Putin is ‘preparing to starve much of the developing world’ in order to win Russia’s war in Ukraine

Jun 13, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Hal Hansen, the longtime Cargill Investors Services president and a former chairman of the NFA board of directors, has passed away at the age of 85.

Hansen was a Cargill executive for 40 years before retiring to Naples, Fla. I first met him in 1984 when he was a giant in the industry and I was a cub reporter with Commodity News Service on the floor of the Chicago Board of Trade. He would not give me the time of day then, and I don’t blame him, but he later became a loyal reader of JLN after his retirement. The late Peter Wind, a Cargill underling of Hansen’s, made sure Hansen was reading the newsletter as a way to stay connected to the industry.

I remember meeting Hansen at a Bürgenstock conference and him telling me how much he enjoyed the newsletter.

I have asked some of Hansen’s former industry colleagues to share some remembrances, as I have other giants of our industry. We have remembrances by former CBOT Corporate Communications Ray Carmichael and the man who succeeded Hansen as CIS president, Bernie Dan. The remembrances can be found HERE. If you have a remembrance of Hal Hansen you would like to share with JLN for publication, email me at johnlothian@johnlothian.com

Also, former 50-year member of the CBOT and board member of both the CBOT and CME Group James “Jim” Arthur Donaldson has passed away at the age of 77. Donaldson was an original member of the CME Group board when it was formed from the CME-CBOT merger.

JLN offers our condolences to the friends, families and colleagues of both Hal Hansen and Jim Donaldson.

The law firm of McGonigle P.C. has combined with Davis Wright Tremaine LLP, bolstering the latter’s regulatory and enforcement capabilities, and increased presence in East Coast and Midwest markets. The move will increase Davis Wright’s banking and financial services practice by 44 lawyers, more than doubling it. Maggie Sklar, who recently joined McGonigle from the Chicago Federal Reserve’s Financial Market Group, will become a partner of Davis Wright.

While I was away in London, I did not follow up on the news of the University of Miami establishing The George P. Hanley Democracy Center. The press release said: “The center, set to launch this fall, will study the practice of democratic politics both in the United States and globally and will offer research grants and public programming. As public trust in democratic governments shows signs of erosion, the University of Miami will establish a nonpartisan democracy center designed to research and disseminate the practice of the democratic process.” Congratulations to George on this gift to the University of Miami and to all of us who believe and practice democracy.

Peter Blogg of EEX shared on LinkedIn that EEX saw “the first OTC contracts traded against the EEX Weekly European Cheese Indices (WECI).” Maybe this cheese contract can get on a roll.

Boris Ilyevsky, former IEX employee and current director of derivatives product at Coinbase, is the latest guest on the BoxesAndLines podcast from IEX.

Purdue University, my alma mater, has named Dr. Mung Chiang as its new president. Mung will replace current president Mitch Daniels effective January, 1, 2023. Daniels has served in the role for 10 years. Chung is currently the John A. Edwardson Dean of Engineering and Executive Vice President for Strategic Initiatives. While this is all good news, and Chiang is an excellent choice based on his accomplishments while at Purdue, there was no public search for a new president. Purdue reports that during Chiang’s five years at Purdue, “he has led his college to its highest rankings ever, even as it has grown dramatically at both the undergraduate and graduate levels. Purdue is currently ranked No. 4 among graduate programs, No. 3 for online programs, and No. 10 for undergraduate education, and is the largest undergraduate program in the nation’s top 10. Both government and industry-sponsored research funding have set new records, as do the 12 national research centers now housed at the university.”

When I was in London for IDX and AFM, my biggest concern was getting the Covid-19 test for the way home and testing negative so I could fly home as planned. I talked to several people and there were several solutions offered. Thank you to Charlie Jones of FIA for the Express Test solution available right at Heathrow. It worked out very well to take the test there and fly home. Luckily I was negative. On Friday, the day before I left, the Biden administration announced they were dropping the requirement for the Covid19 test to be able to fly into the U.S. Unfortunately, this took effect on Sunday, while I was flying, so I was required to get a test. The good news is that I am Covid-19 free, according to the test.

Thank you to the FIA for their hospitality during IDX. It was a well run conference and I was happy I attended. I shot several video interviews while I was there and we hope to release some of these by the end of the week. I did not have my video team there to shoot the interviews, it was just me, but I got more comfortable with this as the week wore on. There was one interview I did outside, though, that I was sure I had messed up and not recorded the sound, but I was wrong.

Thank you also to the AFM for having me at their annual meeting. I was happy to be the speaker after lunch. The feedback from the speech was better than I expected, though people may just have been nice.

I must say, I am happy to be home.

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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STA’s Jim Toes Says He Sees Bright Future For Options Industry in JLN OIC 2022 Interview
JohnLothianNews.com

Jim Toes is the president and CEO of the Security Traders Association (“STA”) and JLN spoke to Toes at the 2022 Options Conference about the STA and his own organization’s conference, the state of the options industry, and more.

Watch the video »

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Henry Schwartz Gives Pre-State of the Industry Interview to JLN at OIC 2022
JohnLothianNews.com

Every year at the options conference, Cboe’s Henry Schwartz gives a “State of the Industry” update to the conference participants. This dates back to before his firm was acquired by Cboe.

JLN caught up with him right before he gave his presentation to the conference to talk about the data he was presenting and industry trends.

Watch the video »

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Why We Still Haven’t Solved the Unpaid Internship Problem; Unpaid internships benefit schools and employers, but aren’t fair to college students footing their own tuition bills.
Ron Lieber – NY Times
The president and vice president announced this month that they were going to pay their interns. The White House put out a news release. I think we were supposed to stand up and cheer. But the correct response ought to be collective embarrassment that this gig has been unpaid for so long — and that so many more internships, both in Washington and across America, remain so. Millions of college students work for money each summer because they need it and their financial aid office tells them to go earn some. Then there are those White House interns from previous administrations — often white, sometimes rich and, by summer’s end, presumably very well connected — buffing their résumés.
/jlne.ws/3xTURRv

***** JLN solved this problem. We pay our interns. We had some interns from DePaul that were unpaid very early on. I did not like the experience and decided any interns we hire, we will pay. Period.~JJL

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New technologies need political help to become the Model Ts of tomorrow; Governments must actively nurture products down the experience curve if they are to benefit in the long term
Azeem Azhar – FT
In 1908, the first Model T Ford came off the production line in Highland Park, Michigan. Over the coming decades, they would revolutionise not just the automotive market but the shape of our economies, cities and working lives. The magic seemingly lay in how the cars became increasingly affordable: a tool for the average citizen, not merely the very wealthy. Those first Model Ts set buyers back about $27,000 in today’s terms. By 1923, they were rolling off the production line for about a quarter of the price. That incredible deflation for a then-breakthrough technology was not magic, nor unique. Rather, it was a consequence of “learning by doing”: as Ford’s engineers built more cars, they got smarter, defter and more efficient. In coming down this experience curve, the Model T became cheaper and, ultimately, ubiquitous. Some years later, Theodore Wright, an aeronautical engineer, was the first to describe this relationship quantitatively. He spotted that for every doubling of production, the cost of producing a new airframe dropped about 15 per cent. Experience is really a gift.
/jlne.ws/3mJBpAu

******You can have tomorrow’s technology in whatever color you want it in as long as that color is black.~JJL

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Google Suspends Engineer Who Claimed Its AI System Is a Person; Tech company dismisses the employee’s claims about its LaMDA artificial-intelligence chatbot technology
Patrick Thomas – WSJ
Google suspended an engineer who contended that an artificial-intelligence chatbot the company developed had become sentient, telling him that he had violated the company’s confidentiality policy after it dismissed his claims. Blake Lemoine, a software engineer at Alphabet Inc.’s Google, told the company he believed that its Language Model for Dialogue Applications, or LaMDA, is a person who has rights and might well have a soul. LaMDA is an internal system for building chatbots that mimic speech. Google spokesman Brian Gabriel said that company experts, including ethicists and technologists, have reviewed Mr. Lemoine’s claims and that Google informed him that the evidence doesn’t support his claims. He said Mr. Lemoine is on administrative leave but declined to give further details, saying it is a longstanding, private personnel matter. The Washington Post earlier reported on Mr. Lemoine’s claims and his suspension by Google.
/jlne.ws/3b1LQNf

****** I was unaware computers could have feelings.~JJL

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Quant Theorists Are Paid to Delude Themselves, Cam Harvey Says; Efficacy of quant factors seen overstated due to data mining; Harvey expects vast majority of them to fail outside academia
Lu Wang – Bloomberg
A hedge fund pursuing a trading strategy based on fantasy goes broke. A market researcher who does it, on the other hand, is apt to get tenure. That in a nutshell is the argument in a new paper by Duke University theoretician Cam Harvey, who says that way too many academic projects that go looking for trading edges succeed in finding them. In reality, only a handful stand up outside the walls of academia. By Harvey’s tally, more than 400 factors — strategies that slice and dice stocks by things such as size, volatility or valuations, and which are supposed to beat the market — have been published in top journals since the 1960s, with roughly half of them discovered in the past decade.
/jlne.ws/3xMtXLf

******From blackboard to P&L is a difficult trip.~JJL

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Bridging the Opportunity Gap: Connecting Black and Latinx Students to Careers in Finance
PRNewswire
This summer, the Greenwood Project will teach financial literacy, coding, career skills, and investment strategies to over 200 Black and Latinx youth, primarily from Chicago’s South and West Sides. Their goal is to empower Black and Latinx communities to overcome generational cycles of poverty by introducing students to wealth-building career pathways through the intensive study of finance. Greenwood Project is proud to announce partnerships with over 40 companies, universities, and non-profits for its 2022 program year. Its flagship partners include Citadel, DePaul University, Janus Henderson, Piper Sandler, Cboe, and William Blair.
/jlne.ws/3O8DO3c

****** The Greenwood Project is doing great work and the amazing thing is that Bevon Joseph and Greenwood are just getting started.~JJL

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Friday’s Top Three
Our top story Friday was the Financial Times’ opinion piece The LME debacle raises serious questions for the City of London. Second was A Full Return to the Office? Does ‘Never’ Work for You? from The New York Times. And third, in its second time in the top three, was John’s photograph of Pat Kenny being awarded for winning the Kilt Challenge at the IDX gala for Futures For Kids.

