Hits & Takes
John Lothian & JLN Staff
Chris Brummer, the Agnes N. Williams Research Professor at the Georgetown University Law Center, led a virtual panel discussion yesterday titled “What do the data reveal about (the absence of Black) financial regulators?” The panel discussed a paper that researched the subject and found that “The historical data indicate that there have been a total of 327 individuals appointed to financial regulatory agencies. Of the total, 10 have been Black.”
Former CFTC Commissioner Sharon Bowen was on the panel and was one of the 10 black regulators listed.
The Wall Street Journal has an online story titled “How to Stop Eye Strain When You Relentlessly Stare at Screens,” by Ashley Mateo. This is an important subject as I know my eyes hurt after I have been looking at a screen for 11 hours a day, like I did yesterday.
The New York Times is reporting that U.S. Federal Borrowing Amid Pandemic Puts U.S. Debt on Path to Exceed World War II. When are the Boy Scouts going to start selling pandemic bonds for the government?
Stacy Mallon, the director of infrastructure and security at Vela, has a blog post titled “Marketplaces in the cloud: It’s about much more than data.”
MGEX announced its second-best fiscal year volume in history.
The great Tom Seaver, one of the best pitchers ever to play the game of baseball, has died at the age of 75.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Intercontinental Exchange, Inc. today reported August 2020 trading volume and related revenue statistics, which you can find on the company’s investor relations website in the Monthly Statistics Tracking spreadsheet here.~SR
New York City Warehouse Storing Million-Dollar Art to Shut Down
Katya Kazakina – Bloomberg
The $40-million warehouse called Arcis is located in Harlem; Developed by Cayre Equities, it features retina scanning
Manhattan’s first freeport, a windowless five-story warehouse in Harlem designed to store $2.5 billion worth of blue-chip art, is closing after two years. Named Arcis, which means stronghold or citadel in Latin, the building was developed by Cayre Equities at a cost of more than $40 million and includes 110,000-square-foot of space and security features such as retina scanning. It was built on a lot designated as a foreign-trade zone, meaning that the merchandise inside isn’t subject to U.S. duty or excise tax.
****** I am sure they can find a new use for the facility.~JJL
The Hamptons Hit Uncharted Waters: $75,000-a-Month Fall Rentals; The summer season used to end on Labor Day weekend. Not anymore.
James Tarmy – Bloomberg
In the not-so-distant past, Labor Day signaled the end of the Hamptons summer season. “It was called tumbleweed Tuesday,” says Ritchey Howe, an agent in Southampton, N.Y., with Sotheby’s International Realty. “You could shoot a cannon down main street in Southampton and not hit anyone.” This year is different.
******The burbs and country will continue to be populated after Labor Day.~JJL
When Will Covid Vaccine Be Available? CDC Tells States to Prepare for Nov. 1
John Tozzi and Michelle Fay Cortez – Bloomberg
The U.S. Centers for Disease Control and Prevention has told states to prepare for a Covid-19 vaccine to be ready by Nov. 1 and asked them to remove obstacles that would prevent distribution sites from opening.
The date suggests the federal government anticipates a vaccine will become available just days before President Donald Trump stands for reelection Nov. 3, an aggressive goal that would depend on shots being tested and reviewed by then. Trump’s political future hinges on the response to the virus that has killed almost 185,000 Americans.
*****Two days before the election, how convenient. This is about politics, not science.~JJL
HBO’s new cult doc has big lessons for investors
David Z. Morris – The Ledger
When I first started writing about cryptocurrency (way back in 2013, no big deal), I was above all above all fascinated by the potential of decentralized systems to disrupt everything we took for granted about banks, payments, and finance. But by early 2017, ponzi schemes and other cons had begun leveraging that promise for darker ends. My own fascination increasingly expanded from the technology of crypto to the legion of operators who used techy language and hype to hoodwink victims.
*****Get ready for a deep dive into a new world.~JJL
Wednesday’s Top Three
Our top story Wednesday was U.S. Election Priced as Worst Event Risk in VIX Futures History, from Bloomberg. Second was our MarketsWiki page for Scott Johnston, who recently left the hedge fund Citadel. Third was JLN’s Richard Schaeffer Remembrances By Former Colleagues, recently updated to include a remembrance from Mary Bergonia Ross.
186,858,088 pages viewed; 9,059 pages; 225,941 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,444 pages; 12,712 edits
Singapore Aims to Become Asia’s Benchmark for Bitcoin Pricing
Joanna Ossinger – Bloomberg
Singapore Exchange Ltd. is creating two new cryptocurrency indexes with the goal of setting the pricing standard for Bitcoin and Ethereum in Asia. SGX’s iEdge Bitcoin Index and iEdge Ethereum Index will use inputs from exchanges determined by CryptoCompare, according to the methodology. The aim is for the gauges to become reference points for trading in those cryptocurrencies during Asian hours, according to SGX’s Head of Index Services Simon Karaban.
If 60/40 Keeps Working, Democracy Has Failed, Paul McCulley Says
Joe Weisenthal – Bloomberg
Strategy’s success signals capital’s win over labor, he says; Former Pimco economist hopes Wall Street finds ‘new paradigm’
Portfolios consisting of 60% equities and 40% bonds have had an incredible run, both this year and over the long term. However, with yields on long-term Treasuries near all-time lows, the chorus of naysayers toward the so-called 60/40 portfolio has grown. The criticism is based on the very reasonable grounds that you’re not getting paid much to hold bonds and there isn’t much scope left for capital appreciation.
Robinhood Faces SEC Probe for Not Disclosing Deals With High-Speed Traders; Company could have to pay a fine exceeding $10 million if it agrees to settle
Dave Michaels and Alexander Osipovich – WSJ
Robinhood Markets Inc. faces a civil fraud investigation over its early failure to fully disclose its practice of selling clients’ orders to high-speed trading firms, people familiar with the matter said.The investigation is at an advanced stage and the company could have to pay a fine exceeding $10 million if it agrees to settle the Securities and Exchange Commission probe, one of the people said. A deal, however, is unlikely to be announced this month, the people said, and the two sides haven’t formally negotiated a proposed fine, the person said.
