Millions of Chinese Firms Face Collapse If Banks Don’t Act

Feb 24, 2020

First Read

Hits & Takes
By JLN Staff

Tomorrow I head to Washington, DC for the CFTC’s Technology Advisory Committee meeting on Wednesday. However, a snow storm looks like it is going to impact my flight, so we will see if I can get there.~JJL

We published part one of a two part video interview with Women in Listed Derivatives President Cathey Curley titled “The WILD Growth of Cathey Curley.” Curley tells the story about the dramatic growth WILD is experiencing during her presidential tenure and her own story of personal growth. We are introducing a new intro and music for the interview.~JJL

The FIA Boca conference is just a couple of weeks away. JLN’s video team is seeking traders interested in participating in our Open Outcry Traders History Project who might be located in the Boca Raton, FL area. Email me if you are interested~JJL

Summer is coming (eventually) and that is apparently the biggest time for tax scams. Fortune has What the IRS Wants You to Know About Tax Scams. ~SR


The WILD Growth of Cathey Curley – Part One

Cathey Curley is the president of Women in Listed Derivatives (WILD). She sat down for an interview with John Lothian News to talk about the explosive growth WILD is experiencing and what they are doing with that success. WILD is paying for college for two years for two women at Chicago City colleges. And next year, they want to pay for four women. In part one of the interview, she talks about WILD. In part two, she talks about her career path and how she worked for some of the leading firms, including Citadel, Hull Trading, CME Group and Newedge. Today, she is at Nuveen putting it all together as a lead business analyst.

Watch the video »


The Spread: Always Bet on Bull

This week on The Spread: bullish bets abound despite coronavirus concerns, Cboe creates a cushion and casts chats at two conferences, volume of MIAX’s SPIKES options spike, and more.

Watch the video »


SEC Rejects Controversial ‘Speed Bump’ Proposal; Regulator disapproves plan from Cboe to introduce trading delay to one of its exchanges
Alexander Osipovich – WSJ
The Securities and Exchange Commission has rejected a hotly disputed proposal to add a new “speed bump,” or split-second trading delay, to the U.S. stock market.

*****The speed bump hits a speed bump.~JJL


Losing $450,000 in Three Days: Hackers Trick Victims Into Big Wire Transfers; Fraudsters steal billions of dollars each year by combining sophisticated email hacking with old-fashioned wire transfers
Rachel Louise Ensign – WSJ
In 2018, Frank Krasovec took on a $1 million personal line of credit from PlainsCapital Bank. A few months later, he went on a business trip. When he returned, $450,000 was missing.

*****It can happen to anyone.~JJL


Ken Griffin Adds Calvin Klein’s Hamptons Compound to Collection of Luxury Homes; The billionaire hedge funder is buying the fashion designer’s oceanfront mansion in Southampton in an off-market deal
Katherine Clarke and Candace Taylor – WSJ
Billionaire Ken Griffin is adding a Hamptons house to his growing portfolio of trophy real estate, this time buying the oceanfront property of fashion designer Calvin Klein, according to sources familiar with the transaction.

***** A very stylish real estate deal for Citadel’s Ken Griffin.~JJL


Drug dealer loses $58M in bitcoin after landlord accidentally throws codes out
Daniel Van Boom – CNET
Between 2011 and 2012, Clifton Collins bought 6,000 bitcoin using money he earned from growing and selling marijuana, reports The Irish Times. At the time, the cryptocurrency’s price varied between $4 and $6. Today it stands at over $9,700. But Collins, who is 49, isn’t enjoying any euphoria for the windfall — because his landlord threw out his bitcoin codes.

***** At least the dog did not eat them.~JJL


Cryptoasset Trading Platforms; Manipulation and Contempt
Gary DeWaal – Bridging the Week
The International Organization of Securities Commissions articulated considerations for worldwide regulators evaluating cryptoasset trading platforms within their regulatory perimeter. However, IOSCO noted this assessment poses unique challenges because while CTPs share many common characteristics of trading platforms, they also often perform functions associated with intermediaries, custodians, transfer agents and/or clearinghouses. Separately, two food giants and the Commodity Futures Trading Commission appear poised once again to resolve the CFTC’s 2015 enforcement action charging the defendants with manipulation; a prior settlement was set aside by the presiding judge. However, contempt findings may still be imposed against the CFTC for its conduct in connection with the original settlement although the defendants may no longer be requesting such an outcome.


Friday’s Top Three
Our most read story on Friday was Bloomberg’s ETrade’s Sale Is the Death Knell for Discount Brokerages; In an age of zero commissions, trading is just a way to draw in customers for other products. Second was the Wall Street Journal’s SEC Rejects Controversial ‘Speed Bump’ Proposal, in which the SEC rejected the Cboe’s proposed four-millisecond delay. According to the Journal, this “put(s) the brakes—at least for now—on the proliferation of speed bumps on U.S. stock exchanges.” (The story has been updated since it appeared on Friday.) Third was The Food That Helps Battle Depression, also from the Wall Street Journal. Big surprise – it’s….doughnuts! No it’s not.


