The Fed Brings the Global Financial System Back From the Abyss; The Global Oil Market Is Broken, Drowning in Crude Nobody Needs

Mar 30, 2020

First Read

Not the Ronin Death Watch
By Thom Thompson for John Lothian News

The CME announced on March 20 that it had auctioned the portfolios of Ronin Capital, a direct clearing member, because its capital was insufficient “going forward.” Friday’s Issues and Stops report from the CME, whose Chicago Board of Trade division lists Treasury bond and note futures, indicated that Ronin had been in position to deliver thousands of T-notes against March expiring futures.

As of March 27, Ronin was listed as an active clearing member at CME and appeared to be intact as an entity. Ronin Capital is not registered with the CFTC as an FCM or broker, and does not clear customer business.

The previous Friday, March 20, DTCC’s Government Securities Division said it would no longer act for two specific Ronin accounts. According to an unconfirmed article in on March 26, DTCC liquidated Ronin’s holdings on March 25.

CNBC reported that afternoon that sources had told its reporters that Ronin had sustained losses tied to VIX futures and options, contracts traded at Cboe and cleared at OCC, where Ronin was not a clearing member. What was the connection with portfolios at CME?

To read the rest of this story, go here.


Hits & Takes
By John Lothian & JLN Staff

How did you spend your Sunday morning during the coronavirus outbreak? U.S. President Donald Trump took time to brag about the TV ratings of his coronavirus press conferences on Twitter in which he also attacked the “lamestream media.” He also extended season one of the daily press briefings until April 30 at least.

It was on February 1 that the U.S. had its first death from the coronavirus. It took 27 days to get to 1000 deaths and then three more to get to 2000 deaths. And Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said yesterday that deaths could reach 200,000 in the U.S. Worldwide there are currently more than 735K cases and 34K deaths.

I believe the greater good data about preventing the spread and minimizing the death rate. But, when you are a reality television star with your own show on daily, I guess ratings are the metric that matters. Or, as Fareed Zakaria of CNN summed up well in a tweet: “At some point we Americans must look at the facts and recognize an uncomfortable reality. The United States is on track to have the worst outbreak of coronavirus among wealthy countries, largely because of the ineffectiveness of its government.”

If you think a self-quarantine is difficult, imagine how Noah felt. He had to build an arc and collect two of every animal. I would have a problem just identifying all the animals, let alone naming them.

John Lothian News is pleased to announce that Advantage Futures has agreed in principle to sponsor the Open Outcry Traders History Project. We will be publishing the first video with Advantage as the sponsor later today. It is one you will want to watch, the story of Pat Arbor, former longtime chairman of the Chicago Board of Trade. JLN thanks Advantage and their CEO Joe Guinan for their support of this ambitious video project.

In people news, Peter Nabicht has joined STAC (Securities Technology Analysis Center) as the director of strategy.~JJL


Nasdaq Chief Economist Phil Mackintosh has an opinion piece in Traders Magazine explaining why Closing Markets Is Not the Answer to the current stock market trouble. Historically, he says, closures have rarely reduced volatility or even stopped markets falling.~SR


The Spread: Ronin Runs Into Liquidity Issues

This week on The Spread, the OCC’s daily clearing volume for March exceeds its average for the past three months; Ronin Capital suffers from liquidity setbacks, major exchanges plead for flexibility, and more.

Watch the video »


U.S. Coronavirus Deaths Could Reach 200,000, Says a Top Official; Dr. Anthony Fauci said projections showed confirmed American cases would eventually reach into millions
Talal Ansari, Stella Yifan Xie and Giovanni Legorano – Bloomberg
The top U.S. infectious disease official warned Sunday that the new coronavirus could kill up to 200,000 Americans and sicken millions, as federal authorities issued more urgent warnings about limiting travel between New York and surrounding states. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said a new federal advisory announced Saturday night urging New York City area residents not to travel to other states would help slow the virus’s spread. But he said projections showed the disease would kill between 100,000 and 200,000 Americans and infect far more.

*****If you are from New York, don’t go to Rhode Island. You are not welcome there.~JJL
*****Sorry for all the dark news this morning. Mondays can be that way.~JJL


NYC coronavirus cases reach over 32K, death toll climbs to 678
Julia Marsh and Aaron Feis – NY Post
A stunning 32,308 Big Apple residents have now been diagnosed with the coronavirus, with 678 New Yorkers dead, City Hall stats showed early Sunday — with the disease now claiming one life less than every nine minutes.

***** New York continues to lead the way in the U.S. for the number of cases, and the best response by the state government.~JJL


Jefferies Group CFO Dies From Coronavirus Complications
Hailey Waller – Bloomberg
Jefferies Group LLC said its long-time Chief Financial Officer Peg Broadbent has died from complications after being infected by the coronavirus, marking one of the first deaths among senior Wall Street executives from the pandemic. He was 56.

*****Here is The Trade’s version of this story too.~JJL
*****Another death that brings this whole outbreak home. Condolences to his family, friends and colleagues.~JJL


Carole Brookins, a pioneering woman on CBOT’s trading floor, dies after COVID diagnosis; In the 1970s, Brookins was one of the only women in Chicago’s commodity trading pits and later she became a top World Bank official. She was diagnosed as having the coronavirus before her death this week.
Lynne Marek
Former Chicago Board of Trade member and one-time World Bank official Carole Brookins has died after contracting the coronavirus, according to the Chicago-based American Financial Exchange, where she was a founding director. She passed away March 23 at age 76, the Palm Beach Daily News reported.

******Here is a Lynne Marek story on the life and death of Carole Brookins.~JJL


As population works from home, Walmart reports increased sales for tops but not pants
Sophie Lewis – CBS News
In the age of social distancing, working from home has become the new normal. But coronavirus quarantine has led to an interesting trend in fashion: sales for tops are up, and sales for pants are down.
Millions of workers, typically bound to business or business-casual attire in the office, are now free to lounge around their homes in hoodies and sweatpants. But tops still play an important role as many employees will get semi-dressed for video conference calls.