Warren Buffett and the Market That Foreign Money Forgot; Many investors have been checking out of Japanese stocks, but keeping exposure to them is a sensible proposition.
Mike Bird – WSJ
This week, Warren Buffett unveiled a $6 billion investment in five Japanese trading houses, one of his few international bets. But data released Friday show that Mr. Buffett is swimming in the opposite direction to other international investors. In fact, the week of Prime Minister Shinzo Abe’s resignation announcement also marked the total reversal of Abenomics-related flows into Japanese equities.
Seven Nobel Winners Sign Letter Opposing Shelton Fed Nomination
Christopher Condon – Bloomberg
A group of more than 100 prominent economists, including seven Nobel Prize laureates, have signed a new open letter to U.S. senators urging them to reject President Donald Trump’s nomination of Judy Shelton to the Federal Reserve’s Board of Governors.
Merkel Faces Pressure to Drop Russian Pipeline to Hit Putin
Arne Delfs – Bloomberg
Nord Stream 2 needs to be stopped, CDU lawmaker Roettgen says; Chancellor has sought to decouple Nord Stream and Navalny case
Chancellor Angela Merkel is under pressure from within her own party to drop support for a controversial gas pipeline with Russia after links point to the Kremlin in the poisoning of Russian opposition leader Alexey Navalny. Norbert Roettgen, head of the German parliament’s foreign affairs committee and a candidate to head Merkel’s Christian Democratic party, said the Nord Stream 2 pipeline needs to be stopped because completing it would reward rather than punish Russian President Vladimir Putin.
Markets Aren’t Great at Handling Contested Elections; When the Florida recount consumed the U.S., traders struggled to navigate the extraordinary level of uncertainty.
Stephen Mihm – Bloomberg
It is increasingly likely that the outcome of the presidential election in November may take days, even weeks, to unravel. A recent model went so far as to predict a “Red Mirage” – the appearance of a Trump victory in the days before mail-in ballots tilted the election towards Biden. This would be confusing and confounding in ordinary times. But such an outcome could lead to a prolonged, disruptive power struggle in this election given President Trump’s history of election fraud frauds — even when he won in 2016.
Fauci: US has ‘unacceptably high’ level of COVID-19 cases going into fall
Peter Sullivan – The Hill
Anthony Fauci said Wednesday that the United States has an “unacceptably high” level of new cases heading into the fall, and pushed for people to exercise caution heading into the Labor Day weekend to prevent further surges.
Hong Kong: Beijing cracks down while the financial centre thrives; Ant Group’s IPO will take place against a backdrop of the dismantling of the territory’s pro-democracy movement
James Kynge, Nicolle Liu and Hudson Lockett – FT
It is a tale of two Hong Kongs. Twelve pro-democracy activists were last week captured by China’s coast guard as they attempted a dramatic speedboat escape to Taiwan. They were seeking to evade punishment under the tough national security law that Beijing imposed on the territory in June but now languish in detention in the mainland — the youngest reportedly just 16.
Australian fintech inquiry calls for regulatory reform
An Australian Senate Committee inquiry into fintech has put forth 32 recommendations to promote further competition in the financial sector, with a particular focus on regulatory impediments.
Speculation in tech stocks points to wild swings; Markets predict elevated volatility after burst of trading in call options on Apple and Tesla
Richard Henderson and Michael Mackenzie and Richard Waters – FT
A speculative frenzy in derivatives on US technology stocks is rippling through financial markets, signalling large swings to come after a rally that has already broken records. Expectations for future volatility in the Nasdaq 100, a benchmark dominated by Apple and a handful of other tech giants, have soared to a 16-year high relative to the rest of the stock market.
China Affirms Right to Approve Tech Deals as TikTok Sale Looms
Ministry says new rules aren’t targeted at any company; The assertion jeopardizes negotiations to buy TikTok U.S.
China emphasized its right Thursday to approve or block the sale of technology abroad, confirming it will play a critical role in the sale of TikTok’s U.S. operations to suitors including Microsoft Corp. and Oracle Corp.
Swiss Canton Takes Taxes in Bitcoin as Crypto Goes ‘Mainstream’
Leonard Kehnscherper – Bloomberg
Switzerland’s canton of Zug, home to hedge funds, crypto firms and commodity traders, will start allowing citizens to pay taxes in Bitcoin and Ether as the acceptance of digital currencies continues to rise.
Star hedge fund managers go private in search of an easier life; A family office can allow savvy investment chiefs to be bolder in their trading — free of constraints from outside investors
Stephen Foley – FT
Hedge fund managers of the world, throw off your chains. You will be much happier as a family office. John Paulson — he of the “Greatest Trade Ever”, the bet against the US housing market that earned $15bn from the 2008 crash — is the latest star manager winding up his hedge fund: he declared in July that he would return outside money and continue investing with just his personal fortune. He joins a list of names from industry pioneers George Soros and Stanley Druckenmiller to more recent conversions such as Leon Cooperman and, soon, David Tepper, who have decided that being a family office now holds more appeal.
China raises scrutiny of financial holding groups ahead of Ant IPO; Cabinet passes rules requiring non-bank companies in sector to apply for licences
Hudson Lockett and Ryan McMorrow – FT
China is increasing its regulatory scrutiny of non-bank financial companies including Ant Group, the Chinese fintech conglomerate expected to raise as much as $30bn in its initial public offering this year.
Gold Is a Terrible Predictor of Inflation, BOE’s Vlieghe Says
Lucy Meakin – Bloomberg
Bank of England policy maker Gertjan Vlieghe warned that it’s a “terrible idea” to look at gold prices as a predictor of inflation. Investors have piled into bullion this year, pushing the price up 30%, amid speculation that massive government spending worldwide to counter the coronavirus shock will push inflation higher. But Vlieghe, a former Deutsche Bank AG bond strategist, told U.K. lawmakers on Wednesday that the record-high price of gold “tells you precisely nothing.”
