Hits & Takes
By JLN Staff
Happy Star Wars Day! May the fourth be with you!
John Lothian News is pleased to announce a virtual panel discussion to be held on Thursday, May 14 at 3:30 PM to discuss the Bachelier Option Model and its implications for the markets. The panelists for the online discussion are Lee Betsill for the CME Group, Jerry Hanweck from Cboe Global Markets, and Don Wilson of DRW Holdings. I will be the moderator. The panel will last 30 minutes, and then we will have a 15 minute period of questions and answers from the online audience. JLN will be recording the panel as well and will produce an edited version for publication in this newsletter. Sign up information will be forthcoming later this week. In the meantime, if you are interested in attending, email me HERE to let me know.
Mike Dennis, the chief commercial officer at ABN AMRO, who is running for the CME board of directors as a B share / seat holder, sent me a note asking me to remind people to vote. The election has yet to reach a quorum in any division so it is vitally important for shareholders to vote today.
If you are a CME B Shareholder (own a CME, IMM or IOM seat) your last chance to vote your B Shares is Tuesday May 5th at 10:59 pm CST. You can vote your shares with your control number via this website.
Please exercise your right to vote for a B Share director. It is important to express to the CME Group board and executive team that you value your voting rights and have a voice.
Thank you to Mike for his proactive leadership and pointing this out. That is the kind of leadership the B-shareholders need. Take the hint!
Jack Sandner – Open Outcry Traders History Project – Part Two
Jack Sandner is a former chairman of the Chicago Mercantile Exchange and longtime board member of the CME Group. In part two of this interview with John Lothian News for the MarketsWiki Education Open Outcry Traders History Project he talks about how the S&P 500 and Eurodollars started, the tax straddle that caused tax laws to change and his take on spoofing.
He explains how he was involved with the start of broker groups, which allowed brokers to protect themselves and be able to take occasional vacations. Sandner explains how the post market close was created out of the problems exposed by the FBI investigations of the markets.
He tells the story about how CME came up with the name of Globex, which replaced the initial name PMT for Post Market Close. Sandner was the one who submitted the name Globex to a contest to name the platform.
The Spread: Charity Begins At Cboe
This week on The Spread, Cboe celebrates its 47th anniversary with charitable donations and extends a bountiful business deal, the NYSE Arca options trading floor is rumored to reopen next week, and more.
NMS II: Why Proposed Rule Changes May Make Markets Less Fair for All
Phil Mackintosh – Nasdaq
The middle of a Coronavirus shutdown is probably not the right time to look at reworking the whole U.S. equity market structure. But deadlines are (still, currently) deadlines.
Earlier this year the SEC released almost 700 pages of proposed National Market System (NMS) rule changes, as well as denying Cboe’s unprotected lit speed bump before they deferred their decision on IEX’s protected lit speed bump. Within the next four weeks, we’re all meant to submit comments on these plans as well as doing our day jobs, from home. Today, I plan to focus on the SEC’s proposal and spell out how its plan would truly impact markets.
*****Remember when speed bumps were our biggest concern?~JJL
OCC April 2020 Total Volume Up 42.9 Percent from a Year Ago
OCC Press Release
OCC, the world’s largest equity derivatives clearing organization, announced today that April 2020 total cleared contract volume was 551,538,080 contracts, up 42.9 percent from April 2019. OCC’s year-to-date average daily total cleared contract volume is 27,865,203 contracts.
*****March and April will be volume months we will remember for a long time.~JJL
Reopening states will cause 233,000 more people to die from coronavirus, according to Wharton model
Kristin Myers – Yahoo Finance
New data from the University of Pennsylvania suggests that relaxing lockdowns across U.S. cities and states could have serious consequences for the country’s battle to contain the coronavirus, which has infected over a million people while killing more than 66,000 people.
According to the Penn Wharton Budget Model (PWBM), reopening states will result in an additional 233,000 deaths from the virus — even if states don’t reopen at all and with social distancing rules in place. This means that if the states were to reopen, 350,000 people in total would die from coronavirus by the end of June, the study found.
**** The video in the article above notes that the effect on GDP with no reopening would be -11.6%. If we re-opened now the effect would be -10.1%. So, if we average that out, about 15,500 people per 0.1% of GDP. ~JB
Block Trades; EFRPs, Wash Trades; GSCs; CBDCs; Privacy Violations; Misrepresentations by IAs
Gary DeWaal – Bridging the Week
COVID-19 fallout continued to dominate the financial services industry during the past few weeks, prompting ongoing adherence to business continuity and other contingency plans by market participants and new relief by regulators to enable markets to operate as efficiently as possible. The crashing of crude oil prices into deep negative territory on April 20 also caused consternation for many. Amidst all the extraordinary circumstances, a number of futures-industry exchanges published disciplinary actions related to alleged breaches of their rules concerning block trades and exchange for related position transactions as well as wash trades. Separately, the Financial Stability Board published 10 recommendations related to the supervision of global stablecoins. Curiously, the recommendations did not extend to central bank-issued digital currencies.
Friday’s Top Three
Our most read story Friday was Covid-19 Pandemic Likely to Last Two Years, Report Says, from Bloomberg. Second was Amazon extends work from home regime till October 2, from Reuters. Third was our guest column from the DTCC’s Tim Keady, Automation Is Key to Managing Margin Calls.