***** I have been wearing shorts from home the whole week. Who needs pants?~JJL


Unregistered Digital Securities Offering; Risk Management Breakdown; COVID-19
Gary DeWaal – Bridging the Week
Last week a federal district court ruled that a social media company’s initial fundraising to build a blockchain application as well as its later, proposed distribution of digital tokens to serve as virtual currency and for other legitimate purposes on the blockchain constituted an integrated unlawful offering of securities without a registration statement and granted a preliminary injunction banning the distribution as requested by the Securities and Exchange Commission. Separately, a futures commission merchant was sanctioned by the Chicago Mercantile Exchange as a result of a purported operational breakdown that enabled it to accept trades “far beyond” risk limits that should have been in place for the relevant account.


Friday’s Top Three
Our top story Friday was the Chicago Tribune’s views of Chicago’s empty streets from above showing the strange desolation in big cities during this coronavirus scare. Second was the bad news that the ‘Most photographed’ Wall Street trader Peter Tuchman has coronavirus. We wish him a speedy recovery. Third was The Coronavirus Is the Worst Intelligence Failure in U.S. History from Foreign Policy, which was our No. 2 story on Thursday.


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Lead Stories

The Fed Brings the Global Financial System Back From the Abyss
Molly Smith, Alex Harris, and Matthew Boesler – Bloomberg
Easing dollar shortage, corporate bond issuance signal success; Questions remain about health of riskier debt markets
Sitting calmly in front of a bookshelf filled with thick volumes of the “Federal Reserve Bulletin,” Jerome Powell this week set out to offer a simple explanation for the complicated steps the U.S. central bank is taking to relieve dire stresses in the global financial system. “Many places in the capital markets, which support borrowing by households and businesses — I’m talking about mortgages and car loans and things like that — have just stopped working,” the Fed chair told NBC’s “Today” show, in a rare television interview. “So we can step in and replace that lending under our emergency lending powers.”

The Global Oil Market Is Broken, Drowning in Crude Nobody Needs
Javier Blas, Alex Longley, and Sheela Tobben – Bloomberg
Virus lockdowns have cut global oil consumptions by up to 25%; The world is fast running out of space to store excess crude
The global oil market is broken, overwhelmed by an unmanageable surplus as virus lockdowns cascade through the world’s largest economies. Onshore tanks in many markets are full, forcing traders to store excess oil in idle supertankers. Refineries are starting to shut down because nobody needs the fuels they produce. In physical oil markets, barrels are already changing hands for less than $10, and in a few landlocked markets producers are paying consumers to take away their crude.

Mortgage Bankers Ask SEC to Save Them From Wave of Margin Calls
Joe Light and Benjamin Bain – Bloomberg
Fed bond buying has hammered banks on their hedges, MBA says; Trade group wants SEC and Finra to issue guidance to brokers
Mortgage bankers are sounding alarms that the Federal Reserve’s emergency purchases of bonds tied to home loans are unintentionally putting their industry at risk by triggering a flood of margin calls on hedges lenders have entered into to protect themselves from losses.

U.S. Rebuffs Calls to Close Stock Market; Closing stock market could trigger events harmful to investors, financial executives and academics say
Alexander Osipovich – Bloomberg
The Trump administration has vowed to keep the stock market open, even as the coronavirus pandemic and a steep selloff have led some commentators and politicians to suggest a temporary closure could soothe frightened investors.

A Death at Jefferies Highlights Urgency of C-Suite Backup Plans
Jeff Green – Bloomberg
Companies consider isolating some key staff during outbreak; Executives at NBCUniversal, Altria and BT Group among sickened
Like all aspects of society, the rules of the C-suite are being rewritten under the pressure of a deadly pandemic. Professionals who help companies ensure leadership continuity say the coronavirus crisis has added a new urgency to their work. Some say clients are mulling whether to further isolate key executives; other clients have made private jets a given for top leaders who still travel; some have scattered top lieutenants across the globe as an added precaution. At least one is poised to hire a new chief executive officer largely by video interviews.

Coronavirus emerges as major threat to U.S. election process
John Whitesides, Jarrett Renshaw – Reuters
U.S. election officials looking to construct a safe voting system in a worsening coronavirus pandemic are confronting a grim reality: there may not be enough time, money or political will to make it happen by the November election.

Welcome to a Truly Free Oil Market; As oil floods the market just when the world needs it least, only producers with deep pockets or storage tanks will be able to keep pumping.
Julian Lee – Bloomberg
At the point we’re now at, postponing the oil-price war won’t make a lot of difference for an industry that’s already breaking down under the weight of demand destruction. It’s too late to use diplomacy and artful negotiations to share the burden of output cuts that are now inevitable.

SEC Enforcer Stanley Sporkin Cracked Down on Corporate Bribery; Regulator slammed ‘greedy businessmen trying to get edge’ in foreign markets
James R. Hagerty – WSJ
Stanley Sporkin forced changes in corporate behavior in the 1970s as a crusading enforcement chief at the Securities and Exchange Commission who cracked down on bribery of foreign officials. Mr. Sporkin, who died of congestive heart failure Monday at the age of 88, didn’t accept the typical excuses for bribery—that “everybody does it” or “it’s the only way to win contracts overseas.”

Global oil refiners shut down as coronavirus destroys demand
Florence Tan, Nidhi Verma, Jane Chung, Julia Payne – Reuters
The first oil refinery shutdowns in India and Europe were announced on Friday while global refinery runs drop like a stone in response to plunging demand as countries worldwide implement lockdowns.

Whiplash World About to See If Stimulus Can Fix Wounded Markets
Justin Carrigan – Bloomberg
Friday’s selloff probably points to what is coming this week; Markets set to price in a deep global recession, says Goldman
It’s probably best to take the selloff late Friday as the pointer to what comes next for the world’s financial markets as they limp toward the end of the month.

Black Death Makes Us Think About Interest Rates; The coronavirus could transform economic life for much longer than we expect.
Andy Mukherjee – Bloomberg
All upheavals leave their marks. Some fade away, some linger. Following the Black Death, the plague that’s believed to have killed 60% of Europe’s population in the second half of the 14th century, the realization that life is short, played a big role in shaping interest rates in late medieval Europe, stretching all the way to the Enlightenment.

