Muni Bond Blowup Exposes Flaws in $600 Billion Corner of Market

Nov 17, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

Last night’s fundraiser in Chicago in support of the Pathway to Adventure Council of the Boy Scouts of America at the CBOT Building was a big success. There was a bigger crowd than expected and the total raised is $115,000 and counting. The LaSalle Street Trading Tech Reunion was the first event held in three years of the fundraising events from the Chicago financial community that started back in 1971. Advantage Futures’ Terry Duffy was the chairman of the event and Advantage was the Diamond sponsor for the evening. Other sponsors included the CME Group, Cboe Global Markets, OCC, NFA, FGMK, BIG Construction, George Hanley, Joanne Moffit Silver, CQG and ADMIS. Thank you to all who contributed to make the evening a success, including my nephew Andrew Lothian, who was the well-received entertainment for the evening.

Elon Musk is ignoring the “law of holes,” which is an adage that states that when you find yourself in a hole, stop digging. Musk commented stupidly on an anti-semitic post on his social media platform, now known as X and formerly known as Twitter, saying it was “the Actual Truth.” In response, firms like IBM have pulled their advertising from X. The Wall Street Journal reports on the latter in a story titled “IBM pulls adverts from X after report finding they ran next to Nazi content” with the subheading “Tech company’s move is the latest setback to Linda Yaccarino’s efforts to convince brands Elon Musk’s platform is safe.”

Old plastic milk bottles have new competition for recycling into park benches. According to a Bloomberg story, “Retired Wind Turbine Blades Live on as Park Benches and Picnic Tables.” The subheadline is “To keep turbine blades from piling up in landfills, startups like Canvus are turning them into new products – and free marketing for wind power.”

The good news is that you can have a longer and more productive career on Wall Street than you can as a footballer. However, presently some footballers are getting bigger bonuses than Wall Street investment bankers, according to a Financial Times story titled “Manchester City’s bonuses beat those on Wall Street,” with the subheading “The superstar effect of being a famous footballer has the edge over investment banking.”

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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Worth a look: TIME magazine released its first TIME100 Climate list, which it says are the Most Influential Climate Leaders in Business. The list offers leadership categories: Catalysts; Leaders; Titans; Innovators; and Defenders. To compile the list, TIME editors consulted its TIMECO2 advisory council, a panel of 10 climate experts and sustainability leaders, including Christiana Figueres, former Executive Secretary of the UN Framework Convention on Climate Change; Katharine Hayhoe, Chief Scientist at The Nature Conservancy; and Hindou Oumarou Ibrahim, President of the Association for Indigenous Women and Peoples of Chad. You can see them here.~SAED

Our most read stories yesterday on JLN Options were:
Options traders are piling into bullish bets on small-cap stocks at a record pace from MarketWatch.
SEC Defers Decisions on Spot Bitcoin ETF, Grayscale Ether Futures Filings from Bloomberg.
Korea Mulls Years-Long Trading Ban on Illegal Short Sellers from Bloomberg via Yahoo Finance. ~JB

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

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Sponsored Content
To reinforce the function of margin, that is to “protect investors,” Japan Securities Clearing Corporation (JSCC), a group entity of Japan Exchange Group (JPX), that handles clearing of JPX’s derivatives market, has changed its Margin calculation methodology from “SPAN method” to “VaR method” on November 6, 2023

Under the VaR Margin calculation method, there are 2 types of calculation methods, Historical Simulation Method (HS-VaR Method) and Alternative Simulation Method (AS-VaR Method).

HS-VaR method is used for Index Futures/Options (such as our flagship contract Nikkei 225 futures, excluding dividends index futures), Japanese Government Bond (JGB) Futures/Options, Interest Rate Futures (3-Month TONA Futures) listed on Osaka Exchange (OSE), and TOCOM’s Electricity and LNG Futures contracts. On the other hand, AS-VaR method is used for OSE’s Dividends index futures, Precious Metals Futures/Options, Rubber Futures, Agricultural Futures and TOCOM’s Energy Futures (other than Electricity/LNG Futures).

* In JST: JST minus 15 hours = Chicago time.
** Instruments subject to AS-VaR Method are also recorded.
CLICK HERE FOR MORE DETAILED INFORMATION
Note: Each Broker decides its handling of the amount of Margin to investors independently based on the Margin requirement JSCC notifies the Brokers. So, the Margin requirement JSCC calls for the Brokers and the amount of Margin Brokers require for investors to deposit may be different.

——————————————-
Contact: Osaka Exchange / Tokyo Commodity Exchange Derivatives Business Development
E-mail: ose-dmg@jpx.co.jp
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HR Professional Pat Lunkes Discusses the Future of Work & Its Impact on the Industry at FIA Expo 2023
JohnLothianNews.com

At FIA Expo 2023, Pat Lunkes, the president of Parkway Consulting and a longtime human resources professional, moderated a roundtable discussion titled, “The Future of Work & Its Impact on the Industry in a Global Environment.”

Watch the video »

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Elon Musk Said Antisemitic Social-Media Post Was ‘the Actual Truth’; An X user said Jewish communities push hatred of white people
Jennifer Calfas – The Wall Street Journal
Elon Musk agreed with a post on X that said Jewish people hold a “dialectical hatred” of white people, eliciting a new round of criticism that he promotes antisemitic views. Musk, the billionaire owner of X Corp., formerly Twitter, responded to a user’s post Wednesday that espoused an antisemitic conspiracy theory with: “You have said the actual truth.”
/jlne.ws/3swubGy

****** Stupid is as stupid does. ~JJL

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Ramaswamy’s Crypto Policy Calls for Deregulation and Gutting the SEC
Hadriana Lowenkron – Bloomberg
Vivek Ramaswamy vows to rescind most federal cryptocurrency regulations and drastically reduce headcount at the Securities and Exchange Commission if he is elected president. Ramaswamy’s proposal, the first crypto plan released by a Republican presidential campaign, calls for a 75% reduction of the federal workforce, including the SEC, and says he would make the deregulation of financial and investment rules a priority.
/jlne.ws/3R387N1

****** Somewhere Vivek and his firms and his supporters just went onto an unwritten list.~JJL

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Lord of the Deep; For years a shipwreck hunter has battled governments and rivals over the ocean floor’s riches. He’s kept his identity a secret, until now.
Kit Chellel, Olivia Solon and Jonathan Browning – Bloomberg
Officers from the Icelandic coast guard watched the ship on the control room monitors-a solitary dot on the blue expanse of the nautical map. The dot had been circling 120 miles offshore for several days in April 2017, in weather no sane sailor would loiter in. Near-gale-force winds howled across mountainous seas; rain mixed with sleet.
/jlne.ws/49DVHT4

****** Observation number one: don’t mess with Mother Nature. Observation number two: we need better sailors.~JJL

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Thursday’s Top Three
Our top story Thursday was A Taylor Swift song is the best investment advice for 2024, Goldman Sachs says from Business Insider. Second was a tie between Fifth National Climate Assessment from the US Global Change Research Program and the November issue of Focus from the World Federation of Exchanges, which focuses on COP28. Third was The Philippines To Launch First Tokenized Treasury Bonds in Effort To Strengthen Domestic Debt Market, from CoinMarketCap.

