Hemp Biomass Prices Dip as 2021 Harvest Adds Supply, But Emerging Demand Seen
Suzanne Cosgrove – John Lothian News
Mid-range prices of hemp biomass were bobbing in a sea of red in the September PanXchange Hemp: Benchmark & Analysis report, but the exchange said it was standing by its forecast that prices for “quality 2021” biomass will rally after the current harvest.
Most growers and processors are knee-deep in harvest right now, and early indications are that yields are better than anticipated. Expectations for that 2021 supply and an existing hemp backlog are fueling the current downward trajectory for biomass prices. Another unknown is when stored supplies will flow into the market, the exchange said.
So where is demand coming from? As also noted in the August hemp report, demand for industrial hemp is strong, especially for non-cannabinoid hemp hurd used in animal bedding and building materials like hempcrete, and supply is relatively limited in that segment of the market.
To read the rest of this story, go here.
Hits & Takes
John Lothian & JLN Staff
Yesterday, in a question and answer session that spawned several stories in today’s JLN, Citadel Founder and CEO Kenneth C. Griffin addressed the Economic Club of Chicago. Griffin shared his “perspective on topics including the biggest challenges facing our global economy, American competitiveness, the current political landscape, the role of philanthropy and the future of finance,” according to the Economic Club of Chicago. One big investor in Citadel called it “An extremely impressive interview!” in an email to me. You can watch the video HERE.
Intercontinental Exchange published its September volume and open interest report today. Here are the highlights:
Total average daily volume (ADV) up 11% y/y; total open interest (OI) up 9% y/y, Total Energy ADV up 23% y/y; OI up 8% y/y, Total Oil ADV up 16% y/y, Brent ADV up 25% y/y, Gasoil ADV up 13% y/y; OI up 8% y/y, Other crude and refined products ADV up 20% y/y, Total natural gas ADV up 34% y/y; OI up 13% y/y, Record TTF gas ADV up 151% y/y; OI up 30% y/y including record OI of 3.4M lots on September 23, JKM ADV up 76% y/y; OI up 35% y/y including record JKM OI on September 14, North American nat gas ADV up 20% y/y; OI up 11% y/y, Environmentals ADV up 35% y/y; OI up 15% y/y including record OI of 3M lots on September 21 Ags & Metals OI up 12% y/y, Coffee OI up 22% y/y, Cocoa OI up 20% y/y, Cotton OI up 35% y/y Total Interest Rate ADV up 4% y/y; OI up 13% y/y, Euribor ADV up 6% y/y; OI up 17% y/y, Gilt ADV up 29% y/y; OI up 45% y/y, Record SONIA ADV of 327k contracts; record OI of 3.9M contracts, U.S. Equity Options ADV up 28% y/y.
For the full report and the third quarter highlights, click HERE.
JLN is joining JP Morgan in banning all corporate travel for unvaccinated employees. However, I believe everyone employed by JLN is vaccinated. — Business Insider
Now that the weather is beginning to turn to fall weather, I am considering insider trading. Enough of this working and trading from my patio.
You can find out what your college roommate made for dinner again as Facebook, WhatsApp and Messenger service was restored yesterday after a day-long outage. — FT
The West Loop of Chicago is where it is at. According to the Chicago Tribune, “Chicago PR giant Edelman [is] leaving Aon Center after 26 years for funkier — and smaller — West Loop loft space.” — Chicago Tribune
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Remember, donations above $100 give you entry into a raffle for 5 minutes of John Lothian Productions video.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Citadel’s Ken Griffin said he’d be ‘quite fine’ if payment-for-order-flow was banned and that his firm doesn’t trade crypto because of regulatory uncertainty
Natasha Dailey – Business Insider
Citadel founder Ken Griffin said Monday he’d be “quite fine” with a legislative ban on payment for order flow – the controversial practice used by brokers such as Robinhood to provide free trading. “Payment for order flow is a cost to me,” he said at the Economic Club of Chicago. “So if you’re going to tell me that by regulatory fiat that one of my major items expense disappears, I’m OK with that.”
***** Regulation is fine when it makes your costs go down? Wait, I thought all regulations made your costs go up? Time to order the new 2021 regulatory complaint public relations playbook – mine seems out of date.~JJL
World’s Biggest Stock Market Loser Just Keeps Falling
Catherine Ngai – Bloomberg
An index tracking Chinese companies listed in Hong Kong, which has been this year’s worst-performing major stock gauge globally, is falling further and further behind its peers. The Hang Seng China Enterprises Index, whose most heavily weighted stocks include Tencent Holdings Ltd. and Alibaba Group Holding Ltd., tumbled another 2.4% to a five-year low on Monday. The gauge also trailed behind all counterparts over the past month, three months, six months, year-to date and over 12 months.
*****This week on The Biggest Loser, Hang Seng China Enterprises Index!~JJL
Ken Griffin Sees Young People Making ‘Grave Mistake’ Working at Home
Alan Mirabella and Hema Parmar – Bloomberg
Employees just starting out are risking their career advancement by continuing to work remotely, hedge fund manager Ken Griffin said. “If you are early in your career, you are making a grave mistake not being back at work,” Griffin said Monday in a conversation with Bloomberg’s Erik Schatzker at the Economic Club of Chicago. “It’s incredibly difficult to have the managerial experiences and interpersonal experiences that you need to have to take your career forward in a work-remotely environment.”
***** Clearly Ken Griffin has not figured out how to intimidate employees via Zoom yet.~JJL
How to do the Most Good; Holden Karnofsky, The co-founder of GiveWell, explores the ethical questions around charitable giving
‘The Ezra Klein Show’ – NY Times
Do we actually know how much good our charitable donations do? This is the question that jump-started Holden Karnofsky’s current career. He was working at a hedge fund and wanted to figure out how to give his money away with the certainty that it would save as many lives as possible. But he couldn’t find a service that would help him do that, so he and his co-worker Elie Hassenfeld decided to quit their jobs to build one. The result was GiveWell, a nonprofit that measures the effectiveness of different charities and recommends the ones it is most confident can save lives with the least cost. Things like providing bed nets to prevent malaria and treatments to deworm schoolchildren in low-income countries.
