Options Basics For Newbies: Mind Your Greeks, Professor Says
Suzanne Cosgrove – John Lothian News
The well-documented influx of new retail investors into equities and options on equities in 2020 and 2021 has boosted derivatives volume, but it also has unleashed traders who may not be prepared for high rates of volatility if and when the market falters.
In an interview with JLN, finance professor Edward Szado urged novice traders to learn the ins and outs of options trading and investing before they dive into the market. “The first step before trading a single option is to go to the free websites of the OCC and OIC (Options Industry Council) and learn more about them,” he said.
Szado, who teaches finance at Providence College in Rhode Island, is also the research director for the Institute for Global Asset and Risk Management (INGARM), an educational foundation.
“Options are fabulous, but (there are) so many characteristics that you need to know about them,” he said. “You need to understand their non-linear nature and the Greeks (which are ways to measure the factors that impact options prices), particularly delta and gamma,” he said.
To read the rest of this story, go here.
Hits & Takes
John Lothian & JLN Staff
Have you registered for Boca-V yet? The virtual nature of the conference gives you a unique opportunity to participate in one of most meaningful conferences in the derivatives business. I always learn a lot from attending Boca and I encourage you to sign up for this year’s virtual conference.
Here is the latest report from Acuiti titled “The Market Data Review.” They say, “The widespread commercialisation of market data over the past decade has become a major cause of concern for market participants and regulators alike. But what are the realistic solutions and how can the market for market data be put on a more sustainable path?” This report is not free; there is a fee to receive it.
The Federal Reserve Bank of Chicago and their Financial Markets Group has an opening for a financial markets analyst. You can see the job listing HERE.
I am in the process of sending out invoices for the John Lothian Newsletter. The policy of this company is that if you find the newsletter valuable, you are asked to pay for it. If you have more than one person at your firm reading it, we believe you find it valuable and will send you an invoice. If you regularly open the newsletter and read it, we believe you find it valuable and will send you an invoice. There are some exceptions to this policy. We give the newsletter away to retired people, students, college professors and fellow journalists. So if we send you an invoice and you fit into one of these categories, let us know and we will void the invoice. If you wish to receive an invoice for your 2021 subscription, please email me at email@example.com.
Please support the PanXchange GoFundMe campaign to help them fight a trademark lawsuit.
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
A Conversation with Industry Stalwarts: Richard Grasso & Harvey Pitt
Jim Toes – STA
Over the past three weeks, STA has received significant input from a broad range of market participants, with respect to a letter we submitted to the House Financial Services Committee, just ahead of its virtual hearing on the market volatility we experienced in late January and early February. The title of the hearing is “Game Stopped? Who Wins and Loses When Short Sellers, Social Media and Retail Investors Collide,” and the CEOs of Robinhood, Citadel, Melvin Capital Management and Reddit will be among the witnesses.
*****I can think of more interesting people to talk to.~JJL
North Korea Turning to Cryptocurrency Schemes in Global Heists, U.S. Says; Justice Department charges North Koreans hackers in wide-ranging scheme that included attempts to steal $1.3 billion for Pyongyang
Robert McMillan and Aruna Viswanatha – WSJ
The Justice Department unsealed an indictment Wednesday against two alleged members of North Korea’s military intelligence services, accusing them of hacking banks and companies in more than a dozen countries including the U.S. as part of a wide-ranging scheme to steal $1.3 billion over the past half-decade for Pyongyang.
*****The North Korean government has had an interest in using cryptocurrency for a number of purposes for a while now. In April 2019, an American hacker named Virgil Griffith traveled to Pyongyang to give a talk about how to use cryptocurrency to bypass international sanctions. He was arrested on Thanksgiving later that year.~MR
What ‘The Hunger Games’ Three-Finger Salute Means to Protesters Across Asia; Borrowed from the literary and film series and popularized by Thai protesters in 2014, the gesture has become a prominent symbol against this month’s coup in Myanmar
Feliz Solomon – WSJ
As protests against a Feb. 1 military coup have gripped Myanmar, one symbol has emerged as an icon: the three-finger salute. Civil servants on strike, student protesters, even refugees living abroad have made the gesture in a show of defiance. The sign has an unlikely origin story, popularized in the wake of a different coup, in 2014, in neighboring Thailand. Protesters there borrowed it from the literary and film series “The Hunger Games,” in which it is shown as a symbol for a fictional uprising against tyrannical overlords. Images of political activist Rittipong Mahapetch—flashing the sign at a busy Bangkok intersection against the backdrop of a pedestrian overpass crowded with soldiers—went viral just over a week after the Thai coup.
