract with “Leviathan,” as he called his book, depended on its ability to keep us safe.
*****Maybe we just need to get back to “love one another.”~JJL
News Media Outlets Have Been Ravaged by the Pandemic; Roughly 28,000 workers at news companies in the U.S. have been laid off, been furloughed or had their pay reduced. Some publications that rely on ads have shut down.
Marc Tracy – NY Times
The news media business was shaky before the coronavirus started spreading across the country last month. Since then, the economic downturn that put nearly 17 million Americans out of work has led to pay cuts, layoffs and shutdowns at many news outlets, including weeklies like Seven Days in Burlington, Vt., and Gannett, the nation’s largest newspaper chain.
*****Advertising revenue for newspapers has imploded with the quarantine.~JJL
The Pandemic Is Crushing The Journalism Industry. The Government Could Save It; The scale of the crisis facing the journalism industry requires a radical and dramatic response: a massive public investment in local news.
Travis Waldron – Huffington Post
Three years ago, Matt DeRienzo surveyed America’s journalism landscape and issued a dire warning that most reporters didn’t want or need to hear. “The last recession was brutal for newspapers and local news,” wrote DeRienzo, who at the time was the director for a nonprofit organization that supported local online news outlets. “The next one could be an extinction-level event.”
*****This is one solution, but I am wary.~JJL
How the Head of a Chicago Food Bank Is Relieving Stress During the Coronavirus Crisis; Kate Maehr recommends taking a breath; ‘this pandemic has provoked a remarkable sense of togetherness and humanity’
Ellie Austin – WSJ
In a series called How I Cope, we speak to people across the country about the things they are doing to relieve stress in these uncertain times due to the coronavirus pandemic. Here’s our conversation with Kate Maehr, the executive director and chief executive officer of the Greater Chicago Food Depository, which serves a network of more than 700 partners and programs in Chicago and throughout Cook County. Ms. Maehr, 52, lives in Oak Park, Ill., with her two teenage sons.
******I always feel better when reading a story about the Greater Chicago Food Depository and the work they do, especially Kate Maehr. This is the organization the FIA supports with the EXPO gala. One has to wonder what will be the result of it this fall.~JJL
‘It’s positively alpine!’: Disbelief in big cities as air pollution falls
Hannah Ellis-Petersen, Rebecca Ratcliffe, Sam Cowie, Joe Parkin Daniels and Lily Kuo – The Guardian
The screenshots began to circulate on Delhi WhatsApp groups last week, captioned with varying expressions of disbelief. Having checked the air quality index, something of a sadistic morning ritual among residents of India’s capital, most could not believe their eyes.
Gone was the familiar menacing red banner, indicating how each intake of breath is really just a toxic blast on the lungs, replaced instead by a healthy, cheerful green. Could it really be that Delhi’s pollution levels now fell into the category of … “good”? “It’s positively alpine!” exclaimed one message.
******The impact of human activity on the earth is becoming evident, in a good way.~JJL
Where Have 140 Million Dutch Tulips Gone? Crushed by the Coronavirus; Demand for tulips dropped precipitously as flower shops around the globe have shut, consumers have gone into lockdown and celebrations have been canceled.
Nina Siegal – NY Times
For tulip growers in the Netherlands, Friday the 13th of March this year was a true horror show. When tulip stems came up at the country’s largest flower market in Aalsmeer, the prices stalled over and over again at zero.
*****Tulipmania has officially died.~JJL
End of an Era: Microsoft Word Now Flagging Two Spaces After Period as an Error
Bogdan Popa – Softpedia News
Adding two spaces after a period is something that so many people seem to do, despite others obviously going for what they believe to be the correct choice and using just one space.
While the two-space rule actually made sense in the era of typewriters, it doesn’t anymore, so switching to a one-space approach is something that everyone should do.
******Space, the final frontier. One space at a time.~JJL
There will be no new emoji in 2021 due to coronavirus
Jazmin Goodwin – CNN
The coronavirus pandemic has taken a hit at emojis. The Unicode Consortium, a non-profit that oversees emoji standards and is responsible for new releases, said it’s delaying its new batch of emojis by six months from March to September 2021 because of fallouts from coronavirus.