The Easy Part Is Over for Canada’s Labor Market Recovery
Shelly Hagan – Bloomberg
Economists predict pace of job gains slowed in August; Future risks include lack of childcare, onset of cold weather
The initial quick recovery in Canada’s labor market is set to fade, with many of those initially displaced by the pandemic already back at work and the economy as open as it can be for now. Canada’s economy added 250,000 jobs in August, according to the median forecast in a Bloomberg survey, which would mark a deceleration from 418,500 in July and 952,900 in June. The data are due to be released Friday at 8:30 a.m. in Ottawa.
Butter Hoarding Boosts Profit of Maker of Lurpak
Christian Wienberg – Bloomberg
Arla Foods amba, the Nordic region’s biggest dairy company, reported a 34% jump in profit in the first half of the year, as customers hoarded products including Lurpak butter. Net income rose to 163 million euros ($192 million), from 122 million euros, the company, which is based in the Danish city of Viby, said in a statement on Thursday.
Ernst & Young Loses Two German Clients Amid Wirecard Scandal; Commerzbank, DWS cite potential conflicts of interest in decisions to drop accounting firm
Patricia Kowsmann – WSJ
Accounting firm Ernst & Young has lost two prominent clients in Germany over its longstanding role auditing the financials of Wirecard AG WDI -7.88% , the fintech company embroiled in one of Europe’s biggest corporate accounting scandals in recent years.
What is a Financial Transaction Tax? How Much Could It Cost You? As the 2020 presidential election approaches, a financial transaction tax (FTT) is coming back into focus for investors. What, exactly, is an FTT? And how could it impact Main Street and Wall Street?
As the 2020 presidential election approaches, a financial transaction tax (FTT) is coming back into focus for investors. What, exactly, is an FTT? And how could it impact Main Street and Wall Street?
Exchange operator CrossTower joins Chamber of Digital Commerce
CrossTower, a new exchange operator founded by capital markets veterans on a mission to mainstream digital asset investing and trading, today announced that it has joined the Chamber of Digital Commerce (the “Chamber”). The Chamber is the world’s leading trade association and advocacy group representing digital asset and blockchain industry innovators, operators and investors.
Coronavirus drives UK authorities to embrace electric scooters; After years as a closed market, thousands of e-scooters will hit British streets in the coming weeks
Tim Bradshaw – FT
Thousands of electric scooters are poised to hit British streets in the coming weeks, after the coronavirus pandemic persuaded local authorities to focus on alternative forms of transport. Dozens of cities and local councils across England, Scotland and Wales have been in talks with domestic and multinational electric scooter companies since the transport department cleared the way for schemes over the summer. Tests are already under way in the Tees Valley in the North East and Milton Keynes.
India records world’s largest rise in new cases in single day; New Delhi keen to reopen economy despite confirming 83,000 infections in 24 hours
Amy Kazmin – FT
India has recorded the highest single-day coronavirus case count of any country with 82,860 new infections even as Narendra Modi’s government pushes ahead with reopening its shattered economy. The country has 3.8m confirmed coronavirus infections, the third highest total in the world. Only the US and Brazil have recorded more cases.
DHL warns of Covid-19 vaccine delivery problems; Two-thirds of world unlikely to have easy access to vaccines requiring frozen storage
Joe Miller – FT
Two-thirds of the world’s population is unlikely to have easy access to any Covid-19 vaccine that needs to be stored at freezing temperatures, the German logistics giant Deutsche Post DHL has warned. Research by DHL and consultancy firm McKinsey has found that insufficient “last mile” cooling facilities in the final delivery stages and a lack of storage at clinics in large parts of Africa, Asia and South America would “pose the biggest challenge” to delivering a vaccine at scale.
Your new office is just around the corner; Co-working is back, but now these spaces are informal, suburban — or even in a hotel lobby
Janina Conboye – FT
A few months ago, the future of co-working spaces looked in doubt. The cautionary tale of WeWork’s hubris — breakneck growth followed by near-collapse — was followed by a global pandemic that has kept office workers in their homes. Now, though, a new co-working model is emerging. And it’s probably happening on a high street, or in a hotel lobby, near you.
UK concern at rising Covid-19 hospital cases in France; Health secretary Matt Hancock fears return to more serious phase of coronavirus pandemic
George Parker and Jasmine Cameron-Chilsehe, Victor Mallet and Daniel Dombey – FT
The British government is “worried” about a rise in Covid-19 hospital admissions in France and Spain, concerned that young people could be infecting the more vulnerable. However, health secretary Matt Hancock argued that the implementation of a “package” of protective measures such as social distancing could prevent a similar surge in cases from occurring in the UK.
Indonesia’s Virus Cases Jump by a Record as Fatalities Also Rise
Harry Suhartono – Bloomberg
Indonesia posted a record number of new coronavirus cases on Thursday, since hitting an all-time high less than a week ago. There were 3,622 fresh cases reported over the past 24 hours through midday of Sept. 3, taking the total to 184,268, the National Disaster Management Agency said. That exceeded the 3,308 new infections on Aug. 29.
Thailand’s 100-Day Virus Free Run Ends With New Local Case
Randy Thanthong-Knight, Natnicha Chuwiruch, and Suttinee Yuvejwattana – Bloomberg
A prison inmate tests positive in capital Bangkok on Thursday; Community spread may derail efforts to reopen tourism industry
Thailand detected its first locally transmitted Covid-19 case since late May, snapping a streak of 100 days without community transmission. The new case on Thursday was confirmed in an inmate of a prison in Bangkok shortly after incarceration. The patient’s history showed that he stayed with his family of five and worked as a disc jockey before being lodged in jail, health ministry officials said in Bangkok. He had no history of traveling outside the country, they said.