176,986,171 pages viewed; 24,116 pages; 224,004 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
1,377 pages; 12,186 edits
Special Report: How a corporate PR machine is trying to kill a Wall Street tax
Pete Schroeder, Michelle Price – Reuters
As Democratic presidential hopefuls descended on New Hampshire prior to the state’s Feb. 11 primary, John Tackeff was busy. The 27-year-old attended candidate events across the state to raise concerns about a proposed tax on Wall Street financial transactions that much of the field supported. Bespectacled, unshaven and casually dressed, Tackeff wasn’t shy about asking questions. At a Dec. 22 gathering with former Massachusetts Governor Deval Patrick, Tackeff introduced a woman he said was his mother. Reuters could not verify her identity. Any tax on stock and bond trades would hurt seniors like her and parents trying to save for their children’s college, Tackeff said.
The business world can never go back to the way things were; The global plague has turbocharged the growth of the internet, catapulting us into the future
Michael Moritz, Sequoia Capital – FT
Judging by the number of self-administered haircuts visible on Zoom calls these days, hairdressers have nothing to fear about their long-term prospects once the devastating disruption to their business ends. The same is not true for many other businesses, as Covid-19 reshapes the contours of our lives.
US options exchanges prepare to reopen trading floors; Arca in San Francisco and Box in Chicago will throw open their doors on Monday
Philip Stafford – FT
Traders will be allowed back on to the floors of two US options exchanges on Monday in a move that will test the industry’s appetite to return to workplaces after weeks of stay-at-home orders. The New York Stock Exchange’s Arca options floor in San Francisco and the Box Options Exchange in Chicago will both open for business, albeit with fewer people and a series of precautions.
Your Air Travel Experience Will Never Be the Same; Even before Covid-19, flying was often a miserable affair. It’s about to get much worse — whether you’re in economy or first.
Chris Bryant – Bloomberg
The British romantic comedy “Love Actually” is saccharine, and occasionally creepy, but it’s hard not to be touched by the documentary footage that bookends the movie of families and friends embracing in the arrivals hall of London’s Heathrow airport.
Oil’s Recovery Could Take Decades, Not Years; Or the industry might never fully rebound from the virus, leaving massive spare capacity all along the supply chain.
Julian Lee – Bloomberg
Who knows what the new normal for oil demand will be once Covid-19 is firmly in the rear view mirror? Not me, that’s for sure. But it is likely to be lower than it was in 2019, and it could be that way for many years. That’s going to create overcapacity throughout the oil supply chain and weigh on prices.
From Comic-Con to Cannes, Pandemic-Hit Events Look for Ways to Convene; Organizers of business conferences, auto shows and popular festivals decide whether to cancel, go digital or go ahead—with caution
Patience Haggin – WSJ
Every year, 130,000 sci-fi and fantasy fans donning Captain America and Princess Leia costumes crowd into the San Diego Convention Center for the event known as Comic-Con, where they mingle with stars and other fans. Some 15,000 advertising executives descend on the French Riviera for a festival in Cannes, where parties on cozy yachts are the norm. At New York’s Fancy Food Show, attendees sample each other’s caviar and paté.
Dysfunctional oil market needs a new model; Regional trading blocs would better align mutual interests and provide stability
John Padilla – FT
While global markets have taken a thrashing, oil remains a ticking time bomb for both the energy industry and the global economy. With no solution for rapidly depleting world storage capacity, volatility and uncertainty are likely to be the new norm in the near-term. It is imperative to consider adopting a new model for the oil market.
Economists need to abandon their comfort zones to deal with Covid-19; Complex and adaptive problems cannot be solved with the usual mainstream thinking
Rana Foroohar – FT
I am always surprised by how linear most economic thinking is. Economists take a stand on a particular issue — free trade is either working or it isn’t; regulation is needed or is not — and then refuse to leave their silos, even when the real world turns out again to be a messy and complex place.
John Tyson laments breakdown of meat system his family pioneered; Tyson Foods chief warns of supply shortages that critics blame on concentrated production line
Gregory Meyer – FT
A well-stocked supermarket meat cabinet comes close to clean water as a basic expectation of American life. Running out of chicken breasts, minced beef or pork chops is unimaginable to millions of consumers.
Biggest US energy groups lay out oil crash strategy; ExxonMobil and Chevron deploy plans for cutbacks but preserve dividends
Derek Brower – FT
ExxonMobil and Chevron, the US’s two biggest energy producers, have laid out their strategy to cope with the worst crude oil price crash in history: cut back now, keep investors happy, and be ready for a market recovery.
Pandemic crisis offers glimpse into oil industry’s future ; Price wars and coronavirus have disrupted the sector, possibly moving peak demand even closer
David Sheppard – FT
John Browne, the former chief executive of BP, has witnessed first hand the ups and downs of the oil industry for more than five decades. But unlike the usual market cycles of boom and bust he believes the coronavirus-linked price crash will serve as a warning for the industry of what is to come.
The Great Shale Shut-In Has Begun, Making Good on Trump’s Pledge
Catherine Traywick, Kevin Crowley, and Sheela Tobben – Bloomberg
Exxon, Chevron, Conoco to curb more than 600,000 barrels a day; U.S. crude production has fallen precipitously since mid-March
American shale explorers are rapidly crimping production in the country’s most prolific oil fields as the worst price crash in history threatens the industry’s survival. Three of the biggest oil explorers in the U.S. — Exxon Mobil Corp., Chevron Corp., and ConocoPhillips — plan to curb as much as 660,000 barrels a day of combined American output by the end of June. Across the county, crude production by all companies has already tumbled about 1 million barrels a day since mid-March, when OPEC and its allies clinched an historic deal to trim global supply.
