Hits & Takes
John Lothian & JLN Staff
Last night Nasdaq VOLQ officially launched for trading on the CME. You can track it here. So far, there are no trades.
This volatility index alternative to the VIX is more complementary than challenger, giving traders a second volatility product to trade, and one that helps with the popular Nasdaq-100 index.
VOLQ uses at-the-money (ATM) options to calculate implied volatility, whereas VIX uses lots of out-of-the-money options. The VOLQ landing page at Nasdaq is HERE.
Signature Bank announced the pricing of subordinated notes, which would not normally be big news, but this time it is. The notes are the first Ameribor linked debt offering. There are trillions of dollars linked to Libor, but with this offering we have Ameribor linked debt for the first time. Congratulations to the American Financial Exchange and Dr. Richard Sandor for this achievement. It took Doc Sandor eating a lot of barbeque all across the U.S. to get to this point and this offering.
Matt Lisle on behalf of the Global Digital Asset & Cryptocurrency Association (Global DCA) respectfully disagreed with my opinion concerning the impetus behind the creation of cryptocurrency.
“We would make the following points to counter your opinion:
The primary purpose of cryptocurrency is not to facilitate money laundering but to, among other things,
prevent governments from (hyper) inflating currencies; and
- provide a payment mechanism that solves the “double spend” issue through a distributed ledger;
- Digital assets and cryptocurrencies provide payment mechanisms that do not need intermediaries like banks – which reduces the overall cost or tax of using the system. Two Billion of the Seven Billion global inhabitants are unbanked or underbanked and this results in higher costs when making payments and a tremendous lack of credit. It is hard for the first world to comprehend this fundamental disadvantage. However, think about what it takes for a domestic worker to send remittance payments back home without having a bank account: The person gets charged for cashing their paycheck and then gets charged for sending a portion of that paycheck back to Guatemala or Timbuktu. Those charges can run as high as 10% of the total amount. However, if you and the recipient have a cellphone, internet and an electronic wallet, you can convert the cash paycheck into cryptocurrency and send payment instantaneously almost anywhere. In fact, it’s already feasible to pay your workforce without involving a bank.
- Fiat currencies are controlled by governments and some governments use such controls to benefit the political elite and their cronies while harming their citizens – cryptocurrencies provide an alternative system free from political controls;
- Every transaction that occurs on the major blockchains can be seen on a publicly-accessible database. In fact, it is this transparency that is one of the fundamental benefits of blockchain-based finance. Yes, money launderers can disguise their wallet addresses. However, if a company complies with BSA or FATF requirements, the risk of money laundering is highly mitigated and in fact is the same as the risks inherent with established payment systems;The biggest issue with respect to digital assets and cryptocurrencies is the ambiguity inherent in the regulatory environment and there are serious questions whether certain participants have legal requirements or accountability to their counterparties. A lack of enforceable standards is quite an impediment to developing a stable efficient system. I would bring your attention to a nascent initiative aimed at addressing these issues.
The Global DCA has been founded to guide the evolution of the new technology within a regulatory framework designed to build public trust, foster market integrity and maximize economic opportunity for all participants by devising standards and consensus-based solutions that address the major challenges facing the industry.”
Also, the Global DCA is formally launching itself next Friday, October 9th from 10-12:30, at a virtually-hosted event featuring several leaders in the burgeoning digital asset and cryptocurrency marketplace. You can register for the event HERE.
I shared a more complete version of my theory with Matt and the Global DCA leaders and have yet to have a formal reply.
When I was a kid, I used to regularly read “Reader’s Digest.” One of my favorite pages was “Laughter is the Best Medicine.” Today in that spirit, the New York Times has an article titled “Laughter May Be Effective Medicine for These Trying Times.” I concur.
The great Bob Gibson, one of the fiercest baseball pitchers ever, has died at the age of 84. Gibson played for the St. Louis Cardinals and was a Hall of Fame member who won two Cy Young Awards and threw 56 career shutouts.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Reminder: Registration for FIA Expo-V, which will be virtual, is open. Expo takes place this year
from November 10-12 and includes keynote addresses, 1:1 interviews with exchange leaders, the Innovators Pavilion fintech showcase and a virtual trade show. You can go here for more info and to register.~SR
In our “Cryptocurrencies” section today, we have multiple reports from The Block about digital asset trading volume. According to their reports, decentralized (“DEX”) exchanges made up about 13.9 percent of all trading volume in the cryptocurrency markets in September; one article says that cryptocurrency exchanges collectively facilitated $169 billion worth of trades, while $23.5 billion worth of digital assets were traded on DEX exchanges. Of course, it’s always a good idea to consider these reports with a big ol’ grain of salt.~MR
The Spread: Radio Killed the Video Star
This week on The Spread – election volatility makes options more expensive, the CME has a COVID scare, and more.
Exchanges Round the World Ring the Bell all Week for Financial Literacy in 2020; The World Federation of Exchanges initiative draws record support
The World Federation of Exchanges
Exchanges around the world have united to promote financial literacy and boost financial inclusion, ringing the bell in multiple countries on multiple days all week during World Investor Week (“WIW”) 2020. The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, is supporting the International Organization of Securities Commissions (“IOSCO”) WIW 2020, which runs from 5 October to 11 October 2020. WIW is a week-long, global campaign to raise awareness about the importance of investor education and protection and promote financial literacy.
*****JLN is all about financial literacy and we thank WFE for bringing all the exchanges together to promote it.~JJL
How Kelly Loeffler Went From Atlanta Elite to Trump Loyalist; Senator Loeffler, one of the richest people in Congress, has transformed herself from political moderate to “more conservative than Attila the Hun.”
Richard Fausset – NY Times
Kelly Loeffler is not just a United States senator and a successful businesswoman. She is also one of the social doyennes of Buckhead, the Atlanta neighborhood of the wealthy and aspiring rich, where she has often thrown open the gates of her $10.5 million European-style manse, known as Descante, for charity fund-raisers.
*****Big time New York Times profile of Sen. Loeffler and how she has changed.~JJL
JPMorgan opens UK apprenticeship scheme to aspiring investment bankers; On-the-job training programme includes funding to complete a degree in applied finance
Jonathan Moules – FT
JPMorgan is hiring the UK’s first investment banking apprentices, applying the on-the-job training method previously reserved for hairdressing and car mechanics to roles on its capital markets and dealmaking teams.
*****What is the investment banker version of plumber’s crack?”~JJL
Pope Francis Laments Failures Of Market Capitalism In Blueprint For Post-COVID World
Sylvia Poggioli – NPR
Pope Francis has presented his blueprint for a post-COVID-19 world, covering a vast number of issues from fraternity and income inequality to immigration and social injustice. The document, released Sunday, is his third encyclical — the most authoritative form of papal teaching. Its title is Fratelli Tutti, and it is a scathing description of laissez faire capitalism and a meditation on the coronavirus pandemic that has swept across the globe.
***** I wonder if anyone will listen?~JJL
Billionaire Ken Griffin drops extra $26.7M against Pritzker’s graduated-rate income tax amendment proposal. His total stands at more than $46.7M
Rick Pearson – Chicago Tribune
Ken Griffin, the billionaire founder and CEO of the Chicago-based Citadel hedge fund and investment firm, put another $26.7 million into the campaign against billionaire Democratic Gov. J.B. Pritzker’s ballot proposal to shift the state from a flat-rate income tax to a graduated tax with rates that increase with income. With Griffin’s latest investment, he has now given $46.75 million of the approximately $48.1 million million that has been received by the Coalition to Stop the Proposed Tax Hike Amendment. In August, Griffin gave the group $20 million.