Norway Bans Cruises to Arctic Svalbard Islands Amid Covid Fears
Mikael Holter – Bloomberg
Norway has decided to ban sea cruises to Svalbard in order to limit the Arctic archipelago’s exposure to potential Covid-19 contagion. The new restrictions will last until Nov. 1 initially, and make an exception for day cruises starting and ending on Svalbard with vessels carrying a maximum of 30 people, the government said on its website on Thursday.
Covid Vaccine Frontrunners Will Soon See Their Moment of Truth
Naomi Kresge – Bloomberg
Early data anticipated as soon as mid-September, analysts say; Three companies may have data before key October FDA meeting
Drugmakers made big promises for a quick turnaround on coronavirus vaccines. The moment of truth for the front-runners is coming as soon as this month. The first results showing whether a vaccine can stop people from getting the virus could come by mid-September from AstraZeneca Plc, according to Airfinity Ltd., an analytics company that tracks drug trials. The drugmaker has pledged as many as 30 million doses to the U.K. by the end of the month.
Covid-19 has killed more police officers this year than all other causes combined, data shows
Christopher Ingraham – Washington Post
In a speech this week in Pittsburgh, Joe Biden linked the Trump administration’s mismanagement of the coronavirus to its handling of protests and riots with a surprising statistic: “More cops have died from covid this year than have been killed on patrol,” he said.
U.S. Will Fund Some WHO Programs Despite Trump’s Withdrawal
Nick Wadhams – Bloomberg
Funds will fight polio, Covid-19, flu in vulnerable countries; Official says WHO has yet to show independence from China
President Donald Trump has agreed to contribute $108 million to the World Health Organization to fight Covid-19, polio, flu and other diseases in vulnerable countries, even as the U.S. prepares to withdraw from the institution he blames for early missteps in the coronavirus pandemic.
The Failed Experiment of Covid Lockdowns; New data suggest that social distancing and reopening haven’t determined the spread.
Donald L. Luskin – WSJ
Six months into the Covid-19 pandemic, the U.S. has now carried out two large-scale experiments in public health—first, in March and April, the lockdown of the economy to arrest the spread of the virus, and second, since mid-April, the reopening of the economy. The results are in. Counterintuitive though it may be, statistical analysis shows that locking down the economy didn’t contain the disease’s spread and reopening it didn’t unleash a second wave of infections.
Exchanges, OTC and Clearing
Eurex adds anonymous negotiation and respondent ranking tool to RFQ platform; The new functionalities will be added to Eurex Exchange’s integrated off-book request for quotes (RFQ) platform, EnLight.
Annabel Smith – The Trade
Eurex Exchange has bolstered its off-book request for quote (RFQ) platform, EnLight, and provided clients the ability to negotiate anonymously and with a new tool that ranks respondents.
TraditionDATA integrates AMERIBOR with reference rate data sets; Data arm of Tradition will publish spreads between AMERIBOR, SOFR and EFFR via Refinitiv, Bloomberg and its own data feeds.
Annabel Smith – The Trade
TraditionDATA has integrated US dollar alternative reference rate AMERIBOR in its product suite as market participants continue to transition from the Libor benchmark. The data arm of interdealer broker Tradition said it will publish spreads between AMERIBOR, SOFR, and the Effective Fed Funds Rate (EFFR) this month via vendors including Refinitiv and Bloomberg, as well as through its own global reference rate data feeds.
STOXX® Europe 600 Travel & Leisure Index Futures: Withdrawal of availability for trading for U.S. Participants
As of 5 October 2020, tradability of STOXX® Europe 600 Travel & Leisure Index Futures (Eurex product code: FSTV) will be withdrawn for U.S. Eurex Participants and U.S. investors. Background of this measure is that the index will transition from a non-narrow-based security index to a narrow-based security index.
Further update on ISX Litigation
ASX refers to its update on this litigation released to the market on 21 August 2020. On 1 September 2020, iSignthis Limited (ISX) filed documents with the court increasing its claim for damages.
Intercontinental Exchange Reports August Statistics; Energy Open Interest up 13% y/y including a 26% increase in Global Natural Gas
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported August 2020 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.
CME STP Notices: September 3, 2020
BrokerTec Stream on CME STP – December 7
CME STP Support of BrokerTec Markets – Q4 2020
CME Globex Notices: August 31, 2020
Critical System Updates
iLink 3 MSGW Session Migration
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
Harmonization of Enable/Disable Implied Behavior for ICS – September 20
CME Group Risk Management Tools Enhancement – September 20
New – iLink Enhancements for Location ID and Displayed Quantity – November 15 NEW
Addition of the CME Globex Electronic Trading Venue for all Options on Weather Futures Contracts and Related
Addition of the CME Globex Electronic Trading Venue for all Options on Weather Futures Contracts and Related Administrative Amendments to Certain Product Chapters
CME Globex Operator ID Requirements
Effective on trade date September 17, 2020, and pending all relevant CFTC regulatory review periods, this Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA1902-5 from March 7, 2019. It is being issued to harmonize references to Globex Terminal Operators and the way that such parties are to be identified to the Exchange by replacing references to Tag 50 IDs with “operator ID.”
Additional Information Relief from Exchange Rules as a Result of Covid-19
(SER 8560R supersedes SER 8560 dated March 13, 2020 and addresses the listing of the contracts cited in (2) below on the CME Globex electronic trading platform (“CME Globex”). CME will list the balance of the options on weather futures contracts on CME Globex. Therefore, effective on trade date Monday, September 21, 2020, all weather futures and options will now be listed for trading on CME Globex and for submission for clearing via CME ClearPort. The action associated with (2) below shall be terminated effective on trade date Monday, September 21, 2020 – See SER 8647.)
Documentation of Customer Orders and Submission of Suspense Accounts on CME Globex
Effective on trade date September 17, 2020, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA1912-5 from December 17, 2019. It is being issued based on amendments to Rule 536.B. (“Globex Order Entry”) in connection with the migration from iLink 2 to iLink 3.