*****Who knew giving the “Scout Sign” could be so popular and dangerous all at once.~JJL
Nine out of ten of NYC restaurants could not afford rent in December
Fox 5 New York
A new report from the NYC Hospitality Alliance shows the extreme financial problems restaurants in New York City are facing, as 92% of the city’s restaurants could not afford to pay their rent in December.
The number has steadily worsened throughout the pandemic, from 80% of restaurants in June 2020 not being able to pay rent.
*****Remember to order in more often. We will need the restaurants when we can return to being with each other more.~JJL
Wednesday’s Top Three
Our top story Wednesday was Trading Technologies’ announcement, Trading Technologies Appoints New President, Chief Financial Officer, EVP Global Head of Sales and Chief Technology Officer. Farley Owens, TT’s new president, was also our MarketsWiki Page of the Day. Second was Bloomberg’s At 93, She Waged War on JPMorgan—and Her Own Grandsons. Third was John Lothian News’ NFL Calls Time-out on ErisX’s NFL Binary Options, from Thom Thompson.
200,627,219 pages viewed; 25,410 pages; 230,410 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,497 pages; 13,589 edits
The Real Battle for the City of London; Clearing is an important business, but the loss of EU “equivalence” elsewhere is potentially devastating.
Elisa Martinuzzi – Bloomberg
Britain’s departure from the European Union has left a visible mark on the City of London. Almost overnight at the start of January, the world’s preeminent financial center lost about half of the share trading it used to handle, and a chunk of the buying and selling of derivatives. Next could be clearing, the market plumbing that guarantees the smooth matchmaking of buyers and sellers. Clearing is a vital piece of financial infrastructure in which London dominates. Its sheer size — trillions of dollars of derivatives are cleared every day — make it an even grander political target for the EU than share trading. But it would be a mistake to consider this the most valuable chip still on the table.
LME brokers plan EU outposts to resolve Brexit effects; Moves are intended to overcome regulatory barriers erected after transition period expired
Laurence Fletcher and Henry Sanderson – FT
London Metal Exchange brokers Sucden Financial and Mitsui Bussan Commodities are planning to open offices in the EU, providing the latest examples of how Brexit is forcing investment firms to adapt to win clients based in the bloc.
Singapore makes pitch as Asia bond hub with Euroclear tie-up; City-state seeks to diversify its markets as equities trading pressured by likes of Hong Kong
Stefania Palma in Singapore and Philip Stafford – FT
Singapore’s bourse will set up a distribution link with one of the world’s largest securities depositories in an attempt to lure global investors to its bond market, as its core equities business comes under pressure from regional rivals.
How Redditors Find the Next GameStop Stock; On the surface, WallStreetBets looks like a casino, but an analysis of the stocks that take off reveals some common factors that drive the winners
Shane Shifflett and Caitlin Ostroff – FT
There is a method to the madness on WallStreetBets. For every stock that soars like GameStop Corp. GME -7.21% and AMC Entertainment Holdings Inc., AMC -1.77% many more names touted on the Reddit site fail to launch. A Wall Street Journal analysis of millions of posts on WallStreetBets, the performance of the most-mentioned companies each month and interviews with traders show what makes a stock take off.
