Stacey Cunningham, NYSE president caught up in Sino-US tension; After Capitol Riot, Resignations and Calls for Trump’s Removal

Jan 8, 2021

First Read

$23,151/$300,000 (7.7%)


Hits & Takes
John Lothian & JLN Staff

President Donald Trump finally conceded his presidential election defeat to Joe Biden, kind of. He did not mention Biden. Kelly Loeffler has conceded her senatorial election defeat to Rev. Raphael Warnock. Loeffler also announced she would not be voting for the objection to Joe Biden’s Electoral College tallying. Those two moves were the proper ones for Ms. Loeffler to make, which is very encouraging.

The editorial board of the Wall Street Journal is calling for President Trump to resign. This would be the best thing for the U.S. and President Trump, otherwise he will be impeached a second time, it all but appears.

Meanwhile, the U.S. set another record for the number of deaths related to COVID-19 with 4112, which exceeds the previous day’s record that was inflated because of the weekend. And bitcoin set a new record, exceeding $40,000 for the first time.

The Washington, DC police made a total of 68 arrests during the Capitol breach and 56 officers were injured during the pro-Trump insurrection at the US Capitol. Additionally, one police officer has died as result of his injuries, though there were reports this was not the case.

The president’s lawyer, Rudy Giuliani, during the gathering of the protestors at the National Mall, called for “Trial by Combat,” as if the U.S. election were part of the Game of Thrones, Business Insider reported. Now that is just crazy.

Bloomberg’s Sarah Ponczek reported on Twitter that “when the U.S. capitol was being attacked, more than 29 million call options traded — the fourth most in history.”

FIA’s Walt Lukken penned a commentary titled “CEO Insight China’s evolution is a trend to watch in 2021.” He writes, “Increased international participation is good for all derivatives market participants.”

The Cboe’s David Howon was interviewed by Bloomberg MarketsTV about “Plenty of Opportunity to Grow U.K. and EU Platform.” He talked about “the shifting of EU-listed shares from London to Amsterdam, equivalence, and the future of London as a financial hub.” He speaks with Bloomberg’s Anna Edwards and Matt Miller.

It turns out that 2020 was the hottest year on record, Reuters reported the European Union’s Copernicus Climate Change Service said on Friday.

So much for traveling to Amsterdam. Bloomberg reported that “Amsterdam Wants to Restrict Tourists From Its Marijuana Shops.”

Today we published the second part of our interview with Bill Brodsky, formerly of Cboe Global Markets. Thank you to Mr. Brodsky for participating and doing such a great job explaining the way electronic trading threatened the CBOE and changed the industry and how the CBOE responded.

We had no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. So far we have had 104 donors and raised over $23K of our $300K goal. Thank you to all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

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


Markets Media has a “2021 Outlook Q&A” with Eric Einfalt, Eventus Systems’ chief strategy officer. You can read the interview here. ~SR

Although 2021 has been unique in many ways so far, certain market trends are expected to continue from 2020, says Phil Mackintosh, Nasdaq’s chief economist. Mackintosh, who is known for his ETF research, says one place to expect continued growth is in ETFs. He notes $507.4 billion was invested in U.S.-listed ETFs in 2020, citing data reported by, a record that topped a prior high of $476.1 billion set in 2017. For more insights from Mackintosh, see his weekly blog post on “What to Expect In 2021.”~SC


Bill Brodsky – The Path to Electronic Trading, Part 2

Former Cboe Global Markets Chairman and CEO Bill Brodsky’s career in the financial industry spanned multiple decades and took him on a path from Wall Street to LaSalle Street. In a wide-ranging, two-part interview, he gave JLN an eyewitness view of the evolution of the options business, the exchanges and trading technology. Here is Part 2.

Watch the video »


Live Updates: U.S. Deaths Set New Record as Cases Surge
Adam Martin – WSJ
The U.S. set a new single-day record for reported deaths associated with Covid-19, and newly reported infections hit their second-highest day on record, surpassed only by a day on which data backlogs artificially inflated the figure. The nation reported more than 4,000 deaths on Thursday, according to data compiled by Johns Hopkins University. It was the third record-high day in a row, and the first time the daily figure has surpassed 4,000.

*****This was just as predicted and no crystal ball was even required.~JJL


Wall Street Journal Editorial Urges Trump to Resign to Avoid Impeachment; With the headline “Donald Trump’s Final Days,” The Journal excoriated the president for “an assault on the constitutional process of transferring power after an election.”
Michael M. Grynbaum – NY Times
The editorial board of The Wall Street Journal, the American flagship of Rupert Murdoch’s newspaper empire, denounced President Trump on Thursday for inciting a mob of his supporters to storm the U.S. Capitol and encouraged Mr. Trump to resign from office to prevent a second impeachment by the Democratic-controlled House.

*****This is an incredible thing for the Journal to do and the right thing. I am glad to see their clear headed editorial.~JJL


Hong Kong exchange overtakes CME Group as world’s most valuable bourse; CME Group loses position of most valuable exchange group to HKEX as the Hong Kong venue’s long-serving CEO steps away.
Kiays Khalil – The Trade
Hong Kong Exchanges and Clearing’s (HKEX) shares rose in the final weeks of 2020, establishing it as the world’s largest bourse by market value. The news – first reported by the South China Morning Post – comes following tensions between Beijing and Washington which could lead to secondary listings of US-listed Chinese tech firms. Meanwhile Stock-Connect activity has risen in light of quota restrictions as China looks to open its market up further to foreign investors.

*****Imagine what HKEX could do if they had a CEO?~JJL


‘Hold the Line, Patriots’: New Scenes From the Capitol Riot
Sabrina Tavernise and Matthew Rosenberg – NY Times
WASHINGTON — There were infamous white nationalists and noted conspiracy theorists who have spread dark visions of pedophile Satanists running the country. Others were more anonymous, people who had journeyed from Indiana and South Carolina to heed President Trump’s call to show their support. One person, a West Virginia lawmaker, had only been elected to office in November.