Manual/Automated Trading Indicator
Effective on trade date September 17, 2020, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA1914-5 from December 17, 2019. It is being issued based on amendments to Rule 536.B. (“Globex Order Entry”) in connection with the migration from iLink 2 to iLink 3. Additionally, the FAQ section is being amended to eliminate to references to legacy tags and their associated numbers and replace them with their titles.
TNS Expands Euronext Connection to Include Vital Equities Market Data
Transaction Network Services (TNS) is now offering ultra-low latency access to Euronext equities market data feeds through its TNSXpress Layer 1 solution which offers connectivity speeds as low as 5-85 nanoseconds.
Wirecard and me: Dan McCrum on exposing a criminal enterprise; Intimidation, surveillance and conspiracy theories: inside the FT’s five-year investigation of a billion-dollar fraud
Dan McCrum – FT
January 30 2019: it was mid-afternoon on a grey Wednesday in London when a dozen or so anonymous Twitter bots burst into life. “McCrums a criminal?.?.?.?Dannyboy McCRIM is GOING TO JAIL!!” they sang.
Horizon Software hires senior sales veteran to support APAC expansion; Emmanuel Faure joins Horizon Software as head of sales APAC bringing with him more than 20 years of business development experience in Asia.
Annabel Smith – The Trade
Trading technology provider Horizon Software has appointed a 20-year business development industry veteran as its new head of sales for Asia Pacific to accelerate its expansion across the region.
N.Y. Watchdog Rebukes OCC Rule on Bank-Fintech Partnerships
New York’s financial services regulator is opposing a federal proposal to resolve legal disputes over when a bank or its fintech business partner are a loan’s “true lender” over concerns that it could erode state consumer protections.
The Office of the Comptroller of the Currency’s rule “would, in essence, allow unregulated nonbank lenders to launder loans through banks as an end-run around consumer-protective state usury limits,” New York’s Department of Financial Services said in a comment letter Wednesday.
Sweeping change: Fintech committee offers ‘quick wins’ fix to Australian ecosystem
Asha Barbaschow – ZDNet
The Select Committee on Financial Technology and Regulatory Technology on Wednesday night handed down its interim report on the state of fintech and regtech in Australia, proposing 32 recommendations to the government on how to ensure a thriving and innovative ecosystem in Australia.
Norwegian fintech Vipps in payments deal with Visa
Norwegian fintech company Vipps, said on Thursday it had struck a deal with global payments giant Visa to expand in Europe.
Yieldstreet Named on CB Insights’ List of Most Promising Fintech Companies
Yieldstreet, the digital wealth management platform, was named by CB Insights as one of the most promising companies in the financial technology space in its annual Fintech 250 list.
Through an evidence-based approach, the CB Insights Intelligence Unit selected the Fintech 250 from a pool of 16,000 companies, including applicants and nominees, based on several factors. These factors include patent activity, investor quality, news sentiment analysis, proprietary Mosaic scores, market potential, partnerships, competitive landscape, team strength, and tech novelty. The Mosaic Score, based on CB Insights’ algorithm, measures the overall health and growth potential of private companies to help predict a company’s momentum.
LedgerX Approved by CFTC to Offer Non-Crypto Derivative Products
Aziz Abdel-Qader – Finance Magnates
The US Commodity Futures Trading Commission (CFTC) has amended its official registration for blockchain startup LedgerX, helping solidify its regulatory profile and effectively allows the company to clear products not directly connected to cryptocurrencies.
The company has been working with the securities regulator to secure its amendment since 2018.
Zero Hash Raises Series C Funding Round; Lead Investor tastytrade leads financing with participation from Bain Capital and TradeStation
Zero Hash today announced the close of its Series C funding round that was led by tastytrade, a Chicago-based holding company that owns major broker dealers including tastyworks and Dough, as well The Small Exchange. Existing investors also participated in the round including Bain Capital TradeStation, CMT Digital and Monday Capital.
Swiss Canton Takes Taxes in Bitcoin as Crypto Goes ‘Mainstream’
Leonard Kehnscherper – Bloomberg
Switzerland’s canton of Zug, home to hedge funds, crypto firms and commodity traders, will start allowing citizens to pay taxes in Bitcoin and Ether as the acceptance of digital currencies continues to rise.
What’s Next For Bitcoin Prices After Their Latest Retracement?
Charles Bovaird – Forbes
Bitcoin prices have declined over roughly the last 24 hours, falling back after reaching a recent high of more than $12,000 yesterday on CoinDesk.
After dropping to as little as $11,217.45 earlier this morning, the digital currency has been trading between $11,200 and $11,500, additional CoinDesk figures show.
Russian ministry proposes to amend law banning crypto transactions
Helen Partz – Cointelegraph
Authorities in Russia continue the game of ping pong in regulating cryptocurrencies like Bitcoin (BTC) even after passing the country’s first crypto law.
Russia’s Ministry of Finance has reportedly proposed a set of amendments to the law “On Digital Financial Assets,” or DFA, which bans many operations with crypto.
Senator Asks OCC to Provide Info About Crypto Rulemaking
Nikhilesh De – CoinDesk
U.S. Sen. Mike Crapo (R-Idaho), who heads the powerful Senate Banking Committee, has asked the Office of the Comptroller of the Currency (OCC) to fill his committee in on its Advanced Notice of Proposed Rulemaking for cryptocurrency services.
Hardware Wallet Flaw Lets Attackers Hold Crypto for Ransom
CoinDesk – Colin Harper
A recently disclosed vulnerability in two popular hardware wallets would have allowed attackers to hold users’ cryptocurrency for ransom without going anywhere near the device.
Trump Will Roll Back More Regulations if Re-Elected, EPA Chief Says; Andrew Wheeler says the EPA would push to expand use of ‘science transparency’ for new rules and focus on completing Superfund cleanups
Katy Stech Ferek – WSJ
President Trump would press forward with efforts to ease regulatory burdens on business if re-elected for a second term, while working to ease bottlenecks that have delayed Superfund cleanup projects, U.S. Environmental Protection Agency administrator Andrew Wheeler said.