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Lead Stories

Muni Bond Blowup Exposes Flaws in $600 Billion Corner of Market
Martin Z. Braun – Bloomberg
The red flags were flying all around Randy Miller. He’d already had bouts with bankruptcy. He’d been accused – not once, but three times – of defrauding business associates. He pointed to a partnership with international soccer powerhouse Manchester United, even though the other ties to professional teams he cited were over three decades old.
/jlne.ws/3MLnZkA

FDIC thrown into turmoil amid push for biggest US banking rules overhaul since 2008
Jennifer Schonberger – Yahoo Finance
The Federal Deposit Insurance Corporation (FDIC) is facing its most important regulatory moment since the 2008 financial crisis, pushing for a sweeping overhaul of how banks are regulated in the wake of last spring’s regional bank crisis. But a Wall Street Journal report detailing a toxic work environment at the Washington agency has thrown the regulator into turmoil.
/jlne.ws/3R3PU1Q

Yet another former Silicon Valley darling is convicted of investor fraud
Connie Loizos – TechCrunch
This year will be remembered for a lot of things. Among them could be the growing number of stars in the startup world who were later convicted for defrauding investors. Roughly six months after Theranos founder Elizabeth Holmes headed to jail for four counts of wire fraud, and just two weeks after Sam Bankman-Fried was found guilty on seven counts of fraud and conspiracy for his role in the collapse of his crypto exchange, another former high-flier in the startup world, Mike Rothenberg, was today convicted on 21 counts, including bank fraud, false statements, four counts of money laundering, and 15 counts of wire fraud.
/jlne.ws/3SSMTTc

China Asks Some Big Banks to Cap Rates on Short-Term Funding
Bloomberg News
China told a handful of nationwide lenders to cap interest rates on interbank funding, people familiar with the directive said, a move that dovetailed with a sizable cash injection intended to calm the market after last month’s unexpected liquidity crunch. At least two national banks were told last week by regulators to offer rates on one-year negotiable certificates of deposit at no higher than 2.57%, the people said, asking not to be identified discussing private information. On Thursday, the PrimeNCD rate, an index measuring primary issuance rates on CDs of major commercial banks, was in line with that level at around 2.57%, according to National Interbank Funding Center’s website.
/jlne.ws/49Drm79

Backlash Spreads Over Musk’s Endorsement of Antisemitic Post
Dana Hull and Ian King – Bloomberg
Fallout from an Elon Musk post endorsing antisemitic views continues to spread, with Tesla Inc. investors criticizing the billionaire and more advertisers fleeing his social media platform X. The European Commission on Friday joined International Business Machines Corp. in announcing its decision to stop advertising on the service formerly known as Twitter, after Musk affirmed a post accusing Jewish communities of hating white people. Tesla shares fell 3.8% on Thursday, trailing the benchmark S&P 500 Index, which was little changed.
/jlne.ws/3MMVxPB

AT1 Bond Market Revival Spreads; UBS sold a total of $3.5 billion in AT1s earlier this month; The bank debt market has seen a flurry of sales recently
Ronan Martin – Bloomberg
Banco BPM is selling euro-denominated additional tier 1 bonds as the enthusiasm for risky bank debt expands to smaller firms. The Italian lender is expected to borrow EUR300 million and bankers are offering the bond at a yield around 10%, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. The notes are callable after five years.
/jlne.ws/40KuycX

Europe needs its own SEC, says Christine Lagarde; ECB president says consolidation among region’s exchanges would plug substantial funding gap
Martin Arnold – Financial Times
Europe needs its own version of the US Securities and Exchange Commission and a unified stock exchange to raise enough money to meet the challenges confronting the region, the European Central Bank president has said. Christine Lagarde said in a speech in Frankfurt on Friday that “creating a European SEC” to replace the patchwork of national markets watchdogs would help to raise the huge sums needed to tackle the triple problems of “deglobalisation, demographics and decarbonisation”.
/jlne.ws/3R3z6XN

Opinion: Crypto will overcome the stain of FTX and Sam Bankman-Fried
Ari Juels and Eswar Prasad – MarketWatch
The vertiginous fall of Sam Bankman-Fried, the disgraced founder of the cryptocurrency exchange FTX who was recently convicted of fraud and money laundering in New York, has cast a harsh light on a largely unregulated market. For all the supposed wonders of the blockchain technology underpinning cryptocurrencies, the headline-grabbing events of the past few years indicate an industry in turmoil. In addition to the criminal activity that led to the spectacular collapse of FTX in 2022 and Bankman-Fried’s guilty verdict in early November, U.S. regulators have sued Binance, the world’s largest crypto exchange, for allegedly operating a “web of deception.” An industry-wide reckoning looms. Will crypto always be a magnet for fraud and malfeasance, or can it eventually transform and democratize finance?
/jlne.ws/3MMSeYH

FTX’s Plan to Potentially Reopen Is a New Sign of Crypto Arrogance
Hannah Miller – Bloomberg
In the year since FTX filed for bankruptcy, cryptocurrency prices have declined, venture capital to crypto startups has been drying up, a growing list of CEOs were arrested, and regulators have been asking more questions. FTX, meanwhile, is looking to make a comeback. The digital currency exchange is considering proposals from three bidders that include the option to reopen trading. A winner is expected to be selected next month. The company, which had more than 9 million customers, could even choose to reboot without a partner. Sam Bankman-Fried, who was found guilty of fraud on Nov. 2, won’t be involved. He’s facing a potential second trial in March for charges that include foreign bribery and campaign finance law violations and is awaiting sentencing for his first criminal convictions, which carry a maximum penalty of over 100 years.
/jlne.ws/3MJ5g9h

Leave Treasury basis trade hedge funds alone! The Managed Fund Association bravely stands up for its members
Robin Wigglesworth – Financial Times
Look, sorry, Alphaville will never ever get tired of writing about Treasury market structure. If this isn’t your cup of tea then check out Trevor Milton’s 10/10 plea for leniency or the latest twist in the Amigo saga. If you’re still here, the topic du jour is the Treasury basis trade, and whether it is the single most dangerous hedge fund strategy in history or a vital cog in ensuring the vibrancy of the global financial system.
/jlne.ws/3ucx53t

Echoes of Bitcoin’s 2021 Record Run Emerge in the Derivatives Market; Cost of bullish perpetual futures bets are around 2021 levels; Open interest at top options exchange scales two-year-old peak
Sidhartha Shukla, Akshay Chinchalkar, and Suvashree Ghosh – Bloomberg
A burst of activity in Bitcoin derivatives has evoked memories of the period in late 2021 when the token surged to an all-time high. Variables such as the cost of perpetual futures trades and options open interest point to a revival in speculative gusto for Bitcoin, which has more than doubled in price this year in a partial rebound from a 2022 rout. The increased attention stems partly from expectations that the first US spot Bitcoin exchange-traded funds may soon get regulatory assent, opening up the asset to more investors. The likely level of ETF inflows is an open question but the possibility of greater demand is enough to spur chancy trades.
/jlne.ws/3un7jtC