*****It was a Who’s Who of Trump supporters. Not antifa as some would like to blame.~JJL


BBC Has Staff Wear Electronic Buzzers to Curb Virus
Thomas Seal – Bloomberg
State-backed media company has bolstered safety measures; U.K. has seen surge in coronavirus cases thanks to new variant
British Broadcasting Corp. staff will wear electronic devices to enforce social distancing in a sign of how workplaces are scurrying to contain a new, more-infectious variant of the coronavirus.

*****I know how these things work. It starts with a beep, then you get shocked. Just ask any dog.~JJL


Thursday’s Top Three
Our top story Thursday was JLN’s video interview, Bill Brodsky – The Path to Electronic Trading Part 1. Part 2 appears today, above. Brodsky, the former CEO of Cboe Global Markets, knows how to tell a good story – or rather several. Second was Bloomberg’s Trump Era Ends on a Sour Note for a Wall Street Power Couple, about guess who, Jeff Sprecher and Kelly Loeffler. Third was Members of Trump Cabinet discussing invoking 25th Amendment: Sources, from ABC News.


CryptoMarketsWiki Coin of the Week: XRP
XRP, the digital asset developed by Ripple, has taken a pummeling this week amid its ongoing legal battle with the SEC. Last week, Coinbase and Bittrex announced they would de-list XRP from their trading platforms; this week, Binance.US, Voyager Digital, and Genesis Trading made similar announcements. Grayscale investments announced that the company would remove XRP from its large-cap cryptocurrency indexes. According to data from CoinMetrics, the number of XRP “whales” has decreased significantly, falling by 8 percent over the past two weeks, as wallet holders with significant holdings of XRP sold off their shares.


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Lead Stories

Stacey Cunningham, NYSE president caught up in Sino-US tension; Flip-flops on delisting of Chinese telecoms groups have drawn scrutiny over exchange’s decision-making
Philip Stafford and Eric Platt – FT
Being president of the New York Stock Exchange brings prestige as the face of a symbol of American capitalism. This week Stacey Cunningham was reminded it can also mean taking tough knocks in full public view, as she found herself caught up in the tensions between the US and China — and under scrutiny over the NYSE’s decision-making.

After Capitol Riot, Resignations and Calls for Trump’s Removal; President condemns rioters; transportation and education secretaries resign
Natalie Andrews, Alex Leary and Josh Mitchell – WSJ
Democratic congressional leaders called for President Trump to be removed from office while two cabinet officials resigned, a day after the Capitol was stormed by rioters encouraged by the president to try to block Congress from certifying President-elect Joe Biden’s election win.

2020 ties with 2016 as world’s hottest year on record – EU climate change service
Kate Abnett, Matthew Green – Reuters
Last year tied with 2016 as the world’s warmest on record, rounding off the hottest decade globally as the impacts of climate change intensified, the European Union’s Copernicus Climate Change Service said on Friday.

Some CEOs Fire Rioters, Call for President Trump’s Removal From Office; Statements denouncing violence at Capitol give way to more action
Chip Cutter and Emily Glazer – WSJ
In the wake of the riot at the Capitol, companies moved to cut ties with President Trump and his supporters and fired workers who participated. Facebook Inc. banned Mr. Trump indefinitely and Canada-based Shopify Inc. closed online stores associated with Mr. Trump’s campaign and businesses. Publisher Simon & Schuster said it would drop a coming book by Sen. Josh Hawley, a key backer of Mr. Trump’s election claims. Dozens more executives and trade groups denounced the takeover of the Capitol and called for the removal of the president.

Blacklisted Chinese Telecoms Carriers Cut From Stock Indexes; Removals come after uncertainty about whether the shares would be covered by a U.S. government investment ban
Chong Koh Ping – WSJ
Shares in China’s three major telecommunications companies dropped in Hong Kong on Friday, after index compilers said they would remove the stocks from their benchmarks due to a U.S. government investment ban.

China Takes Its Pigs to the Futures Market; The new hog futures may smooth out some of the wild swings in Chinese markets
Lucy Craymer – WSJ
China opened its own hog futures market, the culmination of a yearslong effort to create a transparent pricing mechanism for one of the country’s most valuable agricultural products. On Friday, traders, farmers and other market participants began buying and selling contracts for live pig deliveries in September 2021, December 2021 and March 2022. Prices for all three tumbled more than 7% from opening levels set by the exchange, with the front-month contract closing on Friday afternoon at 28,290 yuan a metric ton, which is equivalent to $4,367.98 a metric ton and works out to about $1.98 a pound.

‘Individual Sort of Horror’: Traders Reflect on Riot, Aftermath
Max Abelson, Hannah Levitt, and Kelsey Butler – Bloomberg
Finance is back to business after Trump backers raid Capitol; Stocks rallied toward another record on hopes for new stimulus
Dinakar Singh had financial news on mute inside his Midtown Manhattan home office when his son called out to him: “Dad, are you watching this?” The Axon Capital founder, a former top trader at Goldman Sachs Group Inc., switched the television channel and turned up the volume. His mouth fell open.

Russian national gets 12 years in prison for major hacks hitting JPMorgan Chase and others
Shayna Jacobs – NY Times
A highly skilled Russian hacker for hire who breached the networks of JPMorgan Chase, the Wall Street Journal and other major institutions — stealing information from over 100 million victims — was sentenced to a dozen years in federal prison on Thursday.

Crypto Exchange Bakkt Nears Merger With Victory Park SPAC
Gillian Tan and Crystal Tse – Bloomberg
Bakkt, the cryptocurrency platform majority owned by Intercontinental Exchange Inc., is in advanced talks to go public through a merger with blank-check firm VPC Impact Acquisition Holdings, according to people with knowledge of the matter. The transaction is set to value the combined entity at more than $2 billion, and an announcement may come as soon as next week, said the people. Representatives for Bakkt, ICE and VPC declined to comment.