*****This is the eternal question.~JJL
Monday’s Top Three
Our top story Monday was the Cboe video posted on LinkedIn of the construction of the new trading floor and what it will look like. Second was the Washington Post’s Key findings from the Pandora Papers investigation, “revealing the flows of money, property and other assets concealed in the offshore financial system.” And third was the FAQ from the Washington Post about that secret money.
26,625 pages; 235,952 edits
SEC’s Gensler Aims to Save Investors Money by Squeezing Wall Street; Chairman of Securities and Exchange Commission has filled important staff jobs with academics and policy advocates from progressive lobbying groups
Paul Kiernan and Dave Michaels – WSJ
Wall Street’s new overseer has outlined an aggressive regulatory agenda that threatens to squeeze the financial industry’s profit margins. Securities and Exchange Commission Chairman Gary Gensler is working on tougher rules for high-speed trading firms, private-equity managers, mutual funds and online brokerages. Mr. Gensler, less than six months on the job, says he wants to make the capital markets less costly for companies raising money as well as for ordinary investors saving for retirement. His main targets are what he says are profits and salaries earned above what a purely competitive market would allow, known as economic rents.
Is the Stock Market Open at 3 a.m.? This Startup Says It Should Be; 24 Exchange seeks SEC approval to offer round-the-clock stock trading 365 days a year
Alexander Osipovich – WSJ
A startup trading platform is seeking approval from the Securities and Exchange Commission to launch the first U.S. stock exchange that would operate around the clock, including on weekends and holidays. The startup, 24 Exchange, said it filed key parts of its application for a national stock-exchange license with the SEC on Monday, including a rulebook and user manual detailing its proposed approach to trading hours.
Griffin Sees Crypto-Mania as ‘Jihadist Call’ Against Dollar
Hema Parmar and Katherine Doherty – Bloomberg
Hedge-fund billionaire Ken Griffin criticized the amount of time and energy spent on cryptocurrencies, saying it’s “a jihadist call” that some people don’t believe in the dollar. Still, while he’s not a fan of the resources allocated to the digital assets, he said his firm would trade cryptocurrencies if they were properly regulated and he praised Securities and Exchange Commission Chair Gary Gensler for paying greater scrutiny to cryptocurrencies.
Hedge fund billionaire Ken Griffin tells Economic Club of Chicago that Citadel may move its corporate headquarters unless the city changes course
Robert Channick – Chicago Tribune
Billionaire hedge fund manager Ken Griffin, the wealthiest person in Illinois, told the Economic Club of Chicago Monday he has grave doubts about the future of Chicago, and that his investment firm, Citadel, will probably move its headquarters elsewhere — if the city doesn’t “change course.”
OCC September 2021 Total Volume Up 21.8 Percent Compared to September 2020
Year-to-date cleared contract volume through end of September up 35 percent year-over-year
OCC, the world’s largest equity derivatives clearing organization, announced today that September 2021 total cleared contract volume was 816,942,764 contracts, up 21.8 percent compared to September 2020 and the highest September on record. Year-to-date average daily cleared contract volume through September 2021 was 38,846,212 contracts, up 34.6 percent compared to September 2020.
Bitcoin has no value and authorities will soon ‘regulate the hell out of it,’ says JPMorgan CEO Jamie Dimon
Ethan Wu – Business Insider
JPMorgan CEO Jamie Dimon doubled down on past skepticism of bitcoin in a TV interview with Axios published on Monday, warning investors that the cryptocurrency has no underlying value. N”It’s got no intrinsic value,” said Dimon in response to a question on whether bitcoin was akin to fool’s gold.
Here’s the latest stock-market trading issue involving a Fed official
Steve Goldstein – MarketWatch
Another day, another trading scandal? This time the focus is on Vice Chair Richard Clarida. Citing financial disclosure forms, Bloomberg News reported he shifted funds from a Pimco bond fund into two stock-market funds — a day ahead of a statement from Chair Jerome Powell about possible policy action as the pandemic worsened. Clarida’s trades were worth between $1 million and $5 million.
Europe’s Gas and Power Surge to Records as Energy Crunch Worsens
Elena Mazneva and Jesper Starn – Bloomberg
Global shortages of gas, coal are pushing energy prices higher; Russia tests Nord Stream 2 link, start date for supply unclear
European natural gas and power prices soared to fresh records amid worsening fears over supply availability. Global shortages of gas and coal are pushing energy prices higher, disrupting markets from the U.K. to China, as economies emerge from the pandemic. Surging costs are threatening to raise inflation and starting to weigh on industrial production, with some companies in Europe forced to cut output.
How banks exploit us by making services too complex; It’s time to simplify products and documents to reduce cost and anxiety for customers
Paul Lewis – FT
Banks make money because they are better at arithmetic than their customers. They know that if they fix monthly repayments on a credit card at 2 per cent of the outstanding amount with a minimum of £5 it will take 25 years to clear a £2,000 debt and they will have been paid £3,500 in interest.
Beijing vs bitcoin: why China is cracking down on crypto; Supporters champion a digital currency beyond the control of a central authority — but an authoritarian government is putting that idea to the test
Ryan McMorrow – FT
How to become a bitcoin millionaire” is a common theme of videos on TikTok, the app built by Beijing-based company ByteDance. In clip after clip, young influencers teach others how to follow in their footsteps, showing off lifestyles funded by crypto wealth.
Evergrande halts share trading ahead of possible sale of services unit; China’s most indebted property developer rushes to unload assets to avoid collapse
Thomas Hale and William Langley – FT
Evergrande suspended its shares from trading in Hong Kong on Monday as the world’s most indebted real estate developer braced itself for the possible sale of its property management unit.