What Social Distancing Looked Like in 1666; Humanity has been surviving plagues for thousands of years, and we have managed to learn a lot along the way.
Annalee Newitz – NY Times
A lot of English people believed 1666 would be the year of the apocalypse. You can’t really blame them. In late spring 1665, bubonic plague began to eat away at London’s population. By fall, roughly 7,000 people were dying every week in the city. The plague lasted through most of 1666, ultimately killing about 100,000 people in London alone — and possibly as many as three-quarters of a million in England as a whole.

Confirmed Coronavirus Cases Is an ‘Almost Meaningless’ Metric; We need more complete, coordinated data to know when it’s safe to reopen the U.S. economy.
Faye Flam – Bloomberg
It doesn’t matter that the United States surpassed China this week in reported Covid-19 cases because those numbers (83,507 and 81,782 respectively as of March 26) don’t tell us how many people actually became infected in either country. Nor do they tell us how fast the disease is spreading, since only a tiny portion of the population in the United States has been tested.

The mystery of the true coronavirus death rate; Without comprehensive testing and more precision over the cause of fatalities global comparisons should be treated with caution
Camilla Hodgson – FT
The figure at the root of so much global angst about coronavirus is currently 4.7 per cent. That is the proportion of people, as of Sunday afternoon, who have died after being diagnosed with the virus — 32,137 out of the 685,623 who have tested positive for Covid-19 around the world.

Tokyo Economy Could Face Lockdown From Few Dozen Virus Cases
Yoshiaki Nohara, Yuko Takeo, and Lisa Du – Bloomberg
Greater Tokyo’s output equivalent in size to Canada’s economy; Half of Japan’s largest companies are based in the metropolis
All it might take to shut down the mighty economic engine of Tokyo is a few dozen more mystery cases or a jump in infections into the hundreds rather than the thousands seen elsewhere in the world.

Trading European Debt Amid Virus Turmoil Depends on Who You Know
Tatiana Darie and Alice Gledhill – Bloomberg
Screen prices no longer trusted as real bid-ask spreads widen; Trading takes longer and may not yield results, investor says
In Europe’s market for leveraged loans and sophisticated bank bonds, trading has become a time-consuming process dependent on long-established personal rapport as extreme volatility has undermined on-screen prices.

The Iraq War’s Lessons for Fighting Coronavirus; A veteran of Middle East combat and the Treasury Department response to the 2008 financial crisis sees echoes of both today.
Stephen A. Myrow – Bloomberg
Having served on the Treasury Department team that responded to the last financial crisis, I’m experiencing flashbacks to my time in government. It’s not, however, from my experience at Treasury in 2008, but from my time in Iraq in 2004. While the economy was teetering on a precipice during the Great Recession, we never faced issues of life and death. More important, there was clear leadership in 2008, while the constant refrain in 2004, as today, was “Who’s in charge?” In any crisis, it’s leadership that matters above all.

As virus threatens, U.S. embraces big government, for now
Howard Schneider – Reuters
It may, as House Majority Leader and Maryland Democrat Steny Hoyer said on Friday, be out of love that the United States agreed to shut down much of its economy to stop a viral epidemic and save lives.

Leveling up; As a new decade begins, Chris Hall looks at how the role of the buy- and sell-side trader has evolved since the flash crash of 2010, and finds that while the buy-side has levelled up with brokers, progression has not always been smooth.
Chris Hall – The Trade
It was 2010 when electronic trading first hit the headlines. Trade automation was hardly new. Technology-driven innovations had been accommodated in the US and Europe under Reg NMS and MiFID respectively. But execution algorithms and high-frequency trading (HFT) were still a mystery to senior executives at asset management firms, not to mention their institutional and retail clients.

US Cash in Circulation Sees Biggest Increase Since the Y2K Bug Panic, Fed Reserve Data Indicates
Sebastian Sinclair – Coindesk
U.S. currency in circulation has experienced its largest increase in over 20 years, according to data from the Federal Reserve Bank of St. Louis. From March 11 to March 18, dollar banknotes in circulation shot up from around 1.809 trillion to 1.843 trillion, an increase of almost 35 billion, a chart shows. The news was made public by economist John Paul Koning. The data is the first strong signal, beyond scattered anecdotes, that U.S. citizens are now withdrawing more cash than usual from banks and ATMs amid concerns over the effects of the coronavirus pandemic.

Exchanges, OTC and Clearing

Eurex ESG derivatives look back on a successful March roll
Last week’s quarterly rollover, when March’s futures positions were carried forward to the June expiry, has shown that high interest in ESG continues despite turbulent markets. The March contract in STOXX Europe 600 ESG-X Futures recorded an open interest of about 50,500 contracts, valued at over EUR 700 million, as of the end of February. On 23 March, after clients rolled existing positions, open interest in the June expiry stood at 43,000 contracts. This suggests that a high proportion of March contracts were transferred into June.

ETF Options Commentary
The past couple of weeks saw substantial market volatility sweep across fixed income and equity markets alike, raising volumes across all securities markets as investors re-adjusted their asset allocations across asset classes. In these volatile times, many investors picked ETFs as their instrument of choice to manage their exposure across all asset classes. This was partially in response to the liquidity challenges seen across the entire cash bond market and was especially prevalent in corporate bonds.

Exchanges warn of damaging impact of short selling ban; A damning statement from the World Federation of Exchanges warns that restrictions on short selling will impact price formation in volatile markets.
Kiays Khalil – The Trade
A widespread ban on short selling around the world will only serve to increase market uncertainty amid the coronavirus pandemic, the association for global exchanges and central counterparties (CCPs) has warned.

RBC joins LCH RepoClear as clearing member; Royal Bank of Canada and its Channel Islands subsidiary have joined LCH RepoClear as clearing members.
Hayley McDowell – The Trade
UK clearinghouse LCH has confirmed that Royal Bank of Canada (RBC) has become the first Canadian clearing member to join its RepoClear service.