Bitcoin Breaks Records, and the Exchanges Where It’s Traded; Cryptocurrency platforms have experienced disruptions coinciding with rapid price increases throughout the past year.
Donald Moore – Bloomberg
Bitcoin’s historic rally is causing growing pains for the platforms where it’s traded, leaving investors unable to buy or sell the digital currency for hours at a time. As Bitcoin surpassed $40,000 for the first time on Thursday, the most widely used cryptocurrency platform was buckling under pressure. Coinbase said it’s investigating connectivity issues on both its web and mobile apps.

Trump’s rules on China investment spark confusion across global finance; NYSE’s flip-flops on guidance reflect confusion on avoiding fines from January 11
Eric Platt, Colby Smith and David Carnevali and Camilla Hodgson – FT
Brokers and other financial groups from New York to Hong Kong have been left scrambling to comply with a US presidential ban on investment in companies with alleged ties to the Chinese military.

CTAs rise to best monthly gain in five years as managed futures hedge funds end 2020 in “spectacular” style
Hugh Leask – Hedgeweek
Trend-following hedge funds and managed futures strategies enjoyed a storming finish to what was ultimately a turbulent and unpredictable year for the sector, with Société Générale’s CTA indices ending 2020 in positive territory following strong December performances.

Peak Oil? Drivers—and Voters—Could Delay It for Years; Investors and politicians have made their views clear about oil’s uncertain future. Consumers, not so much.
Jinjoo Lee – WSJ
You might be filling up your tank a lot longer than BP thinks. Ambitious green policies—from politicians and even the newly climate-conscious oil companies—suggest the world is moving at warp speed away from fossil fuels. But the transition might not be easy on consumers’ wallets, which is precisely why it could take a while.

Plenty of Opportunity to Grow U.K. and EU Platform: Cboe’s Howson
Bloomberg MarketsTV Shows
David Howson, President of Cboe Europe, discusses the shifting of EU-listed shares from London to Amsterdam, equivalence, and the future of London as a financial hub. He speaks with Bloomberg’s Anna Edwards and Matt Miller on “Bloomberg Markets: European Open.”

Chinese telecom firms lose $5.6 billion in value as index providers drop them
Tom Westbrook – Reuters
Index providers MSCI Inc, FTSE Russell and S&P Dow Jones Indices said they would cut three Chinese telecom companies from benchmarks, part of a widening fallout from a U.S. investment ban that has battered their share prices.


U.K. Clears Moderna’s Vaccine to Add Third Covid-19 Shot
Alex Morales and James Paton – Bloomberg
Approval comes as pandemic surges anew across Britain; U.K. also adds 10 million more vaccine doses from Moderna
The U.K. cleared Moderna Inc.’s Covid-19 vaccine, adding a third shot for emergency use against the pandemic as infections surge. Britain’s medicines regulator said Friday that it has authorized the U.S. company’s vaccine, confirming an earlier report by Bloomberg. As the country ramps up immunizations against the fast-spreading coronavirus, the Covid death toll now stands at more than 78,000 across Britain.

Iran Bans U.S., U.K. Covid-19 Vaccines in Feud With West
Yasna Haghdoost – Bloomberg
Iran’s Supreme Leader said he was banning the purchase of coronavirus vaccines made by U.S. and U.K. companies, limiting the country’s options as it confronts the worst outbreak in the Middle East.

Israel in Deal With Pfizer to Speed Vaccine Deliveries for Data
Ivan Levingston – Bloomberg
Israel agreed a deal with Pfizer Inc. to expedite deliveries of its Covid-19 vaccine so that all citizens over 16 can be inoculated by the end of March, in return for extensive data on the inoculation program.

Sweden’s distinctive Covid strategy nears an end as lockdown proposed; Gradual shift has moved Scandinavian country’s pandemic approach more in line with rest of Europe
Richard Milne – FT
Sweden’s coronavirus strategy has always stood out from the crowd. That distinctive approach is now coming to an end. The government this week proposed an emergency law that would allow it to lock down large parts of society; the first recommended use of face masks came into force; and the authorities gave schools the option to close for pupils older than 13 — all changes to its strategy to combat the pandemic.

EU hits back as blame game over vaccine procurement intensifies; Bloc’s representative tells German parliament ‘it is not the EU that pays’ for Covid-19 jabs
Michael Peel and Joe Miller – FT
The EU has hit back at criticism from member states that its bloc-wide vaccine procurement plan has failed to secure enough doses to enable a rapid start to inoculations.

Arthritis drugs found to reduce risk of death in severe Covid-19 cases; Immunosuppressants tocilizumab and sarilumab also reduce stays in intensive care by at least seven days on average
Anna Gross – FT
Scientists have found that two drugs used to fight arthritis cut the risk of death from Covid-19 by a quarter, in results that will come as relief to health systems around the world which are buckling under the recent rapid spread of the virus.

Boris Johnson’s flawed coronavirus strategy; Striving to prevent the worst would have been better than trying to balance health and the economy
Chris Giles – FT
Boris Johnson is often portrayed as a flawed optimist, promoting liberty for too long during the pandemic until events back him into a corner and he is forced to U-turn.

Covid variant that prompted Brisbane lockdown may become dominant type of infection; The case of the Queensland hotel quarantine worker with the B117 variant has authorities concerned as it’s more infectious
Melissa Davey – The Guardian
A variant of Covid-19, which has triggered a snap lockdown in greater Brisbane and prompted the federal government to announce new testing requirements for travellers, may become the dominant variant circulating globally, virology and infectious diseases experts say.

Exchanges, OTC and Clearing

OCC clears record volumes for US exchange listed options in 2020; The OCC cleared 7.52 billion total contracts and 7.47 billion in options contracts, beating the previous record set in 2018 by a landslide.
Annabel Smith – The Trade
US-based equity derivatives clearing house Options Clearing Corporation (OCC) hit a new record volume for US listed options contracts cleared in 2020.

Capital Index selects SteelEye for MiFIR and EMIR reporting; SteelEye will act as a replacement for CME Group after the May announcement that it would be shutting down its regulatory reporting services by the end of 2020.
Annabel Smith – TheTrade
Capital Index has selected SteelEye to take up the reins for its EMIR and MiFIR reporting following the closure of the CME Group’s regulatory reporting service last year.