*****There is a vote that Mr. Griffin would like to influence so Illinoisans’ taxes don’t go up.~JJL
Friday’s Top Three
Our top story Friday was Bloomberg’s The Stock Trading Revolution: How Robinhood and Its Rivals Are Changing Markets. Second was the Financial Times’s US regulators step up battle with spoofing, about the heavy fine on JPMorgan Chase. Third was another Financial Times story, US charges bitcoin exchange founders over money laundering.
189,433,237 pages viewed; 24,442 pages; 226,190 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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The Race to Replace the City of London Begins; If the EU builds it, will they come?
Lionel Laurent – Bloomberg
When economic historian Charles Kindleberger charted the rise of financial centers around the world in 1973, he doubted London could take the top spot in Europe’s growing union of states: “Sterling is too weak, and British savings too little.” Instead, after assessing various cities’ economies of scale and corporate pulling power, he plumped for Brussels. He was clearly betting on the wrong horse, but Kindleberger’s treatise should still be top of European regulators’ reading list on the eve of a potentially messy end to decades of unfettered free trade with Britain.
JPMorgan Probe Revived by Regulators’ Data Mining; A $920 million fine against bank shows advances in analyzing trading data
Dave Michaels – WSJ
Investigators probing whether traders at JPMorgan Chase JPM 0.96% & Co. rigged silver prices seven years ago decided there was no case to bring. Last week, the same agency hammered the megabank with a $920 million fine. How a small agency that once walked away from an investigation of price manipulation, only to later impose its biggest fine ever for the conduct, shows the advances government has made in using data to uncover market manipulation, said James McDonald, enforcement director of the Commodity Futures Trading Commission.
Wall Street claims the ‘Nasdaq Whale’ is back to pushing up tech stocks
Thornton McEnery – NY Post
The colorful Japanese billionaire behind the summer’s unexpected tech rally — and subsequent declines — appears to be up to his old tricks. Masayoshi Son, the 63-year-old founder and CEO of SoftBank, was unmasked as the so-called “Nasdaq Whale” in early September after it was revealed that he plunked down billions to buy options in popular tech stocks like Amazon, Alphabet, Microsoft and Tesla during the COVID market crash. Son’s buying spree — funded by both Softbank and his own pocket — is believed to have helped push the Nasdaq up 60 percent between April and September — contributing to a bubble that came tumbling down at summer’s end.
SEC Is Willing to ‘Try’ a Tokenized ETF, Chairman Says: Report
Kevin Reynolds – Coindesk
Securities and Exchange Commission (SEC) Chairman Jay Clayton said the regulatory body’s open to the idea of a tokenized exchange-traded fund (ETF), according to a report by Decrypt.
American Financial Exchange AMERIBOR Benchmark Interest Rates Now Distributed by S&P Global Market Intelligence
The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced that S&P Global Market Intelligence will distribute the following three AFX AMERIBOR Benchmark Interest Rates on their quote pages beginning October 1, 2020.
Citi’s new boss Jane Fraser faces hard choices; Incoming chief’s dilemma is whether to stay the course with current bank structure or shake things up
Robert Armstrong – FT
Citigroup is not the strongest of America’s big banks. It is the most interesting. The job for Jane Fraser, its next chief executive, to make it a bit more dull.
A new cold war: Trump, Xi and the escalating US-China confrontation; In the first of a series, Gideon Rachman explores how the rivalry between the two superpowers is starting to feel eerily familiar
Gideon Rachman – FT
“From Stettin in the Baltic to Trieste in the Adriatic, an ‘iron curtain’ has descended across the continent.” Winston Churchill’s speech in Fulton, Missouri, in March 1946 is remembered as a key moment in the outbreak of the cold war.
Signature Bank Announces Pricing of Subordinated Notes
Signature Bank (Nasdaq: SBNY), a New York-based full service commercial bank (the “Bank”), announced today the pricing of $375 million aggregate principal amount of fixed-to-floating rate subordinated notes due 2030 (the “notes”). The notes will bear interest at 4.00% per annum, payable semi-annually in arrears on each April 15 and October 15 commencing April 15, 2021 until October 15, 2025. On October 15, 2025 and thereafter, interest on the notes will accrue at three-month AMERIBOR plus 389 basis points, paid quarterly in arrears on each January 15, April 15, July 15 and October 15. Proceeds from the sale of the notes will be used for general corporate purposes. The offering of the notes is expected to close on October 6, 2020, subject to customary closing conditions.
To Protect Good Jobs, End Tax Breaks for Job-Killing Technology; “Favorable taxation of capital leads to excessive automation,” says MIT economist Daron Acemoglu.
Peter Coy – Bloomberg
Ever wonder why companies spend so much money on machinery and software that kills jobs? One reason is that the U.S. tax code practically forces their hands. The tax on capital has fallen to around 5% in recent years while the tax on labor has remained around 25%, according to a new white paper (PDF) for the Massachusetts Institute of Technology’s Task Force on the Work of the Future.
Britain’s FCA plays for time on EU share trading in London
Huw Jones – Reuters
Britain’s financial watchdog will wait at least until a European Union summit this month before deciding on its rules for trading EU-listed shares in London from January.
Former Chinese government official ran TikTok’s content policy as app went global; Cai Zheng was diplomat in China’s embassy in Tehran before joining TikTok’s owner ByteDance
Ryan McMorrow – FT
A former Chinese government official in his late twenties was in charge of deciding what content should be allowed on TikTok as the short-video app became a smash hit around the world, according to two people close to the company.
China rolls out experimental Covid vaccine as it eyes global market; Medical experts question safety of programme before phase 3 trials are completed
Christian Shepherd – FT
Beijing is set to expand a programme that administers experimental coronavirus vaccines as Chinese developers chart a risky path to dominating global supplies.
The hard business lessons Covid is about to teach; Why the hair salon, the gym and work-related travel may never be the same again
Pilita Clark – FT
I have very few friends who could plausibly be described as gym fanatics. But I do have one in London who has been working out with weights since he was 14, up to six days a week, most recently at a nice health club that costs him £30 a month, thanks to a corporate discount.
Joint Statement By The President Of The European Commission Ursula Von Der Leyen And The Prime Minister Of The United Kingdom, Boris Johnson
The President of the European Commission, Ursula von der Leyen, and the UK Prime Minister, Boris Johnson, spoke today about the state of play in the negotiations on the future relationship between the UK and the EU.
Covid-19 Vaccines Should First Go to Health Workers, First Responders, Group Recommends; U.S. government needs to direct limited initial coronavirus vaccines to those at the front lines of treatment and high-risk groups, panel says
Peter Loftus and Jared S. Hopkins -WSJ
Certain health workers and first responders should be the first to receive a Covid-19 vaccine when one becomes available, followed by people with health conditions that put them at higher risk of severe Covid-19 disease, a special U.S. committee recommended.
Dave Portnoy Says He’s the Most Talked About Name on Wall Street
Luke McGrath and Michael Boyle – Bloomberg
Barstool Sports founder says his portfolio is up $1 million; Portnoy says he gave up shorting stocks after an early setback
Barstool Sports founder Dave Portnoy says he’s the most talked about person on Wall Street. At the beginning of the Covid-19 pandemic, Portnoy pivoted from covering sports as Barstool’s “El Presidente” to live streaming himself making stock picks as “Davey Day Trader.”