After Quant Bust 2020 Comes a Reckoning for Stock Math Wizzes
Justina Lee – Bloomberg
Market-neutral and long-only strategies crater in virus rout; Alt data and discretionary tilt are among solutions floated
As this year’s market storm recedes, the forced stock selling among Wall Street’s quant investors is finally ending. Now the reckoning can begin. These systematic players, who use rules-based strategies to determine what and when to trade, were already suffering through what some called a “Quant Winter” when the mayhem hit. In fact, the turmoil was a chance to show the strength of their math-powered methods, which aim to outperform in a sell-off.
Stock Traders Should Heed the Lessons of the 1930s; The economic outlook is not unlike the Great Depression years, and that didn’t turn out well for equities.
A. Gary Shilling – Bloomberg
Don’t be fooled by the recent rebound in stocks; the investment scene is beginning to resemble the 1929 market crash and the early 1930s Great Depression. In the Roaring ’20s, the Dow Jones Industrial Average jumped 500% from August 1921 to September 1929. It then plunged 48% from Sept. 3 to Nov. 13, 1929. To many, that seemed like a reasonable correction of the 1920s exuberance. The economy was fully employed and growing rapidly and most looked forward to more expansion and higher stock prices. Only days before the crash, prominent economist Irving Fisher stated that “stock prices have reached what looks like a permanently high plateau” and the market was “only shaking out of the lunatic fringe.”
Oil’s Crash Prompts Record Push to Store Fuel at Sea; Traders react to weak energy prices and lack of onshore storage; in turn, freight rates soar
Joe Wallace – WSJ
The cost to ship gasoline, diesel and jet fuel around the world has soared to record highs, as traders look to dodge the commodity price crash by stashing refined oil at sea. Charter prices for vessels that transport refined oil products have tripled since the start of March, according to the Baltic Clean Tanker Index, a gauge of freight rates along 11 shipping routes. The index, calculated daily from estimates submitted by shipbrokers, hit its highest level on record early last week before slipping in recent days.
Fed Won’t Use Stimulus Aid to Push Libor Replacement; Central bank faced pressure not to use new interest-rate benchmark in Main Street Lending Program
Vipal Monga and Cezary Podkul – WSJ
The Federal Reserve has scrapped plans to use a $600 billion aid program for small and midsize businesses to promote the use of its preferred replacement for the troubled London interbank offered rate.
Call It Hero Pay or Hazard Pay, Essential Workers Want More of It; As states reopen after coronavirus restrictions, some companies are ending bonus pay for hourly workers
Te-Ping Chen and Katherine Sayre – WSJ
As businesses across two dozen states start to reopen after coronavirus shutdowns, some companies are reassessing the bonus pay for hourly employees who have been going into work through the pandemic.
Europe Takes Its First Baby Steps Toward a Post-Lockdown Normal
Flavia Rotondi, Boris Groendahl, and Stefan Nicola – Bloomberg
Europe is gingerly trying to get back to business, with restrictions loosening across the continent as the spread of the coronavirus slows. The German Spy Museum in Berlin opened its doors for the first time in weeks, and bars in central Rome began offering takeaway services. In Vienna, shaggy-haired Austrians flocked to barbers’ shops when they reopened on Saturday and students with final-year exams are returning to school.
Testing Isn’t Everything; It won’t banish the coronavirus, and it’s not an excuse for not opening.
The Editorial Board – WSJ
Many states are starting to lift their shutdown orders, but some governors are still insisting they need more testing to do so. The Trump Administration on Monday responded by laying out all of the country’s testing capacity. But no amount of testing by itself will stop the virus from spreading. States will need a cocktail of strategies to limit the spread of infections.
Covid Exit Strategy Depends on Getting Vaccine to Whole World
James Paton – Bloomberg
Health groups push for measures to overcome access hurdles; Competing global interests snarl vaccine supply priorities
Coming up with a vaccine to halt Covid-19 in a matter of months isn’t the only colossal challenge. The next big test: getting billions of doses to every corner of the world at a time when countries increasingly are putting their own interests first.
Business Is Far From Usual as Large Swaths of the U.S. Reopen; Masks, paper plates: See photos from Texas to Alabama and Tennessee
Kurt Wagner and Catarina Saraiva – Bloomberg
Large swaths of the U.S. were once again open for business Friday, as states like Texas, Oklahoma and Alabama lifted the stay-at-home orders that have left many merchants closed and millions around the country unemployed.
This pregnant Goldman Sachs trader says Wall Street will never be the same after the coronavirus
Moran Forman of Goldman Sachs, 33, in her home office in the Chelsea neighborhood of New York. Each weekday morning, Moran Forman wakes up in her Chelsea apartment, takes a few steps to a spare bedroom and powers up the full might of Goldman Sachs on a curved LCD screen.
Fears Mount About Inflation Returning With a Vengeance
Catherine Bosley and Anchalee Worrachate – WSJ
Aftermaths of major conflicts tend to feature surging prices; Policy makers are more worried about deflation for now
Even a calamity of disease, death and economic destruction afflicting the world all at once isn’t enough to suppress the notion in some quarters that inflation could return with a vengeance.
Putin’s Fear of Unemployment Is Being Exposed by Pandemic
Evgenia Pismennaya and Anna Andrianova – Bloomberg
Russia’s strict labor laws make lay offs almost impossible; Situation is deepening poverty after years of falling incomes
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. Elena, a 42 year-old Moscow shop assistant, has a family to feed, a mortgage to pay, and half the income she was receiving a month ago. She can’t apply for support because she hasn’t lost her job, but Russia’s labor laws make it almost impossible for her employer to make her redundant.
