Microsoft and OpenAI say hacking groups are using AI as part of cyberattack efforts

Feb 19, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

Happy Presidents Day, or as I like to call it, National Mattress Sale Day.

The New York Stock Exchange, Nasdaq Stock Market, over-the-counter, and bond markets will close on Monday for Presidents Day, a U.S. federal holiday commemorating George Washington’s birthday on February 22, 1732, and Abraham Lincoln’s on February 12, 1809. They will reopen on Tuesday at 9:30 a.m. and 8 a.m. respectively, Barron’s reported. Banks are closed for the Presidents Day holiday, Yahoo Finance reported. It is a granted day for John Lothian News, which means the staff helps prepare this newsletter and then are given the rest of the day off. There will be no JLN Options today.

I have written a commentary about all the goodwill expressed from my social media posts about being named to the FIA Hall of Fame and how I have used goodwill over the years to build John J. Lothian & Company, Inc. and serve my readers and industry. The title of the commentary is “The Power of Goodwill, Hard Work, Luck and Helping Other People.”

I have stated that I think the AI boom is the latest iteration of the PC-driven productivity boom of the late 1990s. The Wall Street Journal has a story today about how early adopter firms in AI are putting the technology to use. The story is titled “How Companies Are Starting to Use Generative AI to Improve Their Businesses” with the subheadline “Early adopters are putting a lot of money into these new systems, and they are finding it paying off.”

There is a great gambling addiction case study story in The Wall Street Journal about a psychiatrist named Kavita Fischer who found herself trapped in a cycle of online gambling addiction, despite attempts to quit. Initially winning $500,000 in a streak, she hoped to clear her six-figure debt. However, the industry’s use of data analytics and incentives, such as bonus credits and VIP treatment, kept her hooked. Despite acknowledging her problem, Fischer struggled to withdraw her winnings and continued to gamble. This case underscores the challenges individuals face in overcoming gambling addiction, even when equipped with professional knowledge of human behavior and impulse control.

Peak6’s Jenny Just joined Adam Mendler on Episode 213 of Thirty Minute Mentors to share her journey and her best lessons and advice. They discussed a wide range of topics, including entrepreneurship, leadership, decision-making, risk management, investing, poker and managing personal and professional relationships.

Sigma Broking has named Gary Pettit, former UK head of ED&F Man Capital Markets, as its new CEO in London, marking his return just a year after departing from ED&F Man’s brokerage division, FOW reported.

The SEC Historical Society shared on LinkedIn that this week in 1973, President Nixon nominated G. Bradford Cook, former director of market regulation, as chairman of the SEC. However, Cook was forced to resign less than three months later due to scandal.

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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The IFRS Sustainability Symposium 2024 is Thursday, February 22, at the Javits Center, 429 11th Ave, New York City. This in-person event with a virtual option is a full-day program about key developments across the sustainability disclosure landscape. Keynotes will be delivered by Fiona Basset, CEO of FTSE Russell; Emmanuel Faber, ISSB chair; Andrew Liveris, former chairman and CEO of Dow Chemical Company; Brian Moynihan, chair of the board and CEO of Bank of America. This seminar is targeted to the information needs of companies preparing to apply the ISSB Standards; ESG service providers; ESG data analytics providers; accounting, assurance, and management consulting firms; asset managers and asset owners using ESG in their investment process; law firms with corporate clients looking for counsel in compliance, and professional organizations in accounting and governance. Learn more and register here.

Our most read stories from our previous edition of JLN Options were:
Stocks are vulnerable to a 5% ‘air-pocket drawdown’ as greedy traders short volatility, research firm says from Business Insider.
Nvidia earnings will put an entire stock market meme to the test. Again. from Yahoo Finance.
2 Financial Stocks That Stand to Gain in a Shaky Market from Barron’s. ~JB

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

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The Power of Goodwill, Hard Work, Luck and Helping Other People
JohnLothianNews.com

My posting of the recent Hall of Fame induction news and my two commentaries to LinkedIn and Facebook produced an onslaught of congratulatory comments. It also produced many other comments lauding me for my contributions to the industry, hard work and more. It was a tremendous display of the goodwill that I have created over the years through my work.

Read more »

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Dave Ramsey Tells Millions What to Do With Their Money. People Under 40 Say He’s Wrong; Young adults are rejecting the finance guru’s advice to live frugally while getting out of debt
Julie Jargon and Ann-Marie Alcantara – The Wall Street Journal
On their own for the first time, young professionals are craving sound financial advice. They just don’t want to hear it from Dave Ramsey. Ramsey, the well-known and intensely followed 63-year-old conservative Christian radio host, has 4.4 million Instagram followers, 1.9 million TikTok followers and legions more who listen to his radio shows and podcasts. His message is brutal and direct: Avoid debt at all costs. Pay for everything in cash. Embrace frugality.
/jlne.ws/48qOGTI

***** Frugality? We can’t all be Scottish!~JJL

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Top Investors Share the Toughest Lessons They Had to Learn; No one gets good at financial decision-making without taking the risk of being wrong and then figuring out how to adjust.
Suzanne Woolley – Bloomberg
Get a sharp investor talking for long enough, and their stories often become revealing. You’ll undoubtedly hear about their wins but also their most painful mistakes. We asked financial pros to tell us about experiences that left a mark-and, more important, what they managed to learn from them. Their responses have been edited for clarity and length.
/jlne.ws/49FAmba

***** Lessons learned are very important. If you are taught a lesson and don’t remember it, you will be taught it again.~JJL

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The Meltdown in Chocolate Is Coming; Decades of non-investment are coming home to roost.
Javier Blas – Bloomberg
The evening I learned the unspoken truth about the cocoa market I was in Yamoussoukro, the colossal capital city of Ivory Coast. “The problem with cocoa is that’s a poor man’s crop,” explained my dining companion, a government official-turned-businessman. “Do you see any commercial plantation around here? No,” he said. “And do you know why? Because prices aren’t high enough.” Only because millions of West African farmers saw cocoa as their only way to escape abject poverty, the world had plentiful supply and low prices. As a result, you and I have been enjoying the pleasures of chocolate on the cheap for decades.
/jlne.ws/42RC1rR

****** Brace yourselves, chocoholics! The chocolate apocalypse is upon us. ~JJL

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Stock Markets Are Driving a New American Century; The US’s growing financial dominance may be making up for its declining influence in other realms.
Tyler Cowen – Bloomberg
The worldwide dominance of US equities is increasingly obvious. Of the top 10 components of the MSCI global stocks index – which itself now consists of about 70% US stocks – eight are US technology companies. The S&P 500 has breached the 5,000 level. On most days, Apple or Microsoft alone is more valuable than the entire stock markets of major European countries. By one estimate, last year publicly traded US firms accounted for 44.9% of global market capitalization. All these gaudy numbers raise a question: Is the world on the cusp of a new American century, at least in the corporate realm? The answer is a qualified “yes.”
/jlne.ws/42N5qUg

****** My question is how many “New American Centuries” will we have in the next 100 years?~JJL

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Friday’s Top Three
Our top story on Friday was Lutnick on FMX vs CME: “Put us toe-to-toe in the ring and we’re on.” from MarketsMedia’s The Desk. Second was The Financial Times’ Hedge fund stampede into cocoa futures fuels record price jump. Third was JPMorgan’s Exit From Climate Group Sparks ‘Greenhushing’ Debate, from Bloomberg.