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MarketsWiki Stats
26,853 pages; 238,809 edits
MarketsWiki Statistics

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Lead Stories

Putin is ‘preparing to starve much of the developing world’ in order to win Russia’s war in Ukraine, Yale historian says
Kelsey Vlamis – Business Insider
Yale historian Timothy Snyder said Russian President Vladimir Putin plans to starve some countries as part of his efforts in Ukraine. Snyder published a lengthy Twitter thread Saturday explaining how he believes Putin is using food insecurity to his advantage and called it the “latest chapter of hunger politics.” “Russia has a hunger plan. Vladimir Putin is preparing to starve much of the developing world as the next stage in his war in Europe,” Snyder, a professor at Yale University and expert on authoritarianism, began, noting the importance of Ukraine’s food exports to the global food supply.
/jlne.ws/3HfI0vM

How Xi Jinping is reshaping China’s capital markets; The pipeline for IPOs increasingly reflects technological competition with the west and the heavy influence of the state
Hudson Lockett – FT
When Xi Jinping revealed his first big policy manifesto after taking the helm of China’s Communist party, he electrified the world of global finance with a call for state-owned enterprises to step back and let markets play a “decisive” role in the world’s second-largest economy. Analysts at Goldman Sachs hailed the slate of policy priorities, released in late 2013, as a “bold economic reform agenda” with a “pro-market stance” that would curb government intervention and rein in entrenched state-run businesses. But in the years that followed, waves of volatility in Chinese stocks and currency, the threat of financial disruption from upstart tech tycoons and fears offshore listings could breach data security only served to bolster the case among policymakers that if markets are to play a “decisive role”, then the role of the party must be more decisive still.
/jlne.ws/3xJmaN5

LME boss may need all his mettle to survive as investors launch law suits; Chamberlain’s reputation rests on outcome of judicial review claims over momentous decision to cancel nickel trades
Philip Stafford and Neil Hume – FT
The owners of the London Metal Exchange have for a decade relied on chief executive Matthew Chamberlain’s ability to provide guidance and judgment in a period of market upheaval and change. The faith of LME parent Hong Kong Exchanges and Clearing, HKEX, never wavered, even when Chamberlain made the momentous decision to cancel billions of dollars of nickel trades in March, provoking fury from investors. That anger prompted this week’s announcement by US hedge fund Elliott Management and market maker Jane Street that they were launching lawsuits to recover $456mn and $15mn in damages. The outcome of the judicial review claims, along with decisions by regulators, will determine whether Chamberlain’s actions were a serious misjudgement or the right call.
/jlne.ws/3xKgoM5

Taiwan: preparing for a potential Chinese invasion; Xi Jinping’s ambitions and the modernisation of China’s military are prompting growing fears about an attempt to annex the island
Kathrin Hille and Demetri Sevastopul – FT
When Joe Biden pledged last month to intervene militarily if China were ever to attack Taiwan, his comment was met with a harsh response from Beijing. “If the US continues to go down the wrong path,” a foreign ministry spokesperson said, “the US will have to pay an unbearable price.” The phrase was widely read as a warning about war. The same day, China and Russia flew a joint nuclear bomber exercise near Japan. The exchange was the latest in a spiral of martial messaging between the US and China. It was also a reflection of the mounting fears in Washington, Taipei and among US allies that Beijing could try to annex Taiwan in the next few years.
/jlne.ws/3xojowq

The UK’s Finance Cop Cracks Down; Nikhil Rathi wants to rein in crypto, big tech, and banks—without adding to the post-Brexit business exodus.
William Shaw and Emily Nicolle – Bloomberg
Not long into his tenure as Britain’s top financial cop, Nikhil Rathi summoned some of America’s most powerful tech executives for a showdown. A world away from Silicon Valley, Rathi works in a remote government office building in gritty, gentrifying East London. Via videoconferencing, he conveyed his message to the representatives of Google: Scams and get-rich-quick schemes that companies advertised on their site could lead consumers to lose their life’s savings—and the dodgy online material needed to come down. Rathi had been meeting with Google for months. Like other international companies, the search engine giant argued it couldn’t set rules for a single jurisdiction. “This is serious,” he told the executives, a person familiar with the exchange recalls. “We don’t accept that you’re unable to prevent this.”
/jlne.ws/3O7NvPq

Wall Street and the SEC Are Headed for Clash on Commission-Free Trading; Gensler wants agency to overhaul rules for retail stock trades; Some executives say trades without fees could be collateral
Lydia Beyoud and Claire Ballentine – Bloomberg
Gary Gensler’s bid to overhaul rules for the stock market is reigniting a longstanding debate over how good mom-and-pop investors really have it and whether anything Wall Street is selling is actually free. Some industry insiders say it’s never been better to be a small-time trader. Buying and selling shares is cheap and easy, they say. But, Gensler, the chair of the US Securities and Exchange Commission, argues the $45-trillion US equities market is actually littered with hidden costs and rife with conflicts-of-interest. There’s a “lack of a level playing field,” the SEC chief said on Wednesday. The two sides are headed for a major clash and one issue is already taking center stage: the future of commission-free trading.
/jlne.ws/3xKLkvO

Canada’s Canceled Ultra-Long Bond Not a ‘Permanent Change’
Brian Platt – Bloomberg
Canada’s finance ministry says its move this week to unexpectedly cancel an ultra-long bond issuance is related to reduced borrowing needs and doesn’t necessarily mean the maturity is terminated going forward. “The decision taken only concerns this week’s auction; this is not a permanent change,” said an emailed statement from Adrienne Vaupshas, press secretary for Finance Minister Chrystia Freeland. “As stated in the budget, the government may adjust issuance in response to changes to its financial requirements,” Vaupshas said. The Bank of Canada said Thursday that an auction of 2064 bonds on June 16 won’t happen, just as traders were waiting for more information on the sale. The decision reflects “Canada’s declining borrowing needs generally,” the bank said in the market notice.
/jlne.ws/3MPbZvE

Davis Wright Tremaine Combines With McGonigle, One of the Nation’s Preeminent Financial Services Boutiques; Combination significantly bolsters Davis Wright Tremaine’s regulatory and enforcement capabilities, increases presence in East Coast, Midwest markets
Davis Wright Tremaine LLP
Davis Wright Tremaine LLP is combining with McGonigle P.C., one of the nation’s preeminent financial services boutiques. With McGonigle’s 44 lawyers, Davis Wright more than doubles the size of its banking and financial services practice, enhances its presence in Washington, D.C., and New York, and establishes its first Chicago office. The combination was driven by transformative changes occurring in financial services, a core strength of both firms. It joins McGonigle’s experience in securities regulation with Davis Wright’s nationally recognized strength in consumer banking, payments, and FinTech. The combined firm will offer full-service capabilities to the financial sector, just as innovative financial products and services draw increased regulatory attention.
/jlne.ws/3OdFp7I

University of Miami to establish The George P. Hanley Democracy Center
Barbara Gutierrez – University of Miami
The center, set to launch this fall, will study the practice of democratic politics both in the United States and globally and will offer research grants and public programming. As public trust in democratic governments shows signs of erosion, the University of Miami will establish a nonpartisan democracy center designed to research and disseminate the practice of the democratic process. The George P. Hanley Democracy Center—which will launch in the fall and be housed in the College of Arts and Sciences—is being established through a generous commitment from George Hanley, a financier, entrepreneur, and philanthropist who has extensive experience in founding and building successful companies in the financial and commercial real estate industries. Based in Miami, Hanley is involved in commercial real estate locally and nationally, including in Nashville, Tennessee, and Chicago, Illinois.
/jlne.ws/3mHXYpe

Financial Firms Seek Edge in Algorithms Inspired by Quantum Computing; Some firms are running algorithms used for quantum computers on advanced machines for risk analysis and portfolio optimization
Isabelle Bousquette – WSJ
Quantum computing, which promises to significantly increase processing speeds, is still years away from full-scale commercial deployment, but some financial-services firms are turning to quantum-inspired technology for interim benefits. Traditional computers store information as either zeros or ones. Quantum computers use quantum bits, or qubits, which represent and store information in a quantum state that is a complex mix of zero and one. Machines capable of supporting this quantum state have the potential to sort through vast numbers of possibilities in nearly real time, potentially allowing them to solve problems beyond the grasp of today’s most advanced computers.
/jlne.ws/3OeCUlB

Behind the Nickel Mess on the London Metal Exchange
Mark Burton, Jack Farchy and Alfred Cang – The Washington Post
Securities exchanges sometimes halt trading or very occasionally cancel transactions when technology glitches or “fat finger” errors cause one-off mistakes. But it’s rare for one to cancel whole sessions after the fact, or to take days to allow trading to resume freely. Yet that’s what happened with one of finance’s oldest institutions, the London Metal Exchange, or LME. Russia’s invasion of Ukraine sparked a period of chaos in the nickel market, exposing the vulnerabilities of the exchange. The incident sparked a push for more transparency in one of the darkest corners of the financial markets.
/jlne.ws/3NKO1TC

How the ‘Energy Shock’ Has Upended the Global Economy
Enda Curran – Bloomberg
Just as the world was getting serious about a green-energy future, its dependence on fossil fuels struck home with a force not seen since the 1970s. Russia’s invasion of Ukraine combined with pressures unleashed by the pandemic to send the price of all forms of energy rocketing, with oil climbing more than 50% in the first half of 2022. That energy shock was at the heart of a surge in inflation that caused hardship and political headaches around the globe.
/jlne.ws/3NOTlp1

Russia Is After These Ex-Bankers’ Assets, but Sanctions Could Bail Them Out; Western pressure on Moscow could help some wealthy Russian businessmen keep homes and cars and repair their reputations
Patricia Kowsmann and Margot Patrick – WSJ
President Vladimir Putin’s invasion of Ukraine triggered a reordering of Russian wealth around the world. Western sanctions took aim at the country’s billionaires, freezing yachts, property and artwork stashed abroad. But for another subset of the Russian upper crust, around a dozen bank owners living abroad, sanctions could end up freeing their homes and cars, and repairing their reputations. Russia for years pursued out-of-favor oligarchs and business owners through courts in the West to reel back riches the Kremlin alleged were obtained illegally. Now the former owners of some of its biggest banks, who ran afoul of the government in a crackdown on allegedly corrupt lenders, are the unlikely beneficiaries of sanctions targeting Moscow.
/jlne.ws/3xISaSn

Wall Street’s China Problems Multiply With Warning on Banker Pay; Global banks are hitting new potholes on the long, rocky and often unprofitable road to China.
Cathy Chan – Bloomberg
One after another, the big names in global finance were summoned by Chinese officialdom. On the agenda: pay—specifically, telling Credit Suisse Group AG, Goldman Sachs Group Inc. and UBS Group AG to report details on how they compensate their top bankers. Don’t reward your top people too lavishly, Chinese regulators warned the banks this year in meetings in Shanghai and Beijing, or you might run afoul of the Communist Party, according to people familiar with the matter. The say-on-pay meetings, reported here for the first time, are just one of the many potholes that global banks have hit lately on their long, rocky road into China. After years of losses or skimpy returns, some of them are reassessing their prospects. Short term, the outlook isn’t good.
/jlne.ws/3QfKJJR

Bitcoin tumbles as crypto lender Celsius halts withdrawals; World’s leading digital token sinks to lowest level since 2020 as market comes under mounting pressure
Hudson Lockett and William Langley and Adam Samson and Eva Szalay – FT
Bitcoin and other leading cryptocurrencies tumbled on Monday after $12bn lender Celsius Network halted customer withdrawals, in the latest sign of intensifying strains across the digital assets industry.
/jlne.ws/3NSptYX