Citadel Securities founder ‘quite fine’ with ending payment for order flow; Kenneth Griffin says a ban on the controversial practice would cut costs for the market maker
Madison Darbyshire – FT
Kenneth Griffin, the founder of Citadel Securities, said he would be “quite fine” if payment for order flow was banned as the controversial practice comes under increasing scrutiny from securities regulators. “Payment for order flow is a cost to me,” Griffin said, addressing The Economic Club of Chicago on Monday. “So if you’re going to tell me that by regulatory fiat one of my major items of expense disappears, I’m OK with that.”
Global airlines commit to net zero CO2 emissions by 2050; Carriers admit targets will be tough to meet as industry is difficult to decarbonise
Philip Georgiadis and Claire Bushey – FT
Global airlines have committed to reaching net zero carbon emissions by 2050, an ambitious challenge for the heavily polluting industry as it begins to recover from the crisis caused by Covid-19
Market-makers take on the banks in PR battle over trading reforms; #WeAreMarketMakers highlights the role they play in the capital markets
David Wighton – Financial News
When an industry lobby group starts a public relations campaign, the cynical observer instinctively asks: Why? Why now? Do they have an image problem? What are they worried about? Do they want changes in regulation?
JPMorgan bans business travel for unvaccinated U.S. employees – memo
JPMorgan Chase & Co said on Monday it will restrict business travel for U.S. employees who are unvaccinated or have not disclosed their vaccination status to the bank, according to an internal memo seen by Reuters.
Vaccine Laggard Romania Running Out of ICU Beds as Cases Peak
Irina Vilcu and Andra Timu – Bloomberg
Romania is running out of beds in intensive-care units designated for patients suffering from the coronavirus as cases spike to a new daily record.
Law firms launch wellness schemes to reduce burnout and retain talent; Legal groups struggle with attrition as M&A boom sparks exhaustion among junior lawyers
Kate Beioley – FT
International law firms are launching wellbeing programmes and taking steps such as hiring “burnout advisers” to hold on to staff as a boom in deals activity stokes a war for talent.
AstraZeneca Submits Preventive Covid-19 Treatment for FDA Authorization; AstraZeneca’s antibody drug could be an alternative to vaccines for people whose immune systems make existing shots less effective
Jenny Strasburg – WSJ
AstraZeneca AZN 1.44% PLC said Tuesday it has asked U.S. regulators for emergency-use authorization for an antibody drug that earlier this year showed strong efficacy in preventing symptomatic Covid-19, offering a potential alternative in evading the disease.
The Geography of Vaccines; Analysis of vaccination rates across U.S. metro areas shows how the shots have become the latest flashpoint in a divided America.
Richard Florida – Bloomberg
One of the strangest moments in a year of truly surreal politics occurred this summer when Donald Trump was unceremoniously booed at his own rally in Cullman, Alabama, for telling his usually adoring followers they should get vaccinated.
Exchanges, OTC and Clearing
EEX registers first trades on new nationwide German gas market
The European Energy Exchange (EEX) has introduced its gas contracts on Trading Hub Europe (THE), the new nationwide German gas market area. A total of 5.5 TWh were traded the first day in both Spot and Futures markets.
Intercontinental Exchange Reports September & Third Quarter 2021 Statistics
Third Quarter ADV up 18% y/y; OI up 9% y/y
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported September and third quarter 2021 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet. “We’ve seen elevated market activity across numerous asset classes in the third quarter as our customers manage their exposure to concerns including inflation driving interest rate changes, and rising gas and carbon prices in energy markets,” said Ben Jackson, President of Intercontinental Exchange. “ICE’s global exchanges were built to connect market participants and provide price transparency to allow them to manage their risk efficiently and with greater certainty.”
DTCC makes case for implementing central clearing across US Treasury transactions; Outline of benefits and possibilities follows up on claims earlier this year that central clearing of US Treasury transactions can reduce risk and improve resiliency.
Jonathan Watkins – The Trade
The Depository Trust & Clearing Corporation (DTCC) has issued a paper on rolling out central clearing across US Treasury transactions. Through its Fixed Income Clearing Corporation (FICC), the DTCC says its long-standing open-access approach provides the flexibility necessary to allow a wide variety of market participants to access central clearing, while also ensuring impartiality and fairness.
The Path to Implementing Central Clearing Across U.S. Treasury Transactions
There is broad industry consensus around the benefits of increased central clearing of U.S. Treasury transactions, however, the systemic risk mitigation objectives of a clearing mandate will not be achieved if market participants cannot effectively access clearing.
Eurex Exchange Readiness Newsflash | Readiness Videos – Roadmap 2021/2022
Another year is nearing the end – and what a year 2021 has been so far! Many initiatives have been realized to date. Watch now the Keynote with Dr. Wolfgang Eholzer, Member of the Eurex Executive Board and Manfred Matusza, Member of the Eurex Clearing Executive Board, to get detailed highlights and an outlook on the IT Roadmap for 2022:
Eurex Exchange Readiness Newsflash | Publication of Emergency Playbook on Incident Handling
Eurex is publishing its joint Emergency Playbook with Frankfurter Wertpapierbörse (FWB®, the Frankfurt Stock Exchange) on incident handling (Standards and Best Practices). This document provides Trading Participants with a concise overview of technical incident handling at Eurex, including guidelines on incident communication to the market, as well as the internal operational procedures that are activated in the event of a technical incident.
Deutsche Börse and Malta Stock Exchange extend contract for T7 trading technology
Deutsche Börse Group
The Malta Stock Exchange will extend the use of Deutsche Börse’s T7 trading technology for a further five years. The contract ensures that the Malta Stock Exchange will continue to operate its cash market with highly efficient technology. Both parties have agreed that future adjustments or innovations to the trading infrastructure of Deutsche Börse can also be introduced on the Malta Stock Exchange if necessary.