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Lead Stories

Millions of Chinese Firms Face Collapse If Banks Don’t Act
Bloomberg News
Virus outbreak puts millions of small businesses at risk; Banks have extended help to companies in direct path of virus
Brigita, a director at one of China’s largest car dealers, is running out of options. Her firm’s 100 outlets have been closed for about a month because of the coronavirus, cash reserves are dwindling and banks are reluctant to extend deadlines on billions of yuan in debt coming due over the next few months. There are also other creditors to think about.

What the E*Trade Deal Tells You About the New Investing Game; The days of the ‘financial supermarket’ are over. Investment firms want to grab as much of your money as they can.
Jason Zweig – WSJ
Morgan Stanley’s MS -2.47% takeover of E*Trade Financial Corp. for $13 billion shows how drastically the brokerage industry’s business model has changed. Firms no longer want to offer investment products from all sources. Instead, they want to milk their customers’ cash and manage all the assets themselves. Investors need to understand the rules of the new game.

China’s Xi Jinping Sounds Alarm Over Virus Outbreak at Party’s Doorstep
Bloomberg News
President urges capital Beijing on call to ‘spare no effort’; Warning comes after local government quarantines officials
President Xi Jinping urged China to “spare no effort” to contain the coronavirus outbreak in Beijing, as the nation’s top legislature postponed its annual legislative session in the capital to help check the disease’s spread.

Markets Are Waking Up to the Virus Reality; Mining stocks offer a window into the gap between investors’ perceptions and the reality of the economic hit.
Clara Ferreira Marques – Bloomberg
Sharp falls in Asian markets and U.S. stock futures Monday suggest investors are starting to catch up to the disconnect between the coronavirus’s widening impact and hopes of a V-shaped recovery.

Move Over, Elliott. Argentina’s New Bond-Market Nemesis Is Fidelity. The mutual-fund giant isn’t known for tough tactics, but its hard line on a $250 million payment underscores the growing power of large fund firms
Matt Wirz – WSJ
Argentina’s new adversary in the bond market is no highflying hedge fund. It’s Fidelity Investments. Nate Van Duzer is a Mormon Church bishop and former West Pointer who handles “special situations” for the Boston mutual-fund giant. This month he won a standoff with Argentina’s Buenos Aires province by calling the municipality’s bluff when it said it didn’t have enough money to make a $250 million payment, people familiar with the matter said.

How One Singapore Sales Conference Spread Coronavirus Around the World; One meeting, attended by 109 people, sent virus hunters scurrying to a French Alpine ski town, a British pub and locations in Malaysia and South Korea
Niharika Mandhana and Feliz Solomon and Eun-Young Jeong – WSAJ
Last month, 109 people gathered in a Singapore hotel for an international sales conference held by a U.K.-based company that makes products to analyze gas. When the attendees flew home, some unwittingly took the coronavirus with them.

Barclays prepares to begin hunt for Jes Staley’s replacement
Anna Menin – City AM
Barclays is preparing to begin the search for a new chief executive to replace Jes Staley, making it the latest European bank to hunt for new leadership.

The Fight Over a Gas Pipeline Is Paralyzing Parts of Canada’s Economy; The latest showdown between indigenous groups and the government is backing up cargo-ship traffic, halting passenger rail, and delaying freight trains.
Kevin Orland, Robert Tuttle – Bloomberg
The long-simmering conflict between Canada’s indigenous people and its leading industries has exploded again, but this time it’s not just delaying a pipeline or halting a logging project—it’s threatening to hit an already-shaky economy.

Natural-Gas Exporters Struggle to Lock Up Buyers Despite ‘Freedom Gas’ Pitch; President Trump plans to make the case during his trip to India, but the global gas glut has made the market more commoditized
Collin Eaton – WSJ
President Trump is planning to push American shale gas when he travels to India this week. So far, U.S. gas exports have proven to be a tough sell globally. U.S. companies have struggled to line up foreign buyers willing to sign long-term deals for liquefied natural gas as the world is experiencing a glut of the fuel.

Super-Size Solar Farms Are Taking Over the World; As costs come down, developers are going for even more scale – like 550 football fields of scale.
Will Mathis and Brian Eckhouse – Bloomberg
All of a sudden, solar energy is huge. As many of the world’s major governments and corporations move to transition the global power supply away from fossil fuels, developers are transforming swaths of empty desert, agricultural land, and rural lakefront into vast solar energy farms. The mega-sized projects represent a new class of renewable power capacity that’s finally approaching the scale of coal-, oil-, and natural gas-fired plants.

Are Carbon Credits Vanishing Into Thin Air? The IRS is writing rules for fossil fuel companies who say they are storing carbon dioxide underground. Will anyone check?
Derek Sylvan and Christopher Allen – Politico
Thanks to one of the rare instances of bipartisan cooperation on climate policy, the federal government is compensating companies that “capture” carbon dioxide from smokestacks or the ambient air, and then bury it underground. A provision originally passed in 2008 and vastly expanded in 2018 offers a significant tax credit for companies that keep this carbon out of the atmosphere.

G20 finance heads eye impact of coronavirus outbreak on growth, see modest pickup
Marwa Rashad, Francesco Canepa – Reuters
Finance chiefs of the world’s top 20 economies vowed to monitor the impact of the coronavirus outbreak on global growth and act if needed, as they said loose monetary policy and easing trade tensions would prompt a pick-up in 2020 and 2021.