Only 3 states are reporting declines in new coronavirus cases as the US hits its highest daily rate in 2 months
Madeline Holcombe and Christina Maxouris, CNN
Only three US states are reporting a decline in new Covid-19 cases compared to last week, as the country hit its highest daily rate of new cases in almost two months. As of Saturday night, new cases were down in Texas, Missouri and South Carolina, while 21 states reported a rise in cases and a little more than half held steady compared with the week before.
Keep Calm and Carry On’ May Not Work in a Time of Pandemic; Eighty years after Londoners rallied in the face of the deadly German Blitz, many are flouting the rules aimed at preventing the spread of the novel coronavirus.
Peter S. Goodman – NY Times
During a recent visit to a private London hospital, I was horrified to encounter a delivery man wheeling in a load of supplies without wearing a face mask. An orderly in blue scrubs stood inside the elevator, three feet from me, with his mask draped around his chin.
Coronavirus triggers borrowing spree by private equity managers; Demand surges for bespoke loans to ensure leveraged strategies survive health crisis
Chris Flood – FT
Private equity managers are turning to specialist borrowing facilities to ensure their highly leveraged strategies can survive the coronavirus pandemic, but there are growing concerns that the use of these complex financing deals poses new threats to investors.
Law must be rethought for mass homeworking; New rules must seek broad equivalence with office standards
The editorial board – FT
Global lockdowns triggered a mass homeworking experiment that appears likely to outlast the pandemic itself. For many of those used to office life before Covid-19, spending a significant chunk of one’s working hours at home looks set to become the norm. That is no bad thing — if done well, such arrangements can lead to a more productive, happier workforce. Yet much of the legislation governing homeworking is not fit for purpose. Plans in Berlin and other European capitals to press ahead with fresh rules to set the terms and conditions surrounding it are therefore welcome.
Small businesses face ruin as UK lenders block access to Covid loans; Banks increasingly restrict bounceback loans to customers on their books before pandemic
Claer Barrett, Andy Bounds in Huddersfield and Chris Tighe – FT
Lenders have been accused of endangering the survival of large numbers of small UK businesses by blocking access to cheap state-backed loans, amid a stampede in demand.
Company chiefs plan to cut office space after pandemic; Institute of Directors survey finds more than half of executives intend to allow staff to work from home more permanently
Daniel Thomas in London – FT
More than half of UK directors will cut back office space as staff move more permanently to working from home in a sign of the long-term impact of the pandemic on the British property market, according to a business group survey.
Less than half UK population to receive vaccine, says task force head; PM warns of ‘bumpy’ winter while data ‘issue’ blamed for 16,000-case backlog pushing numbers to record high
Anna Gross and Jasmine Cameron-Chileshe – FT
Less than half the UK population can expect to be vaccinated against coronavirus, the head of the government’s vaccine task force has said in an attempt to clear up the public’s “misguided”
Americans Are Driving Less Than Before Pandemic, and It’s Permanent; Working from home and delivery mean less miles on the road, though the number of cars is holding steady.
Justin Fox – Bloomberg
The early days of the Covid pandemic brought an unprecedented decline in driving in the U.S., with vehicle miles traveled down 41% from February to April on a seasonally adjusted basis. By July, the most recent month for which the Federal Highway Administration has released data, vehicle miles were still down 13% (seasonally adjusted) from February.
NYC Mayor Reverses Course in Push to Close Schools, Businesses
Henry Goldman – Bloomberg
City needs state permission to act in nine problem ZIP codes; Cuomo wants compliance crackdown for statewide virus uptick
It took New York City more than three months to reduce the spread of the novel coronavirus to a rate considered low enough to reopen the largest U.S. public school system. Just days after students returned to class, fear of resurgence is forcing Mayor Bill de Blasio to walk back that effort.
Italian government set to impose new curbs to tackle COVID-19 resurgence
The Italian government will likely impose new restrictions on the country in the coming week to try to beat back rising numbers of coronavirus cases, Health Minister Roberto Speranza said on Sunday.
As cold weather arrives, U.S. states see record increases in COVID-19 cases
Lisa Shumaker – Reuters
Nine U.S. states have reported record increases in COVID-19 cases over the last seven days, mostly in the upper Midwest and West where chilly weather is forcing more activities indoors.
South Africa Restores Free Visa for Countries Including U.S.
Felix Njini – Bloomberg
South Africa has reinstated free visas for travelers from countries including the U.S. after suspending them in March as part of a strict lockdown to curb the coronavirus.
Boris Johnson Says ‘Eat Out’ Drive May Have Spread Covid in U.K.
Tim Ross – Bloomberg
U.K. Prime Minister Boris Johnson acknowledged that his government’s summer plan to subsidize dining out may have helped spread the coronavirus.
Exchanges, OTC and Clearing
The Cause and Measure of arrowhead System Failure
TSE would like to express our sincerest apologies to investors and the people related to the stock market for any inconvenience caused by the failure of the equity trading system, arrowhead, on October 1, 2020. Because the direct cause of the failure has been identified, we have already taken actions on the system side.
For the details, please refer to the attached files.
Establishment of an Investigation Committee in Relation to the System Failure
JPX would like to deeply apologize for the inconvenience caused to many investors and other market users due to the failure in the arrowhead cash equity trading system on October 1, 2020. JPX has today established a “System Failure Investigation Committee” comprised of independent outside directors of JPX, as listed below. The committee will investigate, among other things, the cause(s) of the system failure and will work to maximize the effectiveness of measures put in place based on the investigation results, including those to prevent similar incidents.
SGX welcomes the listing of Phillip SGD Money Market ETF, the first of its kind in South East Asia
The first Singapore-domiciled money market exchange-traded fund (ETF) on SGX, and the only money market ETF in South East Asia, starts trading today with S$100 million in initial assets under management (AUM)
Singapore Exchange (SGX) today welcomed the listing of Phillip SGD Money Market ETF, a new treasury and cash management tool for institutional investors as well as a timely alternative investment solution for individual investors to manage their ready cash efficiently.
Amendments to CME, CBOT, NYMEX/COMEX Rule 588.C. (“Trade Cancellations and Price Adjustments”) and Rule 588.H. (“Globex Non-Reviewable Trading Ranges”) Table Relating to all Option Contracts
Effective Sunday, October 18, 2020 for trade date Monday, October 19, 2020, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME”), The Board of Trade of the City of Chicago, Inc. (“CBOT”), New York Mercantile Exchange, Inc. (“NYMEX”) and Commodity Exchange, Inc. (“COMEX”) (collectively the “Exchanges”) will adopt various amendments to CME, CBOT, NYMEX/COMEX Rule 588. (“Trade Cancellations and Price Adjustments”) and Rule 588.H. (“Globex Non-Reviewable Trading Ranges”) table (the “Table”) to change the process for adjusting prices and cancelling trades for all option contracts (collectively,
Product Modification Summary: Amendment to the Listing Cycle and Subsequent Delisting of the KC HRW-Chicago SRW Wheat Intercommodity Spread Options Contract
Amendment to the Listing Cycle and Subsequent Delisting of the KC HRW-Chicago SRW Wheat Intercommodity Spread Options Contract.