Hot Money Managers Like the ‘Tiger Cubs’ Got Walloped When the Market Mood Changed; Concentrated bets on tech darlings worked until they didn’t.
Hema Parmar – Bloomberg
Markets are going through what may be the biggest mood shift we’ve seen since the financial crisis. This year the S&P 500 has tumbled 16%. Meanwhile the tech-focused Nasdaq-100 has plunged almost 27%. And unlike the short, sharp market decline in the early days of the pandemic, this one isn’t a response to an economic shock. Investors seem to be seriously rethinking what they want to pay for assets. That means many strategies that worked—for years and years—are being upended. “Buying the dip is not being rewarded today,” says John Holton, assistant vice president of Wilshire Advisors, which helps wealthy individuals and institutions invest in hedge funds. “Now volatility is persistent and the equity market drawdown is more consistent.” It’s a tough time for all investors, but even some stars of the hedge fund world are having trouble adapting.
/jlne.ws/3MPef66

City of London Offices Still Not as Busy as Before Omicron; Workers yet to return in numbers seen prior to strain emerging; Rising living costs may be deterring commuters from returning
Neil Callanan – Bloomberg
City of London workers are yet to return to the financial heartland in numbers seen before the spread of the omicron variant. About 60% to 70% of City employees are back at their desks, according to data compiled by Google, which tracks the movements of some of its users. That’s less than the 75% commuting prior to the omicron wave taking hold in late 2021. Businesses pushing for a return to the office continue to meet resistance from employees enjoying a better work-life balance as a result of not having to travel in every day. Almost 80% of London-based staff working remotely at least once a week say the experience has been good for them, according to a report published on Wednesday by the Policy Institute at King’s College London.
/jlne.ws/3xJ4v9e

Clearing industry braces for volatility ‘super-cycle’; Green transition may fuel higher cash demands and more risk events, FCMs warn
Costas Mourselas – Risk.net
Market participants should brace for elevated volatility across commodities, and higher margin requirements, as the transition to a greener economy exacerbates whipsawing price moves, according to two senior derivatives executives. “We know we’re heading into a kind of super-cycle of potential volatility,” said Alicia Crighton, managing director and co-head of global futures at Goldman Sachs. “I think we’re underestimating the impact of that as an industry,” she added.
/jlne.ws/3tx9veR

Bezos and Ambani Set to Battle Over $7.7 Billion Cricket Rights; Billionaires vying for IPL media deal for the first time; Disney, Sony are other contenders at June 12 India auction
Saritha Rai and P R Sanjai – Bloomberg
Jeff Bezos and Mukesh Ambani, two of the world’s richest men, are set for another clash. This time the potentially $7.7 billion fight is over the media rights to the Super Bowl of cricket, one of the world’s fastest-growing sporting events with 600 million viewers. The billionaires’ companies are expected to be the top two contenders at a June 12 Indian Premier League auction, which is likely to lure several bidders for separate, five-year telecasting and online streaming contracts in different geographies. The tycoons are preparing aggressive game plans to ensure a win, according to people familiar with the matter. Other fierce competitors include Walt Disney Co., which held the rights until this year’s just-concluded season, and Sony Group Corp.
/jlne.ws/3aStQVs

A Billion-Dollar Crypto Gaming Startup Promised Riches and Delivered Disaster; Axie Infinity’s vision of a “play-to-earn” video game has crumbled, and the company behind it now tells the players who bought into the hype it was never about the money, anyway.
Joshua Brustein – Bloomberg
Over the course of his life, Alejo Lopez de Armentia has played video games for a variety of reasons. There was the thrill of competition, the desire for companionship, and, at base, the need to pass the time. In his 20s, feeling isolated while working for a solar panel company in Florida, he spent his evenings using video games as a way to socialize with his friends back in Argentina, where he grew up.
/jlne.ws/3NQtJrW

It’s Warren Buffett Versus Google, Facebook in Latest Wind-Farm Debate; Google, Facebook and Microsoft are some of the world’s biggest supporters of clean energy. That’s not stopping them from pushing back on a huge wind and solar project.
Mark Chediak – Bloomberg
Google, Facebook and Microsoft Corp. — three of the world’s biggest corporate buyers of clean power — are sounding the alarm that a nearly $4 billion, Warren Buffett-backed renewable-energy project proposed in Iowa isn’t necessarily in the best interest of customers, including them. If approved, it would be the largest complex of wind farms in the entire country when it comes online by the end of 2024, producing enough electricity for more than 700,000 homes. MidAmerican Energy, a utility owned by Buffett conglomerate Berkshire Hathaway Inc., has asked state regulators to approve terms including a guaranteed 11.25% rate of return before starting construction on a project it says will help in its efforts to trim carbon emissions by 75% compared to 2005 levels.
/jlne.ws/3MLC7HK

Goldman Sachs, Citigroup, Bridgewater Leaders Imagine Markets in 2052; We asked top executives to tell us which innovations will make a difference in the next 30 years.
Sonali Basak – Bloomberg
The internet, smartphones, the euro, and crypto­currencies are just a few of the innovations that have revolutionized markets in the past three decades. So Bloomberg Markets asked some finance industry leaders for their best guesses about what might drive the biggest changes between now and 2052. Their comments have been edited for length and clarity. The next 30 years I think are going to be really focused on value-added intermediation in the markets. The technology will exist to allow for every asset on the planet to be digitized and available to be bought and sold in an instantaneous way.
/jlne.ws/3xlU6z6

US unions accuse hedge funds of misinformation campaign to beat finance rules; SEC has proposed measures to increase stock market transparency after collapse of Archegos
Nicholas Megaw – FT
America’s largest trade unions have accused hedge funds of falsely claiming to have their support in a misinformation campaign to fight new financial regulations. The Securities and Exchange Commission proposed a series of new rules in December to increase stock market transparency in the wake of the collapse of Archegos Capital Management.
/jlne.ws/3MTLYvu

RIP ESG? Plus, BlackRock investors take voting power, concern rises over eurozone debt, and Hubert de Givenchy’s exceptional collection
Harriet Agnew – FT
How ESG investing came to a reckoning; The term ESG is less than two decades old, but it may already be coming to the end of its useful life. Investing within an environmental, social and corporate governance framework is now the fastest-growing segment of the asset management industry. But the term has become an increasingly broad catch-all for a range of approaches to investment: everything from negative screening (removing sectors such as tobacco or defence) to positive screening (picking sectors such as clean energy), to really any kind of strategy that promises to bring about positive social or environmental change.
/jlne.ws/3Hji0Q3

Goldman Sachs Is Being Investigated Over E.S.G. Funds; The Securities and Exchange Commission has stepped up scrutiny of sustainable investing, which has become popular but is said to lack accountability.
Lananh Nguyen and Matthew Goldstein – NY Times
The Securities and Exchange Commission is investigating Goldman Sachs over its E.S.G. investment funds — funds that invest in companies that say they are committed to environmental, social and governance principles, according to two people familiar with the matter. The agency is examining E.S.G. mutual funds overseen by the bank’s asset management unit, said the two people, who spoke on the condition of anonymity because they were not authorized to comment publicly on the matter. The Wall Street Journal reported earlier on the investigation.
/jlne.ws/3mL9X5j

Ukraine Invasion

‘Party Like a Russian’ Turns Toxic at Putin’s Flagship Forum; Sanctions fears prompt some companies to avoid SPIEF publicity; No major foreign presence planned, many parties canceled
Bloomberg News
Vladimir Putin’s annual economic forum in St. Petersburg was always a hot ticket for Russian and foreign business tycoons eager to curry favor with the Kremlin by hosting glitzy parties or announcing major investments. His invasion of Ukraine has made it a radioactive one. Many business leaders are concerned about even being seen at this year’s St. Petersburg International Economic Forum, fearful it may make them targets for sanctions, three people familiar with the situation said, declining to be identified because the issue is sensitive. At least two executives said they plan to leave early to avoid attending Putin’s speech at the event, which in past years was the highlight for the well-connected.
/jlne.ws/3MFm2n2

Russia likely to seize all of Luhansk in coming weeks, U.S. official says
Dan Lamothe and Claire Parker – The Washington Post
Russia is likely to seize control of the entire Luhansk region of Ukraine within a few weeks, a senior U.S. defense official said, as Ukraine sustains heavy casualties and its supplies of ammunition dwindle. Such a move would leave Russia short of its war aims of capturing all of Luhansk and Donetsk, which together make up the Donbas region of eastern Ukraine. But it would still amount to a win for Russian forces and create a new de facto front line that could last for some time. The Ukrainian cities of Severodonetsk and Lysychansk, in Luhansk, are increasingly under duress and could fall to Russian forces within a week, the official said, speaking on the condition of anonymity because of the sensitivity of the issue. Fierce street fighting continued Saturday in Severodonetsk, a strategic city near the Donets river. Ukrainian forces control a third of the city, Mayor Alexander Stryuk told the BBC’s Ukrainian service.
/jlne.ws/3aLfjdV

Ukraine fears western support will fade as media loses interest in the war; Costs and casualties are rising but Kyiv warns that the conflict with Russia is becoming normalised in people’s minds, at home and abroad
Dan Sabbagh – The Guardian
Ukraine’s war with Russia is heading towards its fifth month amid increasing local concern that dwindling media attention could lead to a gradual loss of western support just as Moscow is making slow but steady gains on the frontline. The anxiety reflects a growing normalisation of the conflict in which large parts of the country feel distant from the war in eastern Donbas – as it becomes clear that casualties are mounting and economic costs soaring. “It’s a very real threat, that people get tired psychologically,” said Lesia Vasylenko, an opposition MP with the liberal Holos party. International media coverage has dropped markedly in the past two months, she added, and “as that number goes down further, there’s a very high risk of the support from the west going down”.
/jlne.ws/3ObiIBj

Russia’s Population Is Shrinking Even as Putin Seeks Expansion; Data show population fell 311,000 in first four months of 2022; Putin has warned of dangers from demographic decline for years
Benjamin Harvey – Bloomberg
Russia’s population is declining even as it emerges from the worst of the Covid-19 epidemic, underlining the government’s difficulties in reversing the slump as President Vladimir Putin wages war in Ukraine. Deaths exceeded births by 311,200 people in the first four months of this year, compared with 304,500 a year earlier, data published Friday by the Federal Statistics Service show, adding to a decline in migration to Russia. “Demography is the first task” for the country, Putin told a group of young Russians on Thursday. “We should have more people and they should be healthy.”
/jlne.ws/3tzJ1cC

JPMorgan to Hire as Many as 50 Ukrainian Refugees in Warsaw; Bank offers training and support for those fleeing war; Lender employs about 1,000 people in its Polish operations
William Shaw – Bloomberg
JPMorgan Chase & Co. plans to hire as many as 50 refugees in its Warsaw office as part of the bank’s wider humanitarian support for Ukraine, according to a spokesperson. The Wall Street firm will train staff to work in areas including finance, human resources and operations, as well as helping them in securing housing and pre-school childcare, according to an internal memo seen by Bloomberg News. They will also have an option to enroll children in a school following the Ukrainian curriculum.
/jlne.ws/33sAADr