LCH’s RepoClear welcomes two new clearing members
Royal Bank of Canada is first Canadian member to clear Euro debt at LCH SA;Royal Bank of Canada (Channel Islands) Limited is first member from the jurisdiction to clear Sterling debt at LCH Ltd
LCH, a leading global clearing house, today announced that Royal Bank of Canada (RBC) is the first Canadian bank to become a clearing member at LCH SA’s RepoClear service, while Royal Bank of Canada (Channel Islands) Limited has become the first clearing member from the Channel Islands to join LCH Ltd’s RepoClear service. By joining the service, RBC and Royal Bank of Canada (Channel Islands) Limited are now able to access the largest European & UK pools of cleared debt, respectively. As a result, both entities are benefiting from the risk management efficiencies of central clearing.

Survey Finds Significant Growth in Hong Kong Derivatives Market
The Derivatives Market Transaction Survey 2018/19 (2018/19 Survey) conducted by Hong Kong Exchanges and Clearing Limited (HKEX) found that Hong Kong’s derivatives market has grown significantly and continues to attract a wide range of investors. The survey’s target respondents were Exchange Participants. The response rate was 61 per cent by number and 95 per cent by turnover value in the target population.

The World Federation of Exchanges warns against short-selling bans
The WFE Communications Team
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today issued a statement, criticising recent bans on short-selling as damaging to markets and failing to achieve their desired effect. WFE CEO Nandini Sukumar said:


FinTechs Could be a Vital Tool in Solving Coronavirus Problems
FinTech Rising
There’s no way to get around talk about the coronavirus. Now in over 80 countries, it’s touched on nearly every aspect of life for people around the world. Its impact on the FinTech landscape is no less profound, but its long-term effects are still an open question.

Coronavirus Drives 72% Rise In Use Of Fintech Apps
Simon Chandler – Forbes
The coronavirus has driven a massive 72% rise in the use of fintech apps in Europe, according to new research published today by deVere Group. At a time when most sectors of the global economy are beginning to feel the effects of what may already be a worldwide recession, the sharp jump in app adoption and usage provides encouraging news for the fintech industry. And it comes as yet another indication that the long-term legacy of the coronavirus will be an increasingly digital and online society.

FinTech trading platform TradeUP introduces Hong Kong stock trading
PR Newswire via Yahoo Finance (press release)
TradeUP, an online trading platform that offers commission-free trading of U.S. stocks and ETFs, introduced Hong Kong stock trading to its mobile platform today. The unique offering of Hong Kong stock trading gives U.S. investors a distinctive opportunity to access one of the most liquid markets in the world and expand their portfolios to include international stocks.

BISON hits the 100,000 active users mark; Growth of more than 40 percent in 2020 // Bitcoin is by far the most frequently traded cryptocurrency on BISON
Borse Stuttgart
Uncomplicated and secure trading in cryptocurrencies on the smartphone: this is possible with BISON, Boerse Stuttgart Group’s crypto app. BISON has now hit the 100,000 active users mark. “The number of active users of BISON has grown by more than 40 percent since the beginning of 2020. Even in the turbulent market phases of the past few months, we have been able to offer the usual simple and reliable trading in cryptocurrencies. On this basis, we intend to increase our user numbers steadily,” said Dr Ulli Spankowski, CEO of Sowa Labs GmbH, the subsidiary of Boerse Stuttgart Digital Ventures GmbH which developed the BISON app.


Stablecoins saw record transaction volumes of over $90 billion in 2020’s first quarter
Yilun Cheng – The Block
Stablecoins have seen significant growth in transaction volumes since the beginning of 2020. According to research by The Block, in Q1 2020, the transaction volume for stablecoins increased by 8% from the previous quarter and surpassed $90 billion for the first time ever. As a point of reference, the total transactional volume for stablecoins was $250 billion last year, while that for PayPal was $712 billion. Notably, this growth came from not only trading activities but also on-chain value flow from one address to another.

Derivatives exchange for digital assets ZUBR goes live
The rapidly expanding community of crypto derivatives traders stands to benefit from an industry-grade trading service with the launch of ZUBR, a new high-performance exchange for digital asset derivatives.

Binance to delist FTX leveraged tokens
Celia Wan – The Block
Crypto exchange Binance has decided to delist all 25 FTX leveraged tokens. “Due to lack of understanding of how leveraged tokens work by many of our users, Binance has decided to delist all existing FTX leveraged tokens and corresponding trading pairs, and will stop trading at 2020/03/31 10:00 AM (UTC),” Binance stated in an announcement published on Saturday.

Can Bitcoin Survive the Climate Change Revolution?
Ian Allison – Coindesk
Coronavirus might be the biggest story of the decade, but climate change will be the grand narrative of the century. As energy of any kind becomes of premium value to the planet, and the world’s transport systems come onto the electric grid, how will notoriously energy-hungry processes like bitcoin fare? In financial services, environmental, social and governance (ESG) is becoming the new buzzword among impact-minded corporations. An example of this was the latest letter from BlackRock CEO Larry Fink promising a fundamental reshaping of finance.

Bittrex Global Launches Euros-crypto Trading with Zero Fees
Associated Press (press release)
Bittrex Global, a global leading blockchain technology and cryptocurrency exchange, has today announced that customers will be able to trade cryptocurrencies with EUR without trading fees on Euro markets until April 30.

Splinter Cryptocurrency Hive Outperforms Justin Sun’s Steem After One Week Trading
Brady Dale – Coindesk
It’s been a week since the community that drove the Steem blockchain largely broke off to form Hive, and the market action so far has been on the side of the dissidents. Hive tokens are trading at $0.321 versus steem at $0.168, according to CoinGecko at the time of this writing. The upstart is almost twice as valuable as the original blockchain. “This is a true show of how a community can’t be bought,” Dan Hensley, a major holder of steem, and now hive, told CoinDesk.