Gold Bars Fight Covid Kits for Space on the Plane; Before the health crisis, gold typically traveled around the world on commercial flights.
Elena Mazneva, Justina Vasquez, and Ranjeetha Pakiam – Bloomberg
Swiss refiner Valcambi SA tried for five straight days last month to move a shipment of gold out of Hong Kong. Twice the metal was packed carefully onto a plane, only to be offloaded again.
Coronavirus cases in Russia rise by record daily amount, mortality rate slows
Andrew Osborn and Vladimir Soldatkin – Reuters
Russia on Sunday recorded its highest daily rise in confirmed coronavirus cases with 10,633 new cases, bringing the total to 134,687, with more than half of cases and deaths in Moscow.
Coronavirus Kills People an Average of a Decade Before Their Time, Studies Find; Research, which can help governments assess economic cost of lockdowns, shows Covid-19 isn’t merely hastening the end for the already ill
Jason Douglas and Daniel Michaels – WSJ
People dying of Covid-19 could have expected to live on average for at least another decade, according to two studies that help fill in the developing picture of the human cost of the coronavirus pandemic. The findings show the virus isn’t just carrying off the elderly or infirm a few months before their time.
Global coronavirus cases surpass 3.5 million amid underreporting fears
Jane Wardell – Reuters
Global coronavirus cases surpassed 3.5 million on Monday and deaths neared a quarter of a million, according to a Reuters tally, concerning experts who fear substantial underreporting even as the rate of fatalities and new cases slows.
Exchanges, OTC and Clearing
CME Group Reports April 2020 Monthly Market Statistics
CME Group, the world’s leading and most diverse derivatives marketplace, today reported April 2020 market statistics, showing it reached average daily volume (ADV) of 17.8 million contracts during the month. Open interest at the end of April was 119.7 million contracts. Market statistics are available online in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
CME Group secures $7 billion credit facility to protect against a clearing member default
Tomi Kilgore – MarketWatch
CME Group Inc. CME, -2.55% disclosed Thursday that it agreed to an amendment that gives the commodity exchange company a $7 billion multi-currency credit facility. The company said the 364-day amended facility is intended to provide liquidity “in the event of a clearing member default,” a liquidity constraint or depositary default, or in the event of a delay in the payment systems utilized by CME. The stock fell 2.8% in afternoon trading. It has dropped 19.4% over the past three months, while the S&P 500 SPX, -2.80% has shed 11.6%.
Regulator’s Column: SGX RegCo’s Expectations on Information to be provided to Shareholders in connection with a General Offer
Issuers may apply to Singapore Exchange (SGX) to seek a delisting for a variety of reasons and strategic impetuses. Various mechanisms may also be utilised to privatise an issuer, such as, a general offer under the Singapore Code on Take-overs and Mergers (“General Offer”). The Listing Rules stipulate the requirements that must be satisfied before SGX will agree to the delisting (“Delisting Rules”). On 11 July 2019, following consultations with market participants and the public, Singapore Exchange Regulation (SGX RegCo) amended the Delisting Rules to enhance minority shareholder protection. SGX RegCo also published a Regulator’s Column on 11 July 2019 to clarify the applicability of the Delisting Rules to a delisting through a General Offer (available here).
Nasdaq, PureShares and ETFMG Reach Settlement
Nasdaq (Nasdaq: NDAQ), PureShares LLC, and Exchange Traded Managers Group, LLC (ETFMG) have reached a global settlement that resolves claims in two separate lawsuits pending in the Southern District of New York Federal Court and New Jersey State Superior Court, involving the former PureFunds ETFs. The settlement is subject to future negotiations and approvals among independent third parties.
Reports: Amendment to the list of prioritised reports of Eurex and Eurex Clearing
This circular contains information regarding the amendment to the list of prioritised reports of Eurex and Eurex Clearing.
One year Eurex EnLight extension – review and outlook
While it first launched in June 2018, one year ago Eurex extended its selected RfQ-based service to cover all equity and equity index options, as well as the corresponding futures. What has happened since then and are there new extensions in the pipeline? We spoke to Randolf Roth, Member of the Executive Board of Eurex Frankfurt AG.
Barclays launches BARX Futures co-location in Frankfurt for Eurex connectivity; The latest BARX Futures platform from Barclays will be launched in Frankfurt, enhancing its execution offering on Eurex.
Kiays Khalil – The Trade
Barclays has announced the launch of its sixth BARX Futures co-location, this time in Frankfurt to bring greater execution offerings for derivatives exchange Eurex.
DGCX Volumes In G6 Currencies Surge In April Amid Continued Global Economic Uncertainty
The Dubai Gold and Commodities Exchange (DGCX) continued to see robust trading activity in April, with members increasingly seeking to protect themselves against volatility and global economic uncertainty. In light of continued currency volatility and varying views on the dollar as a safe haven, the DGCX last month most notably recorded a surge in trading of its G6 currency portfolio, which registered year-on-year (Y-O-Y) volume growth of 653.45%.
The Investor, the SME and COVID-19: Time For The Stock Exchange To Change Or Estrange
Hirander Misra – Hedgethink.com
The Investor, the SME and COVID-19: Time For The Stock Exchange To Change Or Estrange
While the COVID-19 pandemic poses a significant threat to mainstream industry and commerce, it will be even more devastating to Small-to-Medium Enterprises (‘SMEs’), as a large number may not survive the economic impact of the crisis. This issue affects SME activity worldwide, however it is especially pronounced in emerging markets, where access to capital is usually more constrained than developed markets.