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Lead Stories

Microsoft and OpenAI say hacking groups are using AI as part of cyberattack efforts
Daniel Howley – Yahoo Finance
Microsoft (MSFT) and OpenAI released a report on Wednesday saying that hacking groups from China, Iran, North Korea, and Russia are increasingly probing the use of AI large language models (LLMs) to improve their chances of successfully launching cyberattacks. According to the report, the state-affiliated groups are using AI to understand everything from satellite technology to how to develop malicious code that can evade detection by cybersecurity software.
/jlne.ws/3OMRjs6

Systemic Risk Concerns Grow Among Money Managers as Real Estate Woes Cause Turmoil; US CRE, China real estate most likely sources of credit event; Latest inflation figures have lowered likelihood of rate cuts
Neil Callanan – Bloomberg
Fears of a systemic credit event are growing among fund managers as alarms sound in property markets around the world. About one in six of those polled considers such a crunch to be the biggest tail risk facing markets, compared to about one in 11 in December, according to Bank of America Corp.’s latest Global Fund Manager survey. The deepening disquiet in US commercial real estate and Chinese property markets means it’s now the third-biggest worry for respondents, lagging higher inflation and geopolitics.
/jlne.ws/3SNk350

How Texas came to rival New York as a finance hub
David Hollerith – Yahoo Finance
JPMorgan Chase (JPM) is putting up a massive new headquarters in midtown Manhattan. But New York is no longer the state where it employs the most people. Texas is. The country’s largest bank has 31,500 employees in the Lone Star State following an expansion over the last decade highlighted by a four-building, 1-million-square-foot campus in Plano, a suburb of Dallas. That is 2,600 more than it has in New York.
/jlne.ws/3ONwDQE

Can the SEC’s landmark reforms survive a Wall Street fightback? The US securities watchdog is proposing major rule changes in several sectors but market participants are challenging its plans in the courts
Stefania Palma – Financial Times
Hanging on the wall in Gary Gensler’s office is a quote from a letter penned by Felix Frankfurter, later a Supreme Court justice, to President Franklin Roosevelt. It is dated 1934, the year the Securities and Exchange Commission was established to regulate markets. It advises the president to appoint administrators “who have stamina and do not weary of the fight, who are moved neither by blandishments nor fears, who in a word, unite public zeal with unusual capacity.”
/jlne.ws/49CJZaz

SEC’s Gensler plays down hedge fund fears over Treasury dealer rule; New registration regime ‘is primarily about principal trading firms’, says chair of regulator
Kate Duguid, Costas Mourselas and Nikou Asgari and Stefania Palma – Financial Times
The top US securities regulator has played down the impact on hedge funds of a new rule tightening oversight of the Treasury bond market, telling the Financial Times that they are not the main target. Gary Gensler, chair of the Securities and Exchange Commission, said in an interview on Friday that the so-called dealer rule his agency passed this month is more focused on big high-speed trading firms than on hedge funds.
/jlne.ws/3I12YzQ

America’s Oil Power Might Be Near Its Peak; The production growth that blunted surging oil prices is dwindling
Bob Henderson – The Wall Street Journal
A U.S. shale boom that helped suppress oil-price surges over the past two years is waning. The country’s crude oil output is expected to increase by just 170,000 barrels a day in 2024 from last year, down from a jump of 1 million barrels a day in 2023, according to federal record-keepers. That is the smallest annual increase since 2016, not counting the pandemic.
/jlne.ws/3wmTvQH

More Wall Street Firms Are Flip-Flopping on Climate. Here’s Why; Financial giants were already trimming their climate pledges amid Republican attacks. Then came concerns about legal risks.
David Gelles – The New York Times
Many of the world’s biggest financial firms spent the past several years burnishing their environmental images by pledging to use their financial muscle to fight climate change. Now, Wall Street has flip-flopped. In recent days, giants of the financial world including JPMorgan, State Street and Pimco all pulled out of a group called Climate Action 100+, an international coalition of money managers that was pushing big companies to address climate issues.
/jlne.ws/3uvWGVQ

Nature Has Value. Could We Literally Invest in It? “Natural asset companies” would put a market price on improving ecosystems, rather than on destroying them.
Lydia DePillis – The New York Times
Picture this: You own a few hundred acres near a growing town that your family has been farming for generations. Turning a profit has gotten harder, and none of your children want to take it over. You don’t want to sell the land; you love the open space, the flora and fauna it hosts. But offers from developers who would turn it into subdivisions or strip malls seem increasingly tempting. One day, a land broker mentions an idea. How about granting a long-term lease to a company that values your property for the same reasons you do: long walks through tall grass, the calls of migrating birds, the way it keeps the air and water clean.
/jlne.ws/3UQqG9H

A Broker’s 34-Year Wait for a Stock-Market Boom; Japan’s Nikkei is set to break the record it set in 1989. One brokerage chief who survived the crash that followed shares what he learned.
Miho Inada – Financial Times
TOKYO-The last time Japanese stocks were at these levels, Hiroyuki Kikuchi celebrated his brokerage’s 40th anniversary at a luxury hotel and hired a composer and band for more than $100,000 to create a ballad titled “Never Say Can’t.” A few months later, on Dec. 29, 1989, the Nikkei Stock Average closed at a record high of 38915.87. Most of the world’s most valuable companies were Japanese. The country seemed on track to surpass the U.S. as the world’s largest economy.
/jlne.ws/3I6tZ4I

How US Regulators Are Overhauling the Treasuries Market
Lydia Beyoud and Liz Capo McCormick – Bloomberg
US securities regulators are rolling out big changes to the market plumbing for US Treasuries. They aim to aid transparency and resiliency to a more than $26 trillion market that helps guide the price of all kinds of securities and loans but whose trading activity is opaque and has suffered from big disruptions. Rules being phased in over the next couple of years will alter the trading infrastructure, operating rules and disclosure requirements for the large private funds operating in the market.
/jlne.ws/3T1k9HQ

Fed’s Barr Says Regulators Are Eyeing Commercial Real Estate Risk; Fed asking if lenders have done enough to brace for bad loans; Central bank steps up pace of issuing findings and downgrades
Katanga Johnson – Bloomberg
US regulators are “closely focused” on risks in commercial real estate loans, and have stepped up downgrades of supervisory ratings on lenders amid new strains on their finances, according to the Federal Reserve’s chief bank watchdog. Supervisors are looking at what banks are doing to mitigate potential losses, how they are reporting risks to their boards and senior management, and whether they have enough reserves and capital to handle CRE loan losses, said Michael Barr, the Fed’s vice chair for supervision, in remarks Friday at Columbia University in New York.
/jlne.ws/3UMgmiW

The Man Who Tamed the World’s Most Troubled Bank; Christian Sewing pulled Deutsche Bank to firmer ground, but investors have yet to fully buy into the comeback story
Patricia Kowsmann – The Wall Street Journal
Christian Sewing barreled down a German autobahn to meet clients in a former milltown when a friend called. Credit traders had zeroed in on Deutsche Bank, the lender Sewing had nursed back to health after he took over five years earlier. It was March 2023 and markets were looking for the next victim after Credit Suisse and two U.S. regional banks collapsed. The cost to insure Deutsche Bank’s debt surged to its highest level since the pandemic.
/jlne.ws/49mcbyE

Craig Wright Trial Includes Ninja Anecdote Cited as Proof He’s Bitcoin Creator Satoshi; On Friday, Craig Wright’s sister Danielle DeMorgan recounted how she once saw him dressed as a ninja and another time he was working in a room full of computers, evidence, she says, he created Bitcoin.
Camomile Shumba – CoinDesk
Crypto Open Patent Alliance’s (COPA) trial to solve the mystery of whether Australian computer scientist Craig Wright is Satoshi Nakamoto, the infamous anonymous creator of bitcoin (BTC), has just completed its second week. The week ended creatively. Wright’s sister Danielle DeMorgan took to the witness stand on Friday to recount a blog post that she wrote that stated when she heard the name Satoshi, a Japanese name, she knew that was Wright. In the blog, DeMorgan recounted the time she saw Wright in the park dressed as a ninja when he was 18 or 19 – a tale she says explains why she connected the dots. She added that she once saw Wright around 2007 or 2008 in a room full of computers and he explained he was working on something important.
/jlne.ws/49hNvr6