Republican party battles over its post-Trumpian soul; An ideological contest rages between Reaganite libertarians and post-Trump conservatives
Oren Cass – FT
Politicians are not known for decency or decorum, but typically they wait for a leader’s defeat before diving into the scrum for a successor. Not this time. Even before US President Donald Trump gets his chance at a second term, a battle has begun over where the Republican Party may turn after.
Twitter Says Account Linked to Modi’s Website Was Hacked
Archana Chaudhary – Bloomberg
Twitter Inc. said an account linked to Indian Prime Minister Narendra Modi’s personal website was hacked on Thursday. The hacked handle, @narendramodi_in has been active since May 2011 with over 2.5 million followers. The handle has since been restored, the social media platform said.
Gerald Ford Rushed Out a Vaccine. It Was a Fiasco; Trump should keep that in mind as he pushes for a coronavirus shot.
Rick Perlstein – NY Times
Last week, news arrived that President Trump had lurched into what may be his most reckless obsession yet: His administration would probably seek an “emergency use authorization” for a Covid-19 vaccine long before some scientists believe it would be safe to do so.
Homeland Security Blocked Warnings of Russian Campaign Against Biden; The department’s leaders declined to publish a memo describing Russian attempts to question Joseph R. Biden Jr.’s health, prompting new scrutiny of political influence at the department.
Zolan Kanno-Youngs – NY Times
The Department of Homeland Security has declined to publish a July 9 intelligence document that warns of Russian attempts to denigrate Joseph R. Biden Jr.’s mental health, prompting new scrutiny of political influence at the department.
A Freelance Writer Learns He Was Working for the Russians; A man who had written for a site that officials say was a front for a Russian group said his mysterious editor “had a different kind of agenda.”
Sheera Frenkel – NY Times
Colin Munro Wood was not shocked when he learned that federal investigators believed the new website he had been writing for was a facade for a Russian troll operation looking to sway Americans ahead of the November election. It explained the strange emails and writing prompts he had been receiving from his mysterious editor, an individual who admitted he was not based in the United States but wanted to weigh in on the presidential race.
Trump Encourages People in North Carolina to Vote Twice, Which Is Illegal; The president’s suggestion, which he framed as a way to test the security of elections systems, constituted the kind of voter fraud he has railed against.
Maggie Haberman and Stephanie Saul – WSJ
President Trump on Wednesday suggested that people in North Carolina stress-test the security of their elections systems by voting twice — an act that constitutes the kind of voter fraud the president has railed against.
SEC probes US-listed Chinese education company GSX Techedu; Beijing-based group discloses investigation after short-sellers accused it of faking sales
Mamta Badkar and Richard Henderson – FT
GSX Techedu, a US-listed Chinese education company, is facing an investigation by the US securities regulator following allegations from short-sellers that it faked sales. The Beijing-based company, which listed on the New York Stock Exchange last summer, was asked by the Securities and Exchange Commission’s enforcement unit to share “certain financial and operating records” from 2017, the education group revealed in a filing on Wednesday. The company, which runs online courses for students starting from kindergarten through the 12th grade, said it was co-operating with the SEC.
SSE fined £2m for failing to publish inside information in ‘timely manner’; Ofgem says misjudgment by FTSE 100 group likely led to higher wholesale electricity prices
Nathalie Thomas – FT
SSE has been fined more than £2m by Britain’s energy market regulator for failing to publish inside information “in a timely manner”, a move that is likely to have led to higher wholesale electricity prices.
MAS to Enhance Bank Access to Dollar Funding to Improve Liquidity
Chanyaporn Chanjaroen – Bloomberg
New measures are preemptive after virus-induced recession; Local units of Citigroup and HSBC will also be eligible
Singapore’s financial regulator said it will introduce measures to enhance banks’ access to local and U.S. dollar funding to protect the city state’s financial sector against the economic fallout of the coronavirus pandemic. From Sept. 28, the new facility will provide banks and financial firms an additional channel to borrow Singapore dollar funds at longer tenors and will allow lenders to use more forms of collateral, the Monetary Authority of Singapore said in a statement on Thursday. The regulator will also raise the asset encumbrance limit for locally-incorporated banks to 10% of total assets from 4%, it said.
Robinhood reportedly faces SEC probe related to deals with high-speed traders
Robinhood Markets faces a probe by the Securities and Exchange Commission over its early failure to fully disclose its practice of selling clients’ orders to high-speed traders, the Wall Street Journal reported Wednesday. The investigation is at an advanced stage and the company could pay a fine exceeding $10 million, the report added, citing people familiar with the matter.
Dutch regulator calls for overhaul of MiFID II fixed income transparency rules; The AFM stated in a recent report the overall sentiment is that MiFID II has not yet delivered its goals in fixed income markets, and should be considered a work in progress.
Hayley McDowell – The Trade
The Dutch Authority for the Financial Markets (AFM) has recommended major changes to MiFID II’s rules for fixed income and derivatives trading in a recent study, which found the regulation’s focus on transparency has been ‘counterproductive’.
ASIC bans former National Representative of BitConnect cryptocurrency investment scheme from providing financial services for seven years
ASIC has banned John Louis Anthony Bigatton, of New South Wales, from providing financial services for seven years. Between August 2017 and January 2018, Mr Bigatton was the Australian National Representative of an online cryptocurrency platform known as BitConnect and a cryptocurrency investment scheme known as the BitConnect Lending Platform.
CFTC Charges 5 Canadians, 1 American, and 4 Companies in $165 Million Global Binary Options Fraud Scheme
The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the U.S. District Court for the Western District of Texas charging six individuals and four companies with operating a fraudulent binary options trading scheme that received over $165 million in connection with illegal, off-exchange binary option transactions on currency pairs, oil, and other commodities.