Morphing Futures Contract; Transforming Digital Assets; Blue Sheets
Gary DeWaal – Bridging the Week
Morphing financial products that potentially caused or arguably should have caused the instruments to move from the oversight of one financial regulator to another highlighted non-COVID-19 developments in financial services in the United States during the last two weeks. The Korea Exchange saw its Kospi 200 futures and mini-futures contracts transform from broad-based security index futures under the sole oversight of the Commodity Futures Trading Commission in the US prior to April 1 to narrow-based security index security futures under the joint oversight of the CFTC and the Securities and Exchange Commission in the US on April 1. Separately, Telegram Group Inc. and TON Issuer Inc. argued in papers filed with a federal court of appeals in New York that “Grams” digital tokens proposed to be distributed in October 2019 to initial purchasers of investment contracts related to the cryptoasset would not have constituted securities, but rather would have been commodities outside the scope of securities laws. The defendants are appealing an adverse decision by a US district court granting the SEC its request for a preliminary injunction precluding the distribution.
Friday’s Top Three
Our most clicked “story” on Friday was a picture of Los Angeles without smog because fewer people are out on the roads due to the coronavirus. It looks beautiful. Second was The New York Times’ Small Businesses Wait for Cash as Disaster Loan Program Unravels, about the troubled Economic Injury Disaster Loan program. Third was the Wall Street Journal’s Bridgewater’s Big Options Bet Helps Limit Losses.
175,573,000 pages viewed; 24,096 pages; 223,800 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,370 pages; 12,115 edits
Mexico Stock Exchange Chairman Dies After Virus Hospitalization
Scott Squires – Bloomberg
Jaime Ruiz Sacristan was hospitalized March 16 after diagnosis; Banker was among executives testing positive after ski trip
The chairman of Mexico’s stock exchange, Jaime Ruiz Sacristan, died early Sunday, more than three weeks after he was hospitalized with coronavirus. He was 70. The death was announced in a statement from Bolsa Mexicana de Valores SAB, which didn’t cite a specific cause. Ruiz had been hospitalized March 16 with coronavirus. Ruiz was among a cluster of high-profile Mexican executives who had tested positive for the virus after returning from a ski-resort vacation to Vail, Colorado, on a private jet.
****Condolences and prayers to family, friends and colleagues of Mr. Ruiz.
Trading Floor Closures Hurt Stock Futures Liquidity, Peak6 Says
Joanna Ossinger – Bloomberg
Volume shifted to SPY ETFs from e-mini futures, Shah says; It’s harder for brokers to source liquidity without pit: Peak6
The closure of U.S. trading floors has taken some liquidity out of the futures market as volumes shifted to exchange-traded funds, according to Peak6 Investments LLC. It has become more difficult to trade S&P 500 e-mini futures as volume has migrated to products based on the all-electronic SPDR S&P 500 ETF Trust, said Neel Shah, a senior trader at the options trading firm.
Risks Too Numerous to Bear as Traders Tip-Toe Back From Easter
Justin Carrigan – Bloomberg
All eyes on oil Monday after historic deal to cut crude output; Investors hope IMF and G-20 announce measures to bolster EMs
Make-or-break International Monetary Fund and Group-of-20 meetings, wrangling over oil, likely confirmation of China’s economic slump and the prospect of a collapse in company earnings. The risks to global markets were almost too numerous to bear as traders prepared to return to work Monday after the Easter long weekend. And that’s even before they try to unpick the latest numbers on the ebb and flow of the Covid-19 pandemic.
Putin Makes Painful Climbdown as He Sues for Peace in Oil War
Evgenia Pismennaya, Ilya Arkhipov, and Henry Meyer – Bloomberg
In reversal, Russia assuming more cuts than Saudi Arabia; U.S. main winner from OPEC+ deal as Trump avoids commitments
Vladimir Putin’s deal with OPEC to cut oil output and boost prices three years ago was a triumph for the Russian leader, bolstering his clout on the global stage. But now he’s had to to make stinging concessions after U.S. President Donald Trump stepped in to end a price war.
Smithfield CEO Warns of Risks to Pork Supply; South Dakota’s governor has ordered Sioux Falls plant to remain closed after coronavirus outbreak there
Jacob Bunge – WSJ
Smithfield Foods Inc. will keep its Sioux Falls, S.D., pork plant closed indefinitely at the urging of the state’s governor, though the company’s chief executive warned of dire consequences for farmers and consumers.
The Fed’s Emergence as a Power Player Poses New Risks to Its Independence; The central bank acted quickly to address the coronavirus crisis, but the moves could drag it into a partisan battleground
Greg Ip – WSJ
On Wednesday, investors put the probability that Ford Motor Co. would default on its debts at around 20%. By Friday, that had plunged to 14%. What happened? In between, the Federal Reserve announced that as part of its extensive new programs to support the economy, it would buy bonds that had been investment grade until March 22 but no longer are, a category that includes Ford.