Tron launches its own MakerDAO-like stablecoin system
Yogita Khatri – The Block
The Tron Foundation has launched its own MakerDAO-like stablecoin system called “Djed.” The new system was unveiled by Tron founder Justin Sun on Twitter on Saturday. Sun initially revealed the project in January. At the time, he said the TRON community would launch a new decentralized stablecoin backed by Tron (TRX) and BitTorrent (BTT) tokens. (The Tron Foundation acquired BitTorrent in 2018).

Could Covid-19 Impair Bitcoin Mining? Riot Blockchain Says It Might
Rachel McIntosh – Finance Magnates
Cryptocurrency mining firm Riot Blockchain is concerned that the outbreak of Covid-19, also known as the Coronavirus, could “seriously disrupt” its Bitcoin mining business and operations. The company’s concerns were published in its annual 10-K report, which was filed with the United States Securities and Exchange Commission on Wednesday of last week.

Microsoft Files Patent Application for Crypto Mining System Powered by Human Activity
Paddy Baker – Coindesk
Microsoft has proposed a system that can mine cryptocurrencies using data collected from humans as they exercise or read an advertisement. In a patent application filed with the World Intellectual Property Organization (WIPO) Thursday, the American computer giant said sensors could detect activity associated with specific tasks – such as time spent viewing ads – and convert it into computer-readable data to solve computational problems, in much the same way as a conventional proof-of-work system.

Malta Denies Two Crypto Exchanges Have License to Operate
Felipe Erazo – Cointelegraph
The Malta Financial Services Authority, or MFSA, has issued an alert on March 25 about two crypto exchanges that do not have licenses to operate, nor are they regulated in the country. COINMALEX and Crypto Foxtrades are the exchanges that the country’s financial watchdog alluded to in the statement, as both companies claimed on their websites that they had the necessary regulations and licenses to operate. Crypto Foxtrades claimed that they had the “Category 3 Investment Services” provider from the Maltese authorities to operate.

Bitcoin development funding is led by Blockstream and Lightning Labs, says BitMEX
Yogita Khatri – The Block
Blockstream and Lightning Labs are the two firms currently leading the funding for open-source bitcoin and lightning development, according to data compiled by BitMEX. Announcing the news on Saturday, BitMEX said the two firms employ the largest number of bitcoin developers. Pieter Wuille, Andrew Chow and Gregory Sanders are some of the bitcoin developers, which are currently being funded by Blockstream.


EU backs bank rule delay to spur crisis lending; Brussels reassessing its own plans after one-year deferral of capital standards, says financial regulation chief
Jim Brunsden – FT
Europe’s financial regulation chief has pledged to delay tough new capital rules for banks, saying that support for lending has to be the overwhelming priority in the fight against coronavirus.

Congress and the Fed Are Saving Lives; By containing the economic damage, they’re making it easier to curb the pandemic.
Bill Dudley – Bloomberg
Authorities’ efforts to stem the spread of the coronavirus have plunged the U.S. economy into a sharp contraction, leading some to argue that the cure may be worse than the disease. This misguided thinking ignores a crucial consideration: As Congress and the Federal Reserve have demonstrated, we can improve the trade-off by lowering the cost of saving lives.

Trump Rules Bar Thousands of Foreign Nurses Willing to Help U.S.
Bruce Einhorn, Claire Jiao, and James Paton – Bloomberg
Agencies recruiting from Philippines can’t get visas processed; U.K. has severe shortage after nurses left because of Brexit
As the coronavirus pandemic threatens to strain nursing staffs at hospitals across the U.S., Melanie N. Beckham knows where to find reinforcements. But first, the Trump administration needs to give its approval.

Coronavirus Makes America Seem Like a Civilization in Decline; The Covid-19 crisis is another example of the nation’s inability to effectively respond to pressing challenges.
Noah Smith – Bloomberg
Crises such wars, depressions, natural disasters and pandemics can reveal differences in how effectively a society organizes itself. In the 1600s and 1700s, for example, Britain’s more advanced tax system allowed it to outspend Spain and France, while Prussia’s efficient army let it overcome larger opponents such as Austria. In the Civil War, the Union’s industrial prowess allowed it to outlast and overwhelm the agrarian Confederacy.

‘President Cuomo’ Is New Daydream for Those Fretting Over Biden
Ryan Teague Beckwith – Bloomberg
New York governor’s daily briefings have pre-empted Biden’s; Presumptive Democratic nominee Biden working to be heard
While Americans are stuck at home, the Democrat dominating the airwaves to counter President Donald Trump’s messaging about the coronavirus is not the one seeking to replace him in the Oval Office — it’s New York Governor Andrew Cuomo.

A history of the Trump War on Media — the obsession not even coronavirus could stop
Manuel Roig-Franzia and
Sarah Ellison – Washington Post
President Trump took the podium in the White House press briefing room with a somber face on the afternoon of March 19, the day the tally of confirmed U.S. coronavirus cases was expected to pass the 10,000 mark.

Treasury: U.S. will be ‘compensated’ for assistance to airlines
David Shepardson, Andrea Shalal – Reuters
U.S. Treasury Secretary Steve Mnuchin said on Friday that taxpayers will “compensated” for providing up to $25 billion in direct grants to the airline industry.


U.S. regulators give banks relief on accounting standard, derivatives rule
Pete Schroeder – Reuters
U.S. banking regulators told banks Friday they could ignore the capital implications of a new accounting standard for two years and adopt early a new, more sensitive way to measure risk in a bid to ensure banks continue lending through the pandemic.

Coronavirus: FCA summons council of war
Jill Treanor and Emma Dunkley – The Times
Two of Chris Woolard’s three children were due to sit exams this year, but with GCSEs and A-levels cancelled because of the coronavirus, it is the 48-year-old who now faces the bigger test.

Surveillance of Homebound Wall Street Traders Relies on Pen and Paper; Traders are grappling with technology snafus while still being required to record trade-related conversations as best they can
Julie Steinberg and Ben Dummett – WSJ
Traders are going old-school—with notebooks and pens. As banks, asset managers and hedge-fund firms adjust to the new normal of employees working from home, they are grappling with technological challenges such as dropped calls and shaky internet connections.