Amendments to CME, CBOT, NYMEX/COMEX Rule 588.C. (“Trade Cancellations and Price Adjustments”) and Rule 588.H. (“Globex Non-Reviewable Trading Ranges”) Table Relating to all Option Contracts
Effective Sunday, October 18, 2020 for trade date Monday, October 19, 2020, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME”), The Board of Trade of the City of Chicago, Inc. (“CBOT”), New York Mercantile Exchange, Inc. (“NYMEX”) and Commodity Exchange, Inc. (“COMEX”) (collectively the “Exchanges”) will adopt various amendments to CME, CBOT, NYMEX/COME Rule 588. (“Trade Cancellations and Price Adjustments”) and Rule 588.H. (“Globex Non-Reviewable Trading Ranges”) table (the “Table”) to change the process for adjusting prices and cancelling trades for all option contracts (collectively, the “Rule Amendments”).
Product Modification Summary: Amendments to the Termination of Trading Rule of the Options on the Russian Ruble/US Dollar (RUB/USD) Futures Contract (Monthly)
Amendments to the Termination of Trading Rule of the Options on the Russian Ruble/US Dollar (RUB/USD) Futures Contract (Monthly) to Clarify LTD in the Event of a Russian Holiday.
Amendments to the Termination of Trading Rule of Eight (8) Coal Futures and Options Contracts
Effective Sunday, November 8, 2020, for trade date Monday, November 9, 2020, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will amend the Termination of Trading rules of eight (8) coal futures and option contracts (the “Contracts”) in the table below to align the Contracts’ last trade date (“LTD”) for December contract months with Argus’ current practice.
Correction to the CME ClearPort Reporting Hours for CME and CBOT Products
Effective Tuesday, October 20, 2020, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME”) and The Board of Trade of the City of Chicago, Inc. (“CBOT”) (collectively, “the Exchanges”) will correct the CME ClearPort reporting hours for CME and CBOT futures and options contracts, excluding OTC FX futures and options contracts, (the “Contracts”).
Quality criteria, international standards, transparency: market consultation on the DAX reform started
Deutsche Börse Group
STOXX Ltd., the global index provider of the financial services provider Qontigo, started a market consultation today as part of a reform of the DAX selection indices . The aim is to introduce extended quality criteria for the selection of index constituents of the DAX family (DAX MDAX, SDAX and TecDAX) and to align these criteria with international index standards. A high level of capital market relevance and objectivity should be maintained, while transparency and predictability should be further strengthened.
Eurex Clearing named ‘Clearing House of the Year’ at the GI Investment Excellence Awards 2020
You never get bored of winning, so we are happy to announce that we have again been named ‘Clearing House of the Year’. It’s confirmation of our constant search for – and delivery of – innovative products and solutions for our customers, or as Luke Jeffs, Editor, Global Investor kindly put it: “Eurex Clearing is one of the world’s leading central counterparties, assuring the safety and integrity of markets while providing innovation in risk management, clearing technology and client asset protection. The Frankfurt-based firm clears a broad scope of products under a single framework in Europe, both listed products and OTC, and accepts the world’s most comprehensive spectrum of eligible collateral.”
Eurex nabs MSCI futures market share following SGX delisting; After SGX announced in May that it would be delisting its MSCI futures by February 2021, Eurex Exchange has increased its market share.
Annabel Smith – The Trade
Derivatives exchange Eurex has increased its market share in Asia-based MSCI futures after the Singapore Exchange (SGX) confirmed it would delist the products in May this year.
ICE Benchmark Administration Launches Beta Version of GBP SONIA ICE Swap Rate
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announces that ICE Benchmark Administration Limited (IBA) has launched an initial, ‘Beta’, version of its GBP ICE Swap Rate for SONIA swaps.
DTCC INTRODUCES CLAIMCONNECT TO AUTOMATE AND SIMPLIFY CORPORATE ACTIONS CLAIM PROCESSING
(Press release via email)
New service will enable clients to bilaterally manage and settle claims seamlessly through a flexible, single point of entry
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that its Depository Trust Corporation (DTC) subsidiary has filed with the U.S. Securities and Exchange Commission (SEC) a proposal to launch ClaimConnect, a new DTC service that will centralize and automate cash claim processing across the entire lifecycle of a corporate action claim.
Nigerian Stock ExchangeMoves Closer To The Launch Of West Africa’s First Exchange Traded Derivatives (ETDs) With SEC’s Approval-In-Principle Of NG Clearing
Investors in the global capital markets can expect the launch of West Africa’s first Exchange Traded Derivatives (ETDs) on The Nigerian Stock Exchange (NSE or The Exchange) in the near term following the registration of NG Clearing by the Securities and Exchange Commission (SEC) as a premier Central Counterparty Clearing House (CCP). The approval-in-principle will allow The Exchange to launch ETDs supported by NG Clearing in the risk management process.
Europe’s Nexi and SIA to Merge in $17.6 Billion Payments Deal; Agreement is the latest tie-up in a sector where scale is a competitive advantage
Ben Dummett and Giovanni Legorano – WSJ
Italy’s Nexi NEXI -0.68% SpA agreed late Sunday to acquire crosstown fintech rival SIA SpA in a stock deal that creates a European giant in the fast-consolidating payments sector. The deal, that will result in a company with a combined market capitalization of EUR15 billion, equivalent to $17.6 billion, marks the end of monthslong negotiations. SIA is majority-owned by an arm of the Italian government, while Nexi is listed on the Milan bourse.
TP ICAP signs seven-year deal with BT on remote voice trading technology; BT said the seven-year contract will provide TP ICAP’s London team with a secure, software-based platform and applications featuring remote working capabilities.
Annabel Smith – The Trade
Interdealer broker TP ICAP has inked a seven-year contract with BT to deploy its software-based platform to boost its voice trading processes with remote working capabilities.
TP ICAP Hires David Everson as Head of Matchbook Credit EMEA; Ambition to grow TP ICAP’s post-trade risk management solution, Matchbook
TP ICAP, a leading provider of market infrastructure, today announces the appointment of David Everson as Head of Matchbook Credit, EMEA TP ICAP’s Matchbook business is a post-trade risk management solution that helps clients achieve cost efficiencies. David will build on TP ICAP’s growing portfolio of optimisation products to cover Fixed Income and Emerging Markets across EMEA.
Trump’s Covid-19 case prompts questions, financial services in a post-Brexit world; A rundown of the most important global business stories you need to know for the coming day, from the newsroom of the Financial Times. Available every weekday morning.
Donald Trump’s doctors said the president could be discharged from hospital today after testing positive for Covid-19
Bitcoin’s Rising Correlation With Stocks Debunks Haven Narrative
Vildana Hajric – Bloomberg
Stocks were jolted Friday following news President Donald Trump tested positive for coronavirus. But in a move counter to the often-touted narrative that the dominant cryptocurrency acts as a haven, Bitcoin also retreated. That’s because the correlation between Bitcoin and the benchmark S&P 500 stock index remains positive, meaning that its price movements are consistent with those in equity markets. In addition, Bitcoin’s 14-day Relative Strength Index (RSI) reading clocks in at 45, while the equity index’s is at 51. That suggests the cryptocurrency’s decline has been more severe than the overall stock market drop.
Cryptocurrency exchanges generated over $169B in trading volumes in September
Cryptocurrency exchanges in The Block’s legitimate volume index reported over $169 billion in volume for the month of September. Last month was the second-highest trading volume month in 2020, as shown in the data below. The largest exchange by trading volume continues to be Binance, which generated $113B in volumes — taking up 66.8% of the market share.
Decentralized exchange volumes hit $23.5 billion in September
Saniya More – The Block
Data for September shows that decentralized exchanges saw more than $23 billion in trade volume for the month. The approximately $23.5 billion in volume reflects a 103% month-over-month increase compared to August’s $11.6 billion, according to data published by Dune Analytics, which tracks volumes in the DEX ecosystem. September’s volume figure is higher than previously reported.