Morgan Stanley accused of duping ECB with fake Frankfurt job title; Bank’s ‘head of loan trading’ told court he was instructed not to use his title as it only ‘existed on paper’
Olaf Storbeck – Financial Times
A senior banker has alleged that Morgan Stanley manufactured his job title to dupe European regulators into believing the bank had moved top staff to Frankfurt to comply with post-Brexit rules. The banker joined Morgan Stanley in Frankfurt in April 2021 on a salary of EUR375,000 plus bonus. He was made an executive director, the rank below managing director, and formally given the title of “head of loan trading”.
/jlne.ws/49Cc41G

For Gensler, Financial Risks Lie Where Banks and Non-Banks Meet
Lydia Beyoud – Bloomberg
Gary Gensler is midway through his tenure leading the US Securities and Exchange Commission through a shakeup of financial markets and middlemen, and amid historic changes in the players and what’s being traded. The SEC Chair has completed just over half of his agenda. Here’s what Gensler has in mind for the rest. In a Feb. 14 interview, the former Goldman Sachs Group Inc. executive and three-time financial regulator commented on financial stability, private credit and why he’s wary of mixing banks and crypto. Some hefty and contentious rules, notably on corporate climate disclosures and reworking the trading structure of equities, are still pending. Gensler says he’s looking to lower the cut taken by intermediaries in dealings between investors and issuers to make markets more competitive and efficient. Gensler spoke with a panel of Bloomberg editors and reporters in New York. The interview has been edited for length and clarity.
/jlne.ws/4bEzyVJ

JPMorgan to Pay Over $350 Million for Trade-Reporting Lapses; Bank is also facing questions over handling of Zelle disputes; And in Russia, it’s getting legal demands over halted payments
Hannah Levitt – Bloomberg
JPMorgan Chase & Co. expects to pay more than $350 million to settle regulatory claims that it failed to feed information on trades into market-surveillance systems. The biggest US bank will pay about that much to two US watchdogs and is in advanced talks with a third, the company said Friday in an annual filing. “The firm self-identified that certain trading and order data through the CIB was not feeding into its trade-surveillance platforms,” JPMorgan said, referring to its commercial and investment bank. “The firm does not expect any disruption of service to clients as a result of these resolutions.”
/jlne.ws/3uuiVLP

ETF Firm Hid Role of Barstool’s Dave Portnoy in Launch, SEC Says
Austin Weinstein – Bloomberg
Van Eck Associates Corp. failed to properly disclose the role of controversial social-media influencer Dave Portnoy, founder of Barstool Sports Inc., in helping promote the launch of an exchange-traded fund in 2021, according to the US Securities and Exchange Commission. New York-based Van Eck paid $1.75 million to settle the probe, neither admitting to nor denying the SEC’s findings, the agency said in a statement Friday. Van Eck agreed to a cease-and-desist order and a censure in addition to the civil penalty. A spokesperson for Van Eck declined to comment.
/jlne.ws/4bKRtdi

FTX creditors sue bankruptcy law firm S&C, alleging fraud involvement
Ana Paula Pereira – Cointelegraph
The FTX bankruptcy case has unfolded into a new chapter as the exchange’s creditors have filed a class-action lawsuit against the law firm overseeing the case. In a court filing on Feb. 16, FTX creditors alleged that Sullivan & Cromwell, also known as S&C, actively participated in the “FTX Group’s multibillion dollar fraud,” claiming the company benefited financially from FTX’s fraud.
/jlne.ws/4bEOGCz

OpenAI Deal Lets Employees Sell Shares at $86 Billion Valuation; The tender offer was planned alongside other funding efforts; Company quickly became one of tech’s most valuable startups
Hannah Miller – Bloomberg
OpenAI has completed a deal allowing employees to sell stakes in the company, according to a person familiar with the matter. The tender offer values the artificial intelligence startup at $86 billion, a price that makes OpenAI one of the most valuable startups in the world. Bloomberg previously reported the value and that Thrive Capital, the venture capital firm led by Josh Kushner, would lead the deal.
/jlne.ws/3uDiQW5

Summers Says CRE Is More ‘Urgent’ for Fed Than Capital Rules
Christopher Anstey – Bloomberg
Former Treasury Secretary Lawrence Summers said the Federal Reserve and other agencies are right to be probing financial risks tied to commercial properties, saying this was a more important effort in the near term than its initiative to boost capital standards among big banks. “Regulators are right to be concerned about commercial real estate,” Summers said on Bloomberg Television’s Wall Street Week with David Westin. “The chronic problem in banking is a failure to pay attention to the market value of assets,” and that’s a “particularly pronounced problem with commercial real estate, where there isn’t always a liquid market for properties,” he said.
/jlne.ws/49gIHSV

ASA Submits Comments on One-Minute Trade Reporting Proposal
American Securities Association
The American Securities Association (ASA) today submitted a comment letter to the U.S. Securities and Exchange Commission raising concerns regarding the Municipal Securities Rulemaking Board (MSRB) and the Financial Industry Regulatory Authority’s (FINRA) proposal to shorten the timeframe for reporting transactions in covered fixed income securities from 15-minutes to within one-minute. “Fixed income markets have performed remarkably well despite multiple crises and black swan events. Yet, the SEC is demanding that MSRB and FINRA change rules without identifying any market failure or investor harm,” said ASA President & CEO Chris Iacovella. “The only justification we have gotten for this proposal is that the SEC Chair wants it. Well, we reject that reasoning because this is not a monarchy, and the Chair of the SEC is not our king. We will not hesitate to protect this well-functioning market in court if the SEC finalizes this legally and economically flawed rule.”
/jlne.ws/48jS0QC

Ukraine Invasion

Ukraine Is Promised 1 Million Drones Within a Year by Allies
Natalia Drozdiak, Ellen Milligan and Aaron Eglitis – Bloomberg
A coalition of allies aims to deliver 1 million drones to Ukraine within a year, as the country struggles to cope with ammunition shortages and a funding fight in Washington. “The primary task at the moment is to supply Ukraine with these very necessary technologies, also to tilt the balance, especially in the context when there are still some shortages of ammunition,” Andris Spruds, Latvia’s Defense Minister, said in an interview in Brussels on Thursday.
/jlne.ws/49gLADh

UK, Allies Look to Arm Ukraine With AI-Enabled Swarm Drones; Technology could help Ukraine overwhelm some Russian targets; Germany’s Scholz calls on EU allies to increase Ukraine aid
Alex Wickham, Ellen Milligan, and Alberto Nardelli – Bloomberg
The UK is working with nations including the US to provide Ukraine with thousands of new AI-enabled drones that could swarm Russian targets simultaneously, according to people familiar with the matter. Western military planners developing the technology believe it could allow Ukraine to overwhelm certain Russian positions with the unmanned vehicles, said the people, who asked not to be identified discussing sensitive matters. The drones could be sent to Ukraine within months, they said, while warning the timeline could slip.
/jlne.ws/49BWxPm

Drone Warfare, AI Risks Are Among the Big Munich Talking Points; Rise of drones also creates need for better air defenses; Election security at risk in a big global year for voting
Aggi Cantrill – Bloomberg
Two years into Russia’s invasion, advances in drone warfare have been hailed as a way for Ukraine to partly neutralize Russia’s military advantage. The relatively inexpensive drones have allowed Kyiv’s forces to strike back, including within Russia – UAVs have reached targets hundreds of miles from the border – although officials at the annual Munich Security Conference said the advances also come with risks.
/jlne.ws/3wmxFwG

Ukraine’s greatest victory becomes another countless victim of Russia’s war
Verity Bowman – The Telegraph
It was one of the greatest victories of the war. Ukrainian troops marched through the streets of Kherson, waving their nation’s flag high above their heads in awe of what they had achieved. Children wrapped in yellow and blue raced into their arms and women threw endless streams of flowers into the air. At the time, many of those who had lived under Russia’s occupation described the day Ukraine liberated the city as the best moment of their lives.
/jlne.ws/49IdojJ

