PPP Covid-19 Small-Business Aid Reopens With 60,000 Loans; Japan Inc faces potential forced sell-off of cross-shareholdings

Jan 20, 2021

First Read

$26,351/$300,000 (8.8%)
Richard Berliand


Yellen Looks Likely To Stick With Treasury Department Policy Regarding Bitcoin
Thom Thompson – John Lothian News

President-elect Joe Biden’s Treasury Secretary nominee, Janet Yellen, upset the cryptoverse yesterday with her response to a senator’s question about terrorism during her Senate Finance Committee confirmation hearing. With regard to terrorist financing, she said, cryptocurrencies “are a particular concern.”

At the hearing Yellen said, “I think many are used, at least in a transaction sense, mainly for illicit financing.” Rapid-fire tweets were then sent out quoting Chainalysis’s year-old study that found less than $10 billion in bitcoin transactions used for illicit purposes, or insisting rhetorically that Yellen be at least as concerned about the U.S. dollar’s use in supporting terrorism.

To read the rest of this story, go here.


Hits & Takes
JLN Staff

Today is inauguration day in the U.S., which used to fall on my birthday, March 4. It was changed many years ago because the Congress that had been voted out had too much time to create havoc by passing new laws. Thus came the term “lame duck” Congress.

Here is the schedule of events for the inauguration of Joe Biden as President of the United States today.

Joe Biden becomes the oldest person to be inaugurated as President of the U.S. and I am the oldest I have ever been when a U.S. President was inaugurated.

Biden posted an incredible picture on Twitter of him and his wife and Kamala Harris and her husband in front of the reflecting pond by the Washington Monument. I really liked that Joe Biden, on the Monday before he was to be inaugurated as President, spent some time filling boxes with canned goods at a food pantry, giving service to others.

In 2004, my wife and I took a trip to London and then on to Switzerland for the Burgenstock Conference. While in London we stopped in the London Metal Exchange and had a tour of the trading floor. It was a time when open outcry trading was more and more an anachronism and the LME seemed like the staunchest holdout. I am glad to have seen the LME trading floor when it was still robust. I am sorry to see it go and would love to find some LME traders to interview for our Open Outcry Traders History Project. We can do the interviews right over Zoom, which I first used in a call with former LME CEO Garry Jones

John Tornatore has joined the Small Exchange as global head of business development. He takes a big job at a Small Exchange after having recently left Cboe Global Markets. Congratulations to John and to Small Exchange CEO Donnie Robberts on an excellent hire.

The Glenview State Bank, a hometown bank from my childhood and the first one where I had a savings account, has been sold to a Champaign, IL-based bank, ending a long run as an independent bank.

Richard Berliand is the latest person to give to our JLN MarketsWiki Education GofundMe campaign. Richard is a retired JP Morgan executive and former FIA chairman who is now the chairman of the board of TP ICAP, among other roles. Richard is one of the people who has had a true impact on the industry during his career and continues to do so through his work with TP ICAP, Man Group, Cloud Margin and other organizations on whose boards he serves. Thank you to Richard and all who have given and all who have yet to give. Support our efforts to preserve industry history by giving to our GofundMe campaign.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


For what it is worth Glenview State Bank (see John’s comment above) is also where I got my first savings account. I still remember driving home and looking at the little book they gave you with your balance in it (which I think was a check I deposited from my grandma for $25).~JB


The Spread: Data Galore

Bitcoin mania appears to have returned stronger than ever at the moment now that the virtual coins are trading between 35 and 40 thousand dollars, depending on the day. Or the minute. I swear the cryptocurrency scene is like a zombie; as soon as you think it’s down, it gets back up and tries to sink its teeth into your brain.

Watch the video »


Sponsored Content
【Special Report】 First year anniversary workshop of TOCOM/JPX Electricity Futures

Asia’s Most Successful Electricity Futures at Tokyo Commodity Exchange (TOCOM)/Japan Exchange Group (JPX) celebrated its first year of listing in a co-hosted webinar with Quick Corp. on December 15, 2020. The event was attended by over 250 people from 152 companies.

At the workshop, Mr. Hatakeyama, Director-General for Commerce and Service Industry Policy of METI gave an opening remarks and Mr. Ishibashi of Astmax Trading, Inc. gave a keynote speech on Electricity trading and Risk management. In the panel discussion, traders from different power companies shared their experiences in using TOCOM Electricity Futures and their internal risk control systems. They pointed out that there is still a huge opportunity in Electricity Futures market in Japan and requested the exchange to list new products such as those covering the Hokkaido and Kyushu areas and change the product design to extend contract months.

For more details, please refer to the following link


The American republic’s near-death experience; Donald Trump was just a symptom and the US is still in danger from those who peddle lies in place of truth
Martin Wolf – FT
Here is what has happened. US president Donald Trump asserted for months, without evidence, that he could not be defeated in a fair election. He duly attributed his defeat to a rigged election. Four in five Republicans still agree. The president pressured officials to overturn their states’ votes. Having failed, he sought to bully his vice-president and Congress into rejecting the electoral votes submitted by the states. He incited an assault on the Capitol, in order to pressure Congress into doing so. Some 147 members of Congress, including eight senators, voted to reject the states’ votes.

*****We were only nearly dead, but true love of democracy brought us back.~JJL


Remote Online Testing Available for Candidates Seeking to Take Futures Industry Proficiency Examinations
FINRA administers the futures industry proficiency exams on behalf of NFA including the Series 3, Series 30, Series 31, Series 32 and Series 34. Beginning today, candidates may choose to take these exams either at a local test center or remotely proctored online. Online testing will be delivered and remotely proctored by FINRA’s testing provider, Prometric. Prometric allows candidates to use a personal or firm-provided, webcam-equipped computer to take proficiency exams remotely. Prometric staff proctors each exam using the webcam and other online tools.