Ripple lawyer urges fact-check of Gary Gensler’s speech, says SEC actions seen as ‘shady’; SEC Chair Gary Gensler shared a speech on X, triggering heated reactions across the crypto community.
Erza Reguerra – Cointelegraph
As Gary Gensler reiterated the United States Securities and Exchange Commission’s mandate in a speech, Ripple’s lawyer and various crypto community members responded, criticizing the SEC chair and arguing that the commissioner’s words contradict his actions. On Nov. 16, SEC Chair Gary Gensler shared a video of him conducting a speech at the 2023 Securities Enforcement Forum. In the speech, he highlighted the words of the first SEC chair, Joseph P. Kennedy, saying that the government agency should be “partners of honest business and prosecutors of dishonesty.”
/jlne.ws/3sCO8v9

Binance is launching an exchange in Thailand with a Thai energy mogul who’s worth $10.6 billion
Ben Weiss – Fortune
The world’s largest crypto exchange continues to expand, despite ongoing regulatory trouble for it and its CEO, Changpeng Zhao. Binance is partnering with Gulf Energy, one of Thailand’s largest private producers of energy, to launch an exchange in Thailand, according to an investor presentation from Gulf Energy for the third quarter of 2023. Sarath Ratanavadi is the majority shareholder and CEO of the Thai energy company and, with a net worth of approximately $10.6 billion, the nation’s second-wealthiest individual, per the Bloomberg Billionaires Index.
/jlne.ws/3sDMMjT

US bank CEOs warn of geopolitical risks as analysts cite stability
Lananh Nguyen, Nupur Anand and Pete Schroeder – Reuters
U.S. bank CEOs warned a slowing economy and rising geopolitical tension could weigh on earnings, but said the industry had regained its footing after the biggest bank failures since the 2008 financial crisis.
/jlne.ws/40KqR75

Goldman Sachs Japan president departs in shake-up; Move accelerates end to career of one of the biggest figures in Tokyo’s financial industry
Leo Lewis and David Keohane – Financial Times
The president of Goldman Sachs Japan has resigned and will step down with immediate effect, bringing to an end the career of one of the biggest figures in Tokyo’s financial industry. The surprise departure of Masanori Mochida, who is around 70, follows a 38-year career at Goldman, during which the US investment bank dramatically raised its profile in Japan and became involved in many of the country’s highest-profile deals.
/jlne.ws/3QHhh0d

Realtor reckoning: US brokers fear for their $100bn commission pool; A profession known for offering flexible and high-paying careers could lose 80% of its members
Taylor Nicole Rogers – Financial Times
A barrage of legal challenges to the fees charged in US home sales has cast doubt over the future earnings of a 1.6mn-strong profession known for offering flexible and high-paying careers, particularly to women. A federal jury in Missouri sided with a group of home sellers in Missouri, Kansas and Illinois last month, finding the largest US real estate brokerages liable for nearly $1.8bn in damages for conspiring to keep commissions high.
/jlne.ws/3QMzuJQ

‘Big Short’ hedge fund pulls out of $1.6bn bets against US market; The wagers against SPY and QQQ ETFs were built up in the second quarter before the ETFs suffered losses of about 3%
Will Schmitt – Financial Times
Michael Burry, the hedge fund manager whose successful bets against the US housing market during the subprime crisis were immortalised in the 2015 movie The Big Short, has pulled out of $1.6bn in wagers against two exchange traded funds tracking the US market.
/jlne.ws/46mSZhX

LSE Group chief says higher US stock market valuations ‘a myth’; David Schwimmer defends London market after Glencore said it would list planned mining spin-off in New York
Nikou Asgari – Financial Times
The head of the London Stock Exchange Group has argued that companies going public in New York do not receive a higher valuation than they would in London, responding to the drift of listings away from the UK. “The notion that you get a better valuation in the US, it’s a myth,” David Schwimmer said. “If you look company by company and adjust for growth rates and other factors, London is at, and in some cases higher, in terms of valuation [than the US].”
/jlne.ws/49Hp077

Singapore opens the door to a shrinking market; Plus, the bleak future facing crypto post-Sam Bankman-Fried
Scott Chipolina – Financial Times
Singapore has given blockchain firm Paxos an in-principle green light to issue a stablecoin – a kind of crypto token pegged to a hard currency. The firm plans to launch the cryptocurrency through its new Singaporean entity. It will be pegged to the US dollar and fully backed one for one by the dollar and cash equivalents.
/jlne.ws/3SGnpsl

Ukraine Invasion

Thousands of Ukrainian children forcefully taken to Belarus via Russia, study finds; Yale University study finds Russia and Belarus ‘have been working together to coordinate and fund the movement of children’
Alisha Rahaman Sarkar – Independent
Thousands of children from Ukraine aged between six and 17 years old have been forcefully transferred to 13 facilities across Belarus since Russia’s invasion last year, a study by Yale University has found. The Humanitarian Research Lab at Yale School of Public Health found that the transfer of 2,442 children was “directly overseen” by Belarusian president Aleksandr Lukashenko – a key ally of Russian president Vladimir Putin.
/jlne.ws/47Fs2Ht

Ukraine establishes ‘several bridgeheads’ on eastern bank of Dnipro – military
Yuliia Dysa and Olena Harmash – Reuters
Ukrainian troops have pushed Russian soldiers out of positions on the eastern bank of the River Dnipro in the Russian-occupied part of Kherson region and established several bridgeheads, Kyiv’s military said on Friday. The Ukrainian Marines said on their Facebook page they had a series of successes, established several bridgeheads and carried out more operations on the eastern side of the river. Russia conceded for the first time this week that Ukrainian troops had crossed the river.
/jlne.ws/47C6lbb

Ukraine seizes initiative from Russia in the Black Sea – Zelenskiy
Reuters
President Volodymyr Zelenskiy said on Thursday that Ukraine has seized the initiative from Russia in the Black Sea and forced Russia’s naval fleet and warships to pull back, thanks to Kyiv’s use of navel drones. “For the first time in the world, it was in the Black Sea that a fleet of naval drones began to operate – a Ukrainian fleet,” Zelenskiy wrote on the Telegram messaging app.
/jlne.ws/49DUFqd

US imposes new sanctions over Russian oil price cap violations, Kremlin influence in the Balkans
Fatima Hussein – Associated Press
The U.S. Treasury on Thursday imposed a new round of sanctions on firms and ships that used American service providers to carry Russian crude oil in violation of the multinational price cap – and imposed another set of sanctions on a group of Balkan people and firms tied to Kremlin influence in the region.
/jlne.ws/49JCe3h

Almost All Russia’s Oil Sold Above the Price Cap Last Month
Bloomberg News
Russia exported almost all its oil cargoes at a price that exceeded a Group of Seven-imposed price cap last month, the latest sign that western sanctions are now failing to restrict Moscow’s access to petrodollars.
/jlne.ws/3SGh0gN

Ukraine Aid From US Won’t Be Approved for a Month, Maybe Longer; Ukraine allies in US Congress begin uphill battle for help; Assistance caught in partisan fight over immigration
Erik Wasson and Billy House – Bloomberg
/jlne.ws/3G7seU5