Ukraine’s Allies Are Gaming Out a World in Which the US Retreats; Leaders, defense officials met at Munich security conference; Stalled US aid to Ukraine added to the meeting’s pessimism
Natalia Drozdiak, Courtney McBride, and Arne Delfs – Bloomberg
NATO members now talk privately about a Russian attack on one of them as a danger that demands an urgent response, as they grow to doubt that the US will maintain its traditional role of protecting Europe as part of the alliance. On Friday President Joe Biden did his best to rule out the word ‘panic,’ but in tip-toeing around it did more than anyone else to describe Europe’s mood.
/jlne.ws/3uH2rjt

How Kharkiv’s tech start-ups became the ultimate test of business resilience; Ukraine’s entrepreneurs and engineers show how to keep going during extreme disruption
Alec Russell – Financial Times
/jlne.ws/49zUE5C

Israel/Palestine Conflict

Houthi Strikes Force Crew to Abandon Ship for First Time; Crew from the Rubymar cargo carrier being taken to Djibouti; Militants have been attacking merchant shipping for months
Omar Tamo, Mohammed Hatem, and Alex Longley – Bloomberg
The crew of a commercial ship in the Red Sea abandoned the vessel following a Houthi attack – the first such evacuation since the militant group began menacing trade in the vital waterway late last year. The strikes on the Rubymar, a relatively small cargo ship, were on the engine room and at the front of the vessel, a company official at GMZ Ship Management Co. in Lebanon said by email. There have been no reports of injuries to the crew, who are being taken to Djibouti, the official said. The UK Navy said the ship is continuing to receive military assistance.
/jlne.ws/3wmGua1

The extremists driving Netanyahu’s approach to war with Hamas; Once seen as fringe figures, ministers Bezalel Smotrich and Itamar Ben-Gvir oppose a ‘reckless’ ceasefire deal in Gaza
Neri Zilber – Financial Times
When Benjamin Netanyahu returned to power in Israel, he insisted his hands would be “firmly on the steering wheel” despite the contentious presence of ultranationalists in his coalition government. Yet 14 months later, with Israel at war with Hamas, the key far-right figures once seen as fringe extremists – Bezalel Smotrich, finance minister, and Itamar Ben-Gvir, national security minister – appear to wield more influence than ever.
/jlne.ws/3SIWMBw

Exchanges, OTC and Clearing

Euronext boss ‘optimistic’ IPO market will come back in 2024; Revenue at the pan-European exchange group increased 3.9% in 2023
Jeremy Chan – Financial News
Euronext chief executive Stephane Boujnah said he was optimistic that 2024 will see a revival in IPOs after a two-year drought. “We are seeing more private investors looking for an exit into public markets in an environment where the costs of capital and debt have changed because of interest rates,” he said in a 15 February media call announcing the exchange’s full-year results.
/jlne.ws/3wlGUNK

ASX Limited – 2024 Half-Year Results Presentation And Speaking Notes
ASX
Attached is a copy of the speaking notes and slides for the 2024 Half-Year Financial Results presentation. Release of market announcement authorised by: Johanna O’Rourke Group General Counsel and Company Secretary
/www.asx.com.au/about/media-centre

Market Release
ASX
ASX Limited Half-Year Results to 31 December 2023 (1H24) Key financial highlights (vs prior corresponding period of 1H23) Operating revenue $511.7 million (→ 2.4%) Record first half operating revenue Driven by growth in Markets and Technology & Data businesses, offset by declines in Listings and Securities & Payments businesses.
/www.asx.com.au/about/media-centre

BME admits a 600 million euro sustainable bond issue by the Basque Government to trading
BME
The eight ESG debt issues registered by the Basque Country since 2018 total 5 billion euros. BME, through the Bilbao Stock Exchange, has today admitted to trading a EUR600 million sustainable issue by the Basque Government, maturing in April 2034. The bonds, which have a nominal value of 1,000 euros, carry an annual nominal interest rate of 3.40%. The issue has been oversubscribed by almost seven times the amount placed. This is the eighth issue linked to ESG principles carried out by Euskadi since it launched its first operation in May 2018. The combined amount of these operations totals 5,000 million euros.
/bit.ly/4bLl7PU

Notice of Disciplinary Action; NYMEX – Effective Date 16 February 2024
CME Group
Non-Member: Adam Cobb Webb
Nymex Rule Violations: Rule 575. Disruptive Practices Prohibited
A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.
/jlne.ws/42KNPMk

JSE to Host Market Close Ceremony in Honour of Conservation and Environmental Icon; Dr Jane Goodall DBE , Founder of the Jane Goodall Institute and UN ambassador of peace
Johannesburg Stock Exchange
On Thursday, 22 February, the Johannesburg Stock Exchange (JSE) will host a market close ceremony in association with the Jane Goodall Institute South Africa (JGISA) to honour the legacy of UN Messenger of Peace and founder of the Jane Goodall Institute, Dr Jane Goodall, DBE. This event forms part of Dr Goodall’s worldwide celebrations marking her upcoming 90th birthday and her remarkable contributions to shaping the global sustainability movement.
/bit.ly/49DydwG

MIAX Exchange Group – SEC Rule Amendment Requiring Certain Firms To Become FINRA Members
Mondovisione
On August 23, 2023, the Securities and Exchange Commission adopted amendments to Securities and Exchange Act Rule 15b9-1 that narrow the exemption from FINRA membership (“Rule 15b9-1 Amendments”). Certain broker-dealers will be required to become a FINRA member if the broker-dealer effects transactions other than on an exchange of which it is a member unless certain conditions are met.
/jlne.ws/3OJ1GwT

Fintech

Google, Microsoft Will Dominate AI as Computing Costs Surge; Start-up firms in artificial intelligence can’t afford to keep the lights on.
Parmy Olson – Bloomberg
Sam Altman’s goal of raising about $7 trillion to make artificial-intelligence chips tells a story beyond his borderline-insane ambitions. First, the infrastructure needed to build AI has become exorbitantly expensive. Second, most of that value is still – still! – held by a handful of large technology companies – and the oligopoly is only going to get worse. For all the competition that was spurred by the launch of ChatGPT in late 2022, and the flurry of new startups that jumped into the hyped-up generative AI market, most of those new players will likely fold or be folded into the incumbents over the next year or so. The costs of doing business are too high for them to survive on their own.
/jlne.ws/42Hb8a5

January Corporate and Municipal CUSIP Request Volumes Flat Year-Over-Year
USIP Global Services
CUSIP Global Services (CGS) today announced the release of its CUSIP Issuance Trends Report for January 2024. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity over the next quarter, found January volumes roughly in line with year-ago totals across corporate and municipal asset classes.
/jlne.ws/3I43ehs

TikTok Facing Threat of EU Fines in Digital Content Clampdown; EU fears ByteDance-owned platform poses risk to minors; Investigation could lead to fines of up to 6% of annual sales
Samuel Stolton, Jillian Deutsch, and Stephanie Bodoni – Bloomberg
TikTok owner ByteDance Ltd. risks heavy European Union penalties under tough new content rules for Big Tech after regulators announced a formal investigation into its alleged failure to protect minors who use the video-sharing platform. EU Internal Market commissioner Thierry Breton announced Monday that TikTok will face a formal investigation under the bloc’s flagship Digital Services Act – which empowers regulators to levy fines of as much as 6% of annual sales, or ban repeat offenders from the EU.
/jlne.ws/4bJn5jG

Operational resilience important in the context of T+1
The Trade
The large-scale transition to T+1 is about more than a change in clocks, it offers an opportunity to re-evaluate, reinforce, and improve a financial services firm’s operations. Operational resilience is the ability and preparedness of an organisation to weather a disruptive change or incident with tolerable impact to clients and business operations. Properly governed, operational resilience structures ensure continuity of critical business operations in the face of a wide range of atypical events such as a cyber-attack, market crash, technology infrastructure outage, or even an industry driven change like the impending move to a T+1 settlement cycle in the US.
/jlne.ws/48pzBBM