*****NFA and innovation are not commonly used together, but they are today. Thank you NFA.~JJL


McConnell Says Mob Attack on Capitol Was ‘Provoked’ by Trump
Steven T. Dennis and Laura Litvan – Bloomberg
Senate GOP leader hasn’t said how he’ll vote on impeachment; Cornyn says Trump impeachment will be a ‘vote of conscience’
Senate Republican leader Mitch McConnell said the mob that stormed the Capitol Jan. 6 was “fed lies” and “provoked by the president” and others into a violent and deadly rampage. McConnell’s words on the Senate floor Tuesday were some of the strongest he’s used to tie President Donald Trump directly to the attack that disrupted the certification of the Electoral College votes that elected Joe Biden as the next president.

*****This is a breathtaking announcement from the former majority leader in the Senate.~JJL


Atlanta Dream Is Close to Being Sold, Taking Kelly Loeffler Out of WNBA
Doug Feinberg – Associated Press
The Atlanta Dream are close to being sold, ending defeated Sen. Kelly Loeffler’s contentious stint as a WNBA owner. As it relates to the Atlanta Dream, we understand a sale of the franchise is close to being finalized,” the league said in a statement. “Once the sale negotiation is concluded, additional information will be provided.”

*****This is the right thing to do. Get away from controversy as much as you can.~JJL


Tuesday’s Top Three
Our top story Tuesday was the LME’s LME Issues Discussion Paper on Future Market Structure regarding proposals to enable the LME to modernise and “create a metals market fit for the future.” Second was the CME Group’s CME Group Completes Migration of BrokerTec EU Government Bond and EU Repo Trading Platform to CME Globex. Third was another LME story, Bloomberg’s London’s Raucous Trading Ring Calls Time on 144-Year History.


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Lead Stories

PPP Covid-19 Small-Business Aid Reopens With 60,000 Loans; First wave of applications is largely handled by community and small lenders after SBA set aside time for them to act exclusively
Amara Omeokwe and Ruth Simon – WSJ
Roughly 60,000 borrowers were approved for more than $5 billion in forgivable loans during the first week of the reopened Paycheck Protection Program, the Small Business Administration said Tuesday. The small-business coronavirus relief effort relaunched Jan. 11 after closing last August. The first wave of applications was largely handled by community and small lenders after the SBA set aside time for them to process the loans exclusively.

*****We applied again for this program to protect our payroll. Fingers crossed.~JJL

Japan Inc faces potential forced sell-off of cross-shareholdings; TSE reshuffle and aggressive new proxy adviser guidelines target widely criticised practice
Leo Lewis and Kana Inagaki – FT
Corporate Japan is facing a historic reshuffle of the Tokyo Stock Exchange and aggressive new guidelines from proxy advisers designed to compel a selldown of the country’s widely criticised “cross-shareholding” networks. The changes could force companies in banking, construction, food and transportation — sectors in which the problem is most acute — to offload cross-held shares over the next few weeks to flatter their appearances ahead of Japan’s financial year-end in March, analysts said.

Conspiracy Charges Filed Over Capitol Riot; FBI reveals attack communications among alleged Oath Keepers: ‘All members are in the tunnels under capital seal them in. Turn on gas’
Aruna Viswanatha – WSJ
Prosecutors filed conspiracy charges related to the mob that stormed the U.S. Capitol Jan. 6, saying in a new complaint that three rioters had acted in an “organized and practiced fashion” and at one point appeared to suggest the possibility of gassing lawmakers in the tunnels below the building.

EU ‘not punishing’ UK financial services sector, London envoy insists; Bloc’s ambassador says Brussels still waiting for more information before making key regulatory decisions
George Parker, Jim Brunsden and Mure Dickie – FT
Brussels is “not punishing” the City of London by withholding key regulatory rulings that would allow UK financial services firms to serve customers in the EU, the bloc’s ambassador to Britain has claimed.

After 144 Years, London Metal Exchange Proposes Closing Trading Ring; Shift would bring greater transparency and broader participation, LME says
Joe Wallace – WSJ
The London Metal Exchange is proposing closing its open-outcry ring, where traders have swapped metals like copper and lead using shouts and hand signals for 144 years, in a bid to attract more financial players to its marketplace.

What to Know About Gary Gensler, Wall Street’s New Watchdog
Liz Moyer – Barron’s
President-elect Joe Biden’s nominee to be Wall Street’s watchdog is returning to familiar ground. Gary Gensler, nominated to be chairman of the Securities and Exchange Commission, the campaign announced on Monday, is a former Goldman Sachs partner and Treasury Department official who led the Commodity Futures Trading Commission during President Barack Obama’s administration.

McConnell says Trump ‘provoked’ the Capitol attackers; “The mob was fed lies,” the majority leader says.
Andrew Desiderio – Politico
Senate Majority Leader Mitch McConnell on Tuesday said President Donald Trump “provoked” the rioters who stormed the Capitol earlier this month as Congress was certifying the presidential election results, his strongest condemnation yet of the outgoing president’s actions that led to the violent insurrection targeting lawmakers.

Goldman chief executive says Spac boom is unsustainable; David Solomon issues warning after financing tool is used to raise nearly $79bn from investors last year
Ortenca Aliaj, Eric Platt and Laura Noonan – FT
David Solomon, Goldman Sachs chief executive, says the boom in listings of blank-cheque companies on Wall Street is unsustainable, casting doubt on a financing tool used to raise nearly $79bn from investors last year.

Far Right Groups Get Bitcoin Windfall Weeks Before Capitol Riot
Olga Kharif and Kartikay Mehrotra – Bloomberg
At least one recipient part of pro-Trump events on Jan. 6; Programmer had also donated to their causes earlier last year
Far-right groups and personalities received a windfall last month and evidence “strongly suggests” it came from a now-deceased computer programmer based in France, according to the researcher Chainalysis Inc. On Dec. 8, the donor sent 28.15 Bitcoins, worth about $522,000 at the time of transfer, to 22 separate addresses in a single transaction, according to Chainalysis, whose clients include law-enforcement agencies. Web personality Nick Fuentes, who the Anti-Defamation League describes as a white supremacist, received the largest portion — about $250,000 — — and other recipients included the anti-immigration organization VDare and “alt-right streamer” Ethan Ralph, the researchers said.