CFTC Approves LedgerX, LLC to Clear Fully-Collateralized Futures and Options on Futures
The Commodity Futures Trading Commission today announced it has approved an Amended Order of Registration for LedgerX, LLC to clear additional products, subject to the terms and conditions specified in the order, as a derivatives clearing organization under the Commodity Exchange Act.
Investing and Trading
Oversupply of Easy Money Sends European Borrowing Rates to Record Low; ECB’s more than $1.5 trillion in loans has damped demand for cash in the interbank market
Anna Hirtenstein – WSJ
The interest rate that European banks use to lend among themselves dropped to a record low this week in a sign of how credit markets have been distorted by central banks’ aggressive measures this year.
Tesla’s biggest independent investor cuts stake in electric carmaker; Edinburgh-based Baillie Gifford reaps estimated $17bn profit after surge in valuation
Chris Flood – FT
Tesla’s biggest independent shareholder has cut its investment in the electric car maker, generating profits of about $17bn in just eight months after a six-fold surge in the company’s valuation.
Airbnb turns down approach from Bill Ackman Spac; Accommodation booking business continues to plan traditional IPO for now
Ortenca Aliaj, Miles Kruppa and James Fontanella-Khan – FT
Airbnb spurned an approach by Bill Ackman to go public via a merger with his blank-cheque company, preferring to go forward with a traditional initial public offering, according to people briefed on the matter.
US corporate bond issuance hits $1.919tn in 2020, beating full-year record; Companies have rushed to raise cash in a debt market boosted by the Fed
Joe Rennison – FT
Companies have raised more debt in the US bond market this year than ever before, as a dash for cash during the coronavirus crisis took issuance past previous full-year totals with months left to go.
Fed’s inflation shift is another blow to ‘safe’ assets; The haven credentials of government bonds were already weakened by the Covid-19 crisis
John Plender – FT
The Covid-19 crisis has pushed government bond prices to all-time highs, suggesting these assets’ reputation for safety remains as strong as ever. But there are good reasons to think the opposite: that US Treasuries have lost their some of their diversification advantages, and that central bank measures to encourage inflation will be ultimately ruinous for holders.
High-energy investments to give your portfolio critical mass; The nuclear sector will be a necessity in the future
David Stevenson – FT
I’ve spent the past few lockdown months working my way through a series of cracking books, of which my favourite by far is Apocalypse Never, by Michael Shellenberger, a US-based environmentalist.
Skillz Mobile-Game Company to Go Public Via Blank-Check Deal
Nick Turner and Olga Kharif – Bloomberg
Hollywood veteran Harry Sloan took same tack with DraftKings; Skillz to be valued at $3.5 billion after Flying Eagle deal
Skillz Inc., a mobile-gaming company with titles like Solitaire Cube and Jewel Blitz, will go public by merging with blank-check company Flying Eagle Acquisition Corp., giving it an equity valuation of $3.5 billion. Investors, including Wellington Management, Fidelity Management & Research, Franklin Templeton and Neuberger Berman, have committed $159 million in the form of private investment in public equity, according to a statement Wednesday. They’ve set a price of $10 per share of Flying Eagle.
August Index Scorecard: Natural Gas Rebounds to Earn Top Spot as Market Continues Upward Trend
Overall, August saw generally positive performance across most markets and indexes, maintaining the upward trend started in April. The Nasdaq Commodity Natural Gas ER (NQCINGER) Index rebounded to become the month’s top performer with a gain of 37.4%. This marks only the second month of positive returns for the index in 2020, a year in which it’s been the worst-performing index for four of the past eight months.
Environmental, Social and Corporate Governance
Biggest banks sustain coal financing despite defunding drive; Lenders bankroll largest fossil fuel producers and users as carbon pledges fail to make a dent
Anjli Raval, Owen Walker, Neil Hume and Stephen Morris – FT
Protesters dressed as bankers and coal miners gathered in London this summer brandishing a banner that read: “Barclays ? Coal: UK’s #1 Coal Bank.”
ESG at a Crossroads
Shanny Basar – The Trade
There is more interest from corporates and investors in environmental, social and governance strategies but there is a lack of standardised ESG data.
Thomas Fekete, EMEA head of strategy and products for sustainable investing at BlackRock, said in the virtual Nasdaq Oslo ESG Summit this morning that it is good sign that so many companies have made a commitment to net zero emissions, including large oil companies such as BP and Shell.
DWS abandons auditor EY in wake of Wirecard scandal; Asset manager says KPMG will instead carry out audit of its 2020 financial statements
Tabby Kinder – FT
Deutsche Bank’s asset management arm DWS has abandoned EY as its auditor as a result of the scandal at payments processor Wirecard, which collapsed in June following a EUR1.9bn fraud.
H2O and the saga of its illiquid bonds; Intervention by French regulator caps a testing 12 months for London-based asset manager
Robert Smith and Cynthia O’Murchu – FT
In a rare intervention, France’s financial regulator has forced H2O Asset Management to suspend a series of its funds because of their exposure to illiquid debt.
Atom Bank cuts losses despite collapse of backer Woodford; App-based lender plans to re-enter mortgage market next week and £100m funding raise
Nicholas Megaw – FT
Atom Bank cut its annual losses for the first time despite growth being held back by the collapse of Neil Woodford’s investment business, which had been one of its largest backers.
Laos faces sovereign default as forex reserves dip below $1bn; Finance ministry asks China for advice on restructuring its debt
John Reed – FT
Laos faces a growing risk of debt distress and sovereign default, according to credit rating agencies and economic advisers, as coronavirus and a debt-laden power sector take their toll on one of Asia’s poorest countries.
Hong Kong steps up currency interventions to most since 2009; City’s monetary authority has sold HK$132bn this year to steady the exchange rate
Hudson Lockett – FT
Hong Kong’s central bank has been selling the territory’s dollar this year after relatively high interest rates and share offerings strengthened the currency to the edge of its designated range against the greenback. The Hong Kong Monetary Authority has intervened 40 times to keep its currency’s peg against the US dollar in check in 2020, official data show — the most active spate of interventions since the financial crisis of 2008 and 2009. In total, it has sold HK$132bn to keep the exchange rate steady.