Reddit Signs AI Content Licensing Deal Ahead of IPO
Amy Or – Bloomberg
Reddit Inc. has signed a contract allowing a company to train its artificial intelligence models on the social media platform’s content, according to people familiar with the matter, as it nears the potential launch of its long-awaited initial public offering.
/jlne.ws/49FdqbT

Masayoshi Son Seeks to Build a $100 Billion AI Chip Venture; SoftBank has $41 billion cash pile and finances helped by Arm; Undertaking code-named Izanagi after Japanese god of creation
Gillian Tan, Min Jeong Lee, and Ian King – Bloomberg
/jlne.ws/3ONcV7z

FTC Wants to Penalize Companies for Use of AI in Impersonation
Rachel Metz – Bloomberg
/jlne.ws/3OPOLtk

OpenAI Is Close-Mouthed About Sora’s Video Secrets; What’s the incentive for big companies to look out for the public interest?
Tobin Harshaw – Bloomberg
/jlne.ws/3uuiwch

Cybersecurity

Scammers Litter Dating Apps With AI-Generated Profile Pics; Cryptocurrency fraud continues to evolve at a rapid clip.
Sana Pashankar – Bloomberg
This Valentine’s Day, that gorgeous person with dreamy eyes who you swiped right on might be generated by artificial intelligence. And they might be trying to scam you out of your life savings. Research provided exclusively to Bloomberg News indicates that fake dating profiles on sites including Tinder, Hinge and Bumble are created by large language model tools, like ChatGPT and Google Gemini, the company’s new generative AI product. It’s the latest tactic in the ever evolving world of pig butchering schemes, where scammers dupe victims into sending them cryptocurrency under false pretenses. And it’s working.
/jlne.ws/3I5srbl

North Korean hackers use AI for more sophisticated scams; Cyber criminals backed by Pyongyang turn to artificial intelligence as they try to secure funds
Christian Davies – Financial Times
North Korean cyber criminals are turning to artificial intelligence to help Pyongyang steal cutting-edge technologies and secure funds for its illicit nuclear weapons programme. The hackers have long targeted employees of global defence, cyber security and crypto companies, tricking users on LinkedIn and other networking platforms into revealing sensitive information or giving access to computer networks or crypto wallets. Their most notorious hacking operations include the theft of $951mn from Bangladesh’s central bank, and the WannaCry ransomware attack on the UK’s National Health Service in 2017.
/jlne.ws/3uCtVqu

Cryptocurrencies

Mom-and-Pop Investors Are Starting to Tiptoe Back Into Crypto; Coinbase, Robinhood see a jump in trading by individuals; Retail activity is still well below last crypto bull market
Olga Kharif and Yueqi Yang – Bloomberg
Small investors have started to ease back into crypto, even if they are not yet rushing in headfirst the way they did during the last bull market three years ago. At the biggest US crypto exchange, Coinbase Global Inc., net consumer transaction revenue rose 60% in the fourth quarter from the year-ago period, and 80% over the third quarter, according to shareholder letter released Thursday. At Robinhood Markets Inc., which reported on Tuesday and is focused on retail users, crypto notional volumes in December jumped by 242% from a year ago, the company said.
/jlne.ws/3UI2A0A

Why Spot Bitcoin ETFs Took Forever – and Became Instant Hits
Olga Kharif and Emily Nicolle – Bloomberg
The US Securities and Exchange Commission’s decision to approve exchange-traded funds that invest directly in Bitcoin brought a new wave of investors to the oldest and biggest cryptocurrency. ETFs have become an enormously popular way for Americans to invest their money in equities, bonds, commodities, currencies and real estate. Spot Bitcoin ETFs from the likes of Fidelity Investments and BlackRock Inc., available since January in the US, are expected to attract many investors who had previously kept crypto at arm’s length.
/jlne.ws/48hVq6h

Musk’s SEC Subpoena Fight Carries on After Court’s Oops Moment
Rachel Graf – Bloomberg
Elon Musk will get another chance to resist testifying in the US Securities and Exchange Commission’s probe of his 2022 Twitter Inc. acquisition after a federal magistrate said she erred in ordering him to comply with a subpoena. It turns out Musk is entitled to make his case to a higher-ranking US district judge about why he shouldn’t have to testify – which was recognized Friday by a San Francisco magistrate judge who said her Feb. 10 order enforcing the subpoena will now be just a recommendation.
/jlne.ws/48mzWoM

Bitcoin Pundits Warn of a Supply Shortage While Liquidity Is Actually Increasing; Saylor, Winklevoss said spot ETFs set to spur Bitcoin shortage; Industry pros point out there is enough supply in the market
David Pan and Olga Kharif – Bloomberg
Liquidity in the cryptocurrency market is actually getting better since the introduction of US spot Bitcoin exchange-traded funds despite suggestions that surging demand from the ETFs will result in a supply crunch. Bitcoin advocates such as MicroStrategy Chairman Michael Saylor and crypto exchange Gemini co-founder Cameron Winklevoss have said pent-up demand from the newly launched funds is at least 10 times as much as the number of new tokens being minted by so-called miners, fueling the more than 20% rally this year in the largest cryptocurrency. However, market data shows there is a plethora of tokens sloshing around.
/jlne.ws/42LQ9TF

BlackRock’s Bitcoin ETF Is Pulling Away From Rest of the Pack; IBIT had more inflows this week than all others combined; Trading volume for IBIT also significantly higher than rivals
Elijah Nicholson-Messmer – Bloomberg
BlackRock Inc. is starting to dominate the nascent Bitcoin exchange-traded fund sector, with its iShares Bitcoin Trust (ticker IBIT) attracting more investor inflows this week than the rest of the other recent entrants combined. Rising Bitcoin prices have attracted more investors to the much anticipated group of US spot Bitcoin ETFs – often referred to as the “Newborn Nine” – which were launched last month after the US Securities and Exchange Commission approved the new investment vehicle. Nearly $2.5 billion have flowed into the ETFs this week, with IBIT capturing about 58% of the week’s total, data compiled by Bloomberg show. On Monday, the fund saw the second highest single day of trading activity since it launched, with roughly $35 million shares changing hands.
/jlne.ws/42RkHmY

Ether Could Be the Next ‘Institutional Darling,’ Bernstein Says
Will Canny – CoinDesk
/jlne.ws/3uOgJP8

Politics

Americans Refuse to Believe Their Country Could Lose; If you don’t open your eyes to the plausibility of defeat, then you run the risk of one day having to endure it.
Brooke Sample – Bloomberg
If You Think World War III Is Unimaginable, Read This – Niall Ferguson
Are we unable to imagine defeat? You might have thought that, having so recently lost a small war, Americans would have no difficulty picturing the consequences of losing a large one. But the humiliating abandonment of Afghanistan in 2021 has been consigned with remarkable swiftness to the collective memory hole.
/jlne.ws/49GPDbQ

For Elon Musk Lately, It’s All About Russia, Russia, Russia; Billionaire maintains his companies are doing the most to undermine the Kremlin
Tim Higgins – The Wall Street Journal
Absurd. That’s what Elon Musk calls accusations these days that he is an apologist for Russian President Vladimir Putin. ut it is easy to see why some are calling him Moscow Musk. Frankly, when Putin is praising Musk, as he did earlier this month, and when the Musketeer Tucker Carlson is airing videos on the X social-media platform praising life under that authoritarian government as superior to the U.S., it is unnerving. When X is seeing a surge in Russian state-backed activity, as researchers say, and Musk’s satellite internet service, Starlink, is said to be used by Russian forces in the war against Ukraine, it is unnerving.
/jlne.ws/3T33VxT