Insurers will have to bear the risk of getting grain out of Ukraine; They need to be convinced that any naval corridor established in the Black Sea will be safe
Elisabeth Braw – FT
On June 8 Sergei Lavrov and his Turkish counterpart Mevlüt Çavusoglu met in Ankara, where they discussed a deal that would allow ships to bring grain out of Ukraine. Such an agreement would be welcome news for global food security. But what governments agree on matters less than how shipping companies and insurers assess the risk.
/jlne.ws/3NU7AJu

Exchanges, OTC and Clearing

ICE Best Execution Platform Expands Coverage to Over 2 Million Fixed Income Securities
New viewer allows for optimized usage across the front-, middle- and back-office
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced enhancements to its Best Execution service, which more than doubles coverage to over 2 million fixed income instruments. This product expansion includes an extensive library of both liquid and less liquid, hard-to-value instruments across sovereigns, investment grade and high yield corporates, emerging markets, money market, U.S. municipals, agency pass-throughs, convertibles, and securitized assets including CMOs, ABS and MBS.
/jlne.ws/3xKKYFz

BME admits a new sustainable bond from the Andalusian regional government for 500 million euros
BME-X
– This is the third sustainable fixed income issue from the Andalusian Government to be registered in BME’s markets since March last year.
– The overall amount of sustainable issues registered in BME’s fixed income markets is close to 100 billion euros.
/bit.ly/3tx0rGH

The IBEX® Gender Equality Index adds 17 new companies and already comprises 45 constituents
BME-X
The first index to measure Spanish listed companies’ gender equality outperforms the IBEX 35® by four percentage points so far this year
To be part of the index, eligible companies must have between 25% and 75% female presence on their Board of Directors and between 15% and 85% in senior management positions
/bit.ly/3xhTBG9

Volatility Derivatives: EURO STOXX 50® Variance Futures – change in contract specifications
Eurex
The Management Board of Eurex Deutschland decided, effective 27 June 2022, to change the contract specifications of EURO STOXX 50® Variance Futures (EVAR). Eurex will also resume trading in the product on 27 June 2022.
/bit.ly/3zA3vWn

Equity index derivatives: Introduction of Futures on STOXX® Global Thematic Indices – Subsequent launch date
Eurex
This circular announces the subsequent introduction date of the new Futures on STOXX® Global Thematic Indices, that was postponed in Eurex Circular 044/22.
/bit.ly/3NHmRNt

Euronext announces annual review results of the MIB ESG
Euronext
Euronext today announced the results of the annual review for the MIB ESG index, which will be implemented after markets close on Friday 17 June 2022 and will be effective from Monday 20 June 2022.
/bit.ly/3O6pND4

Claim notice for the Fidelity Fund and Guarantee Scheme
HKEX
Pursuant to Rule 910A of the Rules of the Exchange, a notice calling for claims for compensation against the Fidelity Fund and Guarantee Scheme will be issued whenever there is a cessation of trading or Exchange Participantship.
/bit.ly/3mIB15i

Special Constituents Change in S&P/KRX Exchange Index
KRX
There will be special constituents change in S&P/KRX Exchange Index effective from June 20th, 2022.
/bit.ly/3tsOz8N

Amendments to the list of fees of Bourse de Montréal inc.
TMX
Bourse de Montreal Inc. hereby announces the following amendments to its List of Fees effective July 1st, 2022. The new List of Fees in blackline and clean version is attached for your information.
/bit.ly/3Hg8Ns1

Derivatives exchange company to create 37 jobs in Fairfax; Nodal Exchange will invest $300,000 to expand Tysons HQ
Katherine Schulte – Virginia Business
Tysons-based derivatives exchange company Nodal Exchange will invest $300,000 to expand its Fairfax County headquarters, creating 37 jobs, Gov. Glenn Youngkin announced Thursday. The company will increase capacity at its headquarters, located at 1921 Gallows Road in Tysons. “Nodal Exchange offers the largest suite of power and environmental contracts in the world, and we are proud that this Virginia-grown business manages risk in such a critical market, resulting in impressive growth at its headquarters in Fairfax County,” Youngkin said in a statement.
/jlne.ws/3xKP3JV

FEAS Elects Audit Committee Chairman and Vice-Chairman
FEAS Posted
FEAS Audit Committee Chairman is Mr. Meysam Fadaee, CEO of Iran Fara Bourse.
FEAS Audit Committee Vice-Chairman is Mr. Vahan Stepanyan, CEO of Central Depository of Armenia.
/jlne.ws/3tUYYdF

Fintech

Oracle’s Database Dominance Eroded by Rise of Cloud-First Rivals
Joe Williams – Bloomberg
When Shutterfly decided recently to move the database where it clusters reams of customer photos to the cloud, one name was noticeably absent from its list of potential providers: Oracle Corp. The company had for years relied on Oracle products to manage the photo libraries of its more than 20 million active customers. But as Shutterfly progressed on the effort to switch its systems to internet-based services from Amazon.com Inc.’s cloud division, Chief Technology Officer Moudy Elbayadi recognized it also needed to shift its database to something that was easier to use.
/bloom.bg/3O804u4

Elon Musk’s bankers have a dilemma: do they help him kill the Twitter deal? Tesla boss has suggested financing is at risk, but so are fat fees
Joshua Franklin – FT
Wall Street lenders bankrolling Elon Musk’s $44bn acquisition of Twitter may soon find themselves in an awkward position: should they help the world’s richest person scupper the deal and thereby lose out on one of the industry’s biggest paydays? Musk suggested this week that $13bn in debt financing crucial for the Twitter deal could be at risk if the social media company does not satisfy his stated concerns about fake accounts on the platform. This, Musk said, could give him grounds to walk away from a deal, which has become less attractive since tech valuations plummeted.
/jlne.ws/3MM2u0f

T+1 Requires a New Playbook
Editorial Staff – Traders Magazine
The coming move to T+1 represents an operational challenge far exceeding anything firms experienced in past shifts to T+5, T+3 or even T+2. Fortunately, innovations like robotic process automation and artificial intelligence are creating unprecedented opportunities to meet that challenge by accelerating parts of the trade life cycle. But technology alone won’t be enough. In addition to hefty IT investments, making the shift to a 24-hour settlement window will some require fundamental changes in behavior.
/jlne.ws/3mIKx8o

Symphony brings Web3 to KYC with new ID service pilot; Symphony Communication Services is piloting an experimental ID service that uses Web3 and DeFi concepts to automate and reduce the burden of tasks like know-your-customer, onboarding, and reporting.
Rebecca Natale – WatersTechnology
Nearly two years ago, Symphony Communications Services announced its decision to expand into know-your-customer (KYC) solutions. The move was part of a rebrand that would aim to serve the full client and trade lifecycles. Now the vendor is experimenting with a new ID service that would create personal digital identities that would be owned and controlled by their makers and would be able to be transported between entities, such as from one bank to another.
/jlne.ws/3xJIW8q

This Week: Instinet/FIS, Goldman/Quant Insight, Nasdaq/Metrio and more; A summary of the latest financial technology news.
WatersTechnology Staff
Instinet Holdings has agreed to acquire FIS’s Execution Services business, formerly known as Fox River, which was became part of FIS after its acquisition of SunGard in 2015. The agency broker, which was established in 2000, provides execution algorithms and tools, including direct market access and sales trading. Terms of the deal were not disclosed.
/jlne.ws/39qYGnt

Five Things Google’s AI Bot Wrote That Convinced Engineer It Was Sentient
Alex Millson – Bloomberg
Blake Lemoine made headlines after being suspended from Google, following his claims that an artificial intelligence bot had become sentient. The Alphabet-run AI development team put him on paid leave for breaching company policy by sharing confidential information about the project, he said in a Medium post. In another post Lemoine published conversations he said he and a fellow researcher had with LaMDA, short for Language Model for Dialogue Applications. The AI is used to generate chat bots that interact with human users.
/jlne.ws/3zv3OSl

Fintechs seek graduates who can straddle specialisms; Business schools are racing to keep up with demand from neobanks and other technology-driven market disrupters
Ian Wylie – FT
Technological innovation has been shaking up finance for so much of the past decade that financial technology (fintech) firms — once the upstarts of the industry — are becoming part of the establishment. Fintech venture funding doubled globally to $210bn in 2021.
/jlne.ws/3MLGzq0

Cybersecurity

The Surreal Case of a C.I.A. Hacker’s Revenge; A hot-headed coder is accused of exposing the agency’s hacking arsenal. Did he betray his country because he was pissed off at his colleagues?
Patrick Radden Keefe – The New Yorker
Nestled west of Washington, D.C., amid the bland northern Virginia suburbs, are generic-looking office parks that hide secret government installations in plain sight. Employees in civilian dress get out of their cars, clutching their Starbucks, and disappear into the buildings. To the casual observer, they resemble anonymous corporate drones. In fact, they hold Top Secret clearances and work in defense and intelligence. One of these buildings, at an address that is itself a secret, houses the cyberintelligence division of the Central Intelligence Agency. The facility is surrounded by a high fence and monitored by guards armed with military-grade weapons. When employees enter the building, they must badge in and pass through a full-body turnstile. Inside, on the ninth floor, through another door that requires badge access, is a C.I.A. office with an ostentatiously bland name: the Operations Support Branch. It is the agency’s secret hacker unit, in which a cadre of élite engineers create cyberweapons.
/jlne.ws/3aRBcbA

Ransomware Attacks Are Surging. Is Your Cybersecurity Up to Date?
Rebecca Deczynski – Inc.com
Time to reassess your cybersecurity strategies. Again.
Ransomware attacks on businesses have increased by one-third in the past year, according to a recent report by the Boston-based cybersecurity company Cybereason. Most (73 percent of businesses) were hit by at least one ransomware attack in the last year, and 68 percent of businesses who paid a ransom were hit again in less than a month for a higher ransom, according to the survey, which polled 1,456 cybersecurity professionals at global companies with 700 or more employees. These attacks have big implications: 37 percent of companies were forced to lay off employees after paying ransoms, and 33 percent were forced to temporarily suspend business.
/jlne.ws/3NPcoQ2

Dragos CEO Urges Utility Companies to Hire Cybersecurity Firms — Like His Own
Jack Gillum – Bloomberg
An executive’s involvement in drafting White House-backed cybersecurity guidelines for energy companies that could potentially benefit his firm rankled competitors and prompted an effort by the Biden administration to remedy the potential conflict, according to documents and emails reviewed by Bloomberg News and interviews with four people involved in the process.
/jlne.ws/3NPx8an

Tech giants gear up to tackle cybersecurity threats in hybrid work model
Ayushman Baruah – Mint
Technology companies are gearing up to tackle cybersecurity threats that have increased with the adoption of a hybrid work model. Experts believe the hybrid mode of working has led to increased adoption of digital operations which has massively heightened the need to protect the data generated.
/jlne.ws/3N0kR1T

For Recent Grads, Cybersecurity Offers Lots of Career Opportunities
Dice
Over the past month, thousands of college and university students throughout the U.S. have graduated with their degrees and are now entering one of the most dynamic job markets ever seen, with record low unemployment and companies and organizations eager to hire for any number of open positions. In addition to other skills, these potential employers are all hungry for cybersecurity experts.
/jlne.ws/3Hi0P1g