Euronext announces volumes for December 2020
Euronext, the leading pan-European market infrastructure, today announced trading volumes for December 2020.

Eurex more than satisfied with MSCI December roll results; 96 percent market share in MSCI Asia underlying futures, 50 percent in MSCI derivatives globally
Eurex continues the success story of its MSCI segment in the December roll month and once again proves that it is the exchange of choice for trading Asia Pacific MSCI derivatives. After the recent roll, Eurex starts the first quarter holding more than 86 percent of global Open Interest in MSCI derivatives on Asian underlyings, compared to 47 percent at the end of 2019. Overall, Eurex holds 50 percent market share globally in MSCI related derivatives.

Equity derivatives: New Capacity Group for futures and options on Unilever PLC
Eurex Circular 002/21 Equity derivatives: New Capacity Group for futures and options on Unilever PLC

Equity derivatives: A. Introduction of Single Stock Futures; B. Withdrawal of admission of Single Stock Futures and Equity Options
Eurex Circular 001/21 Equity derivatives: A. Introduction of Single Stock Futures; B. Withdrawal of admission of Single Stock Futures and Equity Options

TMX Group Consolidated Trading Statistics – December 2020
TMX Group Limited today announced December 2020 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange.

Performance Bond Requirements – Energy, Ags, Interest Rates Margins – Effective January 08, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.

Performance Bond Requirements: Agriculture, Energy, Equity, Interest Rate and Metal Margins – Effective January 08, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.

Application for Spot Call Nonfat Dry Milk and Spot Call Dry Whey Regularity
CME Group
Pursuant to Regulation 1203.C. notice hereby is given that Classic Transportation & Warehousing has applied to the Exchange for a declaration of regularity in Spot Call Nonfat Dry Milk and Spot Call Dry Whey at the following location:

Application for NYMEX Harbor Terminal
CME Group
Pursuant to Regulation 708.A, notice hereby is given that Shell Oil Products US – Newark has applied to the Exchange for regularity in RBOB and ULSD at their Newark terminal.

Initial Listing of the Japan Crude Cocktail (Detailed) Yen Denominated Futures and the LNG Japan/Korea Marker (Platts) Yen Denominated Futures Contracts
CME Group
Effective Sunday, February 7, 2021, for trade date Monday, February 8, 2021, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will list the Japan Crude Cocktail (Detailed) Yen Denominated Futures and the LNG Japan/Korea Marker (Platts) Yen Denominated Futures contracts (the “Contracts”) for trading on the CME Globex electronic platform (“CME Globex”) and for submission for clearing via CME ClearPort as noted in the table below.

Initial Listing of Four (4) Japanese Electricity Futures Contracts
CME Group
Effective Sunday, February 7, 2021, for trade date Monday, February 8, 2021, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will list four (4) Japanese electricity futures contracts (the “Contracts”) for trading on the CME Globex electronic platform (“CME Globex”) and for submission for clearing via CME ClearPort as noted in the tables below.

Change of Component Issues for the TSE Mothers Index
Due to a section reassignment, the following partial change of components for the TSE Mothers Index was announced.

CONNEQTOR started accepting application for the production
Tokyo Stock Exchange, Inc. (TSE) has been developing RFQ (Request for Quote) functions and CONNEQTOR with the aim of improving the liquidity of ETFs. We are pleased to announce that applications for the production use of CONNEQTOR have been accepted as of today. For details, please refer to the attachment. (Updated on January 8: Mizuho Securities Co., Ltd. was added as Trading Participants through which Investors are scheduled to be able to trade ETFs from the first day of operations.)

Nigerian Stock Exchange Inaugurates Its Claims Review Panel
In preparation for its imminent demutualisation, the Nigerian Stock Exchange (“The Exchange”) inaugurated its Claims Review Panel (the Panel) on 21 December 2020, pursuant to the provisions of the Demutualisation of The Nigerian Stock Exchange Act 2018 (the “Act”).


UK fintech review to propose changes to visa and listing rules; Government has identified buoyant sector as a priority following Brexit
Daniel Thomas – FT
A government-backed review into the UK’s financial technology industry will recommend measures to support fast growing companies after Brexit including special visas for skilled workers and changes to the UK’s listing rules.

Fintech start-up SoFi to go public via SPAC backed by Chamath Palihapitiya
Kate Rooney – CNBC
Online finance start-up SoFi is set to go public by merging with a blank-check company run by venture capital investor Chamath Palihapitiya, the companies announced Thursday.
The merger with Palihapitiya’s SPAC, Social Capital Hedosophia Corp V, will value SoFi at $8.65 billion.

German Fintech N26 Primed for Growth in Brazil, but Nubank Has Home-field Advantage
Rio Times
N26 is one of the biggest fintechs in the world, supported by well-known global investors. N26 has more than 5 million customers across 25 European markets and the USA, and has experience in conquering new markets.
The Berlin-based German fintech received a license from the Brazilian Central Bank to “carry out credit operations,” including third-party credit analysis, and issue electronic currency in the country, per AltFi.

Tencent investment stays on game in 2020
Rita Liao – TechCrunch
It’s no secret that Tencent, the Chinese tech giant behind WeChat and a handful of blockbuster video games, is an aggressive investor. Even during 2020 when the pandemic slowed down economic activity in many parts of the world, Tencent was charging ahead with its investment ambitions. During the year, the company participated in more than 170 funding rounds that amounted to a total of 249.5 million yuan ($38 million), according to the Chinese startup database ITJuzi. That made 2020 the most active year to date for Tencent’s investment team, which had been delivering superior results in the last decade.


Bitcoin’s Volatility Resumes After $40,000 Topped for First Time
Vildana Hajric and Olga Kharif – Bloomberg
Digital currency had more than doubles in less than a month; Cryptocurrency market cap is five times year-ago levels
Bitcoin’s wild price swings resumed after the the world’s largest cryptocurrency climbed above $40,000 for the first time. After jumping as much as 11% to $40,394, Bitcoin fell around $3,500 in about half an hour and continues to fluctuate. Prices vacillated as much as 17% on Monday. The digital token has more than doubled in less than a month.