‘Roaring Kitty’ Sued for Securities Fraud Over GameStop Rise
Christian Berthelsen – Bloomberg
Class action accuses Keith Gill of posing as amateur investor; Gill was one of the leading voices promoting the stock online
Keith Gill, one of the most influential voices that pushed GameStop on the WallStreetBets Reddit forum, was hit with a lawsuit that accused him of misrepresenting himself as an amateur investor and profiting by artificially inflating the price of the stock. The proposed class action against Gill, who adopted the YouTube nickname “Roaring Kitty,” was filed Tuesday in federal court in Massachusetts. The suit said Gill was actually a licensed securities professional who manipulated the market to profit himself. Gill touted GameStop shares through an extensive social media presence on Youtube, Twitter and Reddit, where he used a more profane alias.
SEC Data Show $359 Million of GameStop Shares Failed to Deliver
Brandon Kochkodin – Bloomberg
GameStop surged more than 1,700% before curbs were implemented; More than 2 million shares failed to deliver at peak of mania
On Jan. 28, the day after GameStop Corp. mania hit its crescendo on the back of a short squeeze for the record books, about $359 million worth of shares were caught in limbo. More than 1 million shares were deemed failed-to-deliver that day due either to buyers lacking cash to complete purchases or sellers not having the shares to settle trades, according to U.S. Securities and Exchange Commission data.
Big Freeze in Texas Is Becoming a Global Oil Market Crisis
Alex Longley – Bloomberg
More than 4 million barrels a day of supply has been curtailed; Fuel output also curbed following cuts to refinery processing
What began as a power issue for a handful of U.S. states is rippling into a shock for the world’s oil market. More than 4 million barrels a day of output — almost 40% of the nation’s crude production — is now offline, according to traders and executives. One of the world’s biggest oil refining centers has seen output drastically cut back. The waterways that help U.S. oil flow to the rest of the world have been disrupted for much of the week.
Oil and gas industry in Texas buckles under strain of Arctic blast; Frigid temperatures disrupt big pillar of global energy industry, sending crude prices soaring
Justin Jacobs – FT
The oil and gas industry in Texas has buckled under the strain of a blast of Arctic weather that has disrupted a big pillar of the global energy market and sent crude prices to their highest levels in more than a year.
Texans demand answers after dramatic collapse in power supply; Governor says utilities will be asked why equipment was not ‘winterised’
Gregory Meyer and Justin Jacobs – FT
The managers of the Texas grid foresaw record electricity demand when they stared down a cold front this week. What they did not expect was the utter collapse of power supply.
The Electrical Power Crash Is Just Like a Stock Market Crash
Diversification failed when lots of generating plants went down at once.
Peter Coy – Bloomberg
Electrical grids are designed to survive outages at generating plants, but system designers assume the failures will come one at a time and randomly. This time diversification failed because the record cold snap caused lots of plants to fail all at once. It’s what engineers call a “common mode failure”—the mode in this case being the cold itself.
How ‘Flows Before Pros’ Is Disrupting Stock Markets
Tracy Alloway – Bloomberg
It seemed inevitable that the populist forces that have disrupted almost everything else in recent years would eventually arrive to democratize investing. But the sheer impact of retail trading has been shocking, primarily to financial professionals who appeared ill-equipped to deal with it. Organizing via social media, the amateurs have been able to send so-called “meme stocks” like GameStop Corp. soaring, while hedge funds that bet against the chosen companies feel the pain. Some worry that the battle between the “flows” generated by small investors and the “pros,” or professionals, artificially pumps stocks higher in a feedback loop that could lead to a collapse. Others worry such wild trading could ruin the purpose of equity markets: the efficient allocation of capital.
Reddit day trader urges Wall Street probe ahead of GameStop hearing; Keith Gill, also known as Roaring Kitty, to testify alongside hedge fund boss who lost billions
Eric Platt and Ortenca Aliaj and Miles Kruppa and Hannah Murphy – FT
The day trader at the centre of the short squeeze on GameStop stock urged a House committee to investigate “potentially manipulative shorting practices” on Wall Street, ahead of a hearing in which he will appear alongside the hedge fund manager who lost billions on the other side of the bet.
Fed’s Brainard: Climate Change Already Affecting Economy, Financial System; Ignoring global warming risks will bring costs, Fed governor says
Michael S. Derby – WSJ
Federal Reserve governor Lael Brainard said Thursday the economy and financial system are already being affected by climate change, and said the central bank is ramping up work to ensure the financial system can deal with the risks that lay ahead of it.