Uniswap’s monthly trade volume exceeded Coinbase’s in September
Market data collected by The Block Research shows that, for the first time, Uniswap’s monthly trade volume exceeded that of crypto exchange Coinbase. During September, Uniswap saw approximately $15.4 billion in volume — making up 65% of the total reported by DEXs for that month, which was $23.5 billion. By comparison, Coinbase reported $13.6 billion in monthly trade volume.
SEC Is Willing to ‘Try’ a Tokenized ETF, Chairman Says: Report
Kevin Reynolds – Coindesk
Securities and Exchange Commission (SEC) Chairman Jay Clayton said the regulatory body’s open to the idea of a tokenized exchange-traded fund (ETF), according to a report by Decrypt. “We’re willing to try that: our door is wide open,” the report quoted Clayton as saying in a webinar yesterday with the Chamber of Digital Commerce. While Clayton’s statements expressed a willingness to explore the idea of tokenized stocks, the report also noted recent actions by the regulatory body that would seem to indicate the day those ideas becoming reality is still a ways off.
Pro-Crypto PAC Giving $50 in Bitcoin to the Campaign of Each Member of Congress
Jaspreet Kalra – Coinbase
If your elected representative to the U.S. Congress has never heard of cryptocurrencies, how do you start telling them about it? Hoping to raise awareness, blockchain advocacy group Chamber of Digital Commerce’s Political Action Committee (PAC) wants to start by contributing $50 worth of bitcoin to the campaign of each congressperson.
The Truth About Bitcoin: People Aren’t Using It As Currency
Robert Stevens – Decrypt
Bitcoin was originally billed as “a peer-to-peer electronic cash system,” but most cryptocurrencies aren’t used for payments.
Surveys have shown that the majority of Bitcoin is held for speculative purposes.
While some retailers accept Bitcoin, purchases have suffered from higher drop-out rates than cards and cash payments.
Open Interest in CME Bitcoin Futures Slides as Market Sapped by Surging DeFi
Omkar Godbole – Coindesk
Bitcoin futures listed on the Chicago Mercantile Exchange (CME) have lost their shine in recent weeks, and that’s in part due to explosive growth in decentralized finance (DeFi), an analyst says. According to data source Skew, open interest or open positions in CME bitcoin futures fell to $345 million on Friday – the lowest level since May 4. The CME is considered synonymous with institutional activity. Open interest is down nearly 64% from the record high of $948 million on Aug. 17. On the same day, bitcoin’s price clocked a 12-month high of $12,476. Open position in bitcoin futures across all cryptocurrency exchanges stood at $3.6 billion on Friday, having peaked at $5.7 billion on Aug. 17.
KuCoin CEO Says Suspects in $281M Hack Identified; Authorities on the Case
Kevin Reynolds – Coindesk
KuCoin CEO Johnny Lyu tweeted that the South Korean crypto exchange has found what he described as the “suspects” of last month’s hack that resulted in the theft of $281 million in cryptocurrencies. “After a thorough investigation, we have found the suspects of the 9.26 #KuCoin Security Incident with substantial proof at hand,” Lyu said in the tweet. “Law enforcement officials and police are officially involved to take action.”
Coinbase now offers ‘instant’ withdrawals via Visa and Mastercard
Yogita Khatri – The Block
Crypto exchange Coinbase is now offering “instant” withdrawals in nearly 40 countries, including the U.S. and the U.K. The new feature is being facilitated via Visa and Mastercard. Coinbase said its customers in the U.S., the U.K., and Europe would be able to withdraw funds with a linked Visa debit card. In the U.S., they will also be able to withdraw with their Mastercard. “By enabling real-time card withdrawals through the Visa Direct capability, Coinbase is delivering a faster, simpler and more connected experience for its users — making it easier to convert crypto balances into fiat, which can be spent at the more than 60M [million] merchant locations where Visa is accepted,” said Terry Angelos, SVP and global head of fintech at Visa.
SEC chair: perhaps all stocks could become blockchain tokens
In a webinar yesterday, Jay Clayton, Chairman of the U.S. Securities and Exchange Commission (SEC), observed that all stock trading is now electronic, compared to twenty years ago. In the past, there were stock certificates, now there are digital entries. “It may very well be the case that those all become tokenized,” said Clayton. Along with Brian Brooks, Acting Comptroller of the Currency (OCC), he took part in a Digital Chamber of Commerce event, “Two Sides of the American Coin: Innovation & Regulation of Digital Assets”.
Fundraising Feud Spurs Anger Among a Chinese Exile, His Followers and His Detractors; Guo Wengui, a close ally of Steve Bannon, harshly criticizes people demanding details of a fundraising effort that has drawn scrutiny
Brian Spegele and Sha Hua – WSJ
Pastry chef Jiamei Lu said she told the Federal Bureau of Investigation this summer that she was the victim of a financial fraud being run by a company linked to exiled Chinese businessman Guo Wengui and former White House political adviser Steve Bannon. Ms. Lu said that after she met with FBI agents in New York, Mr. Guo lambasted her in an online video. Clutching a baseball bat, Mr. Guo called Ms. Lu a Chinese spy, describing her in vulgar terms. “You wait and see,” he said.
Trump Didn’t Disclose First Positive Covid-19 Test While Awaiting a Second Test on Thursday; President received positive result on Thursday evening before making an appearance on Fox News in which he didn’t reveal those results
Michael C. Bender and Rebecca Ballhaus – WSJ
President Trump didn’t disclose a positive result from a rapid test for Covid-19 on Thursday while awaiting the findings from a more thorough coronavirus screening, according to people familiar with the matter. Mr. Trump received a positive result on Thursday evening before making an appearance on Fox News in which he didn’t reveal those results. Instead, he confirmed earlier reports that one of his top aides had tested positive for coronavirus and mentioned the second test he had taken that night for which he was awaiting results.
The dangerous and inexorable rise of the instant expert; The real threat to becoming a specialist is the yearning for quick fixes and instant gratification
Andrew Hill – FT
It is a grim irony that Donald Trump’s health and possibly his political future are now in the hands of highly trained physicians. Over the course of the coronavirus pandemic, he has regularly disparaged health experts.
White House sends mixed message on Trump’s Covid prognosis; President treated with experimental drugs in military hospital as infection spreads among inner circle
Demetri Sevastopulo – FT
The White House doctor overseeing Donald Trump’s treatment at Walter Reed hospital sowed confusion about his health on Saturday by suggesting the president had contracted Covid-19 on Wednesday, earlier than thought.
Trump’s Condition Clouded by Confusion and Concern for Campaign
Mark Niquette – Bloomberg
Trump’s doctors stay upbeat even as treatment raises questions; Health briefings have offered false or misleading information
Donald Trump’s condition remains clouded by confusion over his treatment for Covid-19, with the president’s effort to show strength contradicted by conflicting accounts from his doctors that raise doubts about how soon he’ll be able return to work and his re-election campaign.
How Sick is Trump? How Much Can He Campaign?
Kathleen Hunter – Bloomberg
Confusion, contradictions and a campaign on hold a month before Election Day. It’s been a remarkable 72 hours. The White House has sought to portray Donald Trump as fully in charge and still working, even as he receives treatment in the hospital for Covid-19. But conflicting accounts from his doctors raise doubts about how soon he’ll be able resume his re-election campaign.