Deutsche Börse expands analytics offering with HHI Insights
Deutsche Börse Group
New offer based on proprietary market data from Xetra and Eurex; Expansion of the analytics portfolio to support investment decisions by customers on the buy and sell side
Measure market concentration, optimize trading strategies, manage risks: Deutsche Börse has expanded its range of analytical indicators in the market data area to include HHI Insights. The new product is based on the HerfindahI-Hirschman Index (HHI), a key figure for measuring market concentration. HHI Insights is based on proprietary information based on data from the Eurex and Xetra trading platforms.
TMX Group Thanksgiving Holiday Market Closures
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Monday, October 11, 2021 for the Thanksgiving holiday.
New analysis of consolidated tape models recommends balanced approach
Provided data quality is improved and changes in market structure are implemented, a new cost-benefit study suggests a 15-minute delay post-trade tape would be the optimal starting position The Federation of European Securities Exchanges (FESE) today welcomed a new study on the proposal for a consolidated tape (CT) in Europe. Independently written and produced by management consultancy Oliver Wyman and commissioned by FESE, the study, entitled ‘Caught on Tape’, sets out a cost-benefit analysis of various CT options for Europe. It concludes that starting with a 15-minute delay post-trade tape would be the most favourable for issuers and investors.
SIX Doubles Its Presence At The European SME Awards
This year’s European SME Awards will feature a very exciting competition: two companies from SIX – one listed on BME Exchange and one at SIX Swiss Exchange – have been shortlisted for the Awards in the same category. The winner will be announced during the ceremony taking place on 16 November 2021 in Slovenia.
— Trading at Settlement (TAS) Eligibility for Certain U.S. Treasury Futures Contracts — CME
— Performance Bond Requirements: Energy – Effective October 05, 2021 — CME
— Performance Bond Requirements – Energy Margin – Effective October 05, 2021 — 3mt7Ylo|CME
— October 2021 Stock, ETF, and Corporate Bond Update — CME
— Modification of Cleared EONIA Overnight Index Swaps to Reference the EURSTR Index – Effective October 15, 2021 — CME
Stable raises $46.5M in Greycroft-led round to help businesses manage ‘volatile’ commodity prices
Mary Ann Azevedo – Techcrunch
Stable, an insurtech aiming to help minimize a businesses’ risk due to volatile commodity prices, today announced it has raised $46.5 million in a Series A round of funding led by Greycroft.
TNS Offers Trading Firms Seamless Relocation to Bergamo IT3; Managed hosting solution delivering lowest latency trading services
Transaction Network Services
Transaction Network Services (TNS) is expanding its Managed Hosting solution to enable firms wanting to co-locate and directly access the Euronext exchange matching engine to seamlessly move trading operations from Basildon to Bergamo.
Definition of a trading venue: Reg review risks ensnarling tech vendors; Industry participants are divided over the definition of a trading venue and how regulators should revise the regulatory framework.
Josephine Gallagher – Waters Technology
What constitutes a trading venue? Which kinds of firms should be regulated as trading venues? The answers to those questions are the subject of much heated debate in Europe, and the review of the Markets in Financial Instruments Directive (Mifid II) could throw fuel on that fire. Market observers say the European regulator’s broad definition of which companies must register as organized trading facilities (OTFs) or multilateral trading facilities (MTFs) pulls into the scope of the regulation
Stanford Grads’ Stock Trading App Is Indonesia’s Newest Unicorn
Yoolim Lee – Bloomberg
Ajaib, an Indonesian online stock trading platform, reached a valuation of $1 billion after raising $153 million in a financing round led by DST Global, a venture capital firm that backed Robinhood Markets Inc.
Ex-Goldman Bankers’ Trading App Scalable Expands Across Europe
Stephan Kahl – Bloomberg
Germany-based company will expand to Spain, Italy, France; Firm had raised money at 1.2 billion euros valuation in June
Scalable Capital, a German financial technology firm founded by former Goldman Sachs Group Inc. bankers and backed by BlackRock Inc., will roll out its broker app to some of Europe’s biggest non-German-speaking countries.
Google’s AI unit DeepMind makes first-ever profit; London-based group says its research is increasingly being embedded in commercial products
Madhumita Murgia – FT
Google’s UK artificial intelligence unit DeepMind made its first-ever profit last year, after losing half a billion pounds in 2019, in the first sign that Google’s huge investment in the research outfit is starting to pay off.
China Leaps Ahead in Effort to Rein In Algorithms; Beijing is building a system intended to ensure that internet platforms’ automated processes are fair, transparent and in line with Communist Party ideology
Stephanie Yang – WSJ
A sweeping new plan to restrain the algorithms that power tech platforms has thrust China to the forefront of a growing movement to curb the influence of giant internet companies. Launched last week by the Cyberspace Administration of China, the campaign aims to establish a comprehensive system to regulate the use of algorithms within three years, part of the ruling Communist Party’s effort to rein in what it sees as unscrupulous business practices and exert more control over online discourse.
Data optimisation and voice trading electronification are essential to future-proof desks, say trading heads; Speaking at the Fixed Income Leaders’ Summit 2021, Invesco’s head of fixed income for EMEA and Ninety One’s global head of trading suggested these actions could safeguard desks in a post-pandemic and post-Brexit landscape.
Annabel Smith – The Trade
Data optimisation and the electronification of voice trading capabilities were the areas dubbed by leading fixed income trading heads to future proof trading desks during a panel discussion. Speaking on an all-star panel looking at ways to future proof trading desks in a post-pandemic and post-Brexit landscape, Karim Awenat, head of fixed income for EMEA at Invesco, suggested data optimisation was an essential part of evolution for the fixed income trading desk.