Robinhood Couple in Viral TikTok Discover Momentum Trading
Justina Lee – Bloomberg
TikTok couple Chad and Jenny claim 2,000% returns in a month; Momentum a winning stock strategy for novices and pros alike
Buy when a stock keeps going up. Sell when it keeps going down. To quantitative investors, it’s dubbed the “momentum” trade — rooted in decades of behavioral analysis, backtesting and academic rigor. To TikTok users @ChadandJenny, a basic version of this follow-the-trend strategy netted a more than 2,000% return on the Robinhood app in a month, they claim.

Time to look again at the financial system’s dangerous faultlines; Change is needed after the pandemic stretched markets to the limit in March last year
Paul Tucker – FT
The west cannot afford another financial crisis. It would be a disaster in every possible way domestically, and a geopolitical gift to strategic competitors in Beijing and elsewhere. Last March and April, the fabric of our financial system was stretched almost beyond endurance. Only intervention from the north Atlantic central banks seems to have averted some kind of disaster triggered by markets grasping the pandemic was serious.

Hong Kong’s central bank criticises State Street over US blacklist flip-flop; Fund manager said it would continue investing in Chinese companies on sanctions list after all
Echo Huang – FT
Hong Kong’s de facto central bank has accused State Street Global Advisors of creating “market uncertainties” with the sudden reversal of its decision to stop investing in Chinese companies on the US sanctions list via Hong Kong’s largest exchange traded fund.

EU faces barriers to boosting single currency’s global status; Bloc yet to settle investor doubts about structure of eurozone despite weight provided by recovery fund
Sam Fleming, Tommy Stubbington and Martin Arnold – FT
Brussels faces a steep climb in its effort to boost the international role of the euro as part of its quest to strengthen the EU’s self-reliance, investors and analysts said after the bloc set out new ambitions for the single currency.

European Commission pushes for consolidated tape in bond markets; The EU regulator has set out plans to carry out a further review of MiFID and MiFIR in 2021 which will include the design and implementation of a consolidated tape.
Annabel Smith – The Trade
The European Commission has set out plans to push for a consolidated tape in the European primary and secondary bond markets following months of pressure from market participants.

Oil Tanker Owners Pay to Move Crude in Wake of Supply Cuts
Alex Longley – Bloomberg
Benchmark supertanker earnings turned negative on Tuesday; Rate slump follows Saudi cuts, unwinding of floating storage
Saudi Arabia’s oil production cuts have hit the tanker market so hard that owners of the biggest vessels are effectively subsidizing cargo deliveries on the industry’s main trade route.


Germany Toughens Mask Rules in Hopes of Slowing Virus Spread
Tim Loh – Bloomberg
Country follows Bavarian lead in mandating medical-grade masks; Germany has reported record virus deaths, even as cases ease
Germany has ratcheted up rules for wearing face masks, becoming the first major European country to require medical-grade protection in shops and public transit in hopes of controlling faster-spreading strains of the coronavirus.

Vaccine Shortage Puts Americans on the Road in Search of Shots
Amanda L Gordon, Shelly Banjo, and Henry Goldman – Bloomberg
Florida, ski resorts seeing influx of vaccine tourists; More than 36,000 out-of-staters snared recent doses in Florida
People in the U.S. finally are traveling again, though not all these trips are for business or rest and relaxation. Instead, some are engaging in vaccine tourism. Frustrated by crashing appointment websites, shortages of Covid-19 shots and a patchwork of confusing eligibility rules, people with time and money are heading out of town in pursuit of a potentially life-saving inoculation.

Vaccination passports need to be handled with care; Immunity passes should aim to facilitate travel without causing discrimination
It seems an enticing vision of the near future: air passengers at passport control hold their phones to a scanner that reads a code showing they have been vaccinated against coronavirus. No more on-arrival testing or quarantines. With inoculation programmes gathering pace, so is talk of “vaccination passports” that would help to reopen international travel, and potentially other restricted activities. Though attractive in principle, however, such initiatives need careful handling to avoid pitfalls.

How to Vaccinate 100 Million Americans in 100 Days; The United States needs a vaccination plan that treats the coronavirus less like the seasonal flu and more like an act of bioterrorism.
Thomas J. Bollyky, Jennifer B. Nuzzo and Prasith Baccam – NY Times
Faced with a slow, chaotic vaccine rollout and ever-rising Covid-19 cases, President-elect Joe Biden has an ambitious plan: to administer 100 million doses of the coronavirus vaccine in his first 100 days in office. Since the vaccines became publicly available in mid-December, 12.3 million shots have made their way into the arms of Americans, an average of 384,000 doses per day. Mr. Biden’s goal of tripling this rate can be achieved if the United States implements a vaccination campaign that treats Covid-19 more like an act of bioterrorism and less like the seasonal flu.

US coronavirus death toll eclipses 400,000 as Biden prepares to take office; The grim milestone comes just over a month after surpassing 300,000 deaths.
Arielle Mitropoulos – ABC News
The U.S. reached yet another grim milestone Tuesday as the confirmed coronavirus death toll topped 400,000, just one day before President-elect Joe Biden is set to take the oath of office.

New CDC Director Pledges to Speed Vaccination, Restore Trust in Agency; Rochelle Walensky will start as CDC director Wednesday after inauguration; ‘This is an emergency’
Betsy McKay – WSJ
Rochelle Walensky, the incoming director of the U.S. Centers for Disease Control and Prevention, said she will start her new job with a big to-do list: helping states fix Covid-19 vaccination programs and persuading exhausted Americans to wear masks and take other precautions.