G-20 Financial Leaders Warn Coronavirus Risk to Global Growth; Finance ministers and central bankers discuss the virus, trade and geopolitical tensions at a weekend meeting in Saudi Arabia
Rory Jones – Reuters
The Group of 20 major economies warned Sunday the fast-spreading coronavirus posed a serious risk to global growth and agreed to take action should the epidemic’s impact intensify.

Digital Tax Fight Emerges as Global Economic Threat; European finance ministers, meeting at the G20 in Riyadh, are pushing the United States for a global tax deal as a year-end deadline looms.
Alan Rappeport and Jim Tankersley – WSJ
The world’s top economic leaders warned on Saturday that an international tax fight between the United States and Europe poses a new threat to the global economy if a resolution is not reached this year.

Global Stocks Plummet Over Coronavirus Concerns
Keith Bradsher – The New York Times
Spreading coronavirus outbreaks in Italy and in South Korea over the weekend incited broad slides in global stock markets on Monday, as investors feared that the economic disruption already seen in China might affect other economies as well. Futures markets indicated that Wall Street would suffer a decline of more than 2 percent when trading began in the United States, with airline and technology stocks hit in premarket trading. Delta Air Lines and American were both more than 3 percent lower, while shares of Apple were down by 3.5 percent. Oil prices also fell as demand for crude waned because of concerns about a widening economic slowdown.

Exchanges, OTC and Clearing

SEC denies Cboe stock exchange speed bump proposal; The controversial speed bump was opposed by some of the markets most active participants and industry lobby groups.
Joe Parsons – The Trade
The US Securities and Exchange Commission (SEC) has denied a proposal from Cboe Global Markets to introduce a four-millisecond delay on its equities exchange.

Eurex Clearing expands buy-side sales
Nick Barnes will join Deutsche Börse Group as Senior Vice President for Sales and Relationship Management on 1 March 2020. Concentrating on Eurex Clearing’s buy-side initiative, he will be based in London and report to Jonathan Lombardo, Head of Fixed Income Derivatives Funding & Financing Sales, Northern Europe. European Sales is led by Frank Gast, while Philip Simons heads Fixed Income Sales globally.

Eurex Clearing hires former MarketAxess repo executive to boost buy-side sales; Eurex Clearing expands buy-side sales and relationship management team
Kiays Khalil – The Trade
Eurex Clearing has bolstered its buy-side sales team with the appointment of Nick Barnes from MarketAxess . Barnes will join the Frankfurt-based clearing house in March as a senior vice president for sales and relationship management , reporting to Jonathan Lombardo, head of fixed income derivatives funding & financing sales in Northern Europe.

Xetra-Gold exceeds EUR 10 billion in assets under management; Rising gold prices and high demand set a new record / Europe’s leading gold ETC with physical securitization
Deutsche Börse Group
Xetra-Gold’s assets under management (ISIN: DE000A0S9GB0 ) exceeded the EUR 10 billion mark for the first time. The physical stock of the gold ETC, which is stored in the central safe for German securities in Frankfurt, is currently 209.98 tons. This corresponds to an increase of 6.39 tons since the beginning of the year.

British financial pundit David Buik joins Aquis Exchange; Aquis Exchange onboards international financial commentator as a consultant.
Kiays Khalil – The Trade
Aquis Exchange has appointed well-known financial markets pundit and commentator, David Buik, as a consultant. The veteran financial expert, with over 50 years’ experience in the financial sector will join up with the exchange on 2 March.

Aquis Exchange Appoints David Buik As Consultant – International Financial Commentator Joins From 2 March
Aquis Exchange PLC (AQX.L), the exchange services group, which operates the pan-European cash equities trading business, Aquis Exchange, today announces that renowned business commentator David Buik will join the Company as a Consultant on 2 March 2020.

SGX Launches Methanol Futures And Swap Contracts
Rising methanol demand calls for improved price discovery and risk management; Methanol contracts complement SGX’s petrochemical suite of products
Singapore Exchange (SGX) today launched methanol futures and swap contracts to help methanol producers, traders and downstream users manage risk and improve price discovery amid rising demand. The new contracts are cash settled in reference to the S&P Global Platts daily price assessment for methanol.

ASX wants more tech firms to list down under
Max Cunningham of ASX says the exchange’s new tech board should bring new companies to Australia, thanks to its international listing strategy.


Fintech startups raised $34B in 2019
Manish Singh – Tech Crunch
Financial services startups raised less money in 2019 than they did in 2018 as VC firms looked to back late stage firms and focused on developing markets, a new report has revealed. According to research firm CB Insights’ annual report published this week, fintech startups across the world raised $33.9 billion* in total last year across 1,912 deals*, down from $40.8 billion they picked up by participating in 2,049 deals the year before. It’s a comprehensive report, which we recommend you read in full here (your email is required to access it), but below are some of the key takeaways.

In the future, there will be no more fintech
Adam Lashinsky and Aaron Pressman – Fortune
Last year, when Fortune decided to start an annual conference focused on fintech companies, cryptocurrency investing, and blockchain-related innovation, I suggested that we call the event “Brainstorm Finance.” My argument was that some number of years down the road there would be no more fintech, only financial companies that use the best technology, including alternative currencies and new record-keeping techniques.