Israel/Palestine Conflict

U.S. Relied on Intercepts in Assessing Hamas’s Operations at Gaza Hospital; Signals intelligence gathered independently of Israel was among information behind assessment that Hamas and other militants were using Al-Shifa Hospital complex
Nancy A. Youssef and Warren P. Strobel – The Wall Street Journal
The U.S. assessment this week that Hamas and other Palestinian militants were operating within Gaza’s largest hospital complex was based in part on intercepted communications of fighters inside the compound, people familiar with the matter said Wednesday.
/jlne.ws/3sCOT7t

UN says starvation imminent in Gaza, no let-up in Israeli assault
Nidal Al-Mughrabi and Ari Rabinovitch – Reuters
U.N. aid deliveries to Gaza were suspended again on Friday due to shortages of fuel and a communications shutdown, deepening the misery of thousands of hungry and homeless Palestinians as Israeli troops battled Hamas militants in the enclave. The United Nations’ World Food Programme (WFP) said civilians faced the “immediate possibility of starvation” due to the lack of food supplies.
/jlne.ws/3G0ufS1

Exchanges, OTC and Clearing

89% of SGX-listed issuers have board diversity policy; disclosures need more detail
Singapore Exchange
A joint Singapore Exchange Regulation (SGX RegCo) and Council for Board Diversity (CBD) study found that 89% of SGX-listed issuers have disclosed a board diversity policy. Of those that have not done so, the deadline for such disclosures for most of them (7% of all issuers) was not yet due [1]. The Consumer Non-Cyclicals, Real Estate and Financials sectors performed well in their overall disclosures. Of the largest 100 companies by market capitalisation, all but two disclosed their board diversity policy within the cut-off time for the study with the last two companies disclosing in response to SGX queries.
/jlne.ws/47CRkFX

New document from IFFE FUTURA, which joins NATAC, about its listing on BME Growth
BME
It is the tenth company to register a document of incorporation to this BME market, following one of the largest capital increases in the history of the SME stock Exchange; Following this transaction, the total financing of all BME Growth companies exceeds 7 billion euros since its creation. IFFE FUTURA has carried out three share subscription offers. Through the first of these, of a non-cash nature and amounting to 205.2 million euros, it acquired the company NATAC, which results in the merger of both companies, which will form a group listed on BME Growth with a value of over 300 million euros. In addition, the company has carried out two cash capital increases totaling more than 52 million euros, which is one of the most important capital increases that have taken place within BME Growth and the most important so far in 2023.
/jlne.ws/47imsL4

Exciting excursion: Frankfurt elementary school students at the nationwide reading day on the trading floor
Deutsche Boerse Group
On the occasion of the National Reading Day 2023, the Deutsche Boerse invited Frankfurt primary school students to the trading floor. Around 60 children from the Bonifatius School, Carmelite School and Uhland School in Frankfurt took part in the reading campaign. In the trading floor, the students listened to excerpts from the book “The Scary Schusch” by Charlotte Habersack and illustrator Sabine Büchner. The humorous story, which is about community, tolerance and openness, was read out by ZDF stock market presenter Stephanie Barrett, Caroline von Linsingen from Deutsche Börse and stock market trader Atakan Sahin from ICF Bank. The Reading Foundation was represented at the event by Thomas Kleinebrink.
/jlne.ws/3MQfxRf

Moscow Exchange launched a service for smart broker selection
Moscow Exchange
The Moscow Exchange has provided private investors with a new service for smart broker selection , which allows you to compare service conditions and compare tariffs of the largest Russian brokerage companies. Once selected, users can open an account online and start investing. The service is available on the website of the Finuslugi platform . The Moscow Exchange School conducted a study on how Russian investors behave when choosing a brokerage company: what they pay attention to and how the preferences of beginners differ from the priorities of more experienced investors. Data obtained from studying investor preferences formed the basis of the service.
/jlne.ws/3QKPOux

Fintech

Fairfax Offers to Take Agritech Firm Farmers Edge Private at 99% Below IPO Price
Derek Decloet – Bloomberg
Canadian financial group Fairfax Financial Holdings Ltd. offered to buy out minority shareholders of agriculture technology firm Farmers Edge Inc. at a price that would crystallize near-total losses for any longer-term holders of the stock.
/jlne.ws/49GoYwf

Stripe-Backed Nigerian Fintech Paystack Cuts Overseas Staff; Firm trimming 33 workers in Europe and UAE in restructuring; Aims to focus resources on African markets for expansion
Emele Onu – Bloomberg
Paystack, a Nigerian fintech startup and unit of Stripe Inc, is reducing its operations in Europe and the Middle East to expand in Africa, as it seeks to refocus its business. It’s cutting 33 employees in Europe and the United Arab Emirates, where its engineering hub is located, to enable it “localize costs and get closer to customers,” CEO Shola Akinlade said in a statement posted on X. “We’re changing our operating model to prioritize locating team members within the markets we serve,” he said.
/jlne.ws/47zmZYX

Wall Street Bosses Turn to AI to Help Write Performance Reviews; Banks look to implement Workday’s AI software in coming months; Finance chiefs see AI making their workers more productive
Irina Anghel – Bloomberg
Banks have already turned to AI for derivatives trading and fraud detection. Now they want to use it for the annual review process. That’s according to Workday Inc., one of the world’s largest providers of HR software. The firm in September rolled out a bevy of new products that rely on artificial intelligence to write job descriptions or aid managers in writing up annual reviews of workers’ performance.
/jlne.ws/3uilCQ2

Accenture Tech Boss Says AI Will Impact 40% of Working Hours; Rise of the technology has prompted companies to rethink worker tasks, according to an executive.
Irina Anghel – Bloomberg
Accenture Plc’s European technology lead said generative AI could eventually “free up” about 40% of working hours across industries, allowing workers to focus on other tasks. Speaking at a Workday conference in Barcelona, Accenture’s Jan Willem Van Den Bremen said the rise of the technology has prompted companies to rethink which tasks they want staff to perform. For example, Van Den Bremen said computer programmers could shift to validating programs developed by AI, rather than writing the programs themselves.
/jlne.ws/49DYKux

Microsoft tweaks AI image generator over Disney dogs poster trend; Film company’s logo was visible in mock-ups of movie illustrations featuring users’ pets
Cristina Criddle – Financial Times
Microsoft has tweaked its artificial intelligence image generator tool after concerns were raised over a viral social media trend where users created realistic Disney film posters of their dogs, highlighting broader copyright issues in the industry.
/jlne.ws/3QHCU0n

Cybersecurity

U.S. Cybersecurity Agencies Warn of Scattered Spider’s Gen Z Cybercrime Ecosystem
The Hacker News
U.S. cybersecurity and intelligence agencies have released a joint advisory about a cybercriminal group known as Scattered Spider that’s known to employ sophisticated phishing tactics to infiltrate targets. “Scattered Spider threat actors typically engage in data theft for extortion using multiple social engineering techniques and have recently leveraged BlackCat/ALPHV ransomware alongside their usual TTPs,” the agencies said.
/jlne.ws/3SJNvdQ