Exchanges, OTC and Clearing

LSEG to complete $27 billion Refinitiv acquisition on 29 January; The acquisition of Refinitiv is expected to close on 29 January, subject to regulatory authority approvals that LSEG said it expects to receive shortly.
Annabel Smith – The Trade
The London Stock Exchange Group (LSEG) has confirmed it expects to complete its $27 billion acquisition of data and analytics giant, Refinitiv, on 29 January. Closure of the transaction remains subject to regulatory authority approvals, however, the LSEG said it expects to receive these shortly.

Euronext partners with JA Europe on pan-European programme for young blue economy entrepreneurs
The Euronext Blue Challenge aims to encourage young entrepreneurs’ awareness of the Blue Economy and foster sustainable marine-based businesses in Europe; Euronext volunteers will mentor students in 7 countries pursuing Blue Economy projects to boost financial literacy and encourage innovation
Euronext, the leading pan-European market infrastructure, today announced a partnership with JA Europe, the largest non-profit in Europe dedicated to preparing young people for employment and entrepreneurship, to promote the Blue Economy by encouraging financial literacy amongst European youth across seven of its main countries.

Euronext Brussels awards 2020
Euronext Brussels awarded the best performing listed companies and market members during its New Year’s event. This year’s winners are:

Performance Bond Requirements: Energy & Agriculture – Effective January 20, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below. The rates will be effective after the close of business on 1/20/2021.

Performance Bond Requirements – Energy, Ags Margins – Effective January 20, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.

EEX Press Release – 2020 Annual Volumes; EEX Group continues to strengthen its global position in a year of exceptional change
In 2020, EEX Group continued to strengthen its position in the global commodity exchange space by posting significant volume increases across the majority of its energy and commodity portfolio. The major growth drivers were the European power markets, the environmental markets in Europe and North America and the global dry freight markets. Throughout the year, EEX Group continued to build and develop markets together with its customers and further extended its reach into Asia with the successful entry into the Japanese Power market.

BME Will Launch An AI-Based Roboadvisor Service
BME has developed an innovative service of Roboadvisor with Artificial Intelligence optimizing investments based on the investor’s preferences and knowledge and complying with each firm’s business regulations.


CUSIP Global Services Receives Accreditation Renewal for CUSIP Identifier as U.S. Standard for Unique Security Identification
American National Standards Institute (ANSI) X9 Committee Recognizes CUSIP as American National Standard
CUSIP Global Services
CUSIP Global Services today announced the renewal of the accreditation of the CUSIP identifier as the American national standard for unique securities identification. The five-year accreditation was issued by the American National Standards Institute (ANSI), a private, non-profit organization that administers and coordinates the U.S. voluntary standards and conformity assessment system, through its Accredited Standards Committee X9 (X9).

Barchart and AgVantage Software Announce Integration to Bring More Data to Farmers
Barchart, a leading provider of commodity data and agribusiness solutions, and AgVantage Software, an established leader in the agribusiness software industry, have together announced a joint partnership. Under this partnership, AgVantage will integrate their ERP software solutions within Barchart’s Marketplace Apps, simplifying the workflows between agribusinesses and producers by making data such as grain contracts and scale tickets available.

China Plans Online Payment Rules That May Hit Ant, Tencent
Bloomberg News
Warns payment firms with 50% of market could be a monopoly; PBOC will implement ‘comprehensive’ oversight on payment firms
China proposed measures to curb market concentration in its online payment market, potentially dealing another blow to financial technology giant Ant Group Co. and its biggest rival Tencent Holdings Ltd. The central bank said on Wednesday that any non-bank payment company with half of the market in online transactions or two entities with a combined two-thirds share could be subject to anti-trust probes, according to draft rules released by the People’s Bank of China.

Pragma integrates AI deep-learning technology with equity execution algorithms; Following a beta launch last year, Pragma said that the deep-learning algorithms had improved execution quality by 33%.
Annabel Smith – The Trade
Algorithmic trading technology provider, Pragma, has launched a set of execution algorithms that use AI deep-learning technology following a beta trial last year. The programme was initiated by Pragma in 2018 to explore whether deep neural networks could govern routing, sizing, pricing and timing of orders within an execution algorithm’s micro-trading engine.


Ethereum May Surge Sevenfold to $10,500, Fundstrat Global Says
Joanna Ossinger – Bloomberg
Ether, the second-largest cryptocurrency, could climb more than sevenfold to $10,500 after reaching a record this week, according to Fundstrat Global Advisors LLC.

New Bitcoin Investors Explain Why They’re Buying At Record Prices; Some are being inspired by rapper Megan Thee Stallion, others want to give it to their children, while a few are just hoping they’ll be millionaires.
Charlie Wells, Katharine Gemmell, and Lisa Fleisher – Bloomberg
They’re seeing stories about newly minted Bitcoin millionaires. They’re being offered small amounts of free crypto. And they’re watching mainstream financial firms come around to the idea of investing in digital currencies.

Bitcoin Surge Built on Market Exuberance, Momentum Trading
Bjorn Van Roye and Tom Orlik – Bloomberg
Since October 2020 — the starting point of the latest Bitcoin cycle — about 60% of returns can be explained by exuberance in the wider market and momentum trading, according to Bloomberg Economics’ structural empirical model which exploits the co-movement of prices for Bitcoin and other assets to determine what factors are driving the ups and downs of the digital currency. Bitcoin’s role as a hedge against inflation and uncertainty has earned it the tagline “digital gold.” BE’s model shows that those factors explain a smaller share of the post-October move – – about 35%.