Centre of Finance, Technology and Entrepreneurship Sees Fintech Courses Accredited by Corporate Treasurers in the UK
JD Alois – Crowdfund Insider
The Centre of Finance, Technology and Entrepreneurship (CFTE) has announced that three courses—AI in Finance, Fintech Foundation and “Extrapreneurship” are now accredited by the Association of Corporate Treasurers (ACT). AI in Finance and Fintech Foundations’ syllabuses will jointly focus on current developments in Artificial Intelligence and financial technology within the financial services industry.

BIS Names Heads of Singapore & Switzerland Innovation Hub Centres
Rachel McIntosh – Finance Magnates
The Bank for International Settlements (BIS), which is colloquially referred to as the central bank of central banks, has officially announced the appointments of two new heads to two BIS Innovation Hub Centres: Andrew McCormack in Singapore, and Morten Bech in Switzerland. Both men will begin three-year terms at their respective Innovation Hub Centres in April of this year.


Crypto Appears on Simpsons Where Jim Parsons Explains It’s ‘Cash of the Future’
Ting Peng – Cointelegraph
One of the latest episode of “The Simpsons” aired has just aired featuring Jim Parsons of Big Bang Theory appearing as a guest star to explain cryptocurrencies and how a blockchain works. In the song and dance predicts cryptocurrency to be the future money, the animated ledger states: “Each day I’m closer, to being the cash of the future. Not in your wallet, I’m in your computer!

Japan’s Aso Expresses Concerns Over China’s Digital Yuan
Toru Fujioka – Bloomberg
Japan’s Finance Minister Taro Aso warned the world off China’s digital yuan, saying more work is needed before any issuance. China is expected to introduce the currency later this year, and Japanese officials have repeatedly expressed reservations about such a a move.

Ex-NFL Investor Fowler Faces New Fraud Charge in Crypto Case
Chris Dolmetsch – Bloomberg
An Arizona businessman who once owned a stake in the National Football League’s Minnesota Vikings was accused of fraud relating to another sports league as he prepares to go on trial for allegedly running a shadow bank for cryptocurrency traders. Reginald Fowler was charged Friday in federal court in Manhattan with defrauding individuals associated with a professional sports league by using illegally obtained funds to try to buy an ownership stake.

In Crack Down On Cryptocurrency Tax Evasion, IRS Hosts D.C. Policy Summit
Jason Brett – Forbes
It has been reported the IRS has invited cryptocurrency companies and advocates to a summit in Washington D.C. on March 3 at its Headquarters. In an attempt to ‘balance taxpayer service with regulatory enforcement’, in a copy of the email invitation obtained by Bloomberg Tax, which first reported the story, the details of the summit will include four 90-minute panels on technology updates, issues for cryptocurrency exchanges, tax return preparation, and regulatory guidance and compliance.

‘Crucial’ for Central Banks to Consider Digital Currencies: Bank of England Exec
Paddy Baker – Coindesk
‘Crucial’ for Central Banks to Consider Digital Currencies: Bank of England Exec
The Bank of England’s (BoE) chief cashier, Sarah John, has said it is “crucial” that central banks research digital currencies so they can strike a balance with private issuers.

Does the U.S. Need a National Digital Currency? Proponents say payments with a digital dollar would be faster and easier. Opponents say it would be costly and inefficient.
The nature of money is changing, and central banks around the world are debating whether they need to change with it. As electronic payments take off and private cryptocurrencies such as bitcoin seek to gain traction, governments are exploring whether to issue digital versions of their national currencies that could be used as a universal form of payment in the way physical cash is today. These conversations gained urgency for some last year when Facebook Inc. announced plans to launch a cryptocurrency called libra, sparking concern that one of the world’s most powerful technology firms could become even more powerful by operating its own digital money.

Sweden’s Central Bank Finally Embraces DLT, But Only in Simulation Mode
Danny Nelson – Coindesk
Sweden’s central bank will soon trial a blockchain-based digital currency – but it’s still in its very early stages, at best. Announced Thursday, Sveriges Riksbank’s e-krona pilot is the latest attempt at a central bank digital currency (CBDC) from an institution that for years fretted over basing any such project on distributed ledger technology (DLT). For now at least, the e-krona pilot is set to move forward on a limited basis. Built by Accenture and based on R3 Corda, Riksbank’s digital currency trials will run as a simulation through February 2021, at which point Riksbank could extend the project for another six years.

JPMorgan Chase in talks to launch digital bank in UK; Move could shake up retail banking market as Brexit spurs others to shift operations
FT reporters
JPMorgan Chase is in talks with London regulators about launching a digital bank in the UK this year, a person familiar with the discussions told the Financial Times.

‘Crucial’ for Central Banks to Consider Digital Currencies: Bank of England Exec
Paddy Baker – Coindesk
The Bank of England’s (BoE) chief cashier, Sarah John, has said it is “crucial” that central banks research digital currencies so they can strike a balance with private issuers. John said it was “really important” BoE and other central banks considered whether digital currencies could form the basis of a new payment system and, if so, “quicken the pace” on determining how to regulate the new asset class.

Japan criticizes U.S. digital tax proposal at G20
Leika Kihara – Reuters
Japanese finance minister Taro Aso criticized on Sunday a U.S. tax reform proposal that he said could undermine global efforts to agree new rules on taxing big tech companies.