ESMA publishes call for evidence on credit rating information and data
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published a call for evidence on the availability and use of credit rating information and data. The purpose of this call for evidence is to gather information on the specific uses of credit ratings as well as how the users of credit ratings are currently accessing this information.

ESMA extends deadline for stakeholder group applications
The European Securities and Markets Authority (ESMA) is currently seeking applicants for its Securities and Markets Stakeholder Group, announced on 14 February, and is extending that deadline for applications to 9 April.

In This Together – Raj Pillai, The Zoom Guy
Raj Pillai, The Zoom Guy – FINRA
Raj Pillai is no stranger to crises. Y2K. 9/11. The Northeast blackout of 2003. Superstorm Sandy. He has worked through them all, the latter at FINRA, which he joined in 2011. “There are different challenges with each situation. Every time, we’ve gotten better and better in terms of technology,” says Pillai, who as Senior Director of Enterprise Technology Services is FINRA’s lead on videoconferencing.

State “Shelter-in-Place” and “Stay-at-Home” Orders
In response to the COVID-19 pandemic, a growing number of states and localities have issued workplace restrictions as part of their efforts to prevent the spread of the disease. These “shelter-in-place” or “stay-at-home” orders vary in scope and duration, but generally require businesses not considered “essential” to close their physical offices and continue their operations remotely.

CFTC Postpones March 31 Open Meeting
Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the open meeting scheduled for March 31 has been postponed due to the impact of COVID-19 (coronavirus).

SEC Chairman: Government Shouldn’t Ban Short Selling in Current Market; Short selling needed to facilitate ordinary market trading, Jay Clayton says
Wall Street’s top regulator said he doesn’t believe the U.S. should prevent investors from betting against a falling stock market, as extreme volatility in recent weeks prompts more countries to ban short selling.

UK banks could review dividends given coronavirus crisis, says industry body
Anna Menin – City AM
British banks are likely to want to review their dividend plans for this year given the impact of the coronavirus pandemic on the economy, industry body UK Finance said today.

Investing and Trading

This Trade Has Returned 633% in 2020—but Buyer Beware; Stock-market volatility has made betting on the speed and severity of market moves a popular—and risky—venture
Gunjan Banerji and Mischa Frankl-Duval – Bloomberg
One of this year’s hottest trades is betting on stock volatility. It is also one of the riskiest. Traders big and small have sought to profit from the market’s wild swings. They are doing so through derivatives and exchange-traded products that tend to profit when markets are shaky. Some of the investments promise heightened exposure to volatility and often gain in value when stocks fall and turbulence rises.

Allianz liquidates two hedge funds after losses; Closures at asset management arm AGI come as hedging strategies went awry in market rout
Ortenca Aliaj – FT
Allianz Global Investors, the asset management group owned by Germany’s largest insurance group, is liquidating two hedge funds that suffered huge losses during the March market rout.

Big companies raise record sums from bond market in dash for cash; Investment-grade borrowers topped up their coffers by $244bn even as costs soared
Joe Rennison and Eric Platt – FT
The world’s highest-rated companies, including Warren Buffett’s Berkshire Hathaway, Disney and the drugmaker Pfizer, have bolstered their ability to weather the economic downturn, swallowing higher borrowing costs to raise hundreds of billions of dollars of debt while lower-rated issuers struggle.

Battered Bond Traders Have Another Dizzying Week to Prepare For
Liz McCormick – Bloomberg
Quarter-end strains, dire U.S. economic data are next hurdles; Last week’s relatively tame yield range may be brief respite
Bond traders had better batten down the hatches again — after a brief stretch of relative calm, they’re about to contend with an array of crosscurrents, from quarter-end pressures to a torrent of dire economic data.

More than 100 British companies halt dividend payments due to coronavirus pandemic
More than 100 British companies have postponed or ditched dividend payments in a bid to preserve cash for what could be a lengthy enforced shutdown of large parts of the UK and global economy due to the coronavirus pandemic.

The Wild Hunt for 100-Ounce Gold Bars
Joe Deaux and Yvonne Yue Li – Bloomberg
Coronavirus crisis disrupted supply chain for physical metal; Crunch rocked futures traders who suddenly needed gold in hand
There are few corners of the global financial market that have been upended as spectacularly, or as oddly, by the coronavirus pandemic as gold trading. Not only are prices swinging in an erratic fashion — surging one moment and crashing the next — that is undermining the metal’s vaunted status as a haven in times of crisis, but unprecedented logistical disruptions have also kicked off a frantic hunt for actual bars of gold.

Coronabonds Are Inevitable. Everybody Knows It; The protests of the Germans and Dutch against mutualized euro-zone financing should be taken with a large dose of salt.
Melvyn Krauss – Bloomberg
The European Central Bank has just taken a giant step toward converting its emergency aid package of 750 billion euros ($824 billion) — dubbed the Pandemic Emergency Purchase Program — into a true no-limits bond-buying vehicle by relaxing the “issue limits” it imposes on its debt purchases related to Covid-19.

Volumes Dwindle in Indian Markets Snarled by Virus Lockdown
Subhadip Sircar and Nupur Acharya – Bloomberg
Trading volumes in India’s financial markets continue to thin out as thousands of traders and stock brokers work from home, and with banks curtailing operations during the three-week nationwide lockdown.

Market volatility puts equity offerings on ice; Less than 10 per cent of big initial public offerings happen when ‘fear gauge’ is elevated
Richard Henderson and Miles Kruppa – FT
Companies have shied away from going public in response to the coronavirus shock, as elevated volatility makes deals difficult to price.

Wall Street calls time on the shale revolution; US fracking has survived dramatic price wars before but the latest shock is different
Derek Brower – FT
A decade of shale drilling has transformed US energy. The country’s oil output has more than doubled, cutting its dependence on foreign supplies, while an abundant supply of cheap natural gas has enticed power plants to switch from dirtier coal and helped lower US carbon emissions.

Should the smart money be on smart beta? ETFs based on factors such as value or momentum have yet to live up to their promise
Steve Johnson – FT
The trials and tribulations of so-called “smart beta” investing read almost like a biblical parable. Green-eyed stock market investors sit and watch as portfolios skewed towards certain factors — such as value, dividend generation, momentum, small size and low volatility — consistently outperform the market.