FTSE Mondo Visione Exchanges Index Up By 8% In April Amidst Covid-19 Volatility
Governments and central banks have taken several emergency measures to offset the sudden cratering of national economies. Interest rates were cut, large-scale asset purchases implemented, and facilities were set up to pump liquidity into many corners of financial markets. These measures had a calming effect on markets that had been hit by extreme volatility since the outbreak of the Covid-19 pandemic.
Closure Of Bursa Malaysia In Conjunction With Wesak Day
Bursa Malaysia Berhad and its subsidiaries will be closed on Thursday, 7 May 2020, in conjunction with Wesak Day.
Innovation Timeline: FinTech vs. Healthcare Covid-19 Crisis Series
Stephanie MacConnell – Forbes
This is the third in a series of articles comparing the Covid-19 crisis in Healthcare to the financial crisis in 2008 that led to an industry-shaping boom in FinTech. Find the first article in the series (“Before and After”) here and the second article in the series (“The Guilty and the Innocent”) here.
GoBear acquires Singapore’s fintech startup AsiaKredit
Doris Yu – Tech in Asia
Financial marketplace GoBear today announced that it has acquired the Singapore-based AsiaKredit, an end-to-end digital consumer lender.
The deal is in line with GoBear’s plans to expand its regional reach and drive growth through digital lending, according to a statement. It follows the company’s US$80 million raise from venture capital firm Walvis Participaties and financial services provider Aegon in May last year.
How is COVID-19 impacting fintech startups?
Markos Zachariadis – Fintech Magazine
With limited capital, SMEs across the UK are particularly vulnerable and fintech startups are no exception. As venture capital funds and investors liquidate their assets, fintechs will need to tighten their finances and cut costs to survive the drop. So what does the future have in store for the industry? Profitable enterprises and those backed by funding will have the upper hand, whereas early-stage companies may suffer as the competition for cash intensifies.
11 Members Of Congress Urge Treasury Secretary Mnuchin To Use Blockchain For COVID-19 Stimulus Payments
Jason Brett – Forbes
On Tuesday, a letter from eleven Members of Congress to the Secretary of the Treasury was made public that urged Secretary Mnuchin to consider the use of blockchain technology to help in providing COVID-19 stimulus checks to Americans. With the high-profile nature of suggesting the U.S. Treasury could deliver money owed to the public with both speed and security as a result of using blockchain technology is the equivalent of the ‘Super Bowl’ of blockchain use cases for the private sector.
Wrapped Bitcoin added as DAI collateral type to DeFi lending protocol Maker
Michael McSweeney – The Block
Maker governance token holders have approved a proposal that adds Wrapped Bitcoin (WBTC), an Ethereum-based token backed 1-to-1 by bitcoins, as the lending protocol’s latest collateral type. The finalization was announced in a May 3 blog post, and with the move, WBTC becomes the fourth collateral type on Maker (joining ETH, USDC and BAT) for the creation of the stablecoin DAI. USDC was added in mid-March.
Bitfinex, Tether Seek Subpoenas Across US in Hunt for Missing $800M
George Chidi – Coindesk
The Bitfinex crypto exchange is making a new push to find and potentially recover more than $800 million in user funds seized by legal authorities in four different countries after its payment processor’s bank accounts were frozen.
U.S. Department of Justice seeks claimants to funds seized from crypto exchange in 2018
Michael McSweeney – The Block
U.S. officials are seeking people who may have claims against the holdings of CoinGather, an obscure crypto exchange seized in 2018. The exchange was seized in March 2018, a move that came months after the exchange reportedly went offline and its administrators disappeared – actions fueling the belief that an exit scam had taken place. As Bitcoin.com noted in a November 2017 report, the exchange was small volume-wise (less than $100,000, according to CoinMarketCap data at the time).
Enterprise Blockchains: Walled Off Yet Vulnerable
Anna Baydakova – Coindesk
How do you hack an enterprise blockchain? We may find out soon enough. Enterprise blockchain products have been designed mostly as private networks, limited to authorized parties. This is supposed to make them more efficient than public chains like Bitcoin and Ethereum because fewer computers have to reach agreement on who owns what, and in a sense safer because the participants know each other.
Bitmain Recovers, Claims Profits Despite Pandemic and Power Struggle
Stephen O’Neal – Cointelegraph
Chinese cryptocurrency mining hardware producer Bitmain is now poised for a rebound after hitting a rough patch. Chinese cryptocurrency hardware manufacturer Bitmain seems to be bouncing back after a streak of dismal reports. Earlier this week, a local industry blog revealed that the mining giant has accumulated over $300 million in revenue so far this year and is rewarding employees with massive bonuses on Labor Day.
US Court Dismisses Lawsuit Over Riot Blockchain’s Crypto Pivot
Paddy Baker – Coindesk
A New Jersey judge ruled last week that Riot Blockchain’s decision to change its name was not, by itself, tantamount to securities fraud. U.S. District Judge Freda Wolfson of the District Court of New Jersey dismissed a lawsuit Thursday which tried to argue that the Colorado-based firm had changed its name to “Riot Blockchain” in an effort to boost its share price.
Ethereum projects have received nearly $25 million in grant money to date
Yogita Khatri – The Block
More than 150 Ethereum projects have received nearly $25 million in total grant money to date. The Ethereum Foundation is the biggest donor, awarding over $21 million of the total amount, according to a study by The Block’s Steven Zheng. The foundation is followed by the Ethereum Community Fund, Aragon Foundation, ConsenSys and Protocol Labs.