IOTA Foundation expects to reactivate network by March 2 following $2M user wallet attack
Celia Wan – The Block
The IOTA Foundation said Thursday that it would reactivate the IOTA network by March 2, following an abrupt shutdown last week in the wake of an attack that resulted in some users of the Trinity wallet software having their funds stolen. The nonprofit organization said today that it is developing transition tools for users to transfer their funds from their existing accounts to new ones. After the transition is complete, the Foundation will bring the network online. The Foundation paused the network in the wake of the attack, as reported previously by The Block.

Shopify Joins Libra Association After Raft Of Departures
Darryn Pollock – Forbes
The Libra Association, the collective of major companies putting their weight behind the Facebook cryptocurrency project, Libra, has finally shown a bit of growth after a number of prominent companies departed. It was announced on Friday that Shopify, the e-commerce platform, will become a part of the Libra Association.

New Jersey lawmaker files bill to require licenses for crypto companies
Yilun Cheng – The Block
A lawmaker New Jersey has introduced a new bill that, if passed and signed into law, would mandate that cryptocurrency businesses must obtain a license to operate in the state. The new bill – the “Digital Asset and Blockchain Technology Act” – aims to strengthen consumer protection laws in the cryptocurrency space, according to an official announcement. The measure was introduced on Feb. 20, according to data published on LegiScan.


Bloomberg Tries to Get Past Stumbles Before Super Tuesday
Ryan Teague Beckwith – Bloomberg
Debate performance panned, post-show commentary worse; Candidate has taken steps to recover as more trouble hit
Michael Bloomberg’s offer to lift three non-disclosure agreements and other steps taken in recent days are meant to move beyond his widely panned debate performance, a little more than a week before he’ll be on the ballot in more than a dozen states on Super Tuesday.

Peter Navarro Says Coronavirus Shows U.S. Offshored Too Much
Hailey Waller – Bloomberg
Trump adviser says U.S. economy ‘not particularly vulnerable’; Request coming this week for face masks that China restricted
White House trade adviser Peter Navarro says the coronavirus crisis shows, “not surprisingly,” that the U.S. has offshored too much of its supply chain.

Bernie Sanders’ Nevada Coalition Gives Him Clearest Path to Nomination
Gregory Korte – Bloomberg
Unexpected support among non-white voters strengthens his bid; Democratic rivals already preparing for contested convention
Bernie Sanders’ commanding win in Nevada dismantled the conventional wisdom about his level of appeal. It broadened his coalition to look more like the Democratic Party as a whole and will make it harder for fearful moderates to impede his path to the nomination.

Michael Bloomberg’s other problem
Merrill Brown – CNN
The Bloomberg news organization has been the nation’s quirkiest large news organization over the course of its 30-year history and never more in the news than now. Some of that is about the unusual nature of a significant news gathering organization contained within a much larger financial services company that has huge business relationships with the nation’s most powerful banks and other financial institutions.

Trump’s Efforts to Remove the Disloyal Heightens Unease Across His Administration; As senior officials are shown the door, a new personnel chief orders a search for political appointees as well as career officials deemed insufficiently supportive of the president.
Peter Baker – NY Times
In some of the most critical corners of the Trump administration, officials show up for work now never entirely sure who will be there by the end of the evening — themselves included.

Clint Eastwood Endorses Bloomberg, Citing ‘Ornery’ Politics
Max Berley – Bloomberg
Hollywood legend and longtime Republican activist Clint Eastwood has endorsed Michael Bloomberg for president, saying he was tired of the “ornery” politics of Donald Trump.

Soak-the-Rich Tax Plans Take Hold in the Entire Democratic Field
Laura Davison – Bloomberg
2020 hopefuls have floated increasingly progressive ideas; Democrats no longer have ‘allergy’ to being called tax raisers
Senators Bernie Sanders and Elizabeth Warren would bring one of the most progressive tax agendas in history to the White House if either of them were to become president. So would every other Democrat vying for the presidency.

Digital Edits, a Paid Army: Bloomberg Is ‘Destroying Norms’ on Social Media; His campaign is testing the boundaries of what platforms like Twitter and Facebook allow in politics. They’re having trouble coming up with an answer.
Sheera Frenkel and Davey Alba – NY Times
In the first few months of his presidential campaign, Michael R. Bloomberg has been as aggressive on social media as President Trump was four years ago. But with a lot more money to spend.


ASIC Consults On Relief For Companies Planning An Initial Public Offering
ASIC is seeking feedback on proposals to grant conditional relief for voluntary escrow arrangements and pre-prospectus communications in connection with an initial public offer (IPO).

CFTC Wins Forex Fraud Trial on Damages and Obtains Monetary Judgment of More than $22.6 Million; Court Releases Pallet of Foreign Currency Valued at $2.5M to CFTC
The Commodity Futures Trading Commission today announced that following a bench trial the U.S. District Court for the Middle District of Alabama entered a final judgment against defendants Husam Tayeh of Illinois and his companies, Dinar Corp., Inc. and My Monex, Inc., both Nevada corporations. The court’s ruling orders the defendants to pay more than $22.6 million in disgorgement and civil monetary penalties in connection with Tayeh’s fraudulent foreign currency (forex) scheme. The court previously found the defendants liable for violations of the Commodity Exchange Act, including fraud.