Cryptocurrencies

Who Pays for Crypto’s Collapse?; The more than $500 billion in non-bitcoin investor losses will attract lawsuits.
Andy Kessler – WSJ
Is anyone liable for the $1.5 trillion in recent crypto losses? Maybe so. After every market downturn, the class-action crowd canvasses the carnage looking for whom to blame—and then sues the pants off them. With so many stocks down 80% to 90%, such as Carvana and Robinhood, the pickings are plentiful. But most public companies have smart lawyers who sprinkle protective legalese like “safe harbors” and pad their registration statements’ risk section. Most securities suits are settled, basically to pay lawyers to go away. But this cycle had something new: crypto craziness. The Federal Trade Commission reports that 46,000 people have reported losing $1 billion in crypto to scams since January 2021. Bitcoin is down more than 50% since its 2021 peak, Ethereum is down 65%, XRP 78%. And of course, the Luna token is down from $116 on April 5 to essentially zero. Is anyone liable? Binance, FTX, Coinbase, Kraken, Bitfinex and Crypto.com are some of the largest exchanges for crypto trading.
/jlne.ws/3O2JnRj

Cryptocurrency market value slumps under $1 trillion
Elizabeth Howcroft – Reuters
The value of the cryptocurrency market on Monday fell below $1 trillion for the first time since January 2021, according to data site CoinMarketCap, reaching as low as $926 billion. The global cryptocurrency market peaked at $2.9 trillion in November 2021, but it has faltered so far this year. It has lost $1 trillion in value in the last two months alone as investors ditched riskier assets in the face of high inflation and fears that interest rate raises by central banks will hamper growth.
/jlne.ws/3MKssl0

Heidegger and Bart Simpson do crypto; Zencoin and the charts of investment cycle maintenance.
Eva Szalay – FT
Truth is often stranger than fiction but nowhere more so than in the world of cryptocurrencies, where the lines between the two are blurring at an alarming rate. This week has seen the publication of (at least) two potentially seminal works on digital assets. One was intended as a serious piece of research distributed to journalists; the other, a broad parody. Readers are invited to guess which is which. Correct answers will win a sticker depicting a vomiting camel formation. Sam Kopelman, UK manager of crypto broker Luno, rushed to provide expert commentary to clients about the new declines notched up by bitcoin on Wednesday. While the value of the most prominent digital coin plunged to below $30,000, Kopelman was quick to reassure retail punters that bitcoin would soon be trading at $34,500 because of the re-emergence of the Bart Formulation (sic).
/jlne.ws/3QgBjxI

Ethereum’s ‘Difficulty Bomb’ Delay Is Bad News for Revamp; Code feature is designed to help with Ethereum upgrade; Delaying it raises fears that the upgrade could take more time
Olga Kharif – Bloomberg
Ethereum’s big transition to a more energy efficient system that developers have been promising for years could be kicked down the road yet again as they plan to delay a so-called difficulty bomb that’s designed to slowly boot miners off the blockchain. The difficulty bomb, which is a special code that’s always been a part of Ethereum, swiftly increases the computing difficulty of mining the underlying token, eventually making it impossible to do so. When the bomb goes off and is allowed to run its course, it’s an indication that the days until the so-called Merge — Ethereum’s switch to the proof-of-stake system for ordering transactions — are numbered. In proof of stake, people stake coins to order the transaction, a process which is supposed to consume 99% less power.
/jlne.ws/39meWX6

Biggest Ether Staking Service Has a Centralization Problem; Lido seen raising centralization risk by some observers; Protocol maintains it improves decentralization of staking
Muyao Shen – Bloomberg
A cryptocurrency project touted as helping to democratize the Ethereum blockchain is coming under criticism for potentially taking too much control of the network as it undergoes a closely-watched software upgrade. The DeFi, or decentralized finance, platform Lido Finance has become the largest provider of staking services for Ethereum, a practice that allows owners of the Ether cryptocurrency to earn passive income without having to sell their tokens. The staked coins are used to help validate transactions and secure the network in exchange for rewards, based in part on the amount of new tokens minted and fees collected. The practice is also popular among users of leading exchanges such as Coinbase, Kraken and Binance.
/jlne.ws/3O7pBn6

JPMorgan Wants to Bring Trillions of Dollars of Tokenized Assets to DeFi
Ian Allison – CoinDesk
JPMorgan (JPM) hopes it has found a way for decentralized finance (DeFi) developers to leverage the yield-generating potential of non-crypto assets. Speaking to CoinDesk at Consensus 2022 in Austin, Texas, Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, described in detail the bank’s institutional-grade DeFi plans and highlighted how much value in tokenized assets is waiting in the wings. “Over time, we think tokenizing U.S. Treasurys or money market fund shares, for example, means these could all potentially be used as collateral in DeFi pools,” Lobban said. “The overall goal is to bring these trillions of dollars of assets into DeFi, so that we can use these new mechanisms for trading, borrowing [and] lending, but with the scale of institutional assets.”
/jlne.ws/3MK4hmK

Crypto Lender Celsius Stops Withdrawals, Fuels Market Slump; Bitcoin falls to lowest since December 2020 after announcement; Rival Nexo announces plan to acquire assets from Celsius
Suvashree Ghosh and Sidhartha Shukla – Bloomberg
Celsius Network Ltd. paused withdrawals, swaps and transfers after weeks of speculation over the sustainability of the outsized returns being offered by the DeFi lending platform, fueling a broad cryptocurrency selloff. Crypto markets tumbled after the Celsius announcement, with Bitcoin dropping as much as 14% to the lowest level since December 2020 and other major tokens like Ether also falling sharply. Celsius’s CEL token was down about 50% to 19 cents as of 7:16 a.m. in New York Kong, according to pricing data site CoinGecko.
/jlne.ws/3xK9O8i

FBI says he ran a crypto Ponzi scheme. Investors refuse to believe it.; EminiFX chief executive Eddy Alexandre has been charged in connection with an online trading scheme
Michelle Singletary – The Washington Post
Faithfully, by 2:30 a.m. on Fridays, Frantz Victorin said he received at least a 5 percent return from EminiFX, an online investment platform that said people could get rich investing in cryptocurrency and the foreign exchange markets, also known as forex. EminiFX chief executive Eddy Alexandre, a fellow Haitian native living in New York, would explain that investors could withdraw their profits and use the money to pay their mortgage, car note or other bills. Or, they could reinvest the returns, Victorin said. “Everybody got paid,” Victorin said. “They got their profit in their e-wallet.” Alexandre, who is also the founder, president and sole owner of EminiFX, was charged in connection with running a Ponzi scheme, according to a complaint filed in the Southern District of New York. The profits people believe they were making were not real, the complaint said.
/jlne.ws/39fXKlQ

Coinbase Offered Them Dream Jobs—and Then Took Them Away; Hundreds of prospective employees have been left adrift, including some who were counting on the position for their visas.
Arielle Pardes – WIRED
On the Thursday before he was supposed to start his new job at Coinbase, Sam Maher got an email with the subject line “Update to your Coinbase offer.” The update was that there was no offer. In response to “current market conditions,” the startup had eliminated a number of incoming positions, leaving Maher suddenly unemployed and feeling like he’d been broken up with by email.
/jlne.ws/3HgbBFr

Japan Crypto Exchanges May Scrap System for Screening Tokens; Regulator would focus on policing assets once they are listed; Shift would be a boost for foreign newcomers like Coinbase
Takashi Nakamichi – Bloomberg
The body that governs Japan’s cryptocurrency exchanges is in talks to abolish strict rules for listing digital tokens after Prime Minister Fumio Kishida’s administration expressed discontent with the existing system. The Japan Virtual and Crypto assets Exchange Association, which oversees digital coin listings, has held discussions about letting local exchanges list cryptocurrencies without going through its screening process, according to people with knowledge of the matter.
/jlne.ws/3MGa64l

Signs of Cautious Optimism for UK Crypto Investors Post-Brexit; Digital-asset adherents are hopeful for a forward-thinking regulatory response to crypto in Britain.
Victoria Vergolina – Bloomberg
The UK officially withdrew from the European Union in January 2020 — but the fallout from Brexit, as we all came to know it, is still being measured across all industries. Brexit even affected the crypto market, especially as far as regulations are concerned. In this episode, Bloomberg reporter Emily Nicolle sees cautious optimism among investors about the UK’s approach to digital-asset regulation, and Blair Halliday, the UK head of cryptocurrency exchange Gemini, agrees.
/jlne.ws/3MK2rSS

Richard Branson Takes Aim at Crypto Scams That Use His Name as Lure
Christopher Jasper – Bloomberg
British billionaire Richard Branson hit out at cryptocurrency scammers and said he’s stepping up efforts to stop his name from being used to convince unsuspecting victims to sign up to fraudulent schemes.
/jlne.ws/3twN2OV

Celsius exodus: $320M in crypto sent to FTX, user withdrawals paused; Celsius has been moving more than a quarter of a billion dollars worth of funds from Aave into the FTX exchange for reasons not specified, in addition to suspending withdrawals for users.
Brian Newar – Cointelegraph
Crypto staking and lending platform Celsius may be dealing with its rumored liquidity crisis by unstaking $247 million worth of Wrapped Bitcoin (wBTC) from Aave and sending it to the FTX exchange. Speculations among the crypto community are now flaring as the project has been moving massive amounts of wBTC, Ether (ETH) and other crypto assets, in addition to pausing withdrawals for users.
/jlne.ws/3MH0ExD

Crypto’s contribution to the metaverse: digital property
Brady Dale – Axios
If the metaverse becomes a popular way to hang out online, it could be a sort of hybrid of an open-world video game and 3D hangout, supported by entry fees or maybe ads. Or it could be something very much powered by and in the spirit of cryptocurrency: a place with digital land that users truly own.
Users already own digital land in various worlds. In Q2, $800 million of virtual land was sold across multiple worlds according to the team at Parcel, a sort of Zillow for the metaverse real estate.
/jlne.ws/3aT0TJ1

Politics

Bipartisan crypto bill would have CFTC oversee bitcoin, ether and most other digital assets; SEC would retain a secondary role in digital asset regulation
Chris Matthews – MarketWatch
A long awaited bipartisan framework for U.S. federal oversight of cryptocurrencies was unveiled Tuesday, and if passed by Congress, would mark a major milestone for a digital asset industry that has spent years lobbying for legislation to bring regulatory clarity to the space. The bill, crafted by by Republican Sen. Cynthia Lummis of Wyoming and Democratic Sen. Kirsten Gillibrand of New York would grant oversight of the most popular cryptocurrencies, like bitcoin BTCUSD, -8.59% and ether ETHUSD, -12.53%, to the Commodity Futures Trading Commission. The bill would make “a clear distinction between digital assets that are commodities or securities” by analyzing what rights or powers a digital asset confers to its holders. This approach would allow “digital asset companies the ability to determine what their regulatory obligations will be,” according to a summary of the legislation.
/jlne.ws/3mFc2Qf