Cybersecurity: Insurance Prices Level After Two Years of Brutal Increases
Richard Korman – ENR
Satisfied that they finally have their arms around cyber-security risks and that contractor defenses are adequate for now, insurance carriers in 2023 ceased brutal cyber insurance price hikes, said brokers at the International Risk Management Institute’s recent construction risk conference in Orlando, Fla. Increases of 100% and 200% had been common in the past two years.
/jlne.ws/3SNAxMs

Noventiq Joins Microsoft Intelligent Security Association, Strengthening Its Commitment to Cybersecurity
Noventiq Holding PLC Press Release
Noventiq Holding PLC, a leading global digital transformation and cybersecurity solutions and services provider, announced that it is joining the Microsoft Intelligent Security Association (MISA).
/jlne.ws/3QMlos3

Wirecard hacker sentenced to 80 months in prison; US prosecutors say Aviram Azari orchestrated and facilitated ‘international hacking-for-hire spearphishing campaign’
Joe Miller – Financial Times
An Israeli private detective has been sentenced to 80 months in prison for his role in a $4.8mn hacking scheme that targeted journalists and critics of German fintech group Wirecard. Aviram Azari, 52, pleaded guilty in April last year to computer intrusion, wire fraud and identity theft charges relating to work done on behalf of Wirecard, among others. The company collapsed in 2020 following the exposure of a massive fraud.
/jlne.ws/3QKmRPv

Cryptocurrencies

Binance Labs joins web3 social platform Sleek’s seed token round at $50 million valuation
Yogita Khatri – The Block
Sleek, a web3 social network platform, has raised $5 million in a seed funding round. Investors include Binance Labs, Shima Capital, Spartan Group, Symbolic Capital, Market Across and Big Brain Holdings, Sleek said Friday. The funding was realized via a simple agreement for future tokens (SAFT), Tania Tse, co-founder at Sleek, told The Block. She declined to comment on valuation, but a source with direct knowledge of the matter said Sleek’s valuation with the round is $50 million.
/jlne.ws/47GZHAB

Mastercard says wide adoption of central bank digital currencies would be ‘difficult’ right now
Sheila Chiang – CNBC
There isn’t enough justification for the widespread use of central bank digital currencies right now, which makes broad adoption of such assets “difficult,” Ashok Venkateswaran, Mastercard’s blockchain and digital assets lead for Asia-Pacific, told CNBC. “The difficult part is adoption. So if you have CBDCs in your wallet, you should have the ability for you to spend it anywhere you want – very similar to cash today,” said Venkateswaran on the sidelines of Singapore FinTech Festival on Wednesday.
/jlne.ws/3QJn71l

Biggest Stablecoin Issuer Tether Now Wants to Become a Major Bitcoin Miner
David Pan and Emily Nicolle – Bloomberg
Tether Holdings Ltd. is taking steps to become one of the world’s top Bitcoin miners, as the $87 billion stablecoin operator makes a hefty investment in the already highly competitive sector. The company plans to spend about half a billion dollars over the next six months, its incoming chief executive Paolo Ardoino said in an interview, both through constructing its own mining facilities and by taking stakes in other companies.
/jlne.ws/3MPLhpI

Politics

Do not discount the chance of a Trump return; The former president’s team is running a slicker operation than in 2016
Gillian Tett – Financial Times
“Remember, remember the fifth of November! Gunpowder, treason and plot.” Thus goes the traditional ditty that British children (such as myself) have chanted in past Novembers, in memory of Guy Fawkes, the rebel who tried to blow up the British parliament back in 1605.
/jlne.ws/47jsI5h

Joe Manchin warns second Trump term will ‘destroy democracy in America’; Democratic senator is leaving Congress but there’s speculation he might be eyeing a third-party bid for the presidency
Ed Pilkington – The Guardian
Joe Manchin, the controversial Democratic US senator from West Virginia who is stepping down from Congress, has warned that if Donald Trump is sent back to the White House in next year’s presidential election “he will destroy democracy in America”. Manchin delivered a withering attack on Trump a week after he announced that he will not seek re-election in 2024. He said that it would be “dangerous” if the American people gave Trump a second term as he would use the opportunity not merely to shake up the political establishment as he did first time round, but to break it.
/jlne.ws/47xsWp6

The Economist names Trump “biggest danger” for 2024
Shauneen Miranda – Axios
Why it matters: The respected 180-year-old British newspaper said a “second Trump term would be a watershed in a way the first was not” and the “fate of the world” will depend on the ballots of “tens of thousands of voters in just a handful of states” in the 2024 presidential election. Details: The Economist said in its annual “World Ahead” guide Thursday that another four years of Trump in the White House would be “more damaging” than his previous term.
/jlne.ws/3umgdYl

Donald Trump poses the biggest danger to the world in 2024; What his victory in America’s election would mean
The Economist
A shadow looms over the world. In this week’s edition we publish The World Ahead 2024, our 38th annual predictive guide to the coming year, and in all that time no single person has ever eclipsed our analysis as much as Donald Trump eclipses 2024. That a Trump victory next November is a coin-toss probability is beginning to sink in.
/jlne.ws/47Dr9yZ

Biden and Xi Have Far to Go If They Want to Dispel Fears of Cold War; Leaders made some deals, but disagreed on some basic questions; Tough year looms for diplomacy with elections in Taiwan, US
Shawn Donnan – Bloomberg
It took place at a venue famous for glitzy weddings. But Wednesday’s summit between Joe Biden and Xi Jinping had more in common with a counseling session for a couple contemplating divorce. The premise: Let’s try to keep things civil for the kids.
/jlne.ws/40GXz9o

Regulation

FBI Arrests Three Men in Alleged $10 Million Crypto Laundering Scheme; The alleged scammers would create transactions and then claim they were unauthorized, converting bank refunds into crypto.
Jason Nelson – Decrypt
Three men have been charged with laundering over $10 million in cryptocurrency. If found guilty, the three face a maximum of 30 years in federal prison, according to an announcement from the United States Attorney for the Southern District of New York said on Thursday.
/jlne.ws/47k0cAy

US FDIC scraps planned meeting on ‘special assessment’ for bank failures
Reuters
The U.S. Federal Deposit Insurance Corporation on Thursday abruptly canceled a planned public meeting at which board members were due to consider approving the collection of bank fees to recover losses from March’s failures of Silicon Valley Bank and Signature Bank. The FDIC’s board of directors will still decide on the proposal but will do so “notationally” in private, according to an FDIC spokesperson, who declined to comment on the reasons for the change.
/jlne.ws/40JKMmP

EU Energy Agency Gets Powers to Investigate Manipulation Cases; Negotiators reach deal on EU energy market transparency rules; ACER agency will have power to impose penalties in inspections
Ewa Krukowska – Bloomberg
The European Union’s energy regulators are set to get new powers to enhance the bloc’s protection against market abuse, including the right to carry out investigations in cross-border cases and to impose penalties. As part of a revision of EU law on market transparency, negotiators agreed to broaden the authority of the Agency for the Cooperation of Energy Regulators, known as ACER. It will also allow for on-site inspections and requests for information.
/jlne.ws/3T3J3XR