Nato has no choice but to strengthen its bulwarks against Putin; An ageing Russian ruler surrounded by sycophants may embark on even more reckless moves in coming years
Alexander Gabuev – Financial Times
A growing number of senior Nato officials are warning of a direct military confrontation between Europe and Russia in the not-so-distant future. The Kremlin denies any intention of attacking Nato, dismissing the idea as fear-mongering to the benefit of western militaries and defence manufacturers.
/jlne.ws/49lASLt

Prominent NYT Columnist Tells Biden To Step Aside: ‘He Is Not Up For This’; Ezra Klein laid out an alternative plan for Democrats on his popular podcast.
Lydia O’Connor – Huffington Post
Ezra Klein, a prominent liberal columnist for The New York Times, published an audio essay Friday making his case against President Joe Biden for the Democratic nomination, saying he should withdraw from the race and allow delegates to pick from a slate of candidates with a better shot at defeating Donald Trump in November. “We had to wait till this year – till now, really – to see Biden even begin to show what he’d be like on the campaign trail. And what I think we’re seeing is that he is not up for this,” Klein said on his popular semi-weekly podcast, “The Ezra Klein Show.”
/jlne.ws/3IoNEgJ

Donald Trump just got the green light to return to Wall Street
Matt Egan – CNN
Months after leaving the White House, former President Donald Trump began plotting his return to Wall Street. That return, delayed by years of regulatory and legal hurdles, is now on the verge of becoming a reality – and it could make Trump a fortune. US regulators have finally given the green light to a controversial merger between Truth Social owner Trump Media & Technology Group and a blank-check company. The blessing from the Securities and Exchange Commission removes the last major obstacle holding back the deal.
/jlne.ws/49ioX0V

Lagarde’s Trump Warning Paves Way for EU Capital Markets Drive
William Horobin and Jana Randow – Bloomberg
/jlne.ws/48l8O9J

EU Should Sell Joint Bonds to Boost European Defense, Estonian PM Says
Alberto Nardelli – Bloomberg
/jlne.ws/49FwOWh

It makes perfect sense that Putin wants Biden to win the election; t’s all about the gas market
David Blackmon – The Telegraph
/jlne.ws/42Ljmhb

Regulation

Sam Bankman-Fried’s Sentence Might Be Lighter Than You’d Expect
Ian Allison – CoinDesk
Former FTX boss Sam Bankman-Fried (SBF) may be handed a lighter sentence than otherwise when he faces District Judge Lewis A. Kaplan next month because customers of the bankrupt exchange will probably be made whole thanks to a bounce in crypto markets and the buoyancy of certain investments held by the estate.
/jlne.ws/49hx2D7

Steven Kelly on Rethinking Bank Rules After the Collapse of SVB
Some big changes to banking regulation are being discussed.
Tracy Alloway, Joe Weisenthal, and Stacey Rene – Bloomberg
A little less than a year ago, the US financial system was rocked by its first major banking drama since 2008. While the crisis was eventually contained, and only three lenders ended up collapsing, the experience re-ignited an ongoing conversation about the way we rescue troubled lenders.
/jlne.ws/3OO9jlV

Honduras Financial Regulator Restricts Banks From Dealing in Crypto
Hope C – CoinMarketCap
The Honduran financial system has slammed the brakes on cryptocurrencies, with the National Banking and Securities Commission (CNBS) prohibiting institutions under its supervision from dealing with digital assets. The CNBS has stated that the “maintaining, investing, intermediating or operating with cryptocurrencies, crypto assets, virtual currencies, tokens or any other similar virtual asset” will not be allowed for the country’s financial institutions.
/jlne.ws/3T1lGxy

Japan Moves to Allow Investment Funds to Hold Crypto; Limited partnerships can buy crypto under proposed rule-change; Venture capital, investment funds raise capital from LPs
Emily Nicolle – Bloomberg
Japan inched closer to allowing venture capital firms and other investment funds to hold digital assets directly, after Prime Minister Fumio Kishida’s administration agreed to submit a revised bill to implement the change. His cabinet approved the text of a bill on Feb. 16 that seeks to partially amend the country’s industrial competitiveness enhancement act, according to a statement published on the Ministry of Economy, Trade and Industry’s website. The bill states that “measures will be taken to add cryptoassets to the list of assets that can be acquired and held by investment limited partnerships,” referring to a vehicle used by venture capital firms to secure capital for investments.
/jlne.ws/3UQGJUZ

SEC Small Business Advisory Committee to Discuss the Accredited Investor Definition and the State of the IPO Market
SEC
The Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee today released the agenda for its meeting on Tuesday, Feb. 27, which will include a discussion of the accredited investor definition and initial public offerings (IPOs). Members of the public can watch the live meeting via webcast on www.sec.gov.
/jlne.ws/42Kiae2

SEC Publishes Annual Staff Report on Nationally Recognized Statistical Rating Organizations
SEC
The Securities and Exchange Commission’s Office of Credit Ratings published its annual Staff Report to Congress today on Nationally Recognized Statistical Rating Organizations (NRSROs), commonly known as credit rating agencies, to provide findings on its examinations of the agencies, and to discuss the state of competition, transparency, and conflicts of interest among them.
/jlne.ws/49BCbWv

SEC Charges TIAA Subsidiary for Failing to Act in the Best Interest of Retail Customers
SEC
The Securities and Exchange Commission today announced that registered broker-dealer TIAA-CREF Individual & Institutional Services LLC (TC Services), a subsidiary of Teachers Insurance and Annuity Association of America (TIAA), will pay more than $2.2 million to settle charges that it failed to comply with Regulation Best Interest (Reg BI) in connection with recommendations to retail customers to open a TIAA Individual Retirement Account (TIAA IRA).
/jlne.ws/3SNHXO3

FINRA Announces Three New Governors on Its Board
FINRA
FINRA announced today that Derrick Roman, former partner of PricewaterhouseCoopers LLP (PwC), and Gus Sauter, current member of FINRA’s Investment Committee, have been appointed as public governors on its Board of Governors. In addition, Naureen Hassan, President of UBS Americas and CEO of UBS Holdings, has been appointed as an industry governor to the Floor Member Governor seat. Together, these individuals bring extensive audit, risk management, regulatory policy and investing experience to the Board.
/jlne.ws/49wRWy8

Investing and Trading

Canadian Investment in Foreign Securities Hits All-Time High
Erik Hertzberg – Bloomberg
Canadians bought up a record amount of foreign securities at the end of last year as investors piled into US stocks. Investment in securities outside the country hit C$29.4 billion ($21.8 billion) in December, according to data released Friday by Statistics Canada. That’s the largest net outflow of purchases into foreign stocks and bonds in the history of records going back to 1988.
/jlne.ws/42GUebD

Not All Exchange-Traded Funds Are Destined to Survive; Launching an ETF is easy. Finding lasting success is a whole other story.
Eric Balchunas and Joel Weber – Bloomberg
Launching an exchange-traded fund is easy. Finding success is a different story entirely. About a quarter of all ETFs that have been launched have ended up having to liquidate. These stories can sometimes be forgotten given how much the successful ones are celebrated-but they can also provide a lesson about the marketplace and the importance of timing.
/jlne.ws/3SI1nUr

Natural gas prices plunge as US set for warmest winter on record; Lower demand during mild weather has coincided with surging production
current progress 2%
Myles McCormick – Financial Times
US natural gas prices have plunged to a near-three-decade low as what is set to be the country’s warmest winter on record slashes demand for the heating fuel just as production surges to record levels. Winter months, when heating demand is highest, are on track this year to be the mildest since reliable records began in 1950, analysts said, leaving gas usage much lower than expected.
/jlne.ws/3SJTca7

Traders Scour Fuel Markets for Profits as Crude Prices Drift Sideways; Activity surges in heating oil, gasoline, gasoil futures; Boom spreads into even more esoteric corners of market
Alex Longley and Devika Krishna Kumar – Bloomberg
Trading activity in fuels is surging the most in years as a listless crude market pushes investors to seek money-making opportunities in more niche products. While crude has drifted in a $10 band this year, fuel markets have been roiled by attacks in the Red Sea, refinery outages and heavy maintenance, a deep freeze in the US and Ukrainian drone attacks on Russian refineries. The end result is one of the most active trading periods for refined products in several years.
/jlne.ws/42HSr68