Small U.S. Retirement Plans Lagging in Cybersecurity Oversight
Austin R. Ramsey – Bloomberg
Many small U.S. retirement plan sponsors aren’t evaluating the tech firms they’ve hired to protect user data even with recent U.S. Labor Department guidance and stepped-up enforcement.
A Cerulli Associates Inc. quarterly report late last month found that while the majority of plan advisers consider cyber health an important part of choosing a recordkeeper, most small-to-mid-sized plans still don’t have formal written processes for overseeing their recordkeepers’ fraud prevention practices.
The 16 Biggest Cybersecurity Challenges MSPs Face Right Now
Michael Novinson – CRN
As everyone’s lives have become increasingly dependent on technology, virtually all personal and business data is kept on internet-connected platforms, which can become a gold mine for bad actors. The first full week of the 18th annual Cybersecurity Awareness Month will highlight best security practices and focus on general cyber hygiene to keep user and business information safe.
Omaha experts offer guidance on cybersecurity
Brent Weber – WOWT
Cybersecurity Awareness Month seems like a big title to swallow, but area experts warn no one is safe from hackers.
“Everything and anything that you post publicly has been calculated, put into databases, scraped,” said Robert Lamagna-Reiter, Vice President and Chief Information Security Office for Omaha-based FNTS. “It’s been analyzed and folks use that information, its really accessible, believe it or not.”
White House convenes 30 countries for ransomware and cybersecurity talks
Steve Kaaru – CoinGeek
The U.S. government is doubling down on its efforts against cybercrime and ransomware, this time by enlisting the cooperation of 30 other nations. White House will be holding a meeting with these nations as it seeks to combat the use of digital currencies in cybercrime, improve international cooperation, and more.
The transformative potential of crypto and blockchain is ‘difficult to overstate,’ Bank of America says in its debut report on the sector
Isabelle Lee – Business Insider
Bank of America began coverage of digital assets Monday, analyzing what it said was a revolutionary asset class that has now ballooned to $2.1 trillion. The report, entitled “Digital Assets Primer: Only the first inning,” was led by Alkesh Shah, head of global cryptocurrency and digital asset strategy. He said the industry – currently larger than the GDP of Italy or Canada – is simply “too large to ignore.”
Citadel Securities avoids crypto due to regulatory uncertainty – founder
John McCrank – Reuters
Ken Griffin, founder of Citadel Securities, one of the world’s biggest market-making firms, said the company does not trade cryptocurrencies due to regulatory uncertainties around them.
China’s Biggest Crypto Platform Knows There’s No Going Home
Zheping Huang – Bloomberg
Hours before China issued its sweeping ultimatum against cryptocurrency trading, the industry’s last remaining giant player had already decided to call it quits.Huobi founders and backers voted unanimously at their shareholder meeting Sept. 24 that the crypto exchange, China’s largest, should leave its home market after years of growing government scrutiny. Later that day, Chinese regulators declared that all crypto transactions and services were banned in the country.Huobi ceased account registration for new users in mainland China almost immediately and announced two days later that it would remove existing Chinese users by the end of this year.
Binance trading volumes soar despite regulatory crackdown
Tom Wilson – Reuters
Trading volumes at major cryptocurrency exchange Binance soared between July and September, suggesting a recent crackdown by regulators across the globe has had little impact on the platform’s business.
India Fueling One of World’s Fastest-Growing Crypto Regions
Joanna Ossinger – Bloomberg
Chainalysis flags growth in southern, central Asia and Oceania; Study says India’s crypto market expanded 641% over 12 months
Demand for digital coins in India is helping to make a region spanning central and southern Asia and Oceania one of the fastest-growing cryptocurrency markets globally, according to Chainalysis.
Where to Find Crypto-Themed Investments in Surprising Places
Unconventional names make the cut, as well as PayPal, Coinbase; New team sees regulatory issues as biggest near-term risk
While the likes of PayPal Holdings Inc. and Coinbase Global Inc. make the cut in a basket of stocks compiled by Bank of America Corp.’s new digital-asset research team, there are some less obvious inclusions as well.
‘I believe bitcoin is the best form of money’; Peter McCormack, voice of the ‘What Bitcoin Did’ podcast, appears on FT’s Money Clinic
Claer Barrett – FT
Ask most financial podcasters how they got into investing and they will probably cite an interest in business or an enthusiastic parent who encouraged them to look at the stock market. For Peter McCormack, early inspiration came in the form of “a bag of weed”.
Sen. Warren presses SEC to look into trades made by senior Fed officials
Brian Cheung – Yahoo Finance
Senator Elizabeth Warren on Monday called on the Securities and Exchange Commission to look into trades made by senior Federal Reserve officials over the course of 2020.
Crypto Is Getting Political Because Progressives Are Turning Up the Heat
Daren Fonda – Barron’s
Progressives in Washington are calling for much-tougher regulation of Bitcoin and other cryptocurrencies, and they are likely to get a favorable reception in the Democratic-controlled Congress and Biden Administration.
Ken Griffin, Top GOP Donor, Rules Out Backing a Trump Rerun
Alan Mirabella – Bloomberg
Hedge fund manager Ken Griffin, a major donor to Republicans, ruled out supporting Donald Trump for another run for president.
Griffin, DeSantis’s Top Donor, Wishes He’d Stay Out of Mask Wars
Michael Smith and Jonathan Levin – Bloomberg
Billionaire hedge fund manager Ken Griffin, Ron DeSantis’s biggest financial backer this year, criticized the Florida governor for blocking mask mandates as Covid cases and deaths surged.
‘Kishida Shock’ Hits Japan Markets With Investors Wary of Redistribution Plans
Gearoid Reidy – Bloomberg
Japanese equities saw an inauspicious start to the administration of Prime Minister Fumio Kishida, as stocks tumbled with some pointing fingers at the new premier’s plans for wealth redistribution.