Wells Fargo to Pay $500 Million for Misleading Investors About the Success of Its Largest Business Unit
Payment Will Be Distributed to Harmed Investors
The Securities and Exchange Commission today charged California-based Wells Fargo & Co. for misleading investors about the success of its core business strategy at a time when it was opening fake accounts for unknowing customers and selling unnecessary products that went unused. Wells Fargo has agreed to pay $500 million to settle the charges, which will be returned to investors. The $500 million payment is part of a combined $3 billion settlement with the SEC and the Department of Justice.

Investing and Trading

Wyoming’s Bet on Coal Is a Poor Investment; Wyoming’s meddling in energy markets to extend the “zombie” coal industry is a waste of ratepayers’ and taxpayers’ money.
Wyoming’s meddling in energy markets to extend the “zombie” coal industry is a waste of ratepayers’ and taxpayers’ money (“Wyoming Tries to Give Coal a Lift.” U.S. News, Feb. 18). It makes no economic sense when coal cannot compete with cheap natural gas, wind and solar. Coal makes even less sense when you factor in the economic costs of how it is the worst of all fuels in terms of climate damage.

The Key to New York’s Green Dreams May Be Turning Quebec Into a Mega-Battery; Power grids on both sides of the border could slash their emissions by sending electricity back and forth, MIT researchers say
David R Baker – Bloomberg
Dotted within the sparsely populated forests and tundra of northern Quebec is an existing technology that could hold the key to slashing greenhouse-gas emissions created by powering the dense cities and suburbs between Boston and New York, at the lowest possible price. All that’s needed is a handful of new transmission lines, according to researchers at the Massachusetts Institute of Technology, and the existing network of hydroelectric dams from the Hudson Bay to the St. Lawrence River could serve as a giant battery for the U.S. Northeast.

America’s Bonds Are Caught in a European Tractor Beam; Yields on 30-year U.S. debt have fallen to record lows. Coronavirus is a factor, but so are the meager pickings available in Europe and Japan.
Marcus Ashworth – Bloomberg
The yield on a 30-year U.S Treasury bond has finally fallen to a record low of 1.83%, having dropped a staggering 50 basis points this year already. With the coronavirus outbreak forcing people to look for havens, there are few signs that this investor frenzy for long-maturity sovereign debt is going to abate anytime soon.

The ECB Is in For a Coronavirus Shocker; It’s time for euro-area policy makers to take the threat of the new coronavirus seriously in spite of encouraging economic signs in February.
Ferdinando Giugliano – Bloomberg
It was the calm before the storm. Last week, new data showed that the euro-zone economy had seen an encouraging rebound in February, as activity in the services sector expanded strongly, while manufacturing slowed less than expected. However, the disruptions from the new coronavirus epidemic look set to hit the region’s businesses hard, especially as the number of cases outside of China grows. The European Central Bank and euro region finance ministers have seemed oddly sanguine in recent weeks, but that’s likely to change soon.

Opinion: Here’s a way to boost your chances of missing the stock market’s worst
Mark Hulbert – MarketWatch
Most arguments about stock-market timing, either pro or con, shed more heat than light. That’s a shame, since deciding whether to be a market timer, or instead to buy and hold, is one of the more consequential decisions an investor can make. It’s crucial that the choice be based on as objective an analysis as possible.

Cargill announces plan to launch plant-based patty and ground products in early April
Ciara Linnane – MarketWatch
Cargill said Monday it is launching a plant-based patty and ground products with plans to hit retailers and restaurants in early April. The privately held food and agricultural company said the new products are part of a plan to bring more protein options to retail stores, cafeterias, fast food outlets, restaurants and other locations. The company has invested $7 billion in animal protein in the last five years and also made investments in the alternative protein space.

Rising stocks fuel record profit for Buffett’s Berkshire; operating profit disappoints
Jonathan Stempel – Reuters
Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) on Saturday posted a 23% decrease in quarterly operating profit, while soaring prices in stock holdings such as Apple Inc (AAPL.O) enabled the conglomerate to smash its old record for full-year earnings.

Dumb Money Beats Smart Picking Big Winners in Stocks This Year
Lu Wang – Bloomberg
Seven of the top 50 retail favorites have risen at least 50%; Hedge funds score two, and both are also big with mom-and-pop
Looking for the smart money in equities these days? Try taking a peek at your next-door neighbor’s portfolio.

Buffett calls for more accountability for corporate directors
Jonathan Stempel – Reuters
Warren Buffett on Saturday called on corporate America to make their boards of directors more accountable to shareholders and less beholden to chief executive officers, perhaps by reducing their pay and requiring that they buy more stock.

‘Gluttonous demand’ feeds huge rally in US municipal bonds; Yields touch lowest levels since 1950s following 56 consecutive weeks of inflows
Colby Smith – FT
The extraordinary gains made in the $3.8tn US municipal bond market last year show few signs of letting up, leaving analysts questioning how long the ride can last.

The daunting task of decarbonising investment portfolios; Slow progress on carbon pricing keeps investors in the dark
Amin Rajan – FT
The writer is chief executive of the Create Research consultancy Few countries are pricing carbon high enough to limit the increase in global temperatures to well below the 2C degrees by 2100 set by the Paris Agreement, according to the latest OECD assessment.