Cash Dwindles, ‘Extinction-Level Event’ Looms: Cannabis Weekly
Kristine Owram – Bloomberg
Several firms will run out of cash in 10 months or less: study; Capital raised fell 69% in March from a month earlier
Several cannabis companies are set to run out of cash in the next few months as capital markets grind to a standstill. An analysis of 33 firms tracked by trade publication Marijuana Business Daily found that eight don’t have enough funding to last more than 10 months. It looked at the companies’ operating cash flow, cash on hand, unused credit facilities and new debt or equity and subtracted capital expenditures and debt due in 2020 to reach the conclusions, which were detailed in a presentation last week.
Treasury’s Muzinich Wields Wall Street Skills to Fight Economic Crisis; Department’s No. 2 combines finance expertise with collegial style to win trust of lawmakers
Kate Davidson – WSJ
Justin Muzinich joined the Trump administration in 2017 to help shepherd a landmark tax overhaul intended to boost growth. Three years later, he is a key player in the effort to keep the U.S. economy from collapsing.
‘Champagne’ of tea lost as coronavirus imperils supplies; Leaves used to make world’s best brew are now too long and hard to pick
Benjamin Parkin in New Delhi and Emiko Terazono- FT
Coronavirus lockdowns in India and Kenya are threatening global tea supplies, with traders racing to secure stocks. In India, which is in the midst of a three-week shutdown to stop the virus spreading, production in the top growing regions of Assam and Darjeeling has ground to a halt just as the plucking season was due to begin.
Federal Reserve has encouraged moral hazard on a grand scale; Chair Powell has gone from preaching about credit risks to buying junk bond funds
Jonathan Tepper – FT
We have never seen countrywide lockdowns to prevent the spread of a virus. It is right that governments compensate citizens for quarantines that prevent them from working and central banks prevent a short-term liquidity crisis from becoming a crisis of solvency. But the response must not be a cover to bail out bust borrowers and out-of-pocket speculators.
House-bound bankers pine for office comforts in rush of bond sales; Heavy issuance is complicated by slow internet, ‘wet’ signatures and lively children
Joe Rennison and Tommy Stubbington – FT
Jeff Warren’s commute used to be a 15-minute walk through New York City to Goldman Sachs’ headquarters in southern Manhattan. Since the coronavirus pandemic struck, it has become a 15-second climb to his mother-in-law’s attic.
Oil Traders Squeezed as Glut Fills Storage at Mideast Hub
Anthony Di Paola and Verity Ratcliffe – Bloomberg
Fujairah storage operators deny requests as all tanks leased; Biggest oil-producing region is no haven for surplus barrels
With the coronavirus choking fuel demand and the world awash in surplus crude, even the Middle East’s main oil-trading hub has run out of room to store unwanted barrels. Terminal operators at Fujairah in the United Arab Emirates say they’re turning down requests from traders and refiners to store crude and refined products, whereas a year ago they had ample space. The port’s 14 million barrels of commercial crude-storage capacity is just a fraction of what Saudi Arabia and Abu Dhabi provide for their state oil companies.
Investment Bank Consolidation Likely Amid Virus Fallout: Report
Deirdre Hipwell – Bloomberg
A “new wave of consolidation” among global investment banks could be triggered by the coronavirus pandemic, according to a new report by Oliver Wyman and Morgan Stanley.
U.S. Treasury liquidity on the mend, but without Fed remains fragile
Gertrude Chavez-Dreyfuss, Ross Kerber – Reuters
Some measures of liquidity in the $17 trillion U.S. Treasury market are almost back to normal, thanks to the Federal Reserve’s giant purchases, after drying up two weeks ago at the height of the coronavirus panic, but trading conditions remain challenging.
Trading gains for big U.S. banks may not last past first quarter
Imani Moise, David Henry – Reuters
Big U.S. banks made a pretty penny in trading during the first quarter as the coronavirus pandemic caused wild market swings, analysts said, but those gains will likely be overshadowed by declines in other businesses and a bleak outlook for the rest of the year.
Covid-19 Will Redefine What It Means to Feel Safe
Rosalind Mathieson – Bloomberg
History has shown us that the world can look quite different when it comes out the other side of a crisis. Without a doubt, the challenge of combating the coronavirus will change us in many ways: Culturally, how we work, how we study, how we socialize. It’ll alter our economies, the way governments behave and how they interact — with both their people and each other.
Some Companies Are Too Connected to Fail; Policy makers must act now to lower the risk of cascading bankruptcies.
Peter R. Orszag – Bloomberg
Given Covid-19’s reach through the economy, cascading bankruptcies loom as a major threat. These happen when one company’s failure to pay its bills weakens the financial health of another, which in turn undermines the viability of yet another and so on, causing a chain reaction. Economic stress from the present pandemic is far more diffuse than it was during the 2008-2009 crisis, and this time the firms that pose the greatest danger are not limited to the financial sector.