*****See also: “Bitcoin’s Hot 2021 Continues With Move Above $40,000” by Paul Vigna, WSJ.~MR

Broker Touts Exotic Bitcoin Bet to Wring Income From Crypto
Viren Vaghela and Yakob Peterseil – Bloomberg
As cryptocurrency pushes into mainstream finance and attracts billionaire tycoons, one U.K. brokerage is offering the merely wealthy a potentially safer way to play Bitcoin. The price: giving up any hope of the kind of stratospheric gains the digital coin is famous for. London-based Marex Spectron Group Ltd. is selling a structured product known as an autocallable to people with at least $200,000 to invest, according to a term sheet. If the cryptocurrency stays relatively stable for awhile, Marex claims investors could reap an annualized return of as much as 70% via monthly coupons.

OCC Says Banks Can Use Stablecoins in Payments
Mengqi Sun – WSJ
Banks are allowed to participate in public decentralized networks and use stablecoins in payment settlements, according to new guidance from a federal banking regulator. The Office of the Comptroller of the Currency in a guidance letter this week said national banks and federal savings associations may use new technologies, including independent node verification networks—also known as blockchain networks—and related stablecoins, to perform bank-permissible functions. The letter, published Monday, is the latest from the Treasury Department unit to spell out how traditional financial institutions can do business involving digital currencies. Before the guidance, some banks were unsure about whether they could use the underlying blockchain as payment networks.

Ripple CEO Brad Garlinghouse responds to questions surrounding the SEC lawsuit
Aislinn Keely – The Block
Ripple CEO Brad Garlinghouse laid out his answers to what he felt were “five key questions” surrounding Ripple’s ongoing case with the Securities and Exchange Commission. That included a comment about pursuing the possibility of settlement with a new administration. Ripple CEO Brad Garlinghouse says the firm tried to settle with the Securities and Exchange Commission (SEC) and plans to continue settlement discussions into the new administration.

Coinbase hits number 30 in the top 100 free apps on Apple’s mobile store
Michael McSweeney – The Block
In late November, Coinbase advanced into the top-100 free app list on Apple’s App Store. A couple of months later, Coinbase has continued to climb in those rankings, reaching the 30th slot out of 100 as of Thursday, according to the store’s live rankings.

Grayscale CEO Says Crypto Interest Is Rising From Pension, Endowment Funds
Tanzeel Akhtar – Coindesk
Michael Sonnenshein, the new CEO of digital asset manager Grayscale Investments, said Friday that a wider range of institutional investors are now taking an interest in cryptocurrency. “We’ve started to see participation not just from the hedge fund segment, which we’ve long seen participation from, but now it’s recently from other institutions, pensions and endowments,” Sonnenshein told Bloomberg. “The sizes of allocations they are making are growing rapidly as well,” he said.

Tron-Owned Video Platform Criticized for Hosting Extremists, U.S. Capitol Rioters
Tanzeel Akhtar – Coindesk
[UPDATED] Video streaming platform DLive, owned by blockchain platform Tron, was reportedly used by far-right extremists to live stream the deadly riot at the U.S. Capitol building on Wednesday. The Southern Poverty Law Center (SPLC), a nonprofit legal organization, said on its Hatewatch blog Thursday that “white supremacists and neo-fascists” have taken to DLive as a streaming alternative to YouTube due to its lack of moderation.

ETH’s market capitalization hits a new all-time high
Aislinn Keely – The Block
Ethereum’s market capitalization broke its previous all-time high on Thursday, according to market data from TradingView. The market capitalization, which tracks the total value of all tokens in circulation, reached $149.77 billion. The price of ETH is currently at $1,270 with a market cap of roughly $145.1 billion.

Coinbase acquires crypto trade execution startup Routefire
Yogita Khatri – The Block
Coinbase has acquired crypto trade execution startup Routefire for an undisclosed sum. Routefire announced the news on Thursday, saying that it will cease its services and join Coinbase to continue developing execution services for digital assets. Founded in 2017, San Francisco-based Routefire claims to have the best technology to help institutional customers fill large orders at high speed and lower fees. At Coinbase, Routefire will expand the exchange’s prime brokerage business.


Trump’s rules on China investment spark confusion across global finance; NYSE’s flip-flops on guidance reflect confusion on avoiding fines from January 11
Eric Platt, Colby Smith and David Carnevali and Camilla Hodgsonn – FT
Brokers and other financial groups from New York to Hong Kong have been left scrambling to comply with a US presidential ban on investment in companies with alleged ties to the Chinese military.

Democratic Push to Oust Trump Runs Up Against Clock, Politics
Steven T. Dennis and Billy House – Bloomberg
Trump seeks to quell furor by condemning attack on Capitol; Pelosi, Schumer press Pence, cabinet to deploy 25th Amendment
The rapidly growing calls among Democrats to oust President Donald Trump either by his own cabinet taking action or by another impeachment is running quickly up against the limits of time and Republican Party politics. Trump on Thursday appeared to be trying to quell the furor and head off any clamor for his ouster within the GOP. He released a video message in which he condemned the storming of the U.S. Capitol by his supporters on Wednesday and said he was prepared for a smooth transition to President-elect Joe Biden.

Donald Trump concedes election and denounces attack on Capitol for first time; US president ends campaign to overturn result and condemns ‘heinous’ assault he is accused of inciting
Aime Williams – FT
Donald Trump conceded that Joe Biden would become US president this month and condemned the “heinous” mob attack on Congress, putting an end to his unprecedented campaign to overturn the results of November’s election.

Prosecutor signals Donald Trump’s role in Capitol riot is under scrutiny; Acting US attorney for Washington area says ‘all actors’ are being investigated
Kadhim Shubber – FT
The federal prosecutor responsible for the Washington area signalled on Thursday that his office would investigate the role Donald Trump played in fanning the riot at the US Capitol, saying that “all actors” would be examined.