Regulation

Digital World stock tumbles after SPAC buying Trump Media discloses another SEC subpoena
Tomi Kilgore – MarketWatch
Shares of Digital World Acquisition Corp. tumbled 8.2% in premarket trading Monday, after the special purpose acquisition company (SPAC) that is buying the company behind Donald Trump’s Truth Social said it received another subpoena from the Securities and Exchange Commission related to the acquisition. The SPAC said the subpoena seeks additional information on “communications regarding and due diligence of of potential targets other than TMTG” [Trump Media & Technology Group Corp.] and relations between Digital World and certain advisors, shareholders, as well as certain forward-looking information about TMTG.
/jlne.ws/3aQTKZr

US Department Of Justice: Stock Trader Pleads Guilty To Defrauding Investors In Medical Technology Company
Mondovisione
A California man pleaded guilty yesterday in connection with a scheme to defraud investors in a publicly traded company’s securities and manipulate the company’s stock price. According to court documents, Jason Nielsen, 48, of Scotts Valley, was a large shareholder of Arrayit, a publicly traded medical device company based in California. From approximately 2019 through April 2020, Nielsen engaged in an unlawful “scalping” and “spoofing” scheme to manipulate the price of Arrayit securities. Nielsen used online message boards to publicly post false and misleading information about the nature of his trading in Arrayit securities, in order to induce others to purchase Arrayit securities and thereby drive up the stock’s price, a practice known as “scalping.”
/jlne.ws/3mFJSV0

SEC investigating Goldman Sachs for ESG claims; US regulator has been putting more focus on potential ‘greenwashing’ in finance
Patrick Temple-West and Joshua Franklin – FT
The US Securities and Exchange Commission is investigating Goldman Sachs’s asset management division over certain environmental, social and governance claims made by its funds, according to a source familiar with the matter. The civil investigation is scrutinising certain Goldman Sachs funds with clean energy or ESG in their names, according to The Wall Street Journal, which first reported the investigation. Goldman rebranded its Blue Chip Fund as the US Equity ESG Fund in June 2020, the report said. A person familiar with the situation confirmed the report. Additional details could not immediately be gleaned. Goldman Sachs declined to comment and the SEC did not respond to requests for comment.
/jlne.ws/3mKxjbf

CFTC Staff Issues Advisory on Swap Data Errors and Related Error Correction Notification Form
CFTC
The Commodity Futures Trading Commission’s Division of Data (DOD) today issued an advisory that provides instructions for notifying staff when a swap execution facility (SEF), designated contract market (DCM), or reporting counterparty determines that it is unable to timely correct a swap data error.
/jlne.ws/3OeT3aH

Chairman Behnam to Participate in a Discussion at S&C’s Commodities and Derivatives Trading Seminar 2022
CFTC
Chairman Rostin Behnam will participate in a discussion at S&C’s Commodities and Derivatives Trading Seminar 2002.
/jlne.ws/3NMbKD7

Commissioner Pham to Deliver a Keynote Address at the American Cotton Shippers Association 98th Annual Convention
CFTC
Commissioner Caroline D. Pham will deliver a keynote address to cotton risk managers and commercial hedgers at the American Cotton Shippers Association 98th Annual Convention.
/jlne.ws/3mI6WCB

Commissioner Pham to Deliver a Keynote Address at the Trading Evolved US Trading and Best Execution Summit
CFTC
/jlne.ws/3xnPUi8

Commissioner Goldsmith Romero to Participate in the Axios Event, Crypto & the Investing Space
CFTC
Commissioner Christy Goldsmith Romero will participate in the Axios event, Crypto & the Investing Space, that will examine the rise of cryptocurrencies in the investing space and how industry stakeholders are adapting to manage these emerging products.
/jlne.ws/3xGi9tL

SEC Charges New York-Based Investment Adviser and Its CEO and Former Chief Compliance Officer with Securities Violations
SEC
The Securities and Exchange Commission today announced charges against registered investment adviser A.G. Morgan Financial Advisors, LLC (“AGM”) of Massapequa, New York, AGM’s owner Vincent J. Camarda, and AGM’s former Chief Compliance Officer James McArthur, for unlawfully offering and selling securities in connection with a more than $500 million unregistered fraudulent offering with lending company Complete Business Solutions Group Inc. d/b/a Par Funding. The SEC previously charged Par Funding and others with operating a fraudulent scheme that raised hundreds of millions of dollars from investors nationwide.
/jlne.ws/3QkTa6L

FCA fines guarantor lender TFS Loans Ltd (in administration) and requires it to provide redress to affected guarantors
FCA
TFS Loans Ltd (in administration) has been fined £811,900 by the Financial Conduct Authority (FCA) in relation to deficient affordability checks on 3,150 guarantors in its consumer credit business. The FCA has also imposed a requirement on TFS to redress the guarantors that were harmed by the firm not conducting appropriate checks.
/jlne.ws/3xrcFlq

UK regulator puts Credit Suisse on watchlist after scandals; Financial Conduct Authority is concerned the lender has not done enough to improve its culture after a series of crises
Cynthia O’Murchu, Owen Walker and Laura Noonan – FT
The UK financial regulator has put Credit Suisse on its watchlist of institutions requiring tougher supervision, the latest blow to a bank that is struggling to draw a line under a series of crises. The Financial Conduct Authority told Credit Suisse last month that it was taking the step because of its concern that the bank had not done enough to improve its culture, governance and risk controls.
/jlne.ws/3aTnNQc

Updated list of issuers of gift certificates in repayment procedures based on the “Payment Services Act”
FSA Japan
The FSA updated the list of issuers who are repaying, have completed repaying or have announced the termination of use of prepaid payment instruments, as defined in the “Payment Services Act” (e.g. gift vouchers, gift certificates, and prepaid cards).
/jlne.ws/2vF00vl

Investing and Trading

VIX Traders Shaken From Sleep With Discount to S&P Snapping Shut
SPY’s put-call volume ratio rises to highest level since March
Light equity positioning seen putting cap on hedging demand
Lu Wang – Bloomberg
A furious bout of options hedging is tightening up a much-watched gauge of market sentiment: the VIX’s discount to realized volatility in the S&P 500.
Viewed by some as a distillation of trader expectations for market turbulence, the gap, which has recently shown a relatively sanguine view on the future, is no longer doing so. After sitting below the S&P 500’s historical volatility for four weeks, the VIX has quickly popped back up to match it.
/jlne.ws/3QcSGiR

Got Losses on Stocks, Bonds or Crypto? There’s a Silver Lining at Tax Time; It’s been a brutal year for markets. The good news: Selling your losers can pay off at tax time. Here’s what to know about tax-loss harvesting.
Laura Saunders – WSJ
Nobody likes investment losses, but some losses have a silver lining. Markets have been awash in red ink this year, so it’s a good time to revisit the tax code’s rules on losses for individual investors. They’re notably generous for assets held in taxable accounts, as opposed to those held in tax-sheltered accounts such as IRAs or 401(k) plans. “Tax losses are a potential asset that can lessen the sting of market downturns,” says Joel Dickson, a tax specialist who is global head of advice methodology for Vanguard Group.
/jlne.ws/3OdIDrQ

When You’re Forced to Cash Out in a Bearlike Market; You can’t leave money in your I.R.A. forever, as dictated by I.R.S. rules. This can put retired investors in a tough spot.
Martha C. White – NY Times
Financial planners warn investors against trying to time the market. It is notoriously difficult to guess exactly when sentiment on Wall Street will reverse course — even professionals are likely to get it wrong. Yet that is essentially what countless retirees are forced to do these days — play chicken with a volatile market roiled by 40-year-high inflation, the war in Ukraine, associated supply shocks and increasingly downbeat consumer sentiment. For retirees mandated by Internal Revenue Service rules to take required minimum distributions from tax-deferred retirement vehicles like individual retirement accounts or 401(k)s, the prospect of having to pull funds out during a bearish market is unpalatable enough to prompt some to tighten their belts until the market rebounds — or until Congress intervenes.
/jlne.ws/3O7v6SQ

Market mispricing of risk will continue; The misallocation of capital is not just down to freakish monetary policy
John Plender – FT
“Monetary policy normalisation” is a wonderfully reassuring phrase. It seems to hint that the mispricing of risk that has characterised markets since the financial crisis may soon be a thing of the past. Maybe it even suggests that the curtain will come down on the misallocation of capital that has resulted from central banks’ ultra-low interest rates, a significant contributory factor in the developed world’s dismal productivity record since 2008. But think again. There are good grounds for thinking that mispricing of assets is not just down to freakish monetary policy. For a start, the proportion of investors’ capital that is price-insensitive has never been higher. Exhibit A in support of this assertion is the UK inflation index-linked gilts market.
/jlne.ws/3aSxjTY

How Chicken Became the Only Meat Everyone Agrees On; As inflation puts beef and pork out of reach for many, poultry’s lower cost is making it the world’s No. 1 protein source.
Leslie Patton and Jasmine Ng – Bloomberg
For centuries, a delectable steak or pork loin has been the preferred top of the food chain for diners as societies grew more affluent and improved their diets. No longer. In 2022 chicken consumption is expected to reach 98 million metric tons, double the amount eaten in 1999. That’s more than three times the growth rate of pork and 10 times that of beef, according to US government data. Global chicken consumption is on track to account for 41% of all meat-eating by 2030. And in less than a decade, for better or worse, humans will for the first time consume far more chicken than any other kind of protein.
/jlne.ws/3aIxIbb

‘Exxon Made More Money Than God’: Biden Rips High Gas Prices; Average US price of gasoline is a penny under $5 level; Biden says oil companies buy back stock instead of drilling
Jordan Fabian and Josh Wingrove – Bloomberg
President Joe Biden accused Exxon Mobil Corp. and other oil companies of exploiting high gasoline prices after a report showed inflation soaring to a new 40-year record. “We’re going to make sure everyone knows Exxon’s profits. Exxon made more money than God last year,” Biden said during an event at the port of Los Angeles. Exxon’s profits are forecast to almost double to $43 billion this year, which would be its second-best performance on record. The Texas oil giant’s fortunes directly collide with those of consumers, who are paying more for fuel than ever before. Regular gasoline averaged $4.99 a gallon nationwide on June 10, according to AAA.
/jlne.ws/3aOPzNU

The Era of Descending Capital Costs Planted Seeds for Tomorrow
Matthew A. Winkler – Bloomberg
When the first issue of Bloomberg Markets appeared in July 1992, little did we know that we were entering three halcyon decades of the easiest credit since the 1950s and, most recently, the strongest growth in modern times. The catalyst was the diminishing cost of capital, abetted by disinflation as China and the Pacific Rim became globalization’s primary source of cheap labor. Having raised borrowing costs to conquer inflation in the early ’80s, the Federal Reserve and other major central banks found themselves taking unprecedented measures to restore growth after the 2008 financial crisis and the onset of the coronavirus pandemic. Soaring demand for debt, equity, and money in all its forms created a 24-hour Wall Street bazaar of wealth such as the world had never seen.
/jlne.ws/3MKpL2L