Kashkari Says U.S. May Face 18 Months of Rolling Shutdowns
Matthew Boesler – Bloomberg
Without an effective therapy or a vaccine for the novel coronavirus, the U.S. economy could face 18 months of rolling shutdowns as the outbreak recedes and flares up again, Federal Reserve Bank of Minneapolis President Neel Kashkari said.
Exchanges, OTC and Clearing
NYSE President: Industries are coming together to combat the coronavirus in a way we haven’t seen since WWII—and that matters; They’re part of the concerted effort to battle the pandemic across the U.S.
Stacey Cunningham – Fortune
At this point, it’s clear that victory in the fight against COVID-19 in the U.S. will require a concerted effort across the country. While individuals, medical professionals, first responders, and government agencies are on the frontlines of this battle, corporations have an important role to play in supporting efforts to flatten the curve.
Market Pulse on ESG with Savita Subramanian
Eurex expands reach of its OTC clearing services to Japan
Further potential for Eurex Clearing to increase activity in euro clearing; Japanese banks to benefit from a one-stop-shop for their euro listed and OTC fixed income business
Japan’s Financial Services Agency (FSA) has granted Eurex Clearing a license as a “foreign financial instruments clearing organization”. This enables Eurex’s central counterparty to offer its clearing services not only in the European Union and the U.S. but also in Japan.
Simplifile Processes Its 100 Millionth Document for E-recording; Adds Over 2,400 new submitters in March 2020
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that Simplifile processed its 100 millionth document on April 1 and added more than 2,400 new submitters in March 2020. Simplifile is part of ICE Mortgage Services, which applies technology and high-capacity infrastructure to make the mortgage process electronic and more efficient.
Additional Guidance on the Conduct of General Meetings During Elevated Safe Distancing Period; Joint Statement by Accounting and Corporate Regulatory Authority, Monetary Authority of Singapore and Singapore Exchange Regulation
The Accounting and Corporate Regulatory Authority (ACRA), the Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX RegCo) have prepared a checklist to guide listed and non-listed entities on the conduct of general meetings during the period when elevated safe distancing measures are in place.
An Ancient Computer Language Is Slowing America’s Giant Stimulus
Ian King – Bloomberg
Unemployment systems run spaghetti code that’s hard to change; Pandemic, economic shock expose shortage of COBOL programmers
The Covid-19 pandemic has exposed aging, inflexible computer systems at the heart of the U.S. economy — and a shortage of experts to fix the problem. This is slowing the government’s effort to get billions of dollars in stimulus checks to millions of newly unemployed citizens.
Slack’s Stewart Butterfield on Managing Through Fear and Exponential Growth; “Everything I’d tried to accomplish as CEO over the past five years … just magically seemed to happen,” he says of the online collaboration app.
Nico Grant – Bloomberg
For many companies struggling to adapt to the shelter-in-place era, Slack has been as indispensable as toilet paper and canned beans. The company’s workplace chatrooms were popular in some industries—media, especially—even before the Covid-19 pandemic, but they’ve been essential equipment as the coronavirus has spread.
How Fintech Can Revolutionize The Way We Get Paid (And Thus Contribute To Economic Growth)
Michael Truschler – Entrepreneur
When you ask people what they love about their company, the answer will range from everything like the company culture and the free fruit bowl in the office, to the discounted gym memberships they get and the funky coffee machine in the pantry. However, what they rarely mention is that financial wellness is a top priority- and that goes beyond receiving a decent salary. It genuinely means financial security, and the ability to access your salary when you need it the most.
Fifth-Largest US Accounting Firm Partners With Crypto Tax Tech Company
Samuel Haig – CoinTelegraph
Blockchain-native software and tax services company, Lukka, has been chosen to provide crypto taxation software to the fifth-largest accounting firm in the United States, RSM.
Cointelegraph spoke to Lukka CCO Jeremy Drane, and RSM senior manager of international tax and blockchain/cryptocurrency, Jamison Sites, to find out more about the partnership between the two firms.
EU Lawmakers Want to Create a New Regulator for Crypto ‘Blind Spots’
Samuel Haig – CoinTelegraph
The European Parliament has published a study identifying a number of legislative blind spots pertaining to crypto asset oversight in the European Union.
The report identifies stablecoins, token-based fundraising, and the threat of money laundering through crypto mining among recent industry developments necessitating a regulatory response.
10 Tips to Keep Your Crypto Portfolio Profitable During a Crisis
Marcel Pechman – CoinTelegraph
Dennis Gartman began his trading career in the 1970s and over the years he amassed a ton of experience trading Forex, treasuries, stocks, commodities, and derivatives. Those familiar with Gartman will know that he wrote a very prestigious daily newsletter for 30 years, and it is held in high regard by institutional investors.