Active managers welcome non-transparent ETFs; A new breed of fund aims to combine investor appeal with proprietary knowhow
Rebecca Hampson – FT
Since the Securities and Exchange Commission gave the green light to non-transparent active ETFs last year, several providers have applied for approval to launch them. The new model allows managers to establish ETFs that do not disclose what is in their basket of investments, a move that challenges the status quo in the sector.

Coronavirus puts an end to ETFs’ decade-long spree; Exchange traded funds have had a good run. Can they survive a more volatile environment?
Chris Flood – FT
The coronavirus pandemic has abruptly ended the rapid expansion of the $6tn ETF industry, interrupting a growth spurt that has lasted for 11 consecutive years.

Price gap triggers fears for bond ETFs; Market volatility has led some fixed-income funds to trade at a discount to net asset value
Chris Flood – FT
A whole should not be worth less than the sum of its parts. But that is what has happened with some exchange traded funds this month. As volatility in fixed-income markets has risen in response to the coronavirus pandemic, it has triggered severe price dislocations across bond ETFs.


Fed’s big boost for BlackRock raises eyebrows on Wall Street; New York asset manager is appointed by the central bank to run new easing programmes
Richard Henderson and Robin Wigglesworth – FT
On Tuesday, investors poured a record-breaking $1.5bn into an exchange traded fund run by BlackRock, a sum that represents about $2.3m of fees for the asset management giant. And it was all thanks to the Federal Reserve.

Allianz liquidates two hedge funds after losses; Closures at asset management arm AGI come as hedging strategies went awry in market rout
Ortenca Aliaj – FT
Allianz Global Investors, the asset management group owned by Germany’s largest insurance group, is liquidating two hedge funds that suffered huge losses during the March market rout.

A Hedge Fund Manager’s Dream Job Comes With Drastic Pay Cut
Mikael Holter – Bloomberg
At 53, the London-based hedge-fund manager behind $16 billion AKO Capital LLP says he’s about to step into his dream job. But his new take-home pay won’t even be enough to cover the wealth tax he now faces.

Bank of America capital levels allow operational focus during crisis: CEO
Imani Moise – Reuters
Bank of America Corp (BAC.N) is better positioned to focus on operations rather than financial risk during the coronavirus outbreak, thanks to regulatory safeguards put in place after the financial crisis in 2008, Chief Executive Brian Moynihan said on Friday.

Ackman says Pershing Square no longer has hedges on stocks
William Ackman’s Pershing Square Capital Management no longer has hedges on its stock portfolio, but still has some cash to invest if equities decline further as the United States battles the coronavirus outbreak, the billionaire investor said on Saturday.

JPMorgan Says the Market Rout Is Probably Past Its Worst Now
Joanna Ossinger – Bloomberg
Conditions for market stabilization, revival mostly met: JPM; Most risky assets should trade higher in next quarter: Normand
Strategists at JPMorgan Chase & Co. have concluded that most risk assets — a universe that typically includes stocks and credit — have seen their low points for the recession that’s gripped economies around the world.

Barclays Plans Climate Finance Resolution Amid Activist Pressure
Alastair Marsh – Bloomberg
Barclays Plc said it plans to cut its net greenhouse gas emissions to zero over the next 30 years and only provide finance to projects that align with the temperature reduction goals of the Paris climate accord.

Robinhood Accused of Offering Snafu Credits to Squelch Suit
Joel Rosenblatt – Bloomberg
Company is attempting to ‘wipe out’ claims, lawyers tell court; Payments aimed at quick customer compensation, brokerage says
Robinhood Financial Inc., facing lawsuits over crashes on its trading platform amid violent stock market swings, is now being accused of offering a “$75 goodwill credit” to dupe customers into waiving their legal rights.

As Coronavirus Spreads, Community Banks Watch for Fallout; Small banks, already struggling, brace for another hit as coronavirus pummels local businesses
Orla McCaffrey – WSJ
From his office off U.S. Highway 136, Mike Estes has a clear view of the main strip leading into Fisher, Ill., population 1,900. The president of Fisher National Bank knows the agricultural community well, including the handful of small businesses that dot the road.

BNY Mellon names interim head Gibbons as CEO
Bank of New York Mellon Corp (BK.N) on Monday named interim head Thomas Gibbons as chief executive officer, effective immediately.

Goldman Sachs sees S&P 500 dividends declining 25% in 2020
Goldman Sachs said on Monday it expects S&P 500 dividends to fall by 25% in 2020 as certain large dividend-paying industries are particularly vulnerable to the economic shock of the coronavirus outbreak.

GTS Closes Acquisition of Barclays Equity Options Market Making Business; Already the Biggest Market Maker at the NYSE and Largest Wholesale Market Maker of OTC Securities – Acquisition Furthers GTS’s Vision for Being Trading Partner of Choice
Business Wire
GTS, a leading electronic market maker across global financial instruments, today announced the completion of its acquisition of Barclays’ equities automated options trading unit.


The Lessons of 2008 Have Left Europe’s Markets Better Protected
William Shaw and Jan-Patrick Barnert – Bloomberg
Policy response, though uneven, has heartened investors; U.S. package, central bank moves reflect 2008-2009 experience
The convulsions in European markets for the past month have traders looking back to 2008-2009, the last time the financial world seemed on the verge of collapse. The good news this time around is that policy makers are applying lessons learned from that crisis.

Africa Is Two to Three Weeks Away From Height of Virus Storm
Prinesha Naidoo – Bloomberg
$100 billion emergency stimulus needed to curb virus: UN panel; Africa yet to experience a crisis on the scale of Covid-19
Africa is two to three weeks away from the worst of the coronavirus storm and needs an emergency economic stimulus of $100 billion to bolster preventative measures and support its fragile healthcare systems, according to the United Nations Economic Commission for Africa.