Robinhood heads to the Hill: What to watch at the Congressional hearing; Washington lawmakers to grill key protagonists in January’s amateur trading frenzy
Philip Stafford – FT
The inner workings of the stocks trading industry will receive a public airing on Thursday when Washington lawmakers grill the key protagonists in January’s amateur trading frenzy. Hedge fund managers, professional investors and specialists in the more arcane corners of trade processing are clearing their diaries and checking popcorn supplies for a session that could determine how regulators deal with an explosion in trading by amateurs for years to come.
In Frigid Texas, Desperate Families Take Risks to Stay Warm; Parents resort to gas stoves or build fires inside their homes during power outages, with no relief in sight
Elizabeth Findell- WSJ
The children played in front of four lighted gas burners in East Austin on Tuesday night as their family tried to warm up during days of subfreezing temperatures, no power, and no relief on the horizon. One-year-old Alex Johnson Jr. toddled, his brother Gabriel Brewster, 3, played with a toy, and their cousin Desiah Fisher, 6, hugged them close, as eight other family members huddled around the light of a single candle. Charlene Brewster, the mother of the boys and a 4-month-old daughter, said she knows how dangerous it is to try to heat an apartment with a gas stove. She had no option but to try it for a little while, she said.
‘I’m Like a SPAC—What the Hell Is That?’: Rap Explains Hot Finance Trend; Special-purpose acquisition companies inspire ‘SPAC Dream,’ featuring homages to experts on social media who taught the singer about investing
Amrith Ramkumar – WSJ
The flashiest trend in finance has Wall Street tycoons, professional athletes and celebrities. Now it also has a rap song. Oakland, Calif., recording artist Cassius Cuvée released a music video about his experience investing in special-purpose acquisition companies, or SPACs, on YouTube earlier this month. Called “SPAC Dream,” it has more than 80,000 views. One Twitter booster: hedge-fund manager William Ackman, who last year created the largest SPAC ever and recently tweeted a link to the video, saying “Watch this.”
Melvin Capital Says It Was Short GameStop Since 2014; Hedge-fund manager Gabe Plotkin defends short-selling strategy in House testimony
Juliet Chung – WSJ
Melvin Capital Management had been betting against GameStop Corp. GME -7.21% since 2014 and still believes online videogame downloads will overtake the retailer’s business model, the hedge fund’s founder said in an advance copy of his congressional testimony made public Wednesday.
Robinhood Fails to Meet Deadline to Give Customers Tax Forms
Misyrlena Egkolfopoulou and Anders Melin – Bloomberg
Retail traders say they are frustrated by missing information; Company says most forms will go out by Wednesday evening
Customers of Robinhood Markets eager to get their U.S. taxes filed woke up on Wednesday to find that the company didn’t meet a deadline to provide the necessary forms.
Roaring Kitty Wants You to Know He’s No Wolf of Wall Street
Misyrlena Egkolfopoulou – Bloomberg
Gill calls idea that he pumped GameStop “preposterous”; He is scheduled to testify Thursday before U.S. House panel
The man who helped fuel the massive surge in GameStop shares is using his appearance before U.S. lawmakers Thursday to insist he’s just a regular guy who believes in the video-game company. Keith Gill plans to say he isn’t a financial adviser, and he wasn’t part of any pump-and-dump scheme, according to testimony he provided U.S. lawmakers.
Penny Stock Craze at Boiling Point With SEC Eyeing Social Media
Sarah Ponczek – Bloomberg
February on track to see near 2 trillion OTC shares trade; SEC suspends trading in SpectraScience after price surge
GameStop mania is off the front page, but the spirit that fed it still rules many corners of the market. Penny stocks are an area where sentiment remains boiling hot, earning the scrutiny of federal regulators. Way-off-exchange venues, where lightly regulated companies have repeatedly been drawn into social media-fueled trading vortexes, saw more than 1 trillion shares change hands in December for the first time in a decade. It happened again in January. This month, daily volume is tracking 64% above those levels, a pace that could push the monthly total toward 2 trillion.