Known for his pragmatism and skepticism, Gartman crafted some of the most contrarian trading calls ever registered, often hitting the bullseye. Gartman eventually wrote down some “rules of trading,” and these have been revised and honed over time.
Crypto Exchanges See Bitcoin Reserves Drop by 70% Since Black Thursday’s Market Rout
Jamie Redman – Bitcoin News
Since the market carnage on March 12 otherwise known as Black Thursday, the exchange Bitmex has seen 36% of the trading platform’s bitcoin reserves withdrawn. A few other well-known crypto exchanges have seen cold wallets drained, while other trading platforms have witnessed reserve increases.
This Top Crypto’s Grim Pattern Shows a Massive Decline May Be Imminent
Cole Petersen – News BTC
Chainlink’s immense bullishness seen throughout 2019 spilled into 2020, with the market-wide uptrend in January and February sending the crypto to fresh all-time highs. Even in the face of intense bearishness over the past few weeks, LINK has been able to incur some parabolic momentum.
This momentum, however, may not last too long, as the cryptocurrency is currently flashing some signs of weakness as it forms a pattern strikingly similar to that seen by Ethereum before its decline from its 2020 highs of $290.
This Is Trump’s Fault; The president is failing, and Americans are paying for his failures.
David Frum – The Atlantic
“Idon’t take responsibility at all,” said President Donald Trump in the Rose Garden on March 13. Those words will probably end up as the epitaph of his presidency, the single sentence that sums it all up.
Trump learned of a memo in January warning ‘half a million American souls’ could die of coronavirus, and he was displeased his adviser put it in writing
Michelle Mark -Business Insider
President Donald Trump was reportedly told as early as January about a memo written by one of his advisers that warned of mass death in the United States from a coronavirus outbreak, though he has denied that he saw the memo at the time.
Market And Business Ties Often Determine Where COVID-19 Supplies Go
Brian Mann- NPR
The Trump administration has enlisted some of the biggest corporations in America to help expand the supply of medical equipment needed to fight COVID-19 – but many of those supplies aren’t going to the cities and hospitals where they’re needed most.
He Could Have Seen What Was Coming: Behind Trump’s Failure on the Virus; An examination reveals the president was warned about the potential for a pandemic but that internal divisions, lack of planning and his faith in his own instincts led to a halting response.
Eric Lipton, David E. Sanger, Maggie Haberman, Michael D. Shear, Mark Mazzetti and Julian E. Barnes – NY Times
“Any way you cut it, this is going to be bad,” a senior medical adviser at the Department of Veterans Affairs, Dr. Carter Mecher, wrote on the night of Jan. 28, in an email to a group of public health experts scattered around the government and universities. “The projected size of the outbreak already seems hard to believe.”
Trump’s Big Oil Deal Won’t Save the Weakest of Shale Producers
Stephen Cunningham – Bloomberg
U.S. contributing market-based declines to broad output deal; Nearly 40% of producers face insolvency at $30 oil: survey
President Donald Trump said the “big Oil Deal” sealed on Sunday will save hundreds of thousands of American jobs. But the agreement he brokered depends on a sharp downturn in shale that will likely bring about a wave of bankruptcies and job cuts.
U.K.’s Johnson Says He Risked Dying During Virus Treatment
Alex Morales – Bloomberg
Johnson says ‘things could have gone either way’ in hospital; Parliament to resume on April 21, possibly by video conference
U.K. Prime Minister Boris Johnson praised doctors for saving his life during his week-long hospitalization for Covid-19 treatment that has left him too weakened to resume immediate leadership of the government. Looking pale and gaunt, the premier thanked the National Health Service for the care he had received. In a 5-minute video posted on Twitter on Sunday, he called the health service “unbeatable,” and lauded the “personal courage” of the doctors, nurses, cleaners and cooks who work for it.
One Legacy of Coronavirus Is a Return to Activist Government; The crisis management emerging from the pandemic may result in countries changing their priorities, perhaps taking cues from Angela Merkel.
Alan Crawford – Bloomberg
Today’s political leaders, from Angela Merkel to Donald Trump, are in rare agreement that the fight to defeat the novel coronavirus is a challenge unique since 1945. “We are at war,” is French President Emmanuel Macron’s refrain. In the U.S., Trump has proclaimed himself a “wartime president.”
Coronavirus and the threat to US supremacy
Two questions serve as a reality check on excessive American declinism
Gideon Rachman – FT
At the height of the cold war, Ronald Reagan argued that rivalries between nations would vanish if the world was invaded by aliens. The former US president was too optimistic. Today, the US and China are facing a common threat in the form of coronavirus. Far from uniting these two rivals, the pandemic seems to be intensifying their competition.