The Stock Market’s Leaders Appear Most Vulnerable to Biden’s Tax Plan; Technology sectors that have surged during the pandemic could be hit particularly hard by proposed tax changes
Karen Langley – WSJ
A corporate tax increase stemming from a Democratic victory in November could undermine one of the strongest drivers of this year’s market recovery, market analysts say. Democratic presidential nominee Joe Biden has proposed raising the corporate tax rate to 28% from 21%, imposing a new minimum tax on U.S. companies and increasing taxes on foreign income of many U.S.-based multinationals, among other plans.
The Real, Ugly Story of Trump’s Taxes; The president’s debts — paired with his narcissism — reveal him as a bad businessman and a security threat.
Brooke Sample – Bloomberg
Trump’s Taxes Show He’s a National Security Threat — Timothy L. O’Brien
In a tour de force of hard-won reporting, the New York Times has put numerical clothing on what we’ve known about President Donald Trump for decades — that, at best, he’s a haphazard businessman, human billboard and serial bankruptcy artist who gorges on debt he may have a hard time repaying.
FCA assists innovative companies in tackling coronavirus challenges
The FCA has opened application windows for two ‘sandbox’ services to support innovative firms tackling challenges caused by the coronavirus (Covid-19) pandemic.
Federal Court Orders Pennsylvania Man Pay $7.4 Million in Restitution for Multi-Million Dollar Bitcoin Fraud
The Commodity Futures Trading Commission today announced that U.S. District Judge Loretta A. Preska of the U.S. District Court for the Southern District of New York entered a consent order against Jon Barry Thompson of Easton, Pennsylvania, imposing injunctive relief and restitution of approximately $7.4 million. The order resolved a CFTC enforcement action in which the CFTC charged Thompson with knowingly or recklessly making false representations to two customers in connection with their purported purchase of Bitcoin [See CFTC Press Release No. 8023-19].
CFTC’s Energy and Environmental Markets Advisory Committee to Meet on October 16
Commissioner Dan M. Berkovitz, the sponsor of the Energy and Environmental Markets Advisory Committee (EEMAC) at the Commodity Futures Trading Commission, today announced that the EEMAC will hold a public meeting on Friday, October 16, 2020 to hear remarks on the integration of environmental, social, and governance (ESG) factors within the energy and environmental markets. The meeting will begin at 9:00 a.m. (EDT) and be held via videoconference in accordance with the agency’s implementation of social distancing due to the COVID-19 (coronavirus) pandemic.
FINRA Updates the OTCBB/OTC Equities High Price Dissemination List
FINRA is publishing its quarterly OTCBB/OTC Equities High Price Dissemination List for the second quarter of 2020. This updated list of OTC equity securities eligible for trade report dissemination for trades of fewer than 100 shares is effective as of October 2, 2020. To view changes, visit the Daily List: Security Attribute Changes page, select the “Unit of Trades” filter and enter October 1, 2020 as the “Start” date and October 2, 2020 as the “End” date.
Proposed Rule Change to Adjust FINRA Fees to Provide Sustainable Funding for FINRA’s Regulatory Mission
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to adjust FINRA fees to provide sustainable funding for FINRA’s regulatory mission.
Funding FINRA’s Mission
Eileen Murray | Robert W. Cook
Dear Member Firms, As a not-for-profit membership organization, FINRA is committed to openness and engagement with our member firms regarding our financial plans. In that spirit, we are writing to update you on FINRA’s current financial situation and our path forward for funding FINRA’s mission of protecting investors and promoting market integrity while facilitating vibrant capital markets. As we have stated in several prior financial reports and communications, this path forward must eventually include an increase in member fees.
ESMA publishes updated Q&As on securitisation topics and Guidelines on Portability of Information between Securitisation Repositories
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its final report on the Guidelines on portability of information between securitisation repositories under the Securitisation Regulation. These Guidelines set out common provisions that a securitisation repository (SR) should follow when transferring securitisation information to another SR.
Investing and Trading
Retail Investment: A force for good or evil? Following a surge in retail investment amid increased market volatility and the coronavirus pandemic, Annabel Smith unpacks its potential impact on institutional investors and the trading landscape.
Annabel Smith – The Trade
An isolated population lured in by a string of brokers opting to offer 0% commissions has seen retail investment surge during the coronavirus pandemic. The sudden wave of stay-at-home investors eager to profit from increased volatility has, however, raised concerns as to how retail investors coexist and interact with their institutional brothers and sisters in the market.
Bonds Were a Safety Net When Stocks Fell. Investors Fret They Aren’t Anymore; Long a basic investment strategy, balanced portfolios might need a rethink
Paul J. Davies – WSJ
A reliable link between stocks and government bonds that defined a popular investment strategy for decades has broken this year. Some investors worry the rupture is permanent. Investors for years could chase returns and guard against economic ups and downs by putting 60% of their funds in stocks and 40% in bonds. When storm clouds gathered and the S&P 500 took a hit, Treasury yields would typically fall and bond values rise, alleviating losses on stocks.
The end of the dollar’s exorbitant privilege; A crash is likely given the collapse in US domestic saving and a gaping current account deficit
Stephen Roach – FT
The riddle once posed in the 1960s by former French finance minister (eventually president) Valéry Giscard d’Estaing is about to be solved. Giscard bemoaned a US that took advantage of its privileged position as the world’s dominant reserve currency and drew freely on the rest of the world to support its over-extended standard of living. That privilege is about to be withdrawn. A crash in the dollar is likely and it could fall by as much as 35 per cent by the end of 2021.
Markets Were Already Braced for Chaos—and Then Came the Diagnosis; Traders worried about the election have been buying hedges against volatility.
Michael P Regan – Bloomberg
The news that President Donald Trump and his wife, Melania, have contracted Covid-19 brings a dizzying array of possibilities for the nation—and the financial markets. It’s the type of uncertainty-inducing event that can act like a gut punch. But in this case, many stock investors were already in a defensive crouch. In options and futures, demand for hedges to protect against sudden bouts of volatility has been strong. Traders say that’s in case Trump refuses to accept a loss in November, a prospect he reinforced in Tuesday night’s debate.
October Surprises Usually Don’t Turn Out So Bad for Stocks; Presidential elections — and health scares — add to wild rides during the month, but markets tend to finish strong.
Suzanne Woolley – Bloomberg
U.S. President Donald Trump’s positive coronavirus test stirred up more turbulence in stocks, two days into a month infamous for its volatility. Markets around the world fell after Trump tweeted about his test, and the VIX — a volatility index known as Wall Street’s fear gauge — jumped on Friday by the most in a month before paring gains. Even after closing down nearly 1% following a volatile day of trading on Friday, the S&P 500 posted gains of 1.5% for the week.
What Nobody Wants to Admit About Investing in Art
James Tarmy – Bloomberg
Everyone stuck at home is tired of looking at the same stuff. Online art sales, it turns out, have surged during the pandemic. Auction house Sotheby’s sold $285 million worth of fine art and decorative objects this year through July 31 — triple the value for all of 2019. In that time, 13,000 lots sold compared with 4,000 during the same period the year before. The online portal for art and furniture dealers, 1stdibs, says that between March 1 and Aug. 31 it facilitated the sale of a staggering 8,000 artworks, a 65% jump year over year.
Cineworld Shuts Theaters on Film Delays, Risking 45,000 Jobs
Thomas Seal – Bloomberg
Move affects Regal, Cineworld and Picturehouse chains; Closures raise pressure on chain to raise additional funds
Cineworld Group Plc said it will temporarily suspend operations at all its American and British movie theaters now that crucial income from winter blockbusters has been pushed into 2021 by the coronavirus pandemic. The world’s second-biggest cinema chain will on Thursday close its 536 Regal theaters in the U.S. and its 127 British locations, including the Picturehouse brand, affecting about 45,000 employees, the company said in a statement Monday.