Keynote of Chairman Rostin Behnam at the 2023 U.S. Treasury Market Conference
CFTC
This is the 9th Annual Treasury Market Conference. We come together every year to share our insights and experiences because of the Treasury market’s unique role in the global economy. At our first conference in 2015, CFTC Chairman Timothy Massad differentiated the structural elements between the cash Treasury and Treasury futures markets. [9] He also highlighted findings of a recent joint report on significant volatility events in the U.S. Treasury market,[10] and how the availability of data and continued efforts towards strengthening monitoring would be critically impacted by increased automated trading and cyber risk. That was nearer to the beginning of our current data arc at the Commission-we were just warming up.
/jlne.ws/3R1w6w6

Remarks of Commissioner Christy Goldsmith Romero: Financial Stability is Foundational for Consumer Protection
CFTC
Today, I will talk about how financial stability is foundational for consumer protection. This weekend marks the 15th anniversary of “Citi Weekend.” As the Special Inspector General for TARP (SIGTARP), I testified before Congress about the decisions that regulators made that weekend to save Citigroup-for reasons that included protecting regular Americans.[1] Along with being one of the largest banks and derivatives players, Citi was the largest consumer finance lender and credit card lender in the world, one of the largest mortgage servicers and student lenders, and handled more than $3 trillion in transactions each day for hundreds of corporations.[2] Federal Reserve Board Chairman Ben Bernanke told SIGTARP that a Citigroup failure had the potential to block access to ATMs and to halt the issuing of paychecks by many companies.[3]
/jlne.ws/3ul62mG

SEC Adopts Rules to Improve Clearing Agency Governance and Mitigate Conflicts of Interest
SEC
The Securities and Exchange Commission has adopted new rules to improve the governance of all registered clearing agencies by reducing the likelihood that conflicts of interest may influence their boards of directors or equivalent governing bodies.
/jlne.ws/40GZjPY

Statement on Final Rules Regarding Clearing Agency Governance
Chair Gary Gensler – SEC
Today, the Commission adopted final rules relating to the governance and use of outside service providers by clearinghouses. I am pleased to support this adoption because it helps foster more resilient clearinghouses. Clearinghouses play a vital role in our capital markets. They facilitate what one might call the market plumbing, that which happens after you enter into a transaction through the time that it settles. Standing in the middle of the securities markets, clearinghouses are the buyer to every seller and the seller to every buyer. Thus, they operate like a utility-and in the words of Congress in the Dodd-Frank Act, “financial market utilities.”
/jlne.ws/3uijUhI

Prosecutors push for Samsung chief to serve 5 years in jail for alleged stock manipulation; Lee Jae-yong also faces accounting charges in connection with a 2015 merger
Song Jung-a and Christian Davies – Financial Times
South Korean prosecutors are seeking a five-year jail term for Samsung chair Lee Jae-yong over charges of accounting fraud and stock manipulation connected to the controversial 2015 merger of two of the group’s units. Prosecutors allege that Lee, who was vice-chair of Samsung Electronics in 2015, was among a group of executives that inflated the stock price of Cheil Industries, a textile company, and devalued Samsung C&T, a construction and engineering business, during the merger to help cement the billionaire scion’s control of the conglomerate.
/jlne.ws/47zphY3

High Stakes: Comments on the Adoption of a Rule Related to Clearing Agency Governance and Conflicts of Interest
Commissioner Hester M. Peirce – SEC
Clearing agencies play a critical role in our markets. Therefore, sound regulation of clearing agencies should be a priority for the Commission. The approach embodied in the final rule, however, micromanages clearing agency governance in a way that is likely to divert board attention from key issues by focusing it instead on an amorphous set of stakeholders. Accordingly, I dissent.
/jlne.ws/47CdNTH

Statement on Clearing Agency Governance and Conflicts of Interest
Commissioner Mark T. Uyeda – SEC
The Commission has adopted a new rule under the Securities Exchange Act of 1934 to establish governance standards for registered clearing agencies. The rule also requires registered clearing agencies to take specified measures to mitigate or eliminate conflicts of interest. Clearing agencies play a central role in the securities markets and – unlike other entities registered with the Commission, such as broker-dealers and investment advisers – are not easily substitutable. Given the broad general support for the rule in the public comments and because the Commission has incorporated various recommendations submitted by commenters, I voted in favor of the final rule.
/jlne.ws/3MMBRv4

SEC Settles Case Against Investment Adviser and its Principal Alleged to Have Engaged in a Fraudulent “Cherry-Picking” Scheme
SEC
The Securities and Exchange Commission today announced that it has reached settlements in its case against Defendant Bell Rock Capital, LLC, and its principal, Defendant M. Cassandra Toroian, for operating a multi-year “cherry-picking” scheme that defrauded Bell Rock clients. As described in more detail below, among other things, Defendants agreed to pay disgorgement of $883,597, prejudgment interest of $185,451, and combined civil penalties of $440,000.
/jlne.ws/47iiPVE

Jon Kroeper, EVP-Quality of Markets, to Depart FINRA
FINRA
Jon Kroeper, Executive Vice President, Quality of Markets, is leaving FINRA, effective at year end, to pursue other opportunities. Kroeper joined FINRA in 2007 and has been responsible for the management of the equity and fixed income automated surveillance and investigatory program, including data integrity, market conduct, customer protection and market manipulation-related activity.
/jlne.ws/3MLsFa8

Investing and Trading

$650 Billion Firm Caught in Swiss Wipeout Is Buyer of UBS AT1s
Abhinav Ramnarayan – Bloomberg
One of the major investors caught in Credit Suisse’s historic wipeout of AT1s just bought similar securities sold by the bank’s new owner, UBS Group AG. AllianceBernstein LP participated in the Swiss bank’s $3.5 billion sale last week, according to John Taylor, director of global multi-sector at the $650 billion asset manager.
/jlne.ws/3sGm8ac

A $100 Billion ETF Flood Offers Little Solace to Active Managers
Katie Greifeld – Bloomberg
At first blush, a record $100 billion flood into actively managed exchange-traded funds this year raises a tantalizing prospect: A revival of stockpicking even as only Big Tech names outperform the market. Yet, a look under the hood of popular ETFs shows the boom is almost entirely taking place in passive-looking trades.
/jlne.ws/3G33iNl

Oil’s Plunge to Bear Market Abates as High Supply Pressures OPEC; Crude has fallen more than 20% from year’s high in September; A surge in production has dented prices in recent weeks
Alex Longley – Bloomberg
Oil headed for a fourth weekly loss after sinking into a bear market, a development that poses a headache for OPEC+ leaders set to review production targets later this month. West Texas Intermediate is on course for a weekly drop of more than 4%, even as the benchmark edged higher on Friday. It is down more than 20% from a high in September.
/jlne.ws/3GofJ6R