CARES Act 2020: Retirement Fund Access and Student Loan Relief
The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 provides more than $2 trillion in relief for businesses and individuals affected by the COVID-19 pandemic. The new law includes provisions that provide temporary support related to retirement assets and student loan payments to help Americans deal with the economic impacts of the pandemic. Here are 4 things to know.
#InThisTogether: Sarah Roberts, FINRA’s BCP Guru
Business continuity planning—or “BCP” for short—is a term most of us have heard. But do we really know what it means? And how important is it leading up to times like these, as we navigate our response to the COVID-19 pandemic? One person who knows the answer to both questions is FINRA’s own Sarah Roberts, an Associate Director in Corporate Real Estate
CFTC Extends Certain Comment Periods in Response to COVID-19
The Commodity Futures Trading Commission today announced that it has voted to extend certain currently-open comment periods in light of the COVID-19 (coronavirus) pandemic. The extensions encompass rules proposed by the Division of Market Oversight (DMO) for which current comment periods started in January and February of 2020.
Dissenting Statement of Commissioner Rostin Behnam Regarding CFTC’s Extension of Currently Open Comment Periods in Response to the COVID-19 Pandemic
I strongly support extending all current open comment periods on rule proposals, which will allow commenters to solely focus their efforts on the immediate personal and professional needs of the day, and ensure – after we collectively get through these uncertain times – that commenters are able to provide the CFTC with the most fulsome comments to these important policy proposals. Unfortunately, today’s Commission action does not extend current open comment periods in any meaningful way, and thus I respectfully must dissent.
Investing and Trading
Put clean energy at the heart of stimulus plans to counter the coronavirus crisis
Dr Fatih Birol – ICE
The impact of the coronavirus around the world and the resulting turmoil in global markets are dominating global attention. As governments respond to these interlinked crises, they must not lose sight of a major challenge of our time: clean energy transitions.
7 principles for a post-coronavirus economy
Henry M. Paulson Jr. – Washington Post
The pandemic crisis has laid bare the fact that while our economy was fundamentally strong before the crisis hit, we have unsustainable levels of income disparity in the United States, with too many people living paycheck to paycheck, afraid of the wolf at the door.
Everything Is Awful. So Why Is the Stock Market Booming? Investors are betting that powerful interventions from Washington will protect the long-term profitability of major companies.
Neil Irwin – NY Times
What on earth is the stock market doing? Death and despair are all around. The number of people filing for unemployment benefits each of the last two weeks was about 10 times the previous record — and is probably being artificially held back by overloaded government systems. Vast swaths of American business are shuttered indefinitely. The economic quarter now underway will most likely feature Great Depression-caliber shrinkage in economic activity.
Investors fear virtual AGMs will shift the balance of power; It might be easier for executives to avoid difficult questions if there is no one in the room
Olaf Storbeck, Attracta Mooney, Jamie Smyth and Patrick Temple-West – FT
With climate change activists staging noisy protests and green-minded investors throwing difficult questions at executives, the shareholder meetings of Australian oil and gas producer Santos are usually combative, drawn out affairs.
How the next euro crisis could unfold; What if Italy cannot service its debt and a future government is tempted to default?
Wolfgang Münchau – FT
This is not a forecast. But I think it is a plausible scenario. After initial relief at the emergency deal struck last week by EU finance ministers, investors will study the small print and conclude the rescue package will have no macroeconomic impact.
Top Pork Producer Shuts Key Plant and Warns of Meat Shortfall
Isis Almeida and Matt Day – Bloomberg
Smithfield closes South Dakota pork facility after virus cases; ‘Impossible’ to keep grocers stocked if plants are shut: CEO
The world’s biggest pork producer is shuttering a major U.S. plant indefinitely after a coronavirus outbreak among employees, with the company warning that closures across the country are taking American meat supplies “perilously close to the edge” of shortfalls.
Global economy already set for historic contraction; Tiger index suggested collapse in activity before the height of the coronavirus crisis
Chris Giles – FT
The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index.
Buyers needed for $3tn of US government debt; Which investors will join the US central bank in the bidding?
Colby Smith – FT
The US Treasury is set to issue trillions of dollars of extra debt this year to fund a historic stimulus programme intended to dull the economic pain of the coronavirus outbreak. And one buyer dwarfs all others: the Federal Reserve.
The Coronavirus Has Already Made Us Poorer for Years to Come
Matthew C. Klein – Barron’s
Whatever happens next, the events of the past six weeks will scar the U.S. economy well into the 2030s, if not beyond. The Federal Reserve, Congress, and the U.S. Treasury may believe they have acted quickly and decisively to support the economy, but they were nevertheless too slow to prevent trillions of dollars of lasting damage. Tens of millions of Americans are already paying the price, and they will continue to do so for a long time.