Biden Treasury pick Janet Yellen warns cryptocurrency poses terrorism risk
Jeff John Roberts – Fortune
Janet Yellen, who is expected to lead the Treasury Department for the incoming Biden Administration, described cryptocurrencies as a “particular concern” when it comes to terrorist financing. Yellen made the remark during her Senate confirmation hearing in response to a question from Sen. Maggie Hassan (D-NH) who asked about “the potential for terrorists and criminals to use cryptocurrency to finance their activities.” “I think many [cryptocurrencies] are used, at least in a transaction sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels,” Yellen said Tuesday in remarks reported by Coindesk.

Dan Larimer’s Departure Brings EOS Disappointments to the Fore
Brady Dale – Coindesk
On Jan. 10, leading pro-EOS YouTuber Colin Talks Crypto announced he had sold all his holdings following the revelation earlier that day that Dan Larimer had resigned his position as CTO of Block.one, the company that made the software powering the EOS blockchain. In fact, Larimer has been gone since the end of the year. EOS , as of this writing, is the 16th-largest blockchain by market capitalization, according to CoinGecko, right after the privacy coin Monero and right above decentralized finance (DeFi) protocol Aave. Its market capitalization took a major hit following the Larimer news, losing about a billion dollars in a day.

Coinbase to acquire Bison Trails to compete in the market for infrastructure as a service
Frank Chaparro – The Block
Coinbase is acquiring crypto infrastructure provider Bison Trails in a move that the San Francisco-based exchange-operator says will help it expand into an unsexy but growing corner of the crypto market: infrastructure as a service. Coinbase did not respond to questions pertaining to the financials of the deal, whose transaction value has been speculated to be in the same vicinity of the acquisitions of Tagomi and Earn — each of which have been reported to come in around $100 million. But the firm said that Bison Trails will serve as the foundation of its infrastructure as a service business operation.

Chainalysis: The share of crypto transactions associated with criminal activity fell dramatically in 2020
MK Manoylov – The Block
The “criminal” share of all cryptocurrency activity fell to 0.34% ($10 billion) in 2020 — much lower than its share of 2.1% (21.1 billion) last year, according to new data from Chainalysis. According to the analytics firm, one reason for the large decrease is that total cryptocurrency-based economic activity grew three-fold from 2019 to 2020. Another factor is that Chainalysis underestimated the number of active addresses linked to criminal conduct in 2019. That’s because so much of the criminal activity that occurred in 2019 wasn’t identified till later, including activities connected to the China-based PlusToken Ponzi scheme.

Thai Stock Exchange Launching Digital Asset Trading in H2, Cryptos Excluded
Tanzeel Akhtar – Coindesk
The Stock Exchange of Thailand (SET) is launching a trading platform for digital assets in the second half of 2021. According to a report from Bangkok Post Wednesday, SET’s executive vice-president, Kitti Sutthiatthasil, said the products listed on the platform will be tokenized assets, and will not include cryptocurrencies. That’s because the asset class does not meet the stock exchange’s product standards and could be used to facilitating money laundering, he said. As such, listing cryptocurrencies could harm the stock exchange’s image and lose investor confidence. The digital tokens that will be listed must meet at least one of three conditions.

Binance removes $165 million worth of BNB from circulation in largest-ever token burn
Saniya More – The Block
Crypto exchange Binance has burned over 3.6 million BNB tokens, taking out about $165.8 million in tokens from circulation, the exchange announced on Monday. This 14th quarterly BNB token burn is the highest one ever carried out by the exchange. When it launched BNB, Binance committed to burning 100 million BNB — roughly half of its supply — to reduce the supply. The amount the exchange burns is based on the trade volume on the platform during the previous quarter. Both BNB holders and Binance stand to benefit from a corresponding increase in the token price.

Saddle, a new automated market maker for stablecoins, goes live after raising $4.3 million
MK Manoylov – The Block
A new stablecoin-to-stablecoin automated market maker (AMM) called Saddle went live today and announced that it has raised $4.3 million from venture capitalists. Saddle’s first liquidity pool will be for tokenized bitcoin that will let users swap between WBTC, renBTC, sBTC and tBTC, according to a statement. The fundraising round was led by Framework Ventures, Polychain Capital, and Electric Capital. Other investors include Coinbase Ventures, Nascent, Dragonfly Capital, Alameda Research, and Divergence Ventures.

Chilly This Winter? Cozy Up to the Computer That’s Mining Bitcoin; Videogamers and cryptocurrency miners find their souped-up machines make dandy warmers for rooms, greenhouses, chicken coops
By Sarah E. Needleman – WSJ
ter approached, Dan van der Ster worried his annual utility bill would skyrocket since his family of five was homebound with the pandemic. It hardly budged.


Theresa May Hits Out at Boris Johnson’s ‘Moral’ Failures
Emily Ashton – Bloomberg
Former U.K. Prime Minister Theresa May accused her successor Boris Johnson of abandoning Britain’s “position of global moral leadership” and urged him as a leader to “live up to our values.”

Biden to Mend World Health Organization Ties, Fauci to Speak
David Wainer, John Lauerman, and Mario Parker – Bloomberg
Action reverses Trump’s decision to exit global health body; Biden also plans order requiring masks on federal property
President-elect Joe Biden plans to take immediate steps Wednesday after he is inaugurated to re-engage with the World Health Organization and send top U.S. medical expert Anthony Fauci to speak to the group in a strong repudiation of Donald Trump’s snubs during the coronavirus pandemic.

Trump’s Market Was So-So, Whichever Way You Cut It; Choosing to be judged by the performance of stocks was always a dumb idea. Joe Biden shouldn’t make the same mistake.
John Authers – Bloomberg
Markets Aren’t the Measure
We don’t yet know how history will judge Donald Trump’s presidency, but we know how he wanted his term in office to be evaluated — by the performance of the stock market. From the earliest days after his election, he keenly tweeted the market’s strong reaction to his victory, and he continued to hype the succession of records on his watch.

EU salutes ‘new dawn’ for US ahead of Biden’s inauguration; Ursula von der Leyen says Brussels will seek joint action on Covid response and climate change
Sam Fleming and Michael Peel – FT
Ursula von der Leyen, European Commission president, saluted a “new dawn” in the US following the departure of Donald Trump as she called for a revival of the tattered transatlantic partnership.