‘We Were Fortunate on Timing,’ 28-Year-Old SPAC Billionaire Says
Benjamin Stupples – Bloomberg
‘Gearhead’ Healy’s Hyliion goes public in deal with Tortoise; Truck electrification startup began trading on Friday
Thomas Healy was secretly arranging a deal to turn his Texas-based truck electrification startup into a publicly traded company when the coronavirus pandemic struck. The crisis halted many transactions, but not the one between special-purpose acquisition vehicle Tortoise Acquisition Corp. and Hyliion Inc., which Healy founded in 2015.
There’s No Place to Hide Anymore When the Stock Market Plunges
James Mackintosh – WSJ
September hurt shareholders, not only because stocks fell but also because the things they’d bought to protect their portfolios also fell. From the S&P 500’s high on the 2nd of the month, stocks, Treasurys, gold, bitcoin and the VIX volatility index all dropped. This total failure of hedging is unusual, but investors need to get used to the idea that Treasurys no longer provide the ballast for a portfolio. It wasn’t just the normal pattern of asset returns that broke down. Within the stock market the correction in Big Tech upended many of the reliable ways to minimize losses. High-quality stocks, companies with strong balance sheets and reliable profits, fell by more than the market. Smaller companies beat bigger companies.
Barry interviews Dave Portnoy
Joshua M Brown – The Reformed Broker
My partner Barry Ritholtz interviewed Barstool founder and newly minted daytrading czar Dave Portnoy for his podcast at Bloomberg.
Buying Just One Share of Stock Is Easier Than Ever. But Should You? It may seem kind of pointless. But there are plenty of reasons to consider it.
Dan Weil – WSJ
One may be the loneliest number, as the song says. But there is nothing wrong with owning one share of stock, financial advisers say. In fact, buying one share of stock has recently become easier than ever. True, buying a single share might seem, well, kind of pointless. But for smaller investors, it can be a powerful psychological tool, a way to experiment with investing in individual companies and getting a feel for their day-to-day movements before taking a bigger plunge. It can also be a relatively safe and easy way to diversify a small portfolio—or even introduce a young person to the world of investing.
Five Reasons Why Investors Might Buy Negative-Yielding Debt; From currency fluctuations to deflation, there are scenarios in which purchasers of negative-yield bonds can come out ahead
Simon Constable – WSJ
Why would anyone want to buy a bond with a negative yield? It’s a good question especially given that experts estimate that there are almost $16 trillion of bonds in the world that have negative yields. That’s a lot of securities that investors have purchased knowing that they’ll get back less money than they invested. It means that a one-year bond with a face value of $1,000 that yields minus 1% will leave the investor with $990 when the bond matures.
Frontier and Emerging Markets: What’s Behind the Lower Long-Term Returns; Much of it is due to exchange-rate risk for U.S.-based investors
Derek Horstmeyer – WSJ
Investors looking to boost returns over the long run often turn to emerging-markets mutual funds and even frontier-markets funds, with the idea that the more risk you take, the greater the long-run returns.
The New Math for Dividend Stocks; It has gotten a lot more complicated thanks to the economy and pandemic-related government loans
Bailey McCann – WSJ
For the past decade, dividend stocks were a pretty simple play: stable stocks that you hold for building wealth or generating income in retirement.
These Options Terms Are Greek to You; Delta, gamma, theta, vega and rho are among the Greek terms options traders use to describe the sensitivity of an option’s price to various factors. Here is what they mean.
Nick Ravo – WSJ
Options exchanges are racking up records in trading activity this year—thanks to hedge funds’ high-speed algorithms, as well as new individual investors entering the market. Some of these investors are so new, in fact, that they may lack fluency in the language of options.
When Saving for College, Don’t Just Look at 529s; Coverdell Education Savings Accounts are similar, but they offer an additional advantage
Leonard Sloane – WSJ
It sometimes seems like when it comes to college-savings vehicles, 529s are the only game in town. But investors are doing themselves a disservice if they don’t also look at another savings tool available: Coverdell Education Savings Accounts (ESAs). Like 529s, ESAs are a tax-favored way to save for education expenses. Both types of accounts allow assets to grow tax-free when distributions are used to cover qualifying expenses.
Bankrupt Fracker Sable Permian to Sell to Bank Lenders; Lenders led by JPMorgan agree to trade their debt claims for ownership of the West Texas fracker
Alexander Gladstone – WSJ
Bankrupt shale fracker Sable Permian Resources LLC has agreed to sell itself to bank lenders, all but wiping out more than $700 million of debt held by secured bondholders.
Why (and How) I Plan to Die With an Empty Bank Account; A financial philosophy popular among the world’s wealthiest can be a worthy aspiration for us all.
Farnoosh Torabi – Blomberg
If 2020 has taught us anything, it’s that life is uncertain. Through this lens, I’ve started to abandon some conservative personal finance principles. This summer, for example, I went against the adage of “staying the course” with retirement and stuck my hand in my IRA to shed some stocks. I also bought a house in what can be considered a risky environment. To date, I have no regrets.
Environmental, Social and Corporate Governance
401(k)s Could Become Even Less Welcoming to ESG Funds
Dieter Holger – WSJ
Investors looking for more sustainable-investing funds in their retirement plans could be in for a wait.
The U.S. Labor Department in June proposed a rule that would make it more difficult for funds focused on so-called do-good investments—meaning they select securities based on environmental, social and governance (ESG) factors—to be included in 401(k) plans. The department says the rule, which could take effect as early as Jan. 1, is needed to protect workers from investments that aren’t in their best financial interests.
What You Need to Know About Social-Impact Investing; When you hear ‘socially responsible’ or ‘impact’ or ESG, you likely are making wrong assumptions. Here are some of the biggest ones.
Meir Statman – WSJ
It is an investing strategy that goes by many names. Some call it socially responsible investing. Others call it social-impact investing, or just impact investing. Still others call it ESG (for environmental, social and governance) investing. But whatever the name, they all have one thing in common: a lot of misunderstanding.
A Norwegian-Pakistani millennial explains why ESG is key; Younger executives align personal and business values as they ascend into decision-making roles
Kiran Aziz – FT
Half of the global workforce is now made up of millennials — the generation to which I belong. A large majority of millennials — those born between 1981 and 2000 — are digital natives and are purpose-driven. They want to work for and be associated with businesses that incorporate environmental, social and governance (ESG) goals.
Companies Test a New Type of ESG Bond With Fewer Restrictions
Kristin Broughton – WSJ
Finance chiefs are selling a new type of bond designed to attract socially minded investors that costs less and offers more leeway for companies than other types of sustainable debt.
These instruments, known as sustainability-linked bonds, are similar to traditional debt sales—with one major exception: They are usually structured such that companies pay a higher interest rate to investors if they fail to achieve a set of environmental and other goals before the maturity date. Also, the proceeds from these bonds can be used for general purposes, such as paying down existing debt, which sets it apart from other types of green, social and sustainability bonds.
California’s Grim Fire Mark: Burn Exceeds Last 3 Years Combined
Brian K Sullivan and Mark Chediak – Bloomberg
Fires have been stoked by hot weather, dry bush, powerful wind; At least 31 people have died in the blazes since 2020 began
Wildfires in California have burned a record 4 million acres since the start of 2020, charring more land in the past nine months than during the previous three years combined.