Nvidia earnings will put an entire stock market meme to the test. Again.
Myles Udland – Yahoo Finance
Nvidia (NVDA) is at the center of a new meme stock rally. Its earnings report on Wednesday will put that theme to the test. Again. Wedbush analyst Dan Ives, the most creative voice on Wall Street today, marrying a dramatic flair with a prescient, unabashed bullishness on AI’s investment case, called Nvidia’s quarterly results from last May a “jaw dropping” event.
/jlne.ws/3wkrwkE

Investors shun riskiest US corporate bonds on default fears; Debt with rock-bottom triple C ratings has missed out on a broader rally
Harriet Clarfelt – Financial Times
/jlne.ws/3I2AMwz

Nvidia’s Staying Power Is the $2 Trillion Question; Chip maker’s AI momentum will depend on staying far enough ahead of competitors to keep pricing strong
Dan Gallagher – The Wall Street Journal
/jlne.ws/42N9tQ4

These Teenagers Know More About Investing Than You Do; Custodial investment accounts for minors have surged in popularity
Hannah Miao and Gunjan Banerji – The Wall Street Journal
/jlne.ws/3SN7mYc

Making Money on I Bonds Was Easy. The Tax Paperwork Isn’t; Taxpayers who don’t report interest earned on the savings bonds can face IRS penalties
Ashlea Ebeling – The Wall Street Journal
/jlne.ws/3I3FyJZ

Environmental, Social and Corporate Governance

More Wall Street Firms Are Flip-Flopping on Climate. Here’s Why. Financial giants were already trimming their climate pledges amid Republican attacks. Then came concerns about legal risks.
David Gelles – The New York Times
Many of the world’s biggest financial firms spent the past several years burnishing their environmental images by pledging to use their financial muscle to fight climate change. Now, Wall Street has flip-flopped. In recent days, giants of the financial world including JPMorgan, State Street and Pimco all pulled out of a group called Climate Action 100+, an international coalition of money managers that was pushing big companies to address climate issues.
/bit.ly/42Henyh

Nature Has Value. Could We Literally Invest in It? “Natural asset companies” would put a market price on improving ecosystems, rather than on destroying them.
Lydia DePillis – The New York Times
Picture this: You own a few hundred acres near a growing town that your family has been farming for generations. Turning a profit has gotten harder, and none of your children want to take it over. You don’t want to sell the land; you love the open space, the flora and fauna it hosts. But offers from developers who would turn it into subdivisions or strip malls seem increasingly tempting. One day, a land broker mentions an idea. How about granting a long-term lease to a company that values your property for the same reasons you do: long walks through tall grass, the calls of migrating birds, the way it keeps the air and water clean.
/bit.ly/3SIEPCY

Gresham House Fund Targets $380 Million for ‘Novel’ ESG Credits; WTW will be a partner to focus on biodiversity credits; The new fund will invest in habitat banks, plots of land
Natasha White – Bloomberg
The ESG market just got a new product: a fund that ties investment returns to demand for so-called biodiversity credits in England. Gresham House is starting the fund with Willis Towers Watson Plc, following this month’s enforcement of UK regulations that provide the framework for the new market.
/jlne.ws/4bAaEGG

America’s Oil Power Might Be Near Its Peak; The production growth that blunted surging oil prices is dwindling
Bob Henderson – The Wall Street Journal
A U.S. shale boom that helped suppress oil-price surges over the past two years is waning. The country’s crude oil output is expected to increase by just 170,000 barrels a day in 2024 from last year, down from a jump of 1 million barrels a day in 2023, according to federal record-keepers. That is the smallest annual increase since 2016, not counting the pandemic.
/bit.ly/3wm5RbT

Wall Street Warming to Big Shale After $250 Billion of Deals; Shale drillers can ‘consolidate or get eaten’: Warwick CEO; US oil producers now in ‘arms race’ for scale, investor says
Kevin Crowley, David Wethe, and Mitchell Ferman – Bloomberg
This week’s $26 billion combination of two Texas oil companies is the latest in a series of deals that’s ushering in the era of Big Shale. Wall Street, which eyed the sector with skepticism for most of the last decade, appears to be all in. Diamondback Energy Inc.’s takeover of Endeavor Energy Resources LP announced on Feb. 12 topped off a year of roughly $250 billion in US oil and natural gas deals that consolidated a fractured collection of private wildcatters into larger corporation
/jlne.ws/49eSZCS

CRE Market Woes Mount as Assets Get ‘Stranded’ by CO2 Rules; Brookfield unit says industry ‘very aware of stranded assets’; EU is forcing investors to take climate risk into account
Frances Schwartzkopff – Bloomberg
/bit.ly/4bF78uP

Big Shale means ‘consolidate or get eaten,’ Wall Street is all in, and one of the ‘last original wildcatters’ will become America’s richest oilman
Kevin Crowley, David Wethe, Mitchell Herman and Bloomberg via Fortune
/jlne.ws/48lHF6E

Exclusive: White House set to back tougher climate model for ethanol, sources say
Reuters
/bit.ly/3uL68V9

Exxon Plows Ahead With Foray Into Lithium Despite Price Slump; Customers still need more lithium than they have today: exec; Oil driller has the ‘balance sheet to weather price cycles’
Yvonne Yue Li – Bloomberg
/jlne.ws/42K8i44

Geologists signal start of hydrogen energy ‘gold rush’; Natural sources of the gas are more abundant than expected and could supply energy needs for centuries, study shows
Clive Cookson – Financial Times
/bit.ly/4bLvBOX

Pivotal case in UK law begins over climate protest at JPMorgan offices; Lawyers and activists warn of both a legislative and a judicial clampdown against environmental activism
Attracta Mooney and Alistair Gray – Financial Times
/bit.ly/49DqVZQ

ESG takes a $14 trillion hit as financial firms pull back on commitments
Kimberly Adams – MarketPlace
/bit.ly/49k9wFK

New York State Restricts Investments in ExxonMobil, But Falls Short of Divestment;
Nicholas Kusnetz – Inside Climate News
/bit.ly/48pvtSi

Geologists signal start of hydrogen energy ‘gold rush’; Natural sources of the gas are more abundant than expected and could supply energy needs for centuries, study shows
Clive Cookson – Financial Times
/jlne.ws/3wtugfs

The Boom in Battery Metals for EVs Is Turning to Bust; Producers of lithium and nickel pause projects after prices collapse and momentum slows for electric-vehicle sales
Rhiannon Hoyle, and Julie Steinberg – The Wall Street Journal
xhttps://jlne.ws/49lp9fW

Union-backing shareholder asks Starbucks to disclose ‘anti-union spending,’ approaches SEC
Reuters
/bit.ly/4bJ4PXx

New York lobbyists ‘aiding and abetting’ climate crisis, research reveals; Lobbying firms work double-duty, representing political interests of victims and perpetrators of climate change in state capital
Ava Sasani – The Guardian
/bit.ly/3TdGuCd

Institutions

Korean Banks Face $749 Million of Losses in Overseas Properties
Jaehyun Eom – Bloomberg
South Korea’s five largest financial companies are facing about 1 trillion won ($749 million) of losses from their 20 trillion won of overseas real estate investments, according to an opposition party lawmaker, reflecting growing concern over the sector’s exposure to falling valuations worldwide.
/jlne.ws/3I7Jnhr

HSBC Introduces New Bonus System for Most Junior Employees; New model gives a variable pay target, according to memo; Staff target variable pay may be adjusted higher or lower
Denise Wee – Bloomberg
HSBC Holdings Plc is introducing a new bonus plan for most junior employees in support roles as it seeks to improve transparency on compensation. Those staff will be given a figure called “on target variable pay,” which is set using external benchmark data from peers and internal pay data relating to those in similar roles at the beginning of every year, according to a memo seen by Bloomberg News.
/jlne.ws/42M6Gab