The Deplatforming of President Trump; He is running out of places to post.
Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
Which platforms does Trump have left?
As President Trump belatedly conceded defeat in the 2020 election — after lawmakers and, reportedly, his own cabinet members weighed how to remove him from office — he has found himself with ever-fewer avenues to speak out online, underscoring the power of internet giants and an abrupt shift in how they treat his behavior online.

Facebook Suspends Trump Indefinitely Amid Pressure on Social Media to Clamp Down; President regained use of his personal Twitter account Thursday after a temporary block and posted a video
Sarah E. Needleman – WSJ
Facebook Inc. placed its harshest restrictions yet on President Trump, blocking him Thursday from posting indefinitely a day after the social media giant and its peers removed posts in the wake of the attack on the U.S. Capitol by a pro-Trump mob.

Rising Star Porter’s Future on House Financial Panel Is in Doubt; Katie Porter’s questioning of witnesses, often with a white board, made her a high-profile House member during her first term
Gabriel T. Rubin – WSJ
Rep. Katie Porter, the California Democrat whose interrogations of financial executives and Trump administration officials gained wide notice, is unlikely to remain on the House Financial Services Committee, after Democratic leaders have been unresponsive to her requests for a waiver that would allow her to continue serving on the panel despite having two other committee assignments. Porter has been added to the Natural Resources Committee for the new Congress, and remains on the Oversight Committee. But she has pushed to remain on Financial Services, given her background in bankruptcy law that has made her an ally of progressives including her mentor, Sen. Elizabeth Warren.

In Trump Era’s End, an Uneasy Reckoning for Corporate America; Chorus of condemnations against insurrection at the U.S. Capitol mostly stop short of direct blame
Jeff Green. – Bloomberg
Corporate America is parting with its CEO president — carefully. Four years after Donald Trump swept into the White House, cowing executives and shaking markets with tweet storms and tantrums, corporations that applauded when he cut taxes and red tape are struggling to come to grips with the havoc that’s now followed.

Trump Prepares Pardon List for Aides and Family, and Maybe Himself
Jennifer Jacobs, Justin Sink, and Josh Wingrove – Bloomberg
White House staff, family members may get preemptive pardons; Legal power to pardon self isn’t clear in Constitution
President Donald Trump has prepared a sweeping list of individuals he’s hoping to pardon in the final days of his administration that includes senior White House officials, family members, prominent rappers — and possibly himself, according to people familiar with the matter.

Boris Johnson Is Embarrassed by Donald Trump; The British leader, like his French and German counterparts, should be far braver about defending democracy against authoritarians.
Martin Ivens – Bloomberg
Some whirlwind romances you regret for many years. Isolated from its former European partners as Brexit approached, the U.K. looked for succor from the U.S. Two Conservative prime ministers in succession — Theresa May and Boris Johnson — tried to woo the White House in search of a revived Atlanticism and a fat trade deal. Did Johnson go too far in courting President Donald Trump?

Facebook Bars Trump Through End of His Term; Mark Zuckerberg, Facebook’s chief executive, said the risks of Mr. Trump using the service were too great, even as Twitter lifted its lock on the president’s account.
Mike Isaac and Kate Conger – NY Times
Facebook on Thursday said it will block President Trump on its platforms at least until the end of his term on Jan. 20, as much of the mainstream online world moved forcefully to limit the president after years of inaction.


CFTC and ESMA Sign Enhanced MOU Related to Certain Recognized Central Counterparties
The Commodity Futures Trading Commission (CFTC) and the European Securities and Markets Authority (ESMA) today announced the signing of a new Memorandum of Understanding (MOU) regarding cooperation and the exchange of information with respect to certain registered derivatives clearing organizations established in the United States that are central counterparties (CCPs) recognized by ESMA under the European Market Infrastructure Regulation (EMIR).

ASIC approves variations to the Banking Code
ASIC has approved variations to the Banking Code of Practice (Code). The variations, as proposed by the Australian Banking Association (ABA), do the following:

Call for candidates for the ESA’s Board of Appeal
A call for expression of interest by the European Commission for the appointment of members of the ESA’s Board of Appeal for the financial services sector has been launched:

Update – FINRA TRAQS and API Testing
This is an update to the schedule for the rollout of FINRA’s Multi Factor Authentication (MFA). As part of its Transparency Services improvement initiatives, FINRA is introducing a new method for users to gain secure access to the TRAQS website and will be introducing a new system infrastructure for its products.

SEC Issues Over $1.1 Million to Multiple Whistleblowers
The Securities and Exchange Commission today announced awards totaling more than $1.1 million to five whistleblowers who provided high-quality information that led to successful enforcement actions.

Paul G. Cellupica, Division of Investment Management Deputy Director and Chief Counsel to Conclude Tenure at SEC
The Securities and Exchange Commission today announced that Paul G. Cellupica, Deputy Director and Chief Counsel of the Division of Investment Management, will depart the agency later this month.

Acting Chairman Elad L. Roisman
Investor protection is a paramount component of the Commission’s core mission, and vigorous enforcement of our securities laws is essential to investor protection. The Commission has statutory authority to refer potential criminal securities violations to the Department of Justice (DOJ), and cooperation with DOJ and other governmental authorities is an important facet of the Commission’s enforcement program.

Investing and Trading

Elon Musk Surpasses Jeff Bezos to Become World’s Richest Person
Devon Pendleton – Bloomberg
Entrepreneur has added $165.5 billion of wealth in past year; He surpassed Amazon’s Bezos, who’s held the spot since 2017
Elon Musk, world’s richest person. A statement that seemed outlandish one year ago became plausible, then almost inevitable as Tesla Inc.’s share price climbed higher and higher in 2020. On Thursday it finally happened. The electric-automaker’s shares surged 7.9%, boosting Musk past Inc. founder Jeff Bezos on the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest people. Musk is worth $194.8 billion, or $9.5 billion more than Bezos, whose Blue Origin is a rival to Musk’s Space Exploration Technologies Ltd., or SpaceX, in the private space race.