French oil group Total steps up security co-operation with Mozambique; Islamist insurgency threatens development of vast offshore gasfields
Joseph Cotterill – FT
French oil major Total has stepped up security co-operation with the Mozambican government in an effort to combat an Islamist insurgency that threatens the development of vast offshore gasfields. After insurgents with ties to Isis took over a key port in northern Mozambique last month, Total said it would provide logistical support to a government “joint task force” to strengthen security at liquefied natural gas facilities. Total told the Financial Times on Wednesday that this task force would be run by the Mozambican ministries of defence and the interior, which oversee the army and police.
Bullish Switzerland moves on from lockdown and focuses on economy; Critics warn of complacency but Bern believes the country must learn to live with virus
Sam Jones – FT
Switzerland prides itself on the way it managed to limit the spread of coronavirus within its borders while shielding its economy from the worst ravages of the shutdown. But as economic stimulus packages are wound down across Europe and Covid-19 cases tick up, Bern has signalled it is the economy that must be the priority in the months ahead.
‘Lone Wolf’ Tycoon Creates 68 Millionaires With Water Empire
Richard Macauley – Bloomberg
Nongfu’s IPO is catapulting Zhong among China’s richest; Family members and employees are sharing some of the riches
He’s known as the “Lone Wolf.” Zhong Shanshan has worked in construction, journalism, drug making and bottled water. Those last two endeavors have made him one of the world’s richest people, but he’s rarely quoted in the press, isn’t involved in politics and his business interests aren’t entwined with other rich families, such as the property tycoons. Hence the nickname.
Nigerian Central Bank Starts Sale of Dollars to Clear Backlog
Alonso Soto and Emele Onu -Bloomberg
The Nigerian central bank has started to sell dollars in the spot market and forward operations to clear a backlog of demand for the greenback that has kept foreign investors trapped in Africa’s top economy.
Lira’s Fall to Record Likely Heralds Worse to Come for Inflation
Cagan Koc – Bloomberg
The lira’s latest downswing is taking a toll on Turkey’s inflation outlook. The emerging world’s worst performer against the dollar last month, Turkey’s currency has fallen victim to a campaign of stimulus that’s consisted of steep interest-rate cuts alongside a surge in fiscal spending and a government-sponsored credit push. The lira declined to an all-time low on Thursday.
Europe Pledges Push to Cut Reliance on Imported Raw Materials
Jonathan Stearns and Libby Cherry – Bloomberg
EU to establish alliance on rare earth, magnet supply chains; Initiative driven by coronavirus-triggered trade disruptions
The European Union stepped up a push to become less dependent on imported raw materials such as rare earths and lithium, saying supply-chain disruptions caused by the coronavirus outbreak bolster the need for more self-sufficiency.
Beijing Receives First International Flights in Months From Low-Risk Countries
Beijing’s main international airport on Thursday began receiving international flights again from a limited number of countries considered at low risk of coronavirus infection. Passengers flying in from Cambodia, Greece, Denmark, Thailand, Pakistan, Austria, Canada and Sweden must have first shown a negative coronavirus test before boarding, city government spokesperson Xu Hejian told reporters.
Michel Barnier ‘worried and disappointed’ over Brexit talks impasse
Lisa O’Carroll and Peter Walker – The Guardian
The EU’s chief Brexit negotiator, Michel Barnier, has said he is “worried and disappointed” over the UK’s approach to the talks, fuelling fears that the UK will leave the bloc in January without a deal.
He said there was no breakthrough at a meeting on Tuesday with the UK’s negotiator, David Frost. “We didn’t see any change in the position of the UK, which is why I expressed publicly what I say, that I am worried and I am disappointed because, frankly speaking, we have moved, [and] shown in many issues real openness in the past months,” Barnier told the Institute of International and European Affairs in Dublin.
U.K. Races to Fix ‘Critical Gaps’ in Brexit Border Plan
Joe Mayes – Bloomberg
Boris Johnson’s officials are urgently working to avert a major border crisis when the U.K. leaves the European Union’s trade regime, amid warnings vital government IT systems may not be ready in time.
According to a leaked document, ministers are asking hauliers and other industry groups for help to avoid chaos at the border when the Brexit transition period expires at the end of the year.
Sterling extends falls versus dollar and euro, weighed down by Brexit and economy
Elizabeth Howcroft – Reuters
The Bank of England’s deputy governor, Dave Ramsden, said on Wednesday that the level of British economic output would permanently be about 1.5 percentage points lower than it would be had it not been for the pandemic.
The European Union’s chief Brexit negotiator, meanwhile, said that Britain had not changed its position on key sticking points in Brexit trade talks and that he was “worried and disappointed”.
Barnier ‘Worried and Disappointed’ After Latest Talks with U.K.
Dara Doyle and Peter Flanagan – Bloomberg
EU Brexit chief says U.K. needs to move for deal to be struck; Comments highlight Brussels’s exasperation at lack of progress
The European Union’s chief Brexit negotiator accused the U.K. of failing to engage constructively in negotiations over their future relationship, giving one of his starkest warnings yet that the time to reach a deal is running out.
Hot Back-to-School Items During Coronavirus Are Tents, Webcams; Schools are buying up tech and safety gear to protect students and teachers; ‘money has gone quickly to say the least’
Austen Hufford – WSJ
The most popular back-to-school gear this year besides pencils and notebooks are keyboard covers, webcams and plexiglass. Schools and colleges are purchasing these and other protective products in great quantities as they try to prevent the spread of the coronavirus and calm concerns of teachers, students and parents. The average U.S. school district will spend nearly $400,000 on products related to the pandemic response, according to an estimate from the Association of School Business Officials International. The Cares Act included $30.8 billion in emergency funding for schools and colleges.