Deepening Schism, McConnell Says Trump ‘Provoked’ Capitol Mob; The Senate majority leader’s remarks were the clearest signal yet that he has come to regard President Trump as a force who could drag down the Republican Party.
Nicholas Fandos – NY Times
Senator Mitch McConnell flatly blamed President Trump on Tuesday for the violent rampage at the Capitol on Jan. 6, saying that the mob that stormed the building had been “fed lies” and “provoked by the president” to carry out its assault.

The Financial Minefield Awaiting an Ex-President Trump; Baseless election fraud claims and the Capitol riot have compounded already-looming threats to his bottom line. And the cash lifelines he once relied on are gone.
Russ Buettner and Susanne Craig – NY Times
Not long after he strides across the White House grounds Wednesday morning for the last time as president, Donald J. Trump will step into a financial minefield that appears to be unlike anything he has faced since his earlier brushes with collapse.

DOJ insider trading probe into NC Sen. Richard Burr ends with no charges
Kenneth Garger – NY Post
A Justice Department insider trading probe into Sen. Richard Burr — who sold up to $1.7 million in stocks early in the COVID-19 pandemic — has ended without charges. “Tonight, the Department of Justice informed me that it has concluded its review of my personal financial transactions conducted early last year,” Burr said in a statement.

Obituary for a Failed Presidency; One final dispatch from Trump’s Washington.
Susan B. Glasser – The New Yorker
Precisely at noon on Wednesday, Donald Trump’s disastrous Presidency will end, two weeks to the day after he unleashed a mob of his supporters to storm the Capitol, seeking to overturn the election results, and one week to the day after he was impeached for so doing. He leaves behind a city and a country reeling from four hundred thousand Americans dead, as of Tuesday, from a pandemic whose gravity he downplayed and denied; an economic crisis; and an internal political rift so great that it invites comparisons to the Civil War.

Parler Tries to Survive With Help From Russian Company; The social network, popular with President Trump’s supporters, went offline last week after it was kicked off Amazon’s servers.
Jack Nicas – NY Times
Parler, the social network popular with Trump supporters, is trickling back to life. The social network went offline last week after Amazon booted it from its computer servers for not consistently removing violent posts, an accusation that Parler denied. But after a week in which Parler executives sued Amazon and predicted that their site might never return, they are forecasting it will be back up and running by the month’s end.

Yellen Gets Wall Street Buzzing About 50-Year U.S. Treasuries
Liz McCormick – Bloomberg
Biden’s pick for Treasury secretary was non-committal on topic; Traders sold 30-year bonds in response, steepening yield curve
All it took was a non-committal comment from Janet Yellen to persuade Treasury traders there’s a chance the U.S. will finally expand maturities in the world’s biggest bond market beyond 30 years. The Treasury Department has pondered ultra-long bonds for years, but they’ve never been introduced in part because of resistance from Wall Street. But Yellen, President-elect Joe Biden’s pick for Treasury secretary, got people buzzing about them again by discussing the topic Tuesday during her Senate confirmation hearing. Markets responded, with traders selling 30-year bonds.

Can Ex-Presidents Be Impeached? No. Convicted? Yes. The U.S. Constitution doesn’t give a direct answer to either question. Trump won’t like the best indirect one.
Cass R. Sunstein – Bloomberg
Can a former president be impeached? Can he be convicted? Those are two different constitutional questions. And President Donald Trump, impeached last week while still in office and potentially subject to conviction after departing, has obvious reason to offer a firm “no” to the second question.

Yellen Confirmation for Treasury Could Come as Soon as Thursday
Saleha Mohsin – Bloomberg
Janet Yellen’s nomination for Treasury secretary could be approved by the Senate as soon as Thursday, senators indicated during her confirmation hearing.


Shelley E. Parratt, Acting Director of the Division of Corporation Finance, to Conclude SEC Career After 35 Years of Service
The Securities and Exchange Commission today announced that Shelley E. Parratt, Acting Director of the SEC’s Division of Corporation Finance, is retiring next month after 35 years of service to the Commission. Ms. Parratt joined the SEC’s Division of Corporation Finance in 1986, served as its deputy director since 2003, and served as Acting Director of the Division three separate times.

UK ICO Provides Clarity Regarding Transfers of Personal Data to the SEC
Commissioner Elad L. Roisman – SEC
On January 19, the UK Information Commissioner’s Office (ICO) published its analysis of the impact of UK data protection law on transfers of personal data from certain UK-based firms to the SEC. Specifically, the ICO considered the application of the UK General Data Protection Regulation (UK GDPR) to transfers from UK-based firms or branches that are registered, required to be registered, or otherwise regulated by the SEC, including investment advisers and securities-based swap dealers. In addition, the ICO reviewed the application of the UK GDPR to transfers from UK issuers that have equity securities or depositary receipts registered with the SEC and listed on a US exchange or market. The ICO concluded that the UK GDPR does not impose legal barriers to the transfer of personal data from these entities directly to the SEC for regulatory or enforcement purposes.

CFTC Staff Provides Limited Continuation of Certain No-Action Relief to Market Participants in Response to COVID-19
The Commodity Futures Trading Commission today announced the Market Participants Division (MPD) and the Division of Market Oversight (DMO) are providing a short continuation of limited parts of the temporary no-action relief issued in response to the COVID-19 (coronavirus) pandemic that expired on January 15, 2021.

Office of Legislative and Intergovernmental Affairs Director Summer Mersinger to Join Commissioner Stump’s Office as Chief of Staff
The Commodity Futures Trading Commission today announced that Summer K. Mersinger, Director of the Office of Legislative and Intergovernmental Affairs (OLIA), will transition to the Office of Commissioner Dawn D. Stump where she will serve as Chief of Staff. OLIA Deputy Director Ann Wright will assume the role of Acting Director following Ms. Mersinger’s transition into her new role.