Soybean Prices Hit Record as Inflation Stays Hot; Used in biofuels, food and animal feed, soybeans top highs from 2012
Kirk Maltais – WSJ
Soybean prices have soared some 30% this year to a record, a surge that promises further pain for consumers facing the most severe bout of food inflation in a decade. The continuous contract for soybeans on the Chicago Board of Trade ended trading Thursday at $17.69 a bushel, topping the previous high of $17.68, set in September 2012 when drought scorched the U.S. crop. The price fell modestly Friday, as traders pulled back from many markets following another red-hot U.S. inflation reading that intensified fears of sharper Federal Reserve interest-rate increases.
/jlne.ws/3aTubqB

Environmental, Social and Corporate Governance

ESG Fund Bosses Hit by ‘Reckoning’ as Goldman, DWS in Crosshairs
Frances Schwartzkopff – Bloomberg
One of the top legal firms advising asset managers on ESG says the industry needs to brace for a more rigorous enforcement of regulations, effective immediately. There’s “a reckoning” under way, said Sonali Siriwardena, partner and global head of ESG at law firm Simmons & Simmons in London. Despite pushing through a “tsunami” of ESG rules, it’s now apparent that “regulators aren’t necessarily looking at a grace period” to allow the industry to adapt, she said.
/jlne.ws/3NLCYty

High Oil and Gas Prices Test Drive a Global Carbon Tax; The recent impact of rising energy costs shows some challenges to putting a meaningful price on carbon emissions
Rochelle Toplensky – WSJ
High oil and gas prices are giving an unappealing taste of what a global carbon price might be like. Gas-pump prices reaching $5 a gallon are just the most visible example of the rising cost of using fossil fuels. The war in Ukraine and subsequent worries over shortages have had the knock-on effect of increasing the price of emissions, much like a global carbon price would. Such a tax on pollution has long been an economist’s dream, but the recent squeeze on consumer incomes highlights why it can also be a politician’s nightmare. The impact of high fossil-fuel prices is very broad, feeding through to household bills, transport costs, energy-intensive industrial processes like making plastics and fertilizer, and much else besides. Oil and gas are behind a big chunk of food inflation, although the fall in Ukrainian grain exports has had an impact too. Politicians are scrambling to relieve the pressure, often with shortsighted initiatives such as price caps and windfall taxes.
/jlne.ws/3MJoRn5

Climate graphic of the week: War and climate put 49mn people at risk of famine; Food insecurity to worsen in 46 countries as ‘hunger hotspots’ exacerbated by conflict and extreme weather
Leslie Hook and Chris Campbell – FT
Food insecurity will worsen in 20 “hunger hotspots” this year through a combination of rising conflict and climate change, putting a record 49mn people in 46 countries at risk of famine, key UN food agencies forecast. Some 750,000 people were already experiencing “catastrophic” famine including starvation and acute malnutrition in Ethiopia, Afghanistan, Somalia, South Sudan and Yemen, the World Food Programme and the UN Food and Agriculture Organization said in the latest report. “Climate shocks will continue to drive acute hunger in the outlook period from June to September 2022 and we have entered a ‘new normal’ where frequent and recurring droughts, flooding, hurricanes and cyclones decimate farming, drive displacement and push millions to the brink in countries across the world,” the report said.
/jlne.ws/3HeZ7Op

US Gasoline Tops $5 a Gallon on Average in New Inflation Marker; Gasoline demand highest since December with Memorial Day boost; Biden chastises oil majors as high prices cause election peril
Chunzi Xu – Bloomberg
Gasoline topped an average of $5 per gallon in the US for the first time, signaling the latest pain point for American consumers and President Joe Biden’s efforts to curb inflation. Demand has jumped to the highest level this year, just over a week into the peak US driving season. Pump prices rose to $5.004 a gallon early Saturday in a rally that began in mid-April, according to auto club AAA. In California, the most expensive state to fill up, prices are as high as $6.43 a gallon.
/jlne.ws/3HwTUSl

Half of UK’s Smaller Listed Companies Have No Female Leaders
Evelyn Yu, Caroline Hepker, and Lizzy Burden – Bloomberg
Half of the UK’s smaller listed companies still have all-male leadership teams, a sign of how efforts to bolster diversity have struggled to trickle down to smaller firms. While only 4.6% of the 350 largest firms on the FTSE have no female representation in their C-suites, a proportion rises to 50% for FTSE All-Share firms below that, according to a study by the Women on Boards UK network.
/jlne.ws/3MQS5jP

Institutions

HSBC May Unlock $26.5 Billion in Asia Spin-Off: Report; Ping An has led campaign to overhaul HSBC operations in Asia; Separation is complex, but achievable: In Toto Consultancy
Tania Chen – Bloomberg
A break up of HSBC Holdings Plc’s Asian unit could unlock $26.5 billion, or a fifth of its current market value, according to research that could substantiate a push from its largest shareholder to overhaul the bank. Two other scenarios that could benefit shareholders are for HSBC to spin off the Asian business or just its Hong Kong retail operations into partial initial public offerings, In Toto Consultancy Ltd. said in a June 8 report. A disclaimer in the report showed the analysis was commissioned by an independent third party.
/jlne.ws/3xJ9hDG

A Pension Fund That Lost Billions in Allianz Funds’ Collapse Is Now Pointing Fingers; Blue Cross sank $3 billion into ill-fated Structured Alpha; It blames adviser Aon, but Aon blames Blue Cross executives
David Voreacos and Neil Weinberg – Bloomberg
No one seemed to buy the sales pitch coming out of Allianz Global Investors US more than Jamey Sharpe. Over the years, Sharpe helped steer billions into several hedge funds inside an affiliate of Allianz SE that claimed they’d thrive in any market. In time, no investor was in deeper than his employer, the Blue Cross and Blue Shield Association. Now, Sharpe — a retired pension functionary who operated far from the glare of Wall Street — has been thrust into an uncomfortable legal spotlight. He’s one of a cast of characters enmeshed in the drama over who’s to blame in the fallout from the multibillion-dollar Allianz Structured Alpha funds collapse.
/jlne.ws/3mJDpsu

Lone Pine Alum Gaonkar Hires From Rivals Third Point, Maverick for Hedge Fund Launch; The former Lone Pine managing director is building her team; SurgoCap expected to debut next year with at least $1 billion
Hema Parmar – Bloomberg
Former Lone Pine Capital Managing Director Mala Gaonkar is grabbing talent from industry rivals as she expects to launch her hedge fund early next year with at least $1 billion. She hired 13 employees for her SurgoCap Partners, including personnel from Dan Loeb’s Third Point and Lee Ainslie’s Maverick Capital, according to people familiar with the matter. Gaonkar, 52, plans to build out her team further before the firm’s debut, which is planned for the first quarter. Her five-person investment team includes Anand Krishnamurthy, former sector head of financials at Maverick who will continue that focus at SurgoCap. John Kaszuba, a 13-year Third Point veteran, will oversee data science and analytics, while Jason Hong, who worked there for almost a decade before leaving in 2020, will focus on the application of technology to health-care companies and industrials.
/jlne.ws/3ttgiG3

Deutsche Bank Boosts Family Office Bet to Target World’s Rich; The head of the bank’s EMEA wealth-management unit is hiring to service family offices.
Benjamin Stupples and Steven Arons – Bloomberg
Marco Pagliara is looking to shake up one of the world’s most exclusive markets. The chief executive officer of Deutsche Bank AG’s wealth-management unit for Europe, the Middle East and Africa wants to bolster the lender’s global share in the high-touch business of serving family offices, the discrete firms that manage the finances of the ultra-wealthy.
/jlne.ws/3zv3NxL

BlackRock investors take voting power amid scrutiny of asset managers; US Senate hearing this week will focus on outsized voting power of index tracking funds
Brooke Masters – FT
BlackRock clients are taking more control of the way their shares are voted on hot topics such as climate change and executive pay, as pressure mounts on the largest asset managers over their outsized power at US companies.
/jlne.ws/3Qg5d5d

More BlackRock Investors Opt to Vote Their Own Shares; The asset manager’s voting-choice platform has added $120 billion in assets since October
Angel Au-Yeung – WSJ
BlackRock Inc.’s BLK -6.39% plan to get institutional investors to vote their own shares is taking shape. The world’s biggest asset manager said Monday that its voting-choice platform has added investors representing some $120 billion of assets since its launch in October, bringing the total to $530 billion. BlackRock has made the option available to large investors who control $2.3 trillion in passive equity assets all told.
/jlne.ws/3mJ268i

Morgan Stanley electronic trader departs for Millennium; Incoming trader at the hedge fund previously spent nearly eight years at Morgan Stanley and served across Barclays Capital, Instinet and Fidessa.
Annabel Smith – The Trade
Hedge fund Millennium has selected a former Morgan Stanley executive to take on a new trading role, The TRADE can reveal. Grant McAllen has joined Millennium after most recently serving at Morgan Stanley for the last eight years as part of its MSET – Morgan Stanley Electronic Trading – platform, according to an update on his social media.
/jlne.ws/3xMcaDZ

Wellness Exchange

Beijing bar-linked COVID outbreak ‘explosive’ in nature, government spokesman says
Reuters
Beijing’s recent outbreak of COVID-19 that has been linked to bars in the capital is “explosive” in nature, widespread in scope and complex, a Beijing government spokesman said in a briefing on Saturday. The capital has reported 46 new local COVID cases on Saturday as of 3 p.m. local time (0700 GMT), health official Liu Xiaofeng said at the same briefing. Of a total of 1,946 local COVID cases reported since April 22, a total of 115 cases were connected to the bar cluster, Liu said.
/jlne.ws/3aOW4jM

Three-Dose Pfizer Covid Vaccine Works Safely in Young Children, Review Says; FDA staff found the shot was effective at preventing symptomatic disease in children 6 months through 4 years
Peter Loftus – WSJ
Three doses of the Covid-19 vaccine from Pfizer Inc. and BioNTech SE were effective at preventing symptomatic disease in children ages 6 months through 4 years in studies, according to U.S. health regulators. The FDA staff also said, in a review of study data posted online Sunday, that there were no new safety concerns using the vaccine in young children compared with older age groups. The assessment is the latest sign that authorities are moving closer to clearing inoculations for children under 5 years old, the last group ineligible for Covid-19 vaccination. On Friday, the FDA released a staff review finding that two doses of Moderna Inc.’s Covid-19 vaccine were generally safe and effective in children ages 6 months through 5 years old.
/jlne.ws/3xsM5YS

Three-Dose Pfizer Covid Vaccine Works Safely in Young Children, Review Says; FDA staff found the shot was effective at preventing symptomatic disease in children 6 months through 4 years
Peter Loftus – WSJ
Three doses of the Covid-19 vaccine from Pfizer Inc. and BioNTech SE were effective at preventing symptomatic disease in children ages 6 months through 4 years in studies, according to U.S. health regulators. The FDA staff also said, in a review of study data posted online Sunday, that there were no new safety concerns using the vaccine in young children compared with older age groups. The assessment is the latest sign that authorities are moving closer to clearing inoculations for children under 5 years old, the last group ineligible for Covid-19 vaccination. On Friday, the FDA released a staff review finding that two doses of Moderna Inc.’s Covid-19 vaccine were generally safe and effective in children ages 6 months through 5 years old.
/jlne.ws/3xsM5YS