How ‘Stewardship’ Aims to Make Passive Funds Greener
Alastair Marsh – Bloomberg
What happens when the century’s two biggest investment trends collide? That is, what happens when pressure to make climate change a focus of investment decisions runs into the multi-trillion dollar flow of money into passively managed funds, many of which are locked into holding shares of big carbon emitters? One response has been a new emphasis on the concept of stewardship. The companies that run the largest passive funds (and some active-management peers) call stewardship an organized effort to use their influence to change companies’ environmental ways. Some activists call it a smokescreen for the billions these funds keep sending to fossil-fuel producers even as they talk up a low-carbon future.

HSBC Keeps Net Open for New CEO; Unicredit boss Jean Pierre Mustier ruled himself out, but interim CEO Noel Quinn may still not get the job
Margot Patrick and Simon Clark – WSJ
HSBC Holdings HSBC 0.80% PLC said it would continue looking for a new chief executive while it considers permanently appointing interim CEO Noel Quinn, after UniCredit UNCFF -1.37% SpA boss Jean Pierre Mustier withdrew from talks about the job.

ESG Funds Mostly Track the Market; Push toward ‘sustainability’ in investing so far isn’t having outsize impact on stocks
James Mackintosh – WSJ
Funds that promise environmental, social or governance improvements are a strange bunch: They hold more in technology stocks than the wider market, but are underweight Apple, and Facebook, three of the biggest.

Why Morgan Stanley’s E*Trade Deal Means Bigger Banks
Yalman Onaran – Bloomberg
Morgan Stanley and E*Trade Financial Corp. were Wall Street opposites: One an investment banking firm with a historic pedigree that catered to corporations and the wealthy, the other a discount brokerage that had pioneered cheap online trading. Now they’re merging, for reasons that say a lot about how the U.S. financial landscape is being reshaped. After a decade in which Wall Street giants mostly stood pat, in part because of the fallout from the “too big to fail” bailouts of 2008, the desire to get even bigger is coming back.

Wanted: new chief executive for Norway’s $1.2tn oil fund; Key attributes: ability to steer world’s biggest SWF through critical period
Richard Milne – FT
The deadline for applications for what one senior Norwegian businessman described as the country’s “most important job” closed on Friday. On paper, running Norges Bank Investment Management, an arm of Norway’s central bank, falls short of that description. In practice, whoever secures the role will be the de facto head of the world’s largest sovereign wealth fund.

Goldman Sachs pleads not guilty in Malaysia over 1MDB bond sales: state media
Three units of Goldman Sachs pleaded not guilty to charges of misleading investors regarding $6.5 billion in bond sales that the U.S. investment bank helped raise for state fund 1Malaysia Development Berhad (1MDB), Bernama state news agency reported on Monday.


Italy sovereign, bank CDS soar as coronavirus spreads in Europe
The cost of insuring exposure to debt issued by Italy’s government and banks rose on Monday after the country struggled to contain the worst coronavirus outbreak outside Asia, which claimed four lives and infected hundreds.

Korea’s Coronavirus Spread Puts an Export Hub at Risk; About 90% of South Korea’s exports are intermediate rather than finished goods, meaning that any industrial shutdowns will be felt elsewhere in the world quickly afterward
Mike Bird – WSJ
The rapid spread of coronavirus in South Korea is bleak news for global manufacturers. China-style industrial shutdowns look increasingly likely in a country that punches above its weight—perhaps more than any other—in global supply chains.

Fears Grow of Coronavirus Spread as Cases Spike Beyond China
Rachel Chang – Bloomberg
Swelling case load in South Korea and Italy spark concern; ‘Not just a China issue,’ says Mizuho Bank’s strategy chief
The emergence of new centers of coronavirus infection outside of China is fueling concern the outbreak could become a global pandemic, rattling financial markets and stoking anxiety over the potential hit to economies.

China Pushes Factories to Reopen, Risking Renewed Virus Spread
Bloomberg News
Local governments relaxing criteria for factories to reopen; Top leaders urge businesses to work to prevent economic slump
China is trying to get people back to work, risking a renewed spread of the coronavirus. Central and local governments are loosening the criteria for factories to resume operations as they walk a tightrope between containing a virus that has killed almost 2,600 people and preventing a slump in the world’s second-largest economy.

Italy’s Rich Northern Regions in Lockdown as Virus Spreads
Tommaso Ebhardt and John Follain – Bloomberg
Schools, museums close as northern economic hub faces virus; Areas most affected make up economic heartland of the country
Italy’s economic engine ground nearly to a halt on Monday amid Europe’s largest coronavirus outbreak. Milan, the country’s financial hub, and the productive regions of Lombardy and Veneto were in virtual lockdown, as schools, universities and museums closed, sporting events were canceled and a curfew was imposed on bars.

Asia’s Richest Man Sees Online Gaming as Next Big Thing in India
P R Sanjai and Dhwani Pandya – Bloomberg
For Asia’s richest man, online gaming could be the next big thing in his home market. “There is a huge potential” for gaming to grow in India, Mukesh Ambani, chairman of Reliance Industries Ltd., said while speaking with Microsoft Corp. Chief Executive Officer Satya Nadella in Mumbai on Monday. “Gaming will be bigger than music, movies and television shows put together.”