Rich Americans Bracing for Higher Taxes Await Biden’s First Move; The questions paralyzing the wealthy and their advisers are which proposals by the Democrats will pass, and when they get implemented.
Ben Steverman – Bloomberg
The Democratic sweep of the White House and U.S. Congress puts many wealthy Americans in a bind: Higher taxes are probably on the way, but it may already be too late to avoid big bills. President-elect Joe Biden campaigned on a variety of tax-rate hikes and other changes aimed at squeezing trillions of dollars from corporations and Americans earning more than $400,000. After Democrats’ wins in two Georgia Senate runoffs this week, the party will have narrow majorities in both chambers of Congress, and the ability to fulfill at least some of those promises.

MSCI to drop Chinese telecoms companies from important indices; China Mobile, China Telecom and China Unicom to be removed in compliance with Trump executive order
David Carnevali and Eric Platt – FT
MSCI will drop three Chinese state-owned telecoms companies from closely followed stock benchmarks as it rushes to comply with a Trump administration executive order barring investment in companies with alleged links to China’s military.

Debt dangers hang over markets; With assets fully priced, investors face trouble chasing returns while trying to limit risks
John Plender – FT
It is, to put it mildly, counterintuitive. In the midst of a global pandemic and one of the steepest recessions ever, mainstream investment markets are very fully valued by historic standards.

Pandemic tech bubbles echo those of the dotcom era; Fear of missing out drives demand for companies in a world awash with cash
Richard Waters – FT
Do you remember when $100bn was a lot of money? Twenty years ago, at the height of the dotcom bubble, that was how much was poured into venture capital investments in a single year. It was five times the amount seen two years before, and five times as much as two years later.

LNG prices hit record as cargo shortage amplifies cold weather effect; Winter demand boosted by chillier than expected conditions in Asia
David Sheppard and Song Jung-a – FT
Liquefied natural gas prices have jumped to their highest level on record as a severe cold snap in Asia boosts demand at a time when cargoes of the super-chilled fuel are hard to come by.

Environmental, Social and Corporate Governance

Why UK pledge to become ‘Saudi Arabia’ of wind power rings hollow; Despite being a world leader in offshore wind farms, Britain is yet to enjoy a manufacturing and jobs boom
Nathalie Thomas and Chris Tighe – FT
At three mothballed fabrication yards in Scotland, promises by Boris Johnson that the UK would become the “Saudi Arabia” of wind power rang hollow as their owner BiFab, a producer of giant foundations for offshore turbines, collapsed last month.

Breakingviews – Team Trump should be an ESG red flag
Gina Chon – Reuters
Where will President Donald Trump’s aides go next? That may depend on investors in U.S. companies. Top officials often go on to land coveted company board seats after they leave government. But cabinet members who stuck by the president as he rejected the election result aren’t suited to those roles. Shareholders who care about governance should ensure the revolving door remains shut.

Biodiversity, Supply Chain Rank Among Biggest ESG Themes in 2021
Saijel Kishan and Alastair Marsh – Bloomberg
In a year when the pandemic sent the world into a tailspin, there was a silver lining for the world of ESG investing.
The strategy moved from the peripheries of finance to the mainstream. So did many of the “S” issues that seasoned environmental, social and governance investors have for years pressed companies to address, such as racial disparities, worker pay and safety issues, and fair access to health care.

Blue Wave Is Seen Jolting Environmental and Social Bond Sales
David Caleb Mutua – Bloomberg
The shift of U.S. government control to the Democratic Party this month could give an added jolt to sales of corporate bonds that finance environmental and socially responsible projects.
With the Democrats now gaining control of the Senate, President-elect Joe Biden’s proposed programs and initiatives to, among other things, combat climate change and invest in infrastructure are more likely to happen. Private sector investments linked to these kinds of plans could result in greater issuance of environmental, social and governance bonds, according to Stephen Liberatore, head of fixed-income ESG and impact investing strategies at Nuveen.

Atmospheric Carbon Levels to Hit Unwelcome 2021 Milestone
Jess Shankleman – Bloomberg
CO2 will be 50% above pre-industrial levels, says Met Office; Covid-19 saw sharp drop in CO2 with little long term impact
Global atmospheric carbon dioxide levels will be 50% higher this year than before the start of the Industrial Revolution, according to forecasts that show the rapid pace at which humans are polluting the atmosphere.


Commerzbank to Write Off $1.8 Billion, Lift Bad Loan Reserve
Nicholas Comfort – Bloomberg
Bank cites low interest rates, second wave of lockdowns; CEO Knof is expected to unveil restructuring plan this quarter
Commerzbank AG will write off the remaining 1.5 billion euros ($1.8 billion) in goodwill on its books and set aside more money for bad loans to reflect persistently low interest rates and the impact of a second lockdown to fight the pandemic.

Credit Suisse to Post Fourth-Quarter Loss
Patrick Winters. – Bloomberg
Bank to set aside $850 million, more than it had guided for; Investment bank revenue up more than 15% in dollar terms
Credit Suisse Group AG said it expects to post a fourth-quarter loss after setting aside $850 million for legal cases in the U.S. that date back to the financial crisis more than a decade ago.

Hedge fund Element to return $2bn after profiting in pandemic; Move by billionaire Jeffrey Talpins comes as many funds limit client access to protect returns
Laurence Fletcher – FT
Element Capital, one of the world’s biggest macro hedge funds, plans to return around $2bn of cash to clients, in the latest sign that some top-performing funds are limiting their size after a year of strong gains during the coronavirus crisis.

Active non-transparent ETF provider hits distribution hurdle; Platforms are taking their time to evaluate the new structures, ETF executives say
Jackie Noblett – FT
Concerns about limited uptake by distributors of non-transparent exchange traded funds in the near term drove AdvisorShares to change its mind about using the structure for two recently launched ETFs, the company’s chief executive has said.

Credit Suisse Books $850 Million Charge Over U.S. Mortgage-Backed Securities; Charge pushes Switzerland’s second-biggest bank into a loss, denting strong performance during the pandemic
Margot Patrick – WSJ
An $850 million legal charge will push Credit Suisse CS 2.25% into a net loss in the fourth quarter, denting what had been a strong performance by the Swiss banking giant last year.