Chairman Tarbert’s Tract on Self-Regulation to be Published by Northwestern University; Excerpts from Forthcoming Article in the Northwestern Journal of International Law and Business: “Self-Regulation in the Derivatives Markets: Stability through Cooperation”
“Debates about the ideal form of regulation often pose a false dichotomy, sorting regulatory efforts into two seemingly oppositional categories: governmental or private. But this division offers an overly simple account of the regulatory structures that define modern administrative law. Instead, sound regulation is, more often than not, the result of collaboration between traditional governmental functions and self-regulatory measures performed by private actors. Far from being at odds with each other, government and the private sector often work together to produce regulatory solutions that balance effective oversight with the flexibility needed to adapt to changing circumstances …

Half of reporting firms moved to FCA’s new data collection platform
50% of firms who have previously submitted their regulatory reporting on Gabriel are now using RegData.

Investing and Trading

From Wall Street to Paris, Long Bonds Are Captivating Traders
John Ainger – Blooomberg
France sees record 50-year bids; equivalent Treasury in focus; Bond ‘convexity’ is buoying long-dated debt demand, BI says
In a world awash with money, long-dated debt is where all the action is for bond traders these days. In Europe, investors looking to escape a sea of negative yields are snapping up some of the longest-maturity debt on offer in an attempt to park their money in assets that still provide some sort of return. In the U.S., they’re selling long bonds amid a looming torrent of government spending, as they assess the likelihood of the first-ever Treasury beyond 30 years.

Microcap ETFs Shunned as Reddit, Robinhood Feed Retail Addiction
Cristin Flanagan – Bloomberg
Money has been flowing out as some individual stocks surge; ETF investors gravitate toward sector themes like clean energy
With penny stocks all the rage in Reddit forums and across the Robinhood trading platform, U.S. retail investors are pulling money from microcap funds just to support the habit.

Wall Street’s Bond Traders Reveal Their Limits; After a few stellar quarters, fixed-income trading revenue at Goldman Sachs and other banks comes down from the stratosphere.
Brian Chappatta – Bloomberg
The “Masters of the Universe” are a lot of things, but magicians they are not. With all of the largest U.S. banks except Morgan Stanley now having reported fourth-quarter earnings, it’s clear that bond traders struggled to meet expectations in the final three months of 2020. On Tuesday, Goldman Sachs Group Inc. disclosed fixed-income, currencies and commodities sales and trading revenue of $1.88 billion, short of estimates for $2.02 billion, even as its equities trading blew forecasts out of the water, soaring by 40%. At Bank of America Corp., FICC trading revenue was $1.74 billion, missing expectations for $2 billion. Citigroup Inc. also fell short of FICC estimates, a notable blemish given that it’s one of the larger revenue-generating groups inside the bank. JPMorgan Chase & Co. barely squeaked by, with FICC sales and trading revenue of $3.95 billion, topping forecasts for $3.92 billion.

Environmental, Social and Corporate Governance

Big Oil Takes Unsteady Steps to Cut Transition Risk; For the least prepared in a low-carbon economy, the verdict is in.
Tim Quinson – Bloomberg
Of the biggest U.S. oil and gas companies, EOG Resources Inc. is the least prepared for a low-carbon economy, according to BloombergNEF.

Decarbonising aluminium will require a united front; The world’s largest industrial polluters must transform the way they do business
Lord Barker – FT
This week En+ Group pledged to reach net zero greenhouse gas emissions by 2050 with a reduction of at least 35 per cent by 2030, the most demanding near-term target yet set by any global aluminium company.

Disclosure requirements, key to ESG standardization, expected to increase under a Democratic sweep
Spinnaker Trust – ETF Trends
Last month we wrote about what the future of ESG might look like under a Biden administration. At that time, we were awaiting the Georgia run-offs and a democratic sweep still looked unlikely. We noted that even with a divided government, ESG attention and funding were likely to increase. So, what has changed? The senate is now evenly divided for only the 4th time in history, with any potential tiebreaker to be decided by Vice President Kamala Harris. Consequently, for the first time since 2009 Democrats control the White House, the Senate, and the House of Representatives.

Jupiter shakes up sustainable team as Thomas departs
Imogen Tew – FT Adviser
Jupiter has created a head of sustainable investing role as it brands ESG a “cornerstone” of future business growth. In the new role, Abbie Llewellyn-Waters, manager of the Jupiter Global Sustainable Equities fund, will lead the firm’s sustainable investing arm and shape “best practice” across the business. Meanwhile Rhys Petheram, co-manager of the mixed-asset Jupiter Global Ecology Diversified fund, has been promoted to the newly created role of head of environmental solutions.


Morgan Stanley posts record profit as trading booms; US investment bank caps buoyant earnings season across Wall Street
Laura Noonan – FT
Morgan Stanley reported a 62 per cent earnings jump in the final three months of the year, sending profits at the US bank to a record annual high and capping a strong results season across Wall Street driven by a boom in trading and dealmaking.

Hedge fund industry assets surge to record $3.6tn; Sector delivered best performance in more than a decade in 2020
Ortenca Aliaj – FT
Hedge fund assets hit a record last year as the industry delivered its best performance in more than a decade during the most tumultuous year for markets since the 2008 financial crisis.

Morgan Stanley Quarterly Profit Climbs 51%; Stock- and bond-trading revenue at bank rises 32%; results top analyst estimates
Peter Rudegeair – WSJ
Morgan Stanley MS -0.33% said fourth-quarter profit rose 51% from a year earlier, another big U.S. bank to emerge from a turbulent year in better shape than was expected at the onset of the coronavirus pandemic.