Rise of Retail Army Shrouds Half of Stock Trading in Secrecy
Justina Lee – Bloomberg
More than 50% of volume is done off-exchange on some days; Some wonder just how reliable prices are in light of that
Working in Jersey City as a broker to institutional investors, Michael Beth could mostly only watch in awe as the Reddit mob turned GameStop Corp. into the hottest stock on Earth. It wasn’t always so for Beth and traders like him. The pros his brokerage WallachBeth Capital counts as clients have always been stock-market kingmakers, historically putting them in the mix at pivotal moments.
China Calls West’s Covid Data Criticism ‘Political Interference’
U.S. and U.K. have expressed concern over WHO access; China says ‘high degree of cooperation’ with expert team
China’s foreign ministry pushed back on criticism from the U.S. and U.K. over data sharing and access for World Health Organization experts, saying Beijing had cooperated with its team during a Covid-19 fact-finding trip to Wuhan. “This is yet another case in point of political interference in science,” foreign ministry spokeswoman Hua Chunying told a briefing on Thursday in response to a question on the criticism.
China Blasts Suggestion It Blocked Taiwan Vaccine Purchase
Chris Horton – Bloomberg
Taiwan, BioNTech talks ongoing, health minister still hopeful; Beijing accuses Taiwan of using vaccine for political ends
China’s government hit back at a suggestion by Taiwan’s health minister that it used political pressure to derail a planned purchase of Covid-19 vaccines by the island country. Taiwan’s government “should stop hyping up political issues under the pretext of vaccine issues,” Foreign Ministry spokeswoman Hua Chunying said at a daily briefing in Beijing on Thursday, where she did not explicitly deny that China had interfered in the deal.
Don’t ‘hector’ workers over vaccine, warns top US business group; Head of Business Roundtable says ‘finger wagging’ over Covid-19 jab may prove ‘counterproductive’
Hannah Kuchler – FT
The head of one of America’s largest business groups has warned US employers against “hectoring” their workers into taking a Covid-19 vaccine or “finger wagging” as companies grapple with how to ensure their workforce is inoculated.
Covid infections dropping fast across England, study shows
Positive tests less than one-third of level three weeks ago with London falling the most
Clive Cookson and Jasmine Cameron-Chileshe – FT
Coronavirus infections are falling fast across England, the latest large survey has found, with positive tests now less than one-third the level reported three weeks ago.
These Doctors Want to Pick Their Covid-19 Vaccine, Fearing Reactions, Lower Efficacy; EU leaders pressured AstraZeneca to deliver more doses of its vaccine, but now find some people balk at the shot
Bojan Pancevski, Margherita Stancati and Noemie Bisserbe – WSJ
Health-worker unions in Europe say thousands of their members refuse to take one of the three Covid-19 vaccines available in the region because of concerns over efficacy and reports of side effects, the latest setback for the continent’s slow vaccine rollout.
U.S. Life Expectancy Plummeted in 2020
The drop was particularly steep for Black Americans, with life spans declining by 2.7 years. And communities of color are not getting equal access to vaccines.
7 Virus Variants Found in U.S. Carrying the Same Mutation; Scientists don’t know yet whether the mutation makes the variants more contagious, but they are concerned that it might.
Carl Zimmer – NY Times
As Americans anxiously watch variants first identified in the United Kingdom and South Africa spread in the United States, scientists are finding a number of new variants that originated here. More concerning, many of these variants seem to be evolving in the same direction — potentially becoming contagious threats of their own.
Canada’s slow-burn vaccine roll out puts pressure on Trudeau
Steve Scherer – Reuters
uCanada’s COVID-19 vaccination campaign started on the same day in December as the United States, but it now lags dozens of countries, including its southern neighbor, and Prime Minister Justin Trudeau is feeling the pressure.
Exchanges, OTC and Clearing
SGX and Euroclear Bank to launch Orchid bond structure
Asia’s leading international fixed income marketplace Singapore Exchange (SGX) and Euroclear Bank (Euroclear), the Brussels-based international central securities depositary (ICSD), today announced the launch of the Orchid bond structure in Singapore, combining domestic bond issuance with global distribution channels.