HSBC CEO Noel Quinn Braces for Tough Times After a Strong 2023; Quinn warns top executives of challenges ahead, people say; British lender reports fourth-quarter results on Wednesday
Ambereen Choudhury and Harry Wilson – Bloomberg
At a recent retreat in southeast England for his top executives, HSBC Holdings Plc boss Noel Quinn painted a bullish picture for the year just gone as the lender benefited from rising interest rates. With Europe’s largest bank – which makes most of its profit in Asia – expected to report strong earnings for 2023 this week, Quinn appeared at ease in his role at the gathering late last year in Windsor. He signaled he was keen to steer the lender in the medium term, people familiar with the matter said.
/jlne.ws/3UFFDv3

Goldman Boosts CEO Solomon’s Pay 24% After Firm’s Profit Slumps 24%; Solomon scores $31 million for ’23 in difficult year for bank; His jump exceeds those awarded to every other big US bank CEO
Sridhar Natarajan – Bloomberg
Goldman Sachs Group Inc. boosted David Solomon’s compensation 24% to $31 million for a year when earnings slumped at the Wall Street giant. The board lifted the chief executive officer’s pay after profit tumbled 24% and the firm spent much of the year dousing internal rifts and pitching investors on a simplified strategy. After giving up on its retail-banking ambitions, New York-based Goldman has returned its focus to business lines embraced by Solomon’s predecessors.
/jlne.ws/3SNBEtR

JPMorgan Says Shareholder Returns Are at Peak for European Banks; Central bank rate cuts set to reduce lender’s earnings power; Strategists remain underweight on European bank stocks
Macarena Munoz Montijano – Bloomberg
European banks’ capital returns to shareholders may have already reached a peak, according to JPMorgan Chase & Co strategists. The prospect of central bank rate cuts this year will reduce earnings power for the sector, a team led by Mislav Matejka wrote in a note Monday, adding that current returns “are likely as good as it gets.”
/jlne.ws/48r7IcC

Work & Management

Can Billions of Dollars in Prize Money Solve the World’s Problems? A $1 million contest helped uncover secrets of the past. We need more contests to find the innovations of the future.
Ben Cohen – The Wall Street Journal
Innovation isn’t the first word that comes to mind when you think about a sanitation department. But a few years ago, when New York City officials found themselves in the market for a better garbage can, they followed a strategy to spark creativity that has worked for centuries, producing breakthroughs from the oceans to the heavens and everywhere in between. They started a contest.
/jlne.ws/3T4xlvF

Are Games the Secret to Better Company Training? Researchers looked at whether gamelike training is effective at increasing revenue. The answer: It can be, especially if done right.
Wei Cai – The Wall Street Journal
Let’s face it: Corporate training isn’t much fun. Sure, it may feel crucial, but many workers approach it reluctantly, racing through lessons as quickly as possible so they can get back to their actual work, often failing to fully absorb the material being taught. To fix that, some employers are turning training into a game, adopting platforms that rely on videogame design, with gamelike elements such as progression through levels, instant feedback and competition to keep employees engaged and motivated to learn.
/jlne.ws/3uDiEpP

Wellness Exchange

Gait speed is one of your vital signs, so make sure yours is OK
Melanie Radzicki McManus – CNN
The exaggerated strut of a runway model is a far cry from how regular folks walk. Yet everyone moves in a unique fashion, and your personal gait can indicate a lot about your overall constitution. Gait is the way in which you walk. While everyone’s gait differs, you may develop an abnormal gait due to illness, injury, genetics, or issues with your legs or feet. Abnormal gaits are characterized by irregular movements such as dragging your feet, waddling or crossing your legs as you walk.
/jlne.ws/3wmF0fX

Study finds prevalence of long COVID varies geographically in the United States
Elana Gotkine – Medical Express
There is geographic variation in the prevalence of long COVID in the United States, according to research published in the Feb. 15 issue of the U.S. Centers for Disease Control and Prevention Morbidity and Mortality Weekly Report. Nicole D. Ford, Ph.D., from the CDC in Atlanta, and colleagues analyzed data from non-institutionalized U.S. adults participating in the 2022 Behavioral Risk Factor Surveillance System to examine the prevalence of long COVID, defined as the self-report of any symptoms lasting three or more months that were not present before COVID-19.
/bit.ly/3uDchmm

Largest Covid Vaccine Study Yet Finds Links to Health Conditions; Small increases in neurological, blood, heart-related issues; Looks at medical problems among 99 million immunized people
Jason Gale – Bloomberg
Vaccines that protect against severe illness, death and lingering long Covid symptoms from a coronavirus infection were linked to small increases in neurological, blood, and heart-related conditions in the largest global vaccine safety study to date. The rare events – identified early in the pandemic – included a higher risk of heart-related inflammation from mRNA shots made by Pfizer Inc., BioNTech SE, and Moderna Inc., and an increased risk of a type of blood clot in the brain after immunization with viral-vector vaccines such as the one developed by the University of Oxford and made by AstraZeneca Plc.
/bit.ly/3wmS1pB

Regions

Australia’s Barley Sales to China Boom as Wine Decision Pending; Wine-makers are waiting on tariff decision expected in March; China market power highlights difficulty of diversifying sales
Swati Pandey – Bloomberg
Australia’s barley sales to China have soared since Beijing scrapped tariffs six months ago, highlighting the power of the huge market as the wine industry Down Under prepares for a possible end to its restrictions. In an example of how quickly demand can rebound, China accounted for 90% of Australia’s exports of barley in December, even though the imposts were only removed in August. Shortly after that, Beijing announced a review of tariffs on Australian wine – some as high as 218% – with a decision expected next month.
/jlne.ws/3SMj5WM

Wall Street’s Moelis Bet Big on the Middle East. Now He’s Cashing In; He may be overshadowed by larger rivals in the US and Europe, but Ken Moelis’s long courtship of governments in Dubai and Saudi Arabia is paying off.
Dinesh Nair, Nicolas Parasie, and Julia Fioretti – Bloomberg
In a low-key second-floor office in the heart of Dubai’s bustling financial center, bankers working for Moelis & Co. are busier than ever – so much so that the firm has had to tear down walls to add desks for its expansion drive. In the otherwise stark workplace, shelves are covered with Lucite deal tombstones featuring equity offerings and deals by Middle Eastern companies – from Saudi Arabia’s petroleum behemoth Aramco to Abu Dhabi National Oil Co. Envious rivals whisper that Moelis has turned its Middle Eastern operation into one of the bank’s biggest revenue generators per employee – no mean feat in a part of the world that’s not known for big fees.
/jlne.ws/42GaaLj

Latin America’s Troubled State Companies Lure Bond Investors; Debt from Pemex, PetroPeru, Codelco beating index returns; Sovereign support seen outweighing sizeable debt woes
Maria Elena Vizcaino and Carolina Wilson – Bloomberg
State-owned companies across Latin America face falling output, cash woes and expensive investment plans. Yet bondholders can’t get enough. Companies such as Petroleos Mexicanos SA, Petroleos de Peru SA and Chile’s Codelco are luring investors by offering much higher yields than debt from their respective governments for what is proving essentially the same risk. The argument, it goes, is if the sovereign is doing well, it won’t let the company go under.
/jlne.ws/3OSx1xl

Miscellaneous

Beware the Top Google Search Result. It Might Be Wrong. How to spot AI-generated content, bogus featured text ‘snippets’ and misleading ads
Nicole Nguyen – The Wall Street Journal
Have you noticed lately that some of your Google searches have steered you wrong? There’s a reason for that. Spammers are using artificial-intelligence tools to create an ocean of content, and Google’s algorithms are ranking some of those robot-generated pages ahead of the information you actually need.
/bit.ly/4bTshBE

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