Maybe the Index Funds Don’t Vote; Also proxy proposals, stimulus checks, corporate Bitcoins and a Keynes joke.
Matt Levine – Bloomberg
Should index funds be illegal? Back in 2019, I wrote about “a half-baked theory I have about index fund voting.” The theory is:


London House Prices Surpass 500,000 Pounds for the First Time
Andrew Atkinson – Bloomberg
Inner London outpaces outer boroughs amid homebuying tax cut; Rising house prices threaten to widen generational divide
The average home in London climbed above 500,000 pounds ($685,000) for the first time, bringing cheer to homeowners and piling on the misery for those increasingly priced out of the market. Values in the U.K. capital were 9.7% higher in November than a year earlier, a surge matched only by Yorkshire and The Humber in northern England, according to Land Registry figures published by the Office for National Statistics on Wednesday. At 513,997 pounds on average, prices in London are now more than double the national level.

Done With Stock Picking, China’s Day Traders Turn Back to Funds
Bloomberg News
New product from star manager draws unprecedented orders; Onshore market saw a record of equity fund issuance in 2020
In China, retail investors are calling time on the do-it-yourself investment boom. They’re channeling their love of stock trading through professionally-managed funds instead, accelerating a trend that saw a record 1.57 trillion yuan ($243 billion) of equity funds launched last year, according to data from consultancy Z-Ben Advisors Ltd.

Investments Into Russia Slump to Lowest Level Since 1994
Anna Andrianova – Bloomberg
Falling oil prices and the coronavirus contraction in Russia drove foreign direct investment to the lowest level in more than two decades, according to central bank data released Tuesday. Inflows had slowed in recent years amid Western sanctions and economic weakness, and the $1.4 billion reported for 2020 was the lowest seen since 1994.

Switzerland says it is investigating Lebanese central bank; Fresh blow for embattled Banque du Liban as it faces first European probe
Chloe Cornish and Sam Jones – FT
The Swiss federal prosecutor’s office has opened an investigation into “aggravated money laundering” and “possible embezzlement” from the crisis-hit Lebanese central bank.

Hong Kong Stocks Swell as Market Eats Up Chinese Cash; The city’s stock market is at a 20-month high, and trading volumes have hit records thanks to mainland investorsBy Joanne Chiu and Chong Koh Ping – WSJ
Hong Kong shares have surged to a 20-month high, and trading volumes have hit records, as investors from mainland China have jumped into the market in search of bargains and stocks not available back home.


Border Trouble Deepens as Key Customs System Is Maxed Out
Joe Mayes – Bloomberg
A key U.K. government customs system has been overwhelmed within weeks of Brexit and threatens to trigger more disruption as freight traffic rebounds.
Exporters say they are struggling to acquire transit documents, which allow goods to enter the European Union without delay, because of a shortage of agents with the authority to issue them.

Hard Brexit Could Get Harder
Therese Raphael – Bloomberg
For anyone who thought Brexit was done in 2020, the early signs are that it will, once virus woes settle, become Boris Johnson’s biggest headache. Again.
It’s not a great sign when a formerly pro-Brexit lobby is suddenly furious about a part of the deal that was billed as a triumph. “The key is we’ve got our fish back and they’re now British fish and they are better and happier for it,” arch-Brexiter Jacob Rees-Mogg told a near-empty Parliament last week. Whether or not the fish are happier is unproven, but fishers, as the largely family-owned businesses that catch them are called, surely are not.

Brexit has driven 2,500 finance jobs and EUR170bn to France, says bank governor
The Guardian
The Bank of France’s governor has said that Britain’s withdrawal from the European Union has driven almost 2,500 jobs and “at least EUR170bn in assets” to France.
London remains the continent’s foremost financial centre but Amsterdam, Dublin, Frankfurt and Paris have all scrambled to attract businesses that wanted to remain active in the 19-nation eurozone.

Ed Sheeran & Elton John Criticize UK Government After Brexit Deal Ends Visa-Free Movement For Performers
Tom Grater – Deadline
Leading UK musicians include Ed Sheeran, Elton John and Liam Gallagher have signed a letter stating that the UK government’s Brexit deal has failed the country’s performing artists. In the open letter, published by The Times, the group criticize the end of free movement for touring bands. It also suggests the costs and bureaucracy arising from the new system will make touring “unviable”, in particular for emerging musicians. Following the culmination of the Brexit transition period, workers are no longer guaranteed visa-free travel and may need to apply for additional work permits for performances in certain countries.

U.K. Flight Regulator Faces Brexit Test With Boeing 737 Max Approval
Charlotte Ryan – Bloomberg
Britain’s aviation regulator, granted new powers in the Brexit split, faces an early test of how it uses them with the looming return of Boeing Co.’s 737 Max jetliner. Approval of the Max to fly again after two fatal crashes provides a chance for the Civil Aviation Authority to demonstrate its independence. At the same time it highlights the challenge of carving out a role in a regulatory landscape dominated by the U.S. Federal Aviation Administration, which backed the Max in 2020, and the European Union Aviation Safety Agency, set to do so next week.

Brexit was a typically English revolution – one that left the elites unharmed
Rafael Behr – The Guardian
Jacob Rees-Mogg’s star has waned since his glory days leading backbench rebellions against Theresa May. He is on TV less, playing to smaller crowds. I caught him the other week on the BBC Parliament channel telling the Commons that fish unable to reach EU markets were “better and happier” because Brexit makes them more British. Watching his performance, I recalled the perennially startling fact about Rees-Mogg: he is younger than Kylie Minogue (also Noel Gallagher and Damon Albarn, but Minogue is the more arresting comparator for some reason).

Brexit was a typically English revolution – one that left the elites unharmed
Rafael Behr – The Guardian
Jacob Rees-Mogg’s star has waned since his glory days leading backbench rebellions against Theresa May. He is on TV less, playing to smaller crowds. I caught him the other week on the BBC Parliament channel telling the Commons that fish unable to reach EU markets were “better and happier” because Brexit makes them more British.

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