Gold Bugs Finally See Their Predictions of Doom Coming True
Eddie van der Walt, Ranjeetha Pakiam, and Jan-Patrick Barnert – Bloomberg
Bullion is challenging Treasuries as the best-performing haven; Even mainstream analysts and investors are turning to gold
For years, gold bugs were relegated to the fringes of financial markets. Often viewed by mainstream investors as tinfoil-hat conspiracists with basements full of beans and bottled water, their warnings sounded apocalyptic: a coming collapse in financial assets, widespread devaluation of paper money and global disasters that erode civil liberties.
Call for super-rich to donate more to tackle coronavirus pandemic; While some billionaires have pledged vast chunks of their wealth others have been criticised for not giving enough, or even at all
Rupert Neate – The Guardian
The world’s richest people are being urged to urgently donate big chunks of their fortunes to the global effort to tackle the coronavirus pandemic, and help millions of people across the globe whose lives have been thrown into crisis by Covid-19.
How the Pandemic Wiped Out Oil Demand Around the World
Christopher Sell – Bloomberg
U.S. consumption has fallen to the lowest in at least 30 years; Crude demand in India plunged as much as 70% due to lockdowns
Global oil demand is being destroyed as the coronavirus forces people around the world to remain indoors and avoid all unnecessary travel.
Quarantine Bakers Are Making Flour a Hot Commodity; An ongoing global pandemic has turned many into avid home bakers, forcing suppliers to ramp up production.
Lydia Mulvany and Michael Hirtzer – Bloomberg
The art of baking at home, while not exactly lost, has been on a decline as Americans slowly shifted from eating in to dining out. But with over 90% of the U.S. under some form of stay-at-home order due to the ongoing pandemic, it appears that an increasing number are dusting off old recipes for breads, pastries, cookies and cakes.
Delta Cut to Junk by Fitch as 35,000 Workers Take Leave
Mary Schlangenstein and Hailey Waller – Bloomberg
Move was part of general downgrade of U.S. airline industry; Trump has emphasized urgent need to ‘save’ the airlines
Delta Air Lines Inc. was cut to junk at Fitch Ratings as part of a general downgrade of the U.S. airline industry and its ability to service debt. The assessment adds urgency to the Trump administration’s desire to save the industry.
Trapped UK property fund investors charged £10m a month; At least 10 daily traded funds managing more than £13bn in assets are suspended
Siobhan Riding and George Hammond – FT
Retail investors trapped in UK property funds have forked out nearly £10m in fees over the past month, according to FTfm estimates, despite not being able to sell out and with questions hanging over the value of their investments.
Wall Street slashes forecasts on US fund managers; Investment groups suffered record withdrawals in March as coronavirus pandemic hit the markets
Chris Flood – FT
Analysts have cut their profit forecasts for US asset managers after the coronavirus pandemic led to a global sell-off across financial markets in March.
Coronavirus: is investment management the weak link? The threat of another financial crisis stems from a less regulated part of the industry
Robin Wigglesworth – FT
Even at the depths of the 2008 financial crisis, Cirque du Soleil’s acrobats kept twirling. While other companies tightened their belts or went under, the Canadian circus expanded its roster of flamboyant shows. But the coronavirus crisis proved a vault too far.
Investment banks braced for pandemic earnings wipeout; European lenders seen as more vulnerable, with Wall Street poised to grab market share
Stephen Morris – FT
Global investment banks risk seeing their annual earnings wiped out by the coronavirus crisis, with European banks more vulnerable than their more profitable US counterparts.
BlackRock to advise EU on green regulation for banks; Contract will help boost US asset manager’s often-criticised credibility on sustainable investing
Patrick Temple-West in Tampa and Mehreen Khan- FT
BlackRock has secured a key role in advising the EU on how to integrate sustainability into banking regulation, underlining its close relationship with policymakers around the world and marking a win in the asset manager’s efforts to burnish its climate-protecting credentials.
Private-Equity Firms Scramble to Shore Up Coronavirus-Hit Holdings; Any hope of selling investments profitably is out the window for now
Miriam Gottfried – WSJ
Private-equity executives have spent the past five years bemoaning the difficulty of investing profitably with stocks at elevated levels. Now, they’re getting a taste of what they wished for—and a whole new set of headaches.
Another Tail Risk Hedge Fund Had Eye-Popping March Returns
Erik Schatzker – Bloomberg
LongTail Alpha fund gained almost 1,000% as volatility soared; Founder says it’s not yet time to take more risk in markets
A California hedge fund run by a Pacific Investment Management Co. veteran gained 10-fold in March, rewarding investors who bought its “tail risk” protection against a market collapse.