Prized Art of Alleged Bank-Fraud Mastermind to Hit Auction Block
Jeanette Rodrigues – Bloomberg
Art, jewelry, cars seized from Nirav Modi to be sold in Mumbai; Works include a 1935 painting by Indian artist Amrita Sher-Gil
The man accused of orchestrating India’s biggest bank fraud once counted among his most prized possessions an MF Husain painting that depicts the tussle between right and wrong in the human soul.

Banned Thai opposition party says junta helped 1MDB cover-up
A banned Thai opposition party on Sunday accused the former military junta of helping cover up Malaysia’s multi-billion-dollar 1MDB scandal, urging Thais to demand the truth ahead of a censure debate against Prime Minister Prayuth Chan-ocha.

Saudis Weigh Breaking Oil Alliance With Russia as Virus Crimps Demand; Saudi Arabia, Kuwait and the U.A.E. will discuss a possible collective output cut of as much as 300,000 barrels a day
Summer Said and Benoit Faucon – WSJ
Saudi Arabia is considering a break from its four-year oil-production alliance with Russia, according to people familiar with the matter, as China’s coronavirus outbreak contributes to a drop in global oil demand.

Venice Carnival Ends Early as Italy Virus Outbreak Spooks Europe
Daniele Lepido and John Follain – Bloomberg
Austria temporarily stops trains from crossing key Alpine pass; With most cases in Europe, Italy has imposed regional lockdown
Venice ended its carnival early and Fashion Week in Milan restricted public access after Italian authorities canceled all public events in both cities to contain a surge of coronavirus infections.

‘Massive Risk’ Drives ESG Bets at $108 Billion Finnish Funds
Kati Pohjanpalo and Leo Laikola – Bloomberg
Two of Finland’s biggest pension funds, with combined assets of $108 billion, are determined to make their portfolios carbon neutral over the next decade and a half, in a race to dodge the fallout of global warming before it’s too late.

How ‘Stewardship’ Aims to Make Passive Funds Greener
Alastair Marsh – Bloomberg
What happens when the century’s two biggest investment trends collide? That is, what happens when pressure to make climate change a focus of investment decisions runs into the multi-trillion dollar flow of money into passively managed funds, many of which are locked into holding shares of big carbon emitters? One response has been a new emphasis on the concept of stewardship. The companies that run the largest passive funds (and some active-management peers) call stewardship an organized effort to use their influence to change companies’ environmental ways. Some activists call it a smokescreen for the billions these funds keep sending to fossil-fuel producers even as they talk up a low-carbon future.


EU set for final push to toughen post-Brexit trade stance
George Parker, Jim Brunsden and Michael Peel – Financial Times
EU governments will make a final push this week to toughen the bloc’s negotiating position ahead of the opening of trade talks with the UK, even though British officials claim that the EU27 countries are “divided” over their stance. The two sides, which will both formalise their negotiating objectives this week, are approaching the talks with very different visions of what that relationship should look like, with the UK emphasising its desire to break free from EU rules and Brussels warning that this will reduce the market access it can offer. On Sunday, British officials insisted that, in contrast to the EU27, Boris Johnson’s government was united in seeking a “Canada-style” free trade agreement.

Brexit: Emmanuel Macron ‘not sure’ of UK-EU trade deal by end of year
BBC News
French President Emmanuel Macron has said he is “not sure” a UK-EU trade deal will be struck by 31 December, the end of the Brexit transition period. Mr Macron said negotiations starting in March will be “tense”, with fishing rights a key point of contention. It comes as the UK government signalled it would publish its mandate for the trade deal later this week. In the document, ministers are expected to reiterate their desire for a Canada-style deal with few tariffs on goods. While a trade deal is hammered out with the EU, the UK is following the majority of the bloc’s rules.

Brexit: UK reneging on Northern Ireland pledges risks trade deals with US and EU
Lisa O’Carroll – The Guardian
Reneging on the special Brexit arrangements for Northern Ireland will risk trade deals with both the EU and the US, experts have warned. Concern has been raised after Boris Johnson’s Brexit negotiating team has reportedly been ordered to come up with plans to “get around” the Northern Ireland protocol in the withdrawal agreement, which includes checks on goods and food going from Great Britain to Northern Ireland.


Assange Leaks Threatened Agents Who Put Their Lives at Risk
Ellen Milligan – Bloomberg
U.S. seeking Assange on charges over secret document leaks; Lawyers for U.S. argue that case isn’t about free speech
WikiLeaks founder Julian Assange was called a threat to the people “who put their lives at risk to assist the U.S.” on the first day of his extradition trial in London.

Retracing the Boy Scouts’ Path to Bankruptcy; Decades of failing to fully confront a sex-abuse crisis led to the youth organization’s day of reckoning
Joseph De Avila – WSJ
The Boy Scouts of America were dogged by sex-abuse claims for more than 50 years before it implemented key child-safety policies in the late 1980s. Now, after more than a dozen states changed their statute-of-limitations laws in 2019 to allow lawsuits based on decades-old allegations, hundreds of men are coming forward to say they were abused decades ago.

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