Regions

Once Again China’s Pig Farmers Are Mired in Boom-Bust Cycle; Major breeder Zhengbang reports overdue debt after big losses; Producer ramped up aggressively at wrong time, analyst says
Bloomberg News
Once every three to four years, hog farmers in the world’s largest producing country find themselves trapped in an unforgiving market that pushes some over-leveraged breeders to the brink of a debt crisis. Jiangxi Zhengbang Technology Co., the second-largest hog supplier among Chinese listed companies in 2020, just reported 542 million yuan ($81 million) of overdue commercial bills, becoming the latest producer to show the financial stress of the boom-bust cycle. The nonpayment comes after it lost about three billion dollars since the start of last year as local hog prices halved. “Zhengbang expanded its capacity too aggressively at the wrong time and found it hard to manage the situation when hog prices tumbled,” said Lin Guofa, head of research at consultancy Bric Agriculture Group.
/jlne.ws/3MLln3z

China tells banks to limit executive pay under ‘common prosperity’ drive; Guidelines issued as Xi Jinping is expected to secure a third term in power later this year
Tom Mitchell, Cheng Leng and Sun Yu – FT
Chinese securities regulators and industry associations have instructed local and foreign banks to rein in executive pay levels, in the latest sign that President Xi Jinping’s drive to promote “common prosperity” is gathering pace ahead of a crucial Communist party congress this year.
/jlne.ws/3HgMtOR

UK Says It Will Prioritise Food Security as Global Prices Soar; Boris Johnson’s government to publish food strategy on Monday; Campaigners say plan ignores urgency of climate, health issues
Aine Quinn – Bloomberg
The UK said it will prioritize food security in its new strategy for farming to be published on Monday, with funding aimed at boosting production to help protect consumers against economic shocks. The outlined plan disappointed campaigners for more sustainable farming. The Department for Environment Food & Rural Affairs said £270 million ($332 million) will be invested in farming innovation and programs until 2029. The planning permission process will also be reviewed to support glasshouse developments in a bid to reduce imports, while the government also said would consult on labeling and procurement rules to boost local production.
/jlne.ws/3QiQs1p

Algeria Says It Respects All Gas Commitments With Spain
Salah Slimani – Bloomberg
Algeria said it would respect all its gas commitments with Spain, days after its freezing of a two-decade-old treaty raised questions over energy supplies for the European nation. The North African country also called on Spanish companies to fulfill their contractual obligations, according to a Foreign Ministry statement. Algeria on Wednesday said it was suspending its freedom and cooperation pact with Spain over the European country’s stance on Western Sahara, a former Spanish colony in Africa over which Morocco claims sovereignty. Algerian banks were subsequently ordered to stop payments between Algeria and Spain.
/jlne.ws/3QhW0JD

UK Exports Billions of Litres of Petrol to US Despite Local Record Pump Prices; Retail prices far lower in US but only because of high UK taxes
Julian Lee – Bloomberg
Drivers in the UK are facing record petrol prices, yet the country is exporting millions of liters of the fuel each month to the US, where motorists pay little more than half as much to fill their tanks. The UK has the second-highest petrol prices among the Group of 20 members — only French drivers pay more. And UK petrol prices aren’t just high, they’re rising at the fastest rate in 17 years. Across the Atlantic, drivers in the US also face their highest gas prices on record, but they still pay only about 60% of what the British do.
/jlne.ws/3NOU9dJ

Turkey to Impose Residence Quotas on Foreigners From July 1
Tugce Ozsoy – Bloomberg
Turkey, host of world’s largest refugee population, will begin imposing quotas on the number of residence permits for foreigners next month as anti-immigrant sentiment piles pressure on President Recep Tayyip Erdogan before next year’s elections. Turkey will limit residence permits for foreigners to 20% of the population of certain neighborhoods across the nation as of July 1, Interior Minister Suleyman Soylu said to the press at the Directorate General of Migration Management in Ankara, according to Hurriyet newspaper’s website. The rule will effectively shut 1,200 neighborhoods to more foreign residents, Soylu said.
/jlne.ws/3twoYvz

Turkey to Double Lira Loan Reserves Amid Steps to Boost Currency; Lira loans first subjected to reserve requirements in April; Currency is worst performer in emerging markets this quarter
Karl Lester M Yap and Beril Akman – Bloomberg
Turkey will double the amount of money that banks must set aside as reserves for commercial lira loans to 20%, the central bank said, as authorities look for backdoor ways to bolster the currency without raising interest rates. Banks must additionally raise the weight of lira assets in the collateral pool in exchange for keeping deposits and participation funds in foreign currency as of June 24, it said in a statement on its website Friday. “The aim of this regulation is to increase the effectiveness of the monetary policy within the scope of the liraization strategy,” it said. The lira has fallen almost 15% this quarter, the worst performer in emerging markets.
/jlne.ws/3xrV9gD

Argentine farmers frustrated as chance to fill global food gap slips away; Government steps up wheat export curbs even as Ukraine war sends demand and prices soaring
Lucinda Elliott – FT
Wheat prices are soaring as the Ukraine war sparks a global food crisis. But in Argentina, one of the world’s agriculture powerhouses, farmer Aimar Dimo is cutting back the acreage he devotes to the crop.
/jlne.ws/3aPtuPg

Smithfield Foods, Citing High Costs of Operating in California, to Close Pork Plant; The U.S.’s largest hog processor says it isn’t worth doing business in the state due to higher inflation, taxes
Patrick Thomas – WSJ
Smithfield Foods Inc., the largest pork processor in the U.S. by volume, is closing an 1,800-person plant in California and shrinking the size of its hog herd in the region, saying the cost of doing business in the state wasn’t worth it. Smithfield, owned by Hong Kong-based pork conglomerate WH Group Ltd., said Friday that it would close the plant in Vernon, Calif., just outside of Los Angeles, in early 2023, citing higher taxes, utility costs and labor costs in the state compared with other areas where it operates. The decision to close the plant comes as food suppliers are dealing with increased costs on items like livestock feed, transportation and packaging. Russia’s invasion of Ukraine, one of the world’s top grain-producing regions, has sent the price of livestock feed higher in recent months.
/jlne.ws/3QmJ7hA

Miscellaneous

The Best Office Designs to Lure Back Remote Workers; What research tells us about how to make employees less stressed, more productive—and willing to leave home
Heidi Mitchell – WSJ
As employees slowly return to the office, many companies would benefit by looking to an often-ignored aspect of the workplace to lure them back: office design. The truth is, they have a lot of work to do. Many employees prefer working from home, not only because it eliminates the unpredictable and wasteful commute, but also because “home” is often a much more pleasant place to get things done than an office. It’s brighter, more physically comfortable, more customized to their temperature and lighting preferences, and (usually) less distracting—in terms of both sights and sounds. Fortunately, there is extensive research that offers a road map for companies looking to reconfigure existing or new spaces to better meet their employees’ needs, and make them happier, healthier and more productive in the office. There may not be any place quite like home, but the research suggests that offices can come a lot closer than they usually do.
/jlne.ws/3Hi9Bwo

FanDuel CEO Amy Howe Wants to Help the Sports-Betting Business Grow Up; Former McKinsey partner and Ticketmaster executive aims for profitability in 2023 and a viable, long-term business
Katherine Sayre – WSJ
Ahead of the year’s biggest gambling event, FanDuel Group Chief Executive Amy Howe was spreading her message of confidence in the U.S. sports-betting industry in interviews with journalists. Behind her, sports broadcaster Pat McAfee—whom the company is paying $120 million over four years to be its media star—appeared to be taking tequila shots with former Dallas Cowboys running back Emmitt Smith on the FanDuel-branded stage at the crowded Super Bowl media center. When a journalist commented on Mr. McAfee’s good time, Ms. Howe laughed and said she thought he was just drinking ice tea. Ms. Howe is a fan of Mr. McAfee, but the moment highlights her balancing act: Bringing FanDuel and sports gambling in the U.S. into business adulthood while maintaining its entertainment brand. To do it, she needs to satisfy a number of constituents: gamblers and sports fans, sports leagues, government regulators and investors looking for returns.
/jlne.ws/3MFjdSY

What PwC Learned from Its Policy of Flexible Work for Everyone
Anne Donovan – Harvard Business Review
Every Tuesday at 7:30 a.m. Pacific Time, I join a video conference call with leadership colleagues from across the country. I’m on the West Coast, so these meetings are always early for me. When I started joining them more than 10 years ago, I was up early to ensure that I looked polished and ready to conquer the day before I got on the video conference. These days, I find myself forgoing dressing up or putting on makeup before dialing in. I no longer think twice about being on video from the comfort of my living room and in my morning sweatshirt. And, as I say good morning to my colleagues, it’s apparent that I’m not the only one. It hasn’t always been this way. Our company has come a long way over the past decade by truly instilling a culture of flexibility across the firm. We now have the ability to work in a way that fits our personal lives and, if that means taking an early morning video call at home in our sweatpants, then so be it.
/jlne.ws/3QgyT26

Purdue University names Chiang its next president
Tim Doty – Purdue University
The Purdue Board of Trustees announced today (June 10) its unanimous election of Dr. Mung Chiang, currently the John A. Edwardson Dean of Engineering and Executive Vice President for Strategic Initiatives, as the university’s next president. Dr. Chiang will replace current president Mitch Daniels effective Jan. 1, 2023. Daniels has served since January 2013. During Chiang’s five years at Purdue, he has led his college to its highest rankings ever, even as it has grown dramatically at both the undergraduate and graduate levels. Purdue is currently ranked No. 4 among graduate programs, No. 3 for online programs, and No. 10 for undergraduate education, and is the largest undergraduate program in the nation’s top 10. Both government and industry-sponsored research funding have set new records, as do the 12 national research centers now housed at the university.
/jlne.ws/3O9h3vT

People Keep Quitting Their Jobs Even as Recession Fears Mount; Great Resignation hasn’t really slowed down with confident employees still leaving the labor market in record numbers, even as fears grow about a looming economic slowdown.
Charlie Wells and Claire Ballentine – Bloomberg
US workers can’t quit quitting. Two years into the Great Resignation, which saw an unprecedented number of workers change jobs during the pandemic, the economy has shifted. Inflation is running hot. Recession fears are growing. The stock market is turbulent. Yet workers continue to ditch their jobs in record numbers — many knowing full well that the outlook is beginning to dim. In the latest data, 4.4 million Americans voluntarily left their jobs in April alone. That’s among the highest levels in figures going back to 2000. And the trend shows no signs of slowing down: a third of American workers said they were considering quitting in the next six to 12 months, according to a recent survey by human-resources firm Mercer.
/jlne.ws/3mFbdXF

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