Howard and Odey Show Ups and Downs of Hedge Funds; The disparity of returns in 2020 highlights the volatile nature of hedge fund performance.
Mark Gilbert – Bloomberg
More than a third of 185 family offices surveyed by BlackRock Inc. plan to hand more capital to hedge funds after the pandemic roiled the global economy, according to a report published this week. The problem the affluent face, though, is deciding which manager will build their wealth. The rollercoaster nature of returns makes the choice more akin to picking black or red on a roulette wheel than pursuing an informed asset allocation strategy.

For Bankers, 2020 Was a Bad Year to Have a Good Year; Traders and investment bankers have flourished despite the global economic crisis, turning bonus discussions into a delicate balancing act
Simon Clark and Margot Patrick – WSJ
Wall Street banks have had a decent crisis so far. That is unlikely to translate to bumper bonus payments for bankers and traders, as chief executives and boards grapple with the optics of big payouts amid economic hardship on Main Street.


Ovamba & Singularity launch TradeTech partnership in Egypt; Singularity are the first to sign a Reseller Agreement with Ovamba in the region
Ovamba Solutions rade
Tech innovator, Ovamba Solutions ( and financial services provider, Singularity Finance ( have partnered to deliver financial inclusion and growth capital to small and growing businesses in Egypt. Singularity are the first to sign a Reseller Agreement with Ovamba in the region. This new partnership gives Singularity the rights to sell Ovamba’s digital solutions to banks, microfinance institutions and other alternative providers of trade finance to small and medium enterprises in Egypt.

China’s Finance World Opens Up to Foreigners, Sort Of
Bloomberg News
Even as the trade war was crimping the flow of goods between the U.S. and China, the Chinese government was opening doors in another arena, inviting in more foreign banks, insurance providers and other financial services companies. China has also been making it easier for foreigners to buy its stocks and bonds — something many fund managers are required to do now that major index compilers are including Chinese assets in their gauges — to the growing dismay of some U.S. politicians. The take-up is gathering pace but the going has been tough, even before the economic disruption and increased political tension caused by the coronavirus pandemic.

Surging Stock Markets in Asia Look Increasingly Dangerous; Unreliable flows and inconsistent narratives have sent different stock markets in Asia sharply higher, with many now outperforming U.S. equities
Mike Bird – WSJ
Equity markets are seeing a strong start to the year globally. In parts of Asia, maybe too strong. Six months ago, it was common to hear that while U.S. markets might recover a large portion of early-2020 losses quickly, emerging markets would be slower to bounce back. But the MSCI EM Index is practically level with the MSCI USA for the past 12 months, and many Asian equity indexes are way above U.S. peers.


Brexit Means U.K. Eateries Fight Harder for Authentic Fare
Alberto Nardelli – Bloomberg
Like many other Italian restaurants in London, the eatery Olivo is very much a product of the European Union’s single market. Its staff is mostly from Sardinia, able to work in the U.K. without special papers or visas. And its gourmet meals are made possible by a supply chain that extends across national borders to the island in the Mediterranean.

Brexit Becomes Trucker Nightmare as Red Tape Ties Up Drivers
Joe Mayes – Bloomberg
A week on from Brexit, the main road to Dover has been so quiet that officials were able to close half of it Thursday for a litter-picking operation without causing delays for drivers. But behind such placid scenes, many truckers are still warning of chaos as they struggle to adjust to the new paperwork required by Britain’s departure from the European Union. Drivers are being held up for hours because they lack the right documents, they say.

Brexit: Firms warn of problems as new EU trade rules kick in
BBC News
New border rules introduced last week are already creating problems for exporters and traders, say firms. Marks & Spencer has become the latest company to warn of more red tape and rise in export costs to some countries. Parcels giant DPD has suspended some services, and a seafood exporter said the chaos was like being “thrown in the cold Atlantic without a lifejacket”. One export trade body told the BBC there was a “growing problem and sense of unease” among its members. Shane Brennan, chief executive of the Cold Chain Federation, which represents chilled transport and storage companies, said the emerging problems have come despite the amount of cross border traffic still being quite low.

Scottish fishermen halt EU exports over Brexit delays
Many Scottish fishermen have halted exports to European Union markets after post-Brexit bureaucracy added days to their delivery times and hundreds of pounds to their costs. Fishing exporters have told Reuters their businesses could become unviable after the introduction of health certificates, customs declarations and other paperwork. Business owners said they had tried to send small deliveries to France and Spain to test the new systems this week but it was taking 5 hours to secure a health certificate in Scotland, a document which is required to apply for other customs paperwork.

Brexit barriers for the arts ‘heartbreaking’
Teleri Glyn Jones – BBC
Post-Brexit barriers facing the arts are “heartbreaking” and “confirm worst fears”, industry leaders have said. Extra paperwork, costs and uncertainty over future funding are causing concerns for those in the sector. The Welsh government said it was trying to “break down” barriers while the UK government said it was committed to supporting the creative economy. Tom Rack, artistic director of NoFit State contemporary circus company, described the effects as “a big blow”. The company is restructuring its business model to avoid touring in the European Union, but Mr Rack said it would inevitably mean scaling back productions.

‘I’m stuck here’: lorry drivers in Calais begin to feel effects of Brexit
Lisa O’Carroll – The Guardian
Roger White arrived in France at 2.30pm on Tuesday with a truckload of hard cheese from Somerset. Before Brexit he would have rolled off the Eurotunnel train and carried on up the A16 to Belgium, unloading his wares a few hours later at his ultimate destination in Utrecht. But 24 hours after setting foot on European soil, the 69-year-old driver from Yeovil is still sitting in his cab in the Eurotunnel compound in Calais after being asked to reverse into a special unloading bay at a newly built border control post for sanitary and phytosanitary checks (SPS) checks on food. “I’ve been here since yesterday afternoon and I am stuck here until God knows when. I have to wait until I am cleared to go,” he said.

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