Death of German Finance Official Linked to Virus Crisis
The state finance minister of Germany’s Hesse region, which includes Frankfurt, has been found dead. Authorities said he appears to have killed himself and the state’s governor suggested Sunday that he was in despair over the fallout from the coronavirus crisis.

U.K. Virus Lockdown Could Be Significantly Longer, Gove Says
Jill Ward – Bloomberg
Neil Ferguson says measures should remain in place until June; ‘Things will get worse before they getter better,’ PM says
The U.K.’s nationwide lockdown could last longer than current plans, Cabinet Office Minister Michael Gove hinted on Sunday, as the country braces for the worst impact of the coronavirus pandemic.

French Companies Rush to Apply for Aid for 2.2 Million Workers
Francois De Beaupuy – Bloomberg
Businesses seek state’s help to pay wages, limit joblessness; Hirings have dropped by 70% on virus lockdown, minister says
French businesses are rushing to benefit from government aid to keep 2.2 million workers on their payroll as a lockdown to fight the coronavirus brings several industries to a halt, Labor Minister Muriel Penicaud said.

Spanish Covid-19 Deaths Pass 6,500 as Hospitals Overwhelmed
Charlie Devereux – Bloomberg
Grimmest day for deaths yet, with 838 succumbing to virus; Officials say cases may be stabilizing as lockdown tightened
Spain’s death toll from Covid-19 rose above 6,500 with the government seeking to further limit the movement of people as the nation’s overloaded health-care system grapples with cases outpacing intensive care beds available.

Norway’s Prime Minister Defends Measures to Combat Coronavirus
Frances Schwartzkopff – Bloomberg
Norwegian Prime Minister Erna Solberg defended her handling of the coronavirus crisis, saying drastic measures are necessary to save lives and jobs.

China’s $30 Trillion Market Promise Beckons Global Wealth Firms
Lulu Yilun Chen – Bloomberg
Vanguard, BlackRock can join local partners or go it alone; China opens gates wider for foreign asset managers on April 1
China’s trillion dollar asset-management market opens wider this week, forcing BlackRock Inc., Vanguard Group Inc. and other global firms to make a strategic decision: Go it alone or work with an entrenched local partner.

Saudi Arabia Tells Banks to Support Businesses to Avoid Job Cuts
Archana Narayanan and Matthew Martin – Bloomberg
SAMA instructs lenders to provide concessional loans to firms; Central bank has unveiled a $13.3 billion stimulus package
Saudi Arabia’s central bank is ordering lenders to provide concessional loans to businesses grappling with the fallout of the coronavirus so companies won’t have to cut jobs.

Italy Home Quarantine Repeats Mistake Made in China, Doctors Say
Bloomberg News
Italy needs to shift to mass quarantining of mild cases; Members of Chinese expert team to Italy say in interview
Italy needs to shift to mass quarantining of coronavirus patients with mild symptoms instead of letting them isolate at home, according to a group of Chinese experts who traveled to the European nation to advise officials there.

Australia tightens investment rules on foreign takeovers; Canberra warns that companies hit by coronavirus could be targets of ‘predatory behaviour’
Jamie Smyth – FT
Australia has temporarily tightened its rules on foreign takeovers on concerns that strategic assets could be sold off cheaply as a result of the coronavirus crisis.


Second U.K. Cabinet Member Joins Johnson in Having Virus Symptoms
Another member of British Prime Minister Boris Johnson’s Cabinet has developed symptoms of COVID-19, as the number of people with the coronavirus to die in the U.K. passed the 1,000 mark Saturday. Scottish Secretary Alister Jack said he had symptoms of the disease and was self-isolating a day after the prime minister and Britain’s health secretary revealed they tested positive for the virus and were experiencing mild symptoms.

Johnson’s War With Coronavirus Is No Joke Anymore; The threat to the U.K. from the pandemic has now—literally—hit home for the British prime minister.
Tim Ross – Bloomberg
For Boris Johnson, as for others, it started with a cough and a fever. The British prime minister did what he was told by the most senior medic in the land and took a test. Johnson was in his Downing Street apartment at midnight on Thursday when the result came through: he’d tested positive for coronavirus. It was the moment the pandemic literally hit home.

SNP urges UK government to ‘hit pause’ on Brexit due to coronavirus
BBC News
The SNP is urging the UK government to “hit pause” on Brexit negotiations and seek to extend the transition period. It has urged the UK government to focus on the coronavirus pandemic. The party’s Brexit spokeswoman, MP Philippa Whitford, said it would be irresponsible to continue “hurtling” towards the transition deadline.


Fox Business Host Trish Regan Is Leaving the Network
Christopher Palmeri – Bloomberg
Fox Business host Trish Regan is leaving the network following comments she made on her show earlier this month that some people took to suggest the risk from coronavirus was being overstated for political reasons. On her show, ‘Trish Regan Primetime,’ the host said Democrats and the “liberal media” were using the virus to “destroy the president.” Regan also blamed stock market declines on Donald Trump’s rivals, calling it “another attempt to impeach the president.” While she spoke, the headline ‘Coronavirus Impeachment Scam’ appeared next to her.

Facebook Pledges $100 Million for News Outlets Hit by Coronavirus Outbreak; Tech giant commits $75 million in ad spending as industry reels from pullback in spending by businesses
Lukas I. Alpert – WSJ
Facebook Inc. FB -4.01% is pledging $100 million in grant money and promised ad spending to help struggling news outlets weather the financial blow of the coronavirus outbreak. News outlets—particularly smaller, local newspapers—face substantial advertising revenue declines as shuttered or disrupted businesses pull back spending. While readership has spiked and some media companies have enjoyed increases in online subscriptions, the advertising drop is already forcing many outlets to reduce pay or lay off workers.

Bail Out Journalists. Let Newspaper Chains Die; The coronavirus is likely to hasten the end of advertising-driven media, our columnist writes. And government should not rescue it.
Ben Smith – WSJ
Elizabeth Green was musing the other day about buying 261 newspapers. You could, this Sunday, purchase Gannett, the biggest newspaper chain in the country, for a mere $261 million — about a quarter of what Michael R. Bloomberg spent on his presidential campaign.

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