Big Tech’s $2 Trillion Rally Saves Nasdaq From Correction; Traders are betting Big Tech stocks will keep pushing higher; Focus turns to Nvidia earnings as Nasdaq flashes warning
Jeran Wittenstein – Bloomberg
Investors were given plenty of opportunities to fret about the outlook for technology giants this earnings season. Instead, they doubled down on a strategy that has worked all year: piling into the biggest stocks. That buying spree has fueled an abrupt U-turn in the Nasdaq 100 Stock Index that went from correction territory to a 15-month high in a matter of three weeks, adding roughly $2 trillion in market value along the way.
/jlne.ws/49IwNS6

US Money-Market Fund Assets Climb to Record $5.73 Trillion; Assets rose by $21.9 billion in week ended Nov. 15: ICI data; Inflows into government funds continue to drive increase
Alex Harris – Bloomberg
Money-market fund assets rose to an all-time high for the second-straight week as interest rates north of 5% and volatility in fixed-income markets drove investors to havens. About $21.9 billion flowed into US money-market funds in the week through Nov. 15, according to Investment Company Institute data. Total assets increased to $5.73 trillion from $5.71 trillion the week prior.
/jlne.ws/47EXsxq

The Share of Americans Who Are Mortgage-Free Is at an All-Time High; Almost 40% of US homeowners own their homes outright as of 2022-many of them baby boomers who refinanced when rates were low.
Alexandre Tanzi – Bloomberg
/jlne.ws/3QHUJg2

Auction Houses End November Sales Season With ‘Solid’ $2 Billion; Was it spectacular? No. Was it better than many dealers feared? Yes.
James Tarmy – Bloomberg
/jlne.ws/3G6jGwO

Environmental, Social and Corporate Governance

EU reaches deal to stop sending waste to countries that can’t process it
Reuters
European Union lawmakers and member states have reached a deal to revise the bloc’s waste shipment regulation and end exports of certain types of waste to third countries unable to process it properly, the EU Parliament said on Friday. “Exports of certain non-hazardous wastes and mixtures of non-hazardous wastes (…) will be allowed only to those non-OECD countries that consent and fulfil the criteria to treat such waste in an environmentally sound manner”, the Parliament said.
/jlne.ws/3unsgob

Heat-related deaths could more than quadruple by mid-century -report
Gloria Dickie – Reuters
Heat-related illnesses and deaths are rising as the world warms, an international team of health experts said on Tuesday, forecasting a 370% surge in yearly heat deaths by mid-century if the world warms by 2 degrees Celsius above preindustrial levels. Already, at roughly 1.1C (2F) of warming, people experienced about 86 days of health-threatening high temperatures on average in 2022, the report from the Lancet medical journal found.
/jlne.ws/3ulfHK0

We won’t tackle the climate crisis unless we transform the financing; The loss and damage fund agreed at the last COP is too little, too late
Mariana Mazzucato – Financial Times (opinion)
After last year’s COP summit, the UN hailed the newly announced loss and damage fund, intended to help countries affected by global temperature rises, as a “breakthrough agreement”. But praise for the fund – which has a home at the World Bank – has been shortlived. Developing countries say donor countries will have outsized influence over the fund and charge high fees to recipients. But there is a deeper issue: this is too little, too late, and risks replicating the same damaging economic relationships that led us here. There is plenty of finance out there, but it is time to pay more attention to the quality, not just the quantity.
/jlne.ws/46kbTpL

Top companies’ lobbying undermines their climate pledges, study finds
Reuters
Glencore (GLEN.L), ExxonMobil (XOM.N) and Stellantis (STLAM.MI) are among companies lobbying for policies that conflict with their own pledges to cut carbon emissions, a study published by non-profit think tank InfluenceMap on Thursday found. The report assessed 293 companies from the Forbes 2000 list and found that of those with a net-zero emissions or similar climate target, nearly 60% are at risk of “net zero greenwash” due to their lobbying.
/jlne.ws/47jaDob

New Research Makes it Harder to Kick The Climate Can Down the Road from COP28
Bob Berwyn – Inside Climate News
Research released this week raises new questions about how much more Earth may warm, or cool, if and when human carbon dioxide emissions zero out. Best estimates to date suggest that the global surface temperature would stabilize within a few decades, but the new paper in the journal Frontiers in Science examines the uncertainties around that conclusion, including how the planet’s key carbon dioxide-absorbing systems, like forests and oceans, will respond.For example, an August 2023 study showed a declining decadal trend in the amount of carbon dioxide the oceans absorb, and other recent research suggests multiple forest ecosystems, including the all-important Amazon Basin, are starting to emit more carbon then they take up.
/jlne.ws/3ui9v5r

New York sues PepsiCo over plastic pollution; State’s lawsuit demands drinks maker reduce quantity of waste and pay for environmental damage
Madeleine Speed – Financial Times
/jlne.ws/47C3Lll

Oil and gas firms face virtually no extra borrowing costs, S&P finds; Rating agency says investors ignore ESG when lending to some fossil fuel companies
Ian Johnston – Financial Times
/jlne.ws/3MPbMvv

Delhi turns to artificial rain to ease air pollution crisis; Indian scientists hope cloud-seeding scheme will help clean the skies over world’s most polluted city
Benjamin Parkin – Financial Times
/jlne.ws/3QDbrgq

Germany to Lend South Africa euro 500 Million for Energy Switch; South Africa has agreed climate-finance pact with rich nations; Pact has been delayed by political infighting in South Africa
Antony Sguazzin and Kamil Kowalcze – Bloomberg
/jlne.ws/3sDKSzL

UAE to Set Up Carbon Registry to Gauge Companies’ Emission Cuts; Registry will compare progress against current emission levels; Plan may help with carbon-credit trading: climate minister
Anthony Di Paola – Bloomberg
/jlne.ws/3MNtH5y

BP seeks partnerships to navigate renewables storm
Christoph Steitz and Ron Bousso – Reuters
/jlne.ws/49JzXW6

Japan Firms Exit Taiwan Offshore Wind Projects, Deepening Industry Crisis
Sing Yee Ong – Bloomberg
/jlne.ws/47lfjKi

South Africa May Need $136 Billion for Energy Transition, Study Shows; Even if coal plants are left open, renewables will grow fast; Most ambitious scenario sees 105 GW of renewables by 2040
Antony Sguazzin – Bloomberg
/jlne.ws/49I53gI

Asian LNG Buyers Pay a Panama Chokepoint Premium for 2024; Asian price spread with Europe has doubled for next summer; Longer routes expected to add costs to sending US LNG to Asia
Stephen Stapczynski – Bloomberg
/jlne.ws/3SMnRoW

Institutions

JPMorgan Chase updates financed emissions targets for high-carbon sectors
Sarah George – edie
JPMorgan Chase has set new 2030 targets to reduce financed emissions in aluminium and shipping. It has also updated the way it will calculate financed emissions from energy, as it scales up financing in renewables. The business this week published its latest annual climate report, outlining progress to date in reducing the emissions intensity of the businesses and projects it finances. This report additionally includes updated climate targets and metrics. A notable addition to the financier’s climate plan are new emissions targets for aluminium and shipping. The targets cover shipping clients’ Scope 1 (direct) emissions and both Scope 1 and Scope 2 (power-related) emissions from aluminium.
/jlne.ws/3MJfuH2