Iran Issues License to Bitcoin Mining Farm with 6000 Miners
Arnab Shome – Finance Magnates
Turkey-registered crypto mining company iMiner has received a license from Iran’s Ministry of Industry, Mine, and Trade to legally continue operations in the country. According to a report last week, iMiner has established its cryptocurrency mining operations in the Semnan Province of Iran with 6,000 ASIC miners. The company has invested around $7.3 million in its facility, becoming one of the largest known mining farms in the world.
BitMEX Restricts Access to Japanese Residents, Citing Changes to Local Law
Sebastian Sinclair – Coindesk
Japan has amended the way cryptocurrencies are regulated within the country, prompting BitMEX to begin restricting access to local residents, the exchange announced last week.
The Pandemic Has Made Industrial Policy Palatable Even to Republicans; Once considered taboo among conservatives, the idea of government-directed manufacturing and strategy is gaining advocates.
Shawn Donnan – Bloomberg
The Mountain Pass Mine in California has a long history tied to America’s industrial fortunes. It was born out of prospecting for uranium in the 1940s Atomic Age. Through the 1960s it was responsible for much of the global production of europium, an element that ended up in color televisions and fluorescent lights. Today it has the distinction of being the U.S.’s only active source of rare earths, that 17-member suite of peculiar minerals—largely controlled by China—needed to make the magnets used in everything from electric vehicles to wind turbines to ballistic missiles.
Georgia Senator Kelly Loeffler Trails Rep. Collins by over 40 Points among GOP Voters in Special Election Poll
Tobias Hoonhout -,National Review
An internal Republican poll shows Senator Kelly Loeffler down 44 points to Representative Doug Collins in the race to fill former Georgia Senator Johnny Isakson’s seat in a November special election.
Georgia Is Looking Like Trouble for Republicans in November
Ed Kilgore – NY Mag
Georgia Republican allies Brian Kemp and Kelly Loeffler both have their problems in a key 2020 battleground state. Photo: Brynn Anderson/Jim Lo Scalzo/EPA-EFE/Shutterstock
In the early phases of the 2020 cycle, Democratic thinkers and gabbers spent a lot of time discussing two different geographical approaches to beating Donald Trump, as I noted back in November 2018, just after the Democratic gains in the midterms:
Michael Bloomberg expands influence network within Democratic party
Daniel Strauss -,The Guardian
The former New York mayor Michael Bloomberg spent almost a billion dollars to try to win the Democratic nomination but his audacious bid ended with victory only in tiny American Samoa.
Trump’s Slaughterhouse Order a Blunt Tool Against Political Risk
Mike Dorning and Polly Mosendz – WSJ
Meatpacking closures threaten president’s rural base; Sending workers back a balance of food supply versus safety
President Donald Trump’s unprecedented order to keep U.S. slaughterhouses running is a blunt instrument to stave off a catastrophe threatening his rural base and the voters elsewhere he’ll need to win re-election.
Coronavirus Is Straining the Concept of Federalism; Dealing with Covid-19 is inflaming already fierce tensions between central governments and states globally.
Mihir Sharma – Bloomberg
Crises tend to widen fault lines that already exist. The Covid-19 pandemic has been no exception. Before the virus hit, the unbalanced nature of recent economic growth was already straining federal structures around the world, from the U.S. to India to Europe. The current crisis threatens to open new disagreements and deepen old ones — and transform some political entities beyond recognition.
Investors blast EU’s omission of oil from ESG disclosures; Latest proposal accused of being misleading over environmental risk
Siobhan Riding and Attracta Mooney – FT
Investors, politicians and campaigners have hit out at EU regulators’ “ludicrous” exclusion of oil and gas from a definition of fossil fuels, arguing it will lead asset managers to understate their environmental risks.
Leaderless Watchdog for $500 Billion in Aid Preps for Disclosure
Laura Davison and Saleha Mohsin – Bloomberg
A watchdog created to monitor the work of the Treasury Department and the Federal Reserve in buffering corporate America and Main Street from the Covid-19 pandemic is functioning like an ad hoc committee as it waits for a chairman to start formal operations.
Mifid II influence spreads beyond EU borders; Different approaches to paying for investment research exacerbated by pandemic
Owen Walker – FT
Mifid II, European market rules introduced two years ago, are having a significant impact on fund managers’ use of investment research around the world.
Securities Commission Malaysia Issues New Guidelines On Advertising For Capital Market Products And Services
The Securities Commission Malaysia (SC) issued today new Guidelines on Advertising for Capital Market Products and Related Services (Guidelines) to promote responsible advertising of capital markets products and services and encourage greater use of digital channels.
Investing and Trading
Warren Buffett Says ‘American Magic’ to Overcome Coronavirus Uncertainty; At Berkshire Hathaway’s virtual annual meeting, Mr. Buffett serves up faith in the economy but reveals conglomerate sold its airline stakes
Geoffrey Rogow and Jenna Telesca – WSJ
Warren Buffett offered reassurance at Berkshire Hathaway Inc.’s BRK.B -2.50% annual meeting Saturday that the U.S. economy will recover steadily from the coronavirus pandemic. Speaking onstage at an empty arena in downtown Omaha, Neb., Mr. Buffett said the range of possibilities from the pandemic was wide, but it had significantly narrowed in recent weeks.