Japan’s Kishida Gets Lowest Support for a New Premier Since 2008
Isabel Reynolds – Bloomberg
New premier will be put to the test by an Oct. 31 election; New cabinet scored higher in a survey compiled by Kyodo News
Support for Japanese Prime Minister Fumio Kishida was at 49% in a survey by a major newspaper, the lowest for a new leader in 13 years and an ominous sign as he heads into a national election in a little over three weeks.
How Putin’s Advisers Convinced Him to Take Climate Risks Seriously; The Kremlin may unveil a new approach to coordinate with Europe on emissions at the COP26 summit
Evgenia Pismennaya, Yuliya Fedorinova and Ilya Arkhipov – Bloomberg
After years of publicly dismissing climate change, President Vladimir Putin is finally prodding officials to take the threat it poses to Russia’s economy more seriously.
Boris Johnson denies Britain faces supply chain crisis; Prime minister insists ‘uncontrolled migration’ should not resume and argues country will cope this winter
George Parker – FT
Boris Johnson has denied that Britain is facing an economic crisis, insisting that supply chain disruption and rising prices were the “stresses and strains you’d expect from a giant waking up” after the Covid-19 crisis.
Barred Broker’s $30M Fraud Scheme Bankrupted Firm, SEC and Feds Say
Andrew Welsch – Barron’s
A barred brokerage executive allegedly engaged in unauthorized bond trading that resulted in more than $30 million in losses and forced his employer to file for bankruptcy, according to federal prosecutors and a securities regulator.
USDC Stablecoin Backer Circle Internet Subpoenaed By U.S. SEC
Joanna Ossinger – Bloomberg
Circle Internet Financial, the backer of the USDC stablecoin, received a subpoena in July from the U.S. Securities and Exchange Commission, according to a filing Monday. The disclosure was made as part of a filing about Circle’s planned merger with the special purpose acquisition company, Concord Acquisition Corp., a deal announced in July valued at $4.5 billion. Circle Chief Executive Officer Jeremy Allaire has previously called for more clarity around digital-asset regulation.
Fed’s Internal Watchdog to Open Review Into Trading Activity
Craig Torres – Bloomberg
The Federal Reserve said that its internal watchdog plans to open an investigation into trading activity by senior U.S. central bank officials, following revelations about transactions in 2020. “As part of our comprehensive review, we began discussions last week with the Office of Inspector General for the Federal Reserve Board to initiate an independent review of whether trading activity by certain senior officials was in compliance with both the relevant ethics rules and the law,” the Fed said in a statement Monday. “We welcome this review and will accept and take appropriate actions based on its findings.”
Facebook misled investors about its reach, whistleblower tells SEC; Internal documents reveal years-long decline in younger users in the US
Tim Bradshaw – FT
Facebook has misled investors about the size of its audience and concealed a years-long decline in younger users in the US, said Frances Haugen, a whistleblower, in a complaint to the US Securities and Exchange Commission.
SEC Highlights Investor Protection for World Investor Week 2021
The Securities and Exchange Commission today announced that it will highlight investor education and protection resources during World Investor Week 2021 (WIW). This marks the fifth year of WIW, a global effort promoted by the International Organization of Securities Commissions (IOSCO) that brings together regulators on six continents to raise awareness about the importance of investor education and protection. The SEC is once again serving as the national coordinator in the U.S. working with the U.S. Commodity Futures Trading Commission, Financial Industry Regulatory Authority, National Futures Association, and North American Securities Administrators Association. Together with these organizations, the SEC’s Office of Investor Education and Advocacy (OIEA) issued a joint Investor Bulletin today to promote WIW’s key messages. Investor education and protection resources are available at Investor.gov.
ESMA publishes latest edition of its newsletter; The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its latest edition of its Spotlight on Markets Newsletter.
Your one-stop-shop in the world of EU financial markets focuses this month on the 2022 Annual Work Programme, the enforcement case against trade repository UnaVista Limited, and on Cloud outsourcing and financial stability risks – one of the articles included in the latest Trends, Risks and Vulnerabilities Report.
Key Topics for World Investor Week 2021: Investor Bulletin
World Investor Week 2021 LogoThe SEC’s Office of Investor Education and Advocacy, the Commodity Futures Trading Commission (CFTC), the Financial Industry Regulatory Authority (FINRA), the National Futures Association (NFA), and the North American Securities Administrators Association (NASAA) are issuing this Investor Bulletin to highlight some key topics for World Investor Week 2021, a global campaign to raise awareness about the importance of investor education and protection. From October 4-10, 2021, investors, investment professionals, teachers, parents, researchers, and others are encouraged to make a special effort to promote investor education. Here are a few current key topics we are seeing for Main Street investors in the United States.
Investing and Trading
Sports Betting Likely to Resemble Wall Street Financial Markets
Thomas Halikias (founder, Drives Football) believes in-game micro sports betting will transform the way sports fans wager on games. But the former UBS managing director (he ran their structured equity desk) says one aspect of the pending shift largely being overlooked is the synergies between micro and traditional betting that could enable sportsbooks to execute in-game hedges, increase the size of their trading books and improve their return on capital. As he explained, the current iterations of micro betting products often focus on rather binary events (think: run/pass on next play) or multiple selection markets (think: result of an at-bat will be a single, double, triple, home run or out) that lack a holistic relationship to game scoring and the traditional lines.
World’s Largest Commodity Traders Burned By Massive Wrong Bets On Natural Gas
Just one week ago, we highlighted the first victim of the latest “rogue wave”in global natural gas markets. As Miami-based Statar Capital gave up its “hefty gains”from earlier in the year, tumbling into the red amid the NatGas market turbulence, we warned that it would not be the last fund to admit major losses through this period of chaos.