Hedge fund Qube takes £670mn short bet against HSBC; London-based firm’s position is one of biggest shorts against a big four UK bank on record
Costas Mourselas and Stephen Morris – Financial Times
London-based hedge fund Qube Research & Technologies has taken a £670mn bet against HSBC shares, in one of the biggest short positions on a big four UK bank recorded by regulators. The position, which equates to 0.57 per cent of HSBC’s market capitalisation, comes after a strong run for the bank’s shares, which have gained about 18 per cent so far this year. The position was taken on Tuesday, according to data reported to the Financial Conduct Authority.
/jlne.ws/47EUY2m

Manulife Investment Management to acquire alternative credit manager, CQS; The transaction is set to leverage CQS’s capabilities, complimenting Manulife’s existing fixed income and multi-asset solutions business.
Claudia Preece – The Trade
Manulife Investment Management is set to acquire multi-sector alternative credit manager CQS for an undisclosed sum with the deal set to close in early 2024. Specifically, the transaction concerns the firm’s credit platform and brand. Following close, Manulife is set to align the CQS brand with its own as a co-branded logo – Manulife | CQS Investment Management.
/jlne.ws/46lnmFA

Work & Management

Full vs. Hybrid: Examining the Consequences of How Americans Work Remotely
Eric Carlson, Ben Glasner, Adam Ozimek – Economic Innovation Group
Too much research on remote work treats it as one uniform category of working. Although full-remote and hybrid work may seem fairly similar, the differences of their economic impacts are substantial. In some ways, hybrid work can be more similar to in-person work, given that coming into the office three days a week still means workers have to live within a commutable distance. What counts as an acceptable commutable distance goes up with hybrid work, but it does not eliminate the question entirely.
/jlne.ws/40JMxjV

Goldman’s chief economist just weighed in on the productivity debate-and says it’s been dropping for years before remote work came along
Jane Thier – Fortune
It isn’t hard to find a white collar CEO bemoaning the flexible work era, insisting that workers located anywhere but the office are less focused, less productive, and generally the reason for any sub-par financial results. Goldman Sachs’ David Solomon has long insisted that any gesture towards flexibility is an “aberration.” JPMorgan Chase’s Jamie Dimon insists remote workers can simply work elsewhere, and Amazon’s Andy Jassy cautioned anti-office workers that things “probably won’t work out for you” if they don’t change their tune. Plus, Jassy added, almost all large company CEOs agree with him.
/jlne.ws/49GgZPW

RTO? WFH? Why Post-Covid Work Norms Are So Confusing
Matthew Boyle and Jo Constantz – Bloomberg
As the Covid pandemic fades into the past, many things have returned to normal. The world of work has not. Companies, employees and governments are still figuring out how to adapt to lasting changes to corporate life sparked by widespread lockdowns that put millions onto a Work From Home (WFH) schedule. At stake worldwide aren’t just norms for office life but the economic health of big cities as well, particularly in the US.
/jlne.ws/3R3bZh1

Wellness Exchange

Test Your Protein Knowledge; How much do you need, and where should you get it? See how much you really know about this essential nutrient with our quiz.
Alice Callahan – The New York Times
It’s the beef in your stew and the fish in your tacos; the eggs in your omelet and the beans on your nachos. Protein-rich foods play a starring role in any satisfying meal. And for good reason: Protein is essential for every function in your body. But how much protein do you really need? What are the best food sources? And how can you be sure you’re getting enough?
/jlne.ws/3sGmTjy

Why Some Seniors Are Choosing Pot Over Pills; Older people are using cannabis more than ever. Here’s what to know about its potential medicinal benefits and side effects as we age.
Christina Caron – The New York Times
Seniors are one of the fastest-growing populations of cannabis users in the United States. While some older adults have used pot for decades, studies suggest that others are turning to the drug for the first time to help them sleep better, dampen pain or treat anxiety – especially when prescription drugs, which often come with unwanted side effects, don’t work as intended. In 2007, only about 0.4 percent of people age 65 and older in the United States had reported using cannabis in the past year, according to the National Survey on Drug Use and Health. That number rose to almost 3 percent by 2016. As of 2022, it was at more than 8 percent.
/jlne.ws/3ul3wwK

Regions

Analysis-Cheap yuan catapults China to second-biggest trade funding currency
Samuel Shen and Rae Wee – Reuters
Global companies are making a beeline for China’s debt markets, issuing record amounts of yuan-denominated bonds and borrowing heavily from mainland banks, capitalising on rock-bottom yuan interest rates as funding costs elsewhere jump.
/jlne.ws/46kQYTi

China’s richest nepo babies look set to inherit $120 billion
Polly Thompson – Business Insider
Billionaire business moguls are passing their companies over to their children earlier than usual in the hopes of smoothing transitions of power and wealth amid a rocky economic climate, Bloomberg reported. All aged under 40, Chinese heirs from at least 11 families will soon have control of wealth worth an estimated $120 billion, according to the Bloomberg Billionaires Index.
/jlne.ws/3R1wgDK

Russian gold floods into Hong Kong after UAE cracks down on illicit activity
Aruni Soni – Business Insider
Hong Kong has dethroned Dubai as the biggest hub for Russian gold trading, importing 68 tons of gold so far this year, or four times as much as the whole of 2022. While the Chinese city has long been active in the global gold trade, imports of Russian bullion have surged since April, Bloomberg reported.
/jlne.ws/49FgtBE

Argentina Running Out of Soy Adds to Next President’s Economic Woes
Jonathan Gilbert and Isis Almeida – Bloomberg
The road that leads to some of Argentina’s largest ports and soybean processing plants is usually filled with 2,000 trucks every day at this time of year. On a Tuesday afternoon late last month, there were only a handful. After the worst drought in six decades left the world’s largest exporter of soy products with the smallest crop in nearly 25 years, farmers are running out of the very commodity that fuels Argentina’s economy.
/jlne.ws/3QKeYcR

Brexit is not the problem, Europe’s lack of liquidity is; Amid stagnant volumes and increasing fragmentation, the industry must draw its focus away from UK and European divergence and refocus its attention on competing with the rest of the world, writes Annabel Smith.
Annabel Smith – The Trade
The UK and the European Union must stop focusing on post-Brexit divergence and convergence and re-align their interests to tackle stagnant flows in Europe in comparison with the US and Asia. That was the key takeaway from the FIX conference that took place in Paris earlier this week. Since their split at the start of 2020, Europe and the UK have been focused on emerging as the victor of Brexit with home of the European financial hub to be in either the City of London or Paris.
/jlne.ws/3G2HbXx

Miscellaneous

Algorithms Can’t Replace Hollywood Yet, Just Ask AI Seinfeld; Twitch satire created with artificial intelligence isn’t getting many laughs
Cecilia D’Anastasio – Bloomberg
Artificial intelligence may someday upend the entertainment business. But so far, in early experiments on YouTube and Twitch, video makers are mostly rivaling one particular Hollywood tradition – creating overhyped flops. Witness the trajectory of AI Seinfeld.
/jlne.ws/46j6tLE

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The Spread

The Stock Market Has Rarely Been This Sleepy

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

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