Luckin debacle shakes investor faith in New York’s China listings; Implosion in coffee chain’s stock puts corporate governance risks back in spotlight
Hudson Lockett, Thomas Hale and Henny Sender- FT
Luckin Coffee’s implosion has shattered the faith of some international investors when it comes to Chinese companies listed on the world’s biggest stock exchange.
Investment banks braced for pandemic earnings wipeout; European lenders seen as more vulnerable, with Wall Street poised to grab market share
Stephen Morris – FT
Global investment banks risk seeing their annual earnings wiped out by the coronavirus crisis, with European banks more vulnerable than their more profitable US counterparts.
Malaysian Banks Unswayed by Worldwide Moves to Cut Dividends
Yantoultra Ngui – Bloomberg
Top three banks announced $2.9 billion in dividends in 2019; Central bank has cut rates, ordered stress test amid pandemic
As banks elsewhere scrap or defer dividend payments, investors in Malaysian lenders can still expect their usual cash rewards. Malayan Banking Bhd., the biggest lender by market value, plans to keep its payout ratio of as much as 60% its profit after tax and minority interests, on top of paying a 2019 interim dividend on May 6, its spokesperson said. CIMB Group Holdings Bhd. is more cautious, saying dividend payments will depend on profits and liquidity needs even if banks currently have enough capital.
U.K. Becomes Fifth Country With More Than 10,000 Virus Deaths
Sara Marley – Bloomberg
The U.K. became the fifth country to record more than 10,000 deaths from the coronavirus as officials warned the country could eventually become the hardest hit in Europe.
Japan urges public to reduce social contacts by 80%; Experts fear half-measures could hurt the economy without stopping spread of coronavirus
Robin Harding – FT
Japan is urging the public to step up its compliance with a partial lockdown amid concerns it could leave the country stuck in the worst of both worlds: forcing the economy to a standstill without halting the spread of coronavirus.
Dumped Milk, Smashed Eggs, Plowed Vegetables: Food Waste of the Pandemic; With restaurants, hotels and schools closed, many of the nation’s largest farms are destroying millions of pounds of fresh goods that they can no longer sell.
David Yaffe-Bellany and Michael Corkery – NY Times
In Wisconsin and Ohio, farmers are dumping thousands of gallons of fresh milk into lagoons and manure pits. An Idaho farmer has dug huge ditches to bury 1 million pounds of onions. And in South Florida, a region that supplies much of the Eastern half of the United States with produce, tractors are crisscrossing bean and cabbage fields, plowing perfectly ripe vegetables back into the soil.
The Costly Toll of Not Shutting Down Spring Break Earlier
People got sick — and some died — after attending crowded parties and theme parks in Florida as the coronavirus spread.
Patricia Mazzei and Frances Robles – WSJ
You could find Beatriz Diaz at this spring’s Winter Party Festival in Miami Beach, giving out hand sanitizer.
She came to the rescue during the Great Depression. Now her work is still aiding jobless Americans
Annalyn Kurtz, CNN Business
Sometimes great ideas are born in moments of crisis. Such was the case for one Great Depression heroine, born 140 years ago today, whose life’s work is still benefiting millions of jobless Americans during the coronavirus pandemic. Meet Frances Perkins: the first female member of a presidential cabinet, and the chief architect behind many New Deal programs that live on 85 years later.
Empty pews, empty collection baskets: coronavirus hits U.S. church finances
Michelle Conlin – Reuters
St. Anselm Roman Catholic Church in New York’s Brooklyn borough is used to limping along, month after month, at a budget deficit of several thousand dollars a week.
Americans Most Likely to Be Infected: the Faithful, Jailed or Old; Across the U.S., nursing homes, prisons and houses of worship are danger spots
Gabrielle Coppola and Edvard Pettersson – Bloomberg
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. Seventy-one people connected to a church in California fell ill. Twenty-one inmates and guards were sickened at a Georgia prison that holds 730 people. More than 260 residents of New Jersey nursing homes died.
History’s deadliest pandemics, from ancient Rome to modern America; Centuries before coronavirus, plague, smallpox, yellow fever and other contagions killed hundreds of millions around the world
Michael S. Rosenwald – Washington Post
The novel coronavirus has taken just a few months to sweep the globe. How many will die, how societies will change — those questions are impossible to fathom as the disease rages. But history shows that past pandemics have reshaped societies in profound ways. Hundreds of millions of people have died. Empires have fallen. Governments have cracked. Generations have been annihilated. Here is a look at how pandemics have remade the world.