Some wealth managers are helping clients take advantage of a loophole to use crypto losses to offset taxes on other assets
Natasha Dailey – Business Insider
Wealth managers are helping ease their clients into the cryptocurrency market by helping them tap into a loophole that uses losses to offset taxes elsewhere in their portfolios, The Wall Street Journal reported
Rules against “wash sales” prevent investors from using the loophole with their stock holdings, but because cryptocurrencies are considered property by the federal government, the regulation doesn’t apply the same way, the Journal report said.
These Assets Are Most Exposed to Commodity-Fueled Inflation
Ishika Mookerjee – Bloomberg
The record surge in commodities has intensified investor angst that inflation could upend what has been a Goldilocks period for many markets.
More IPOs Scrapped as Volatile Markets Put Investors on Edge
Swetha Gopinath and Myriam Balezou – Bloomberg
More initial public offerings are being pulled as investors turn cautious in the face of choppy markets and a glut of deals. At least eight companies in Europe, including health-care property company Icade Sante SAS, have put plans on ice over the past month. In New York, wellness platform Better Being Co. and investment software firm Allvue Systems Holdings Inc. scrapped offerings, while TPG-Backed Novotech Health last month said it wouldn’t pursue a Hong Kong IPO.
Cotton Prices Surge to Highest Level in a Decade; China buys up U.S. supplies of crop, even as Trump-era import ban limits use of Chinese-grown fiber
Kirk Maltais – WSJ
Cotton futures are trading at their highest price in about a decade, with growing Chinese demand being met in part by rising U.S. exports to China, a curiosity of Trump-era trade-war policies. Most-active U.S. cotton futures trading on the Intercontinental Exchange ICE -0.61% closed Monday up 0.4% at $1.05 a pound, keeping prices at their highest level since September 2011. Prices have risen 18% higher over the past 10 sessions. Higher clothing prices could eventually follow.
Environmental, Social and Corporate Governance
Citi appoints Pang to head clean energy banking in Asia
Citigroup has appointed William Pang as the head of its Natural Resources and Clean Energy Transition (NRCET) Investment Banking unit in Asia, according to a statement from the bank.
Apollo Names First Sustainability Chief to Lead ESG Push
Melissa Karsh – Bloomberg
Apollo Global Management Inc. named Dave Stangis as its first chief sustainability officer, a new position for the $472 billion alternative-asset manager.
Diversity at Elite Law Firms Is So Bad Clients Are Docking Fees; Facebook, HP, Novartis, and other big corporations have found a novel way to pressure outside counsel: threaten their paychecks.
Ellen Milligan, Todd Gillespie – Bloomberg
Elite law firms in the U.S. and the U.K., long seen as fusty bastions of mostly White men, are being pushed by some of their biggest customers to change. Facebook, HP, and Novartis are part of a growing number of major global companies that have warned they’ll take their work elsewhere or cut fees unless they see more racial and gender diversity in the law firms they hire.
Remote Work Has Vastly Improved the Black Worker Experience; A survey finds that Black employees in white collar jobs feel more valued and supported working from home.
Matthew Boyle – Bloomberg
Working remotely has its downsides: Cramped apartments, endless Zoom calls, juggling child care duties. But for many Black workers in white-collar jobs, getting out of the office has resulted in a vast improvement in their employee experience.
Most Ethnic Minority Workers in U.K. Finance Say They Face Bias
Tom Metcalf – Bloomberg
Two thirds of U.K. financial services workers from minority backgrounds have faced discrimination at their workplaces, according to a survey of 800 employees from more than 400 companies.
Fund Giants Big on Equality Struggle to Fix U.K. Gender Pay Gaps
William Patrick Geor Louch – Bloomberg
Asset managers’ pay inequality barely improves on average; Gap widens at some firms including T Rowe Price, BlackRock
The world’s largest money managers are clamping down on firms they’re invested in to make them narrow the gender pay gap, but are struggling to do the right thing by their own female employees.
Japan Touts New Capitalism But New Finance Chief Sounds The Same
Yuko Takeo and Yoshiaki Nohara – Bloomberg
Japan’s new finance chief wants to tackle wealth inequality; On debt and BOJ policy, he signaled more of the old policies
Japanese Finance Minister Shunichi Suzuki said the nation’s incoming government will seek a new type of capitalism that helps tackle wealth inequality, but on questions around the sales tax, debt and the central bank he sounded like the official he replaced a day earlier.
Three Scientists Win Nobel for Work on Climate Breakthroughs
Charles Daly – Bloomberg
Manabe, Hasselmann awarded physics prize for climate models; Parisi wins for studies ranging from atomic to planetary scale
Three scientists won the Nobel Prize in physics for their breakthroughs in how we understand the planet’s climate and the challenges presented by global warming.
Czech energy CEO calls on EU to classify gas as green transition fuel; Bloc will spell out classifications next month in push towards net zero emissions by 2050
James Shotte and Mehreen Khan – FT
The EU needs to classify gas as a “transition fuel” to green energy if it wants to cut the use of coal and meet its emissions targets, the chief executive of the Czech energy group EP Infrastructure has said.
China unloads Australian coal despite import ban amid power shortage; Factories face energy rationing, threatening economic growth and global supply chain
Primrose Riordan and Neil Hume – FT
China has started unloading a small number of Australian coal shipments despite an unofficial import ban, analysts said, in a move underscoring the intensity of the power crunch facing the world’s second-largest economy.
Fixed income desk could rate banks on ESG scores in the future, says Fidelity trader; Speaking at the Fixed Income Leaders’ Summit 2021, Fidelity’s head of fixed income trading for EMEA, Lars Salmon, claimed ESG scores could decide which banks his team trades with.
Annabel Smith – The Trade
Fidelity’s head of fixed income trading for EMEA, Lars Salmon, has suggested ESG ratings and scores could be used to filter which banks a fixed income desk uses to execute.
U of I endowment soars to record high with 34% annual return; While the gains are worth recognizing, they’re considered an anomaly and won’t immediately alter financial plans.