Investment biker Jim Rogers desperate to hit the road; Renowned investor warns market correction is not over but there is value in commodities
Chris Flood – FT
Jim Rogers shares the frustrations of millions of people under lockdown. The veteran investor, who spent three years with his wife on a world road trip across 116 countries in a customised Mercedes-Benz, feels particularly aggrieved by travel restrictions.
Can governments afford the debts they are piling up to stabilise economies? Two experts debate the long-term impact on inflation of the Covid-19 rescue packages
Stephanie Kelton and Edward Chancellor – FT
Yes — It poses no inherent danger to states that issue their own currency. The Covid-19 pandemic has forced governments around the world to spend large sums in an effort to stabilise their economies, writes Stephanie Kelton. Gone, for now, are concerns about how to “pay for” it all. Instead we are seeing wartime levels of spending, driving deficits — and public debt — to new highs.
Lockdown is exposing the folly of reckless financial strategies; Pension funds need to spend less time on ESG and get back to basics
Jonathan Ford – FT
Imagine a driver who’s mad keen to get home quickly. Trying to shave a few seconds from his daily commute along a twisty mountain road, he overtakes other cars on blind bends. It all works swimmingly, until one day he hits an oncoming truck.
Energy trader Mercuria sees turn in oil market; Price crash provokes supply cuts but ‘all bets are off’ if second wave of pandemic hits
Neil Hume and David Sheppard – FT
The co-founder of Mercuria believes the oil market has “turned the corner” after one of the worst months in its history.
Nouriel Roubini Sees a Bad Recovery, Then Inflation, Then a Depression
Tracy Alloway and Joe Weisenthal – Bloomberg
During the last crisis, the economist Nouriel Roubini earned the nickname “Dr. Doom” for his ominous prognostications about the economy and financial system. While he prefers the moniker “Dr. Realist” Roubini is once again extremely negative. On this week’s episode, he explains why he sees a poor recovery, then a bout of inflation, and then ultimately a depression in the wake of this crisis.
Carson Block Sees Plunge in Stocks as Valuations Make ‘No Sense’
Min Jeong Lee – Bloomberg
Current prices seen as too high given expected virus fallout; ‘The underlying economy will bring the capital markets down’
Carson Block is predicting a plunge in stocks after they roared back from the coronavirus sell-off in March. “The direction has to be sharply downward,” the renowned short seller and founder of Muddy Waters Capital said in a phone interview.
Ultra-Rich Families With Cash on Hand Pile Into Private Debt
Benjamin Stupples – Bloomberg
Family offices boost holdings as pandemic drives yields higher; They can provide extra flexibility and faster access to cash
Michel Andre Heller is looking to lend when credit is tight. The London-based real estate adviser to a billionaire family from the Middle East is lining up deals of as much as 5 million pounds ($6.2 million) for U.K. residential developments and more than double that amount alongside other investors for bigger properties, such as hotels or offices.
Finding Your Balance in a Topsy-Turvy Market; Taking calm, contrarian action in a crazy world is a great way to restore balance—not only to your portfolio, but to your frame of mind
Jason Zweig – WSJ
The market wisdom that sounds the easiest can be the hardest to follow. Take “buy low, sell high. Buying low and selling high is logically sound but emotionally harrowing. That’s because it requires buying something that feels risky because it just went down, while selling something that feels safer because it has just gone up. That counterintuitive step is what investment professionals call rebalancing: moving against the market’s recent direction to adjust your mix of stocks, bonds and other assets back to predetermined targets.
Rising Natural Gas Prices Are a Hot Bet; Investors are unwinding wagers that prices will fall, bidding up producers’ beaten-down shares and even buying their new bonds
Ryan Dezember and Matt Wirz – WSJ
Natural gas is flaring up. Investors, who just weeks ago shunned the fuel and the companies that sell it, are unwinding wagers that prices will fall, bidding up producers’ beaten-down shares and even buying their new bonds. The reason for optimism: The historic collapse in crude prices thanks to the new coronavirus has energy producers racing to close oil wells.
Mom and Pop Brush Off Wall Street’s USO Warnings After 80% Drop
Katherine Greifeld – Bloomberg
Fund forced to reshuffle futures holdings amid oil turmoil; Demand for USO still robust among individual investors
Warnings are blaring everywhere about the dangers of owning the U.S. Oil Fund, the star-crossed security for tracking crude. On Main Street, investors say they understand the risks and aren’t deterred by them.
Stock-Picking Robots Take on Humans in New Study; The buy recommendations of robo analysts outperformed those of human analysts in a new study by Indiana University researchers
Daisy Maxey – WSJ
In the battle between man and machine, robots appear to have an edge in several areas of the stock-picking arena, according to new research. Among the key findings of a study conducted by researchers at Indiana University is that portfolios based on the buy recommendations of robo analysts seem to outperform those of human analysts.
Central banks prop up fund industry with $100bn injection; Fitch says scale of support points to the systemic importance of $55tn asset management market
Siobhan Riding – FT
Central banks have injected close to $100bn to prop up investment funds hit by the coronavirus-induced market turmoil, raising fresh questions about the systemic risks posed by the asset management industry.
Oil price crash threatens Texas university endowments; Turmoil in commodity market slashes state colleges’ revenues
Aziza Kasumov – Ft
The oil price crash that has hammered the US shale industry is now threatening to put the squeeze on one of America’s biggest university endowments.