Water shortages in U.S. West likelier than previously thought
Sam Metz – AP
There’s a chance water levels in the two largest man-made reservoirs in the United States could dip to critically low levels by 2025, jeopardizing the steady flow of Colorado River water that more than 40 million people rely on in the American West.
U.K.’s First New Deep Coal Mine In Three Decades Approved
Jess Shankleman – Bloomberg
Cumbria County Council votes in favor of Woodhouse Colliery; Campaigners say plans undermine net zero greenhouse gas goal
The U.K.’s first new deep coal mine in three decades was approved on Friday, despite a government law to cut greenhouse gas emissions to net zero by mid-century.
Barclays veteran and electronic trading product head D’jelal departs for more senior role; Nej D’jelal has left for a more senior role at an investment bank in the latest high-profile departure for the electronic equities trading division at Barclays.
Hayley McDowell – The Trade
The head of electronic equities and quant prime services product for Europe at Barclays is set to leave the UK investment bank after more than eight years, The TRADE understands.
New Hires to the Holodeck: Fidelity Investments Tries Collaboration Via Virtual Reality; As in videogames, VR creates an immersive experience. Corporations are starting to use that to build the work ties lost during the pandemic
Sara Castellanos – WSJ
As coronavirus lockdowns drag on, IT leaders are feeling hard-pressed to keep collaboration fresh among their remote workforces through video chat and other digital tools. So some are turning to virtual reality. Fidelity Investments Inc., the financial services firm, has been exploring how virtual reality could be used to build workplace relationships among new employees working remotely. In May, it shipped brand-new virtual reality headsets made by Pico Interactive Inc. to more than 140 employees in its operations division. The workers were either new to Fidelity, or had recently moved into an operations role.
Japan Struggles to Save Beloved Bullet Trains From Running Out of Passengers
Shiho Takezawa – Bloomberg
East JR forecasting biggest loss since privatization in 1987; Go To campaign to spur regional travel has had limited success
These days, the section of Tokyo Station serving regional destinations is a shadow of its former self. Gone are the usual crowds and on a mid-week afternoon in late September, just a handful of commuters browsed bento-box stores. “I see more cleaning staff getting off trains than passengers,” said Taro Aoki, who oversees 18 fast-food outlets in the capital’s main inter-city rail terminal. “People used to swiftly pick which bento to buy and wait in line, but now, there’s hardly anyone around.”
Credit Market Dysfunction in Sweden Brings Benefits to Some
Charles Daly and Hanna Hoikkala – Bloomberg
The dysfunction in Sweden’s credit market is creating opportunities for investors ready to take advantage of murky pricing and unreliable liquidity. Niklas Edman, a portfolio manager at Carnegie Fonder AB, says that market features such as illiquidity, a lack of transparency and price volatility are “not only a risk or threat, they can also pose an opportunity.”
Jordan Builds Record Wheat Hoard as Nations Boost Food Security
Mohammad Tayseer and Salma El Wardany – Bloomberg
Kingdom now has enough wheat to cover its needs for 17 months; Saudi Arabia is investing in agriculture; UAE buys dairy cows
Jordan has become the latest Middle Eastern country to strengthen food security as the coronavirus pandemic upends supply chains and causes soft commodity prices to rise. The kingdom has increased wheat reserves to a record 1.35 million tons, enough to meet its needs for 17 months, and wants to grow them further, according a spokesman of the Ministry of Industry and Trade.
Brexit uncertainty causes ‘hiring paralysis’ for London asset managers; Trend contrasts with number of fund management employees in rival EU markets increasing
Siobhan Riding – FT
The number of asset management employees flatlined in the UK last year while increasing in rival fund centre Luxembourg, in a sign of how Brexit uncertainty has taken a toll on hiring in the City of London. Employment levels in the UK’s £8.5tn investment industry remained broadly unchanged year on year in 2019, as groups awaited clarity on the country’s approach to Brexit, according to data from the Investment Association, a trade body.
COVID-19 and no-deal Brexit could cost UK $174 billion a year: Baker & McKenzie
The combination of COVID-19 and a failure to secure a post-Brexit trade deal with the European Union could cost the United Kingdom around 134 billion pounds ($174 billion) each year in lost GDP for a decade, research by law firm Baker & McKenzie showed. Prime Minister Boris Johnson has set Oct. 15 as a deadline for clinching a post-Brexit trade deal which would kick in when the United Kingdom leaves informal EU membership at the end of this year.
UK business research links to Europe plunge after Brexit vote
Peter Foster – FT
International collaboration by British businesses under the EU’s flagship research grant scheme have almost halved since the 2016 Brexit referendum as prolonged uncertainty weighs on sentiment. The sharp drop-off in links under the £80bn Horizon 2020 research programme, which British companies will remain part of after the end of the Brexit transition period, was described as “deeply disappointing” by the CBI employers’ body. It called on the government to take urgent steps to arrest the decline.
Not getting post-Brexit trade deal would be irresponsible, Germany says
The COVID-19 pandemic has made sealing a post-Brexit trade relationship with Britain more urgent than before and failing to get a deal would be irresponsible, Germany’s Foreign Minister Heiko Maas said on Monday.
Speaking after a meeting European Union’s chief Brexit negotiator Michel Barnier, Maas said the EU wanted to be constructive and was still aiming for a deal.
“With today’s health and economic challenges, people on both sides of the channel have enough to shoulder, so it would be totally irresponsible to burden them in this position with additional problems through a no-deal,” Maas said.
Toyota, Nissan seek customs reimbursement from UK if Brexit talks fail: Nikkei
Japan’s two biggest automakers, Toyota and Nissan, will ask Britain to reimburse them for additional custom charges incurred if the UK government fails to reach a Brexit trade deal with the European Union, the Nikkei financial daily reported on Monday. The companies – Toyota Motor Corp 7203.T and Nissan Motor Co Ltd 7201.T – want payments to cover the additional 10% tax on automobile imports from Britain that the EU would impose should Britain crash out of the EU without an agreement, the Nikkei said, without citing sources.
UK’s Johnson doesn’t want a no-deal Brexit but can live with it
British Prime Minister Boris Johnson does not particularly wish for the Brexit transition period to end without a new trade deal in place but believes that Britain could live with such an outcome, he said on Sunday.
UK financial watchdog sets out post-Brexit rulebook
Britain’s Financial Conduct Authority (FCA) published updated rules on Thursday that will apply from January after Brexit transition arrangements end, with waivers in some cases until March 2022. Britain has adopted all EU financial rules into UK law and has given the FCA powers to decide how and when changes to its rules apply after the end of the transition period.
Business ethics guru accused of cheating shareholders; Investors in Dov Seidman’s consultancy allege they were paid artificially low price when they cashed out
Mark Vandevelde and Sujeet Indap – FT
The author of a bestselling book on moral leadership has been accused of cheating investors out of millions of dollars when he sold his business ethics consultancy to a private equity firm.
Virtual Races Give Marathoners a Chance to Compete on Their Own; Participation and fees are down, though, and charities supported by races are hurting.
Tim Loh – Bloomberg
Each August, in normal times, about 13,000 people run 7 miles up the Massachusetts coastline as part of the Falmouth Road Race. To kick off this year’s event, my wife held a watch in the air and yelled, “Go!” I took off running down a narrow trail where we live—in Munich. I’d always been skeptical of virtual races, which allow runners to participate from afar. Why pay someone a registration fee to run around your own neighborhood?