Elyssa Cherney – Crain’s Chicago Business
The University of Illinois posted an enormous endowment return of 34% at the close of fiscal year 2021, bringing its total endowment to a record $3.82 billion as colleges nationwide celebrate similar successes thanks to a booming stock market.
Lehman Scraps in Dispute as Deutsche Bank Makes Legal Bid
Lucca de Paoli – Bloomberg
More than 13 years after Lehman Brothers filed for bankruptcy, the fight for the last scraps of its carcass is still going on. Deutsche Bank AG is leading a last-ditch legal bid to squeeze more from a bet it made on obscure notes issued by Lehman in the years before the U.S. bank’s collapse.
Ex-Credit Suisse Trader Lemssouguer Plans $1 Billion Fund Launch
Donal Griffin – Bloomberg
Credit trader backed by Squarepoint Capital: sources; Lemssouguer’s Arini fund is targeting early 2022 launch
Hamza Lemssouguer, a former top debt trader at Credit Suisse Group AG, is raising hundreds of millions of dollars from Squarepoint Capital LLP as he starts his own hedge fund.
Crop of agtechs aim to overturn Brazil’s image as eco villain; Country is fertile ground for novel sustainable methods but must overcome cost and cultural barriers
Bryan Harris – FT
After the Brazilian government posted a photo online of a rifle-wielding farmer clad in hunting gear to celebrate world agriculture day earlier this year, the backlash was swift.
Does State Street need a deal to save its ETF business? Activist investor Nelson Peltz is circling State Street’s asset management business
Chris Flood, Michael Mackenzie and James Fontanella-Khan – FT
Is Nelson Peltz on the verge of a deal to create a rival to challenge BlackRock and Vanguard, the world’s two largest asset managers? The veteran activist investor acquired a stake in Invesco last year through his fund Trian Partners, and immediately started discussing “strategic combinations” with the leadership of the $1.5tn Atlanta-based investment manager.
Motley Fool ramps up ETFs focus with $1bn conversions plan; The decision to port assets from two mutual funds follows similar moves by other managers
Jackie Noblett – FT
The asset management affiliate of Motley Fool plans to jump on the wave of mutual fund-to-ETF conversions as part of an overhaul of its business.
Tradeweb Reports September 2021 Total Volume of $21.7 Trillion and Average Daily Volume of $1.02 Trillion
Average daily volume (ADV) for the month was $1.02 trillion (tn), an increase of 17.4 percent (%) year over year (YoY). For the third quarter of 2021, ADV was $964.5 billion (bn), an increase of 23.6% YoY. Average daily trades for the month totaled 62,513.
In September, Tradeweb facilitated a record $887 million per day in U.S. High Yield credit. Tradeweb also set ADV records in both U.S. government bonds and European government bonds. In addition, client adoption of the request-for-market (RFM) protocol drove record SEF share for swaps = 1-year.
David Einhorn’s market nihilism; The famed investor gives his thoughts on a market that’s lost its marbles.
Jamie Powell – FT
It’s easy to poke fun at David Einhorn. The star fund manager turned poker player turned bubble-stock-shorter has had a torrid ten years in markets, following his rise to financial fame during the post dotcom crash, and his Lehman Brothers short.
Australia’s trade surplus surprises with record high on commodity demand
Wayne Cole – Reuters
Australia’s trade surplus unexpectedly grew to a record in August as strength in liquefied natural gas and coal exports more than offset a pullback in iron ore prices, a windfall to mining profits and tax receipts.
China’s Developers Priced for Meltdown as Contagion Risk Spreads
Sofia Horta e Costa and Rebecca Choong Wilkins – Bloomberg
A missed bond payment by a Chinese developer reignited investor angst about the health of the nation’s property sector on Tuesday.
China Orders Banks to Ramp Up Funding to Boost Coal Output
China ordered its banks to ramp up funding to coal and energy companies, another step in its efforts to ease a power crunch and ensure supplies this winter.
IMF Board Is Meeting With Law Firm, Accused Chief on World Bank Scandal
Scott Lanman – Bloomberg
The International Monetary Fund said its executive board met Monday with the law firm whose probe last month accused the lender’s chief, Kristalina Georgieva, of improperly pressuring subordinates while at the World Bank to adjust a ranking in China’s favor.
Europe’s Power Crisis Moves North as Water Shortage Persists
Lars Paulsson, Jesper Starn, and Lars Erik Taraldsen – Bloomberg
Norway reservoir levels at lowest in more than a decade; Hydro energy exports to Europe, the U.K. may face limitations
As the frontier of Europe’s energy crisis moves north, the Nordic region faces a worsening power crisis with dwindling water reservoirs hampering the generation of hydroelectric power.
Sixteen Ex-Bankers Unlikely to Sway Poland Into Hiking Rates Now
Piotr Skolimowski – Bloomberg
Unprecedented call for action comes amid surging prices; Polish MPC is expected to keep policy steady on Wednesday
Sixteen former Polish central bank officials wrote an open letter urging an immediate interest-rate hike to curb inflation, a plea that’s bound to fall on deaf ears with Governor Adam Glapinski.
Labour shortages must not be seen as simple case of business vs Brexit; Disentangling effects of leaving EU from jolt of pandemic to labour market is nigh-on impossible
Helen Thomas – FT
It’s been a year since British business was told Brexit was a bit like moving house. “It’s a hassle at first, but you are upgrading,” said Michael Gove, now the government’s supremo for Levelling Up.
The mysterious decline of our leisure time; Between blurred work/play boundaries and a greater focus on childcare, we have fewer free moments to use as we like
Sarah O’Connor – FT
One puzzle of modern life is that so many of us feel short of time, even though we work less than our forebears. In the 19th century, unions campaigned for “eight hours for work, eight hours for rest and eight hours for what we will.” In the 20th century, they succeeded in their push for shorter working hours. But what happened to all that spare time we gained for doing “what we will”?