Citi clears first CDS index options through ICE Clear Credit; ICE Clear Credit launched its clearing services for CDS index options last year and expects to add options on iTraxx instruments to its offering in 2021.
Annabel Smith – The Trade
US Investment bank Citi has cleared the first client-executed credit default swaps (CDS) index option trades in the US through ICE Clear Credit following its launch in November.
Cboe block trading platform sees record EUR72.5m trade in Swiss stock; Record block trade on Cboe LIS follows the readmittance of more than 200 Swiss stocks to UK trading venues after an equivalence agreement was reached this year.
Hayley McDowell – The Trade
Exchange operator Cboe has confirmed its block trading platform logged its biggest-ever transaction earlier this month in Swiss stock Logitech. The record block trade of EUR72.5 million on Cboe LIS happened on 11 February, the exchange confirmed in a statement on social media.
Envipco lists on Euronext Growth Oslo
The cleantech company Envipco has today been admitted to trading on Euronext Growth (ticker code: ENVIP). Envipco is a leading reverse vending machine technology company with customised recycling solutions. In connection with the listing in Oslo, Envipco raised EUR 8.1 million (NOK 85 million) through a private placement. The new shares were issued at a price per offer share of EUR 16.00. “We are very pleased with the successful private placement, reflecting solid interest and trust from the investment community. We are dedicated to further build our capabilities and market presence in Europe,” commented Simon Bolton, CEO of Envipco.
CME Globex Notices: February 15, 2021
Critical System Updates
iLink 2 on MSGW Decommission – Migration Deadline February 26
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
iLink 3 SBE Schema Update – March 7
Anchor Leg Pricing Enhancement – March 21
CME FX Link Enhancements – March 28
CME FX Link Enhancements: Drop Copy Impact – March 28
GLink Network Infrastructure Upgrade at Aurora Co-Location Facility
Performance Bond Requirements: Interest Rate Margins – Effective February 18, 2021
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
New COMEX Chapter 12 – (“Spot Aluminum Transactions”)
On Monday, February 22, 2021, Commodity Exchange, Inc. (“COMEX” or “Exchange”) will adopt new COMEX Chapter 12 – (“Spot Aluminum Transactions”). COMEX Chapter 12 will govern Spot Aluminum Transactions conducted through Aluminum Auctions via the CME Direct Auction Platform. COMEX Chapter 12 is provided in Appendix A below and will become effective February 22, 2021. The date of the initial auction will be provided in a subsequent advisory notice.
Position Limits, Accountability Levels and Large Trader Reporting Requirements in Connection with the Initial Listing of the Methanol CFR China Specific Origins (ICIS) Futures Contract
In connection with the listing of New York Mercantile Exchange, Inc.’s (“NYMEX” or “Exchange”) Methanol CFR China Specific Origins (ICIS) Futures Contract on trade date Monday, February 22, 2021 (see SER-8695R published January 20, 2021), please note below and in Exhibit B of NYMEX Submission No 21-033, the corresponding spot-month position limits (Rule 559), aggregation allocations (Rule 559.D.), single month and all month accountability levels (Rule 560) and reportable levels (Rule 561) for the new contract. The new, financially settled, contract shall have a diminishing balance.
Shenzhen Stock Exchange Press Secretary Answers Reporters’ Questions About The Notice On The Matters Related To The Program Trading Reporting Of Convertible Bonds
On February 5, SZSE officially released the Notice on the Matters Related to the Program Trading Reporting of Convertible Bonds (hereinafter referred to as “the Notice”), so as to further regulate the program trading management of convertible bonds, maintain the transaction order of the market, protect the legitimate rights and interests of investors, and promote the healthy development of the convertible bond market. SZSE Press Secretary answered the reporters’ questions on the topics of great concerns to market entities.
MIAX Exchange Group – Options Markets – 1G LL Shared Extranet Switch Infrastructure Upgrade
MIAX Options, MIAX Pearl Options and MIAX Emerald Options Exchanges will upgrade the 1G