Banks to book more than $50bn against bad loans; Lenders take divergent approaches in making provisions for coronavirus damage
Stephen Morris and Olaf Storbeck – FT
US and European banks are on track to book more than $50bn of charges on souring loans in the first quarter, the biggest such provisions since the 2008-09 financial crisis, and an indication of the severe economic damage wrought by coronavirus.
Global Banks Turn Inward With Pandemic Upending Priorities
Steven Arons and Yalman Onaran – Bloomberg
National service and atonement for 2008 are driving decisions; Domestic focus may endure long after the coronavirus recession
The coronavirus pandemic spurred a turn toward nationalism around the world. Now banks are in the vanguard of the movement, central to government rescue efforts in the face of the worst recession since the Great Depression.
France’s SocGen to provision between 3.5 and 5 billion euros this year: CEO
French bank Societe Generale expects to have to provision 3.5 billion euros to 5 billion euros ($3.84 bln-5.49 bln) this year because of losses due to the coronavirus crisis, its chief executive said in an interview on Saturday.
Goldman Sachs Gives Peek Into Frenzy on Trading Desks in March
Sridhar Natarajan – Bloomberg
Goldman Sachs Group Inc. offered a glimpse into the March madness that propelled Wall Street trading desks to their best quarterly performance in almost a decade. The firm’s traders pulled in more than $100 million on 14 separate days during the first quarter, Goldman Sachs said Friday in a regulatory filing. Volatile markets were a boon for the business, which posted gains on more than 85% of the trading days as the spread of Covid-19 generated a surge in volume and wide bid-ask spreads through much of March.
Australian companies head to stock market in biggest rush since ’09; Companies lean heavily on equity in effort to dent blow from coronavirus
Richard Henderson and Jamie Smyth – FT
Australian companies rushed to the stock market in April, raising more money than any point in the last decade to fortify their balance sheets and take advantage of relaxed market rules that critics argue have favoured large investors at the expense of retail shareholders.
Coal Loses Backing From Another Big Bank
James Thornhill – Bloomberg
Westpac is latest Australian bank to phase out thermal coal; Banks around the world under pressure to cut their exposure
Financing a thermal coal project in Australia just got a little bit harder after Westpac Banking Corp. said it would exit the sector by 2030, leaving Australia and New Zealand Banking Group Ltd. as the last of the country’s big four yet to commit to dropping the most polluting fuel.
World’s Oldest Central Bank Hits Legal Blockade Amid Crisis
Love Liman and Rafaela Lindeberg – Bloomberg
Sweden’s central bank may need to have some of its age-old laws changed if it’s to act on a pledge to do “whatever it takes” to save the economy. The Riksbank’s 352-year history gives it the distinction of being the world’s oldest central bank. But the legislation governing it has yet to catch up with the kind of policy it needs to deliver to address the crisis triggered by Covid-19.
Iran Is Hauling Gold Bars Out of Venezuela’s Almost-Empty Vaults
Patricia Laya and Ben Bartenstein – Bloomberg
Out of cash and desperate for help in propping up its oil industry, Venezuela is raiding its gold vaults and handing tons of bars to its long-time ally Iran, according to people with direct knowledge of the matter.
Virus Hits U.K. Bid to Hire 50,000 Post-Brexit Customs Agents
Joe Mayse – Bloomberg
Trade with EU at risk without 50,000 more U.K. customs agents; Coronavirus hampering government’s customs recruitment drive
The U.K. risks failing to recruit the 50,000 customs agents the logistics industry says are needed before Britain’s final parting with the European Union, spelling potential chaos at the country’s busiest border.
UK steps up plans to train 50,000 form fillers for post-Brexit trade
George Parker and George Steer – FT
Ministers are stepping up co-operation with business to train up to 50,000 people who will be needed to fill in customs forms for post-Brexit trade with the EU through the creation of a special academy. Cabinet Office minister Michael Gove revealed plans for the “customs agent academy”, as UK companies prepare for a more complex trading relationship with the EU after the Brexit transition period that is currently scheduled to end on December 31.
World Athletics braced for financial hit from delayed Tokyo Olympics; Sport’s head Sebastian Coe in talks to protect payments as relief fund for struggling athletes is launched
Murad Ahmed – FT
World Athletics, the international governing body for track and field, is in crunch talks over the financial blow the sport faces from the postponement of this year’s Olympic Games due to the coronavirus pandemic.
In New Season of ‘Billions,’ Axelrod Battles an Altruistic Rival
Amanda L Gordon – Bloomberg
Wall Street show feels nostalgic in the age of coronavirus; Axe looks to branch out from hedge funds with a familiar move
How would Bobby Axelrod fare during a pandemic? Since the life of the “Billions” character usually mirrors that of real hedge fund managers, he’d likely find a way to make a ton of money. And it’s fun to guess who’d he hunker down with. His kids? Wendy? Definitely his personal chef. But not necessarily the housekeeper. One thing we know from last season’s finale is that Bobby can make a bed.
How Babe Ruth beat a pandemic, twice
Jerry Amernic – New York Daily News
In 2008, the one and only eulogy ever given for Babe Ruth was delivered by Bill Jenkinson, a historian who has been scrutinizing the baseball legend for decades. It took place at an event that attracted 2,500 people to St. Patrick’s Cathedral, the very place of Ruth’s 1948 funeral, and this was 60 years later. There had been no eulogy at the funeral.
Will Coronavirus Break the $50 Billion Sports Media Industry?
Lucas Shaw – Bloomberg
As sports leagues weigh when to restart their seasons, they are talking to health officials, players, talent agents, TV networks, local governments and hotel workers. One group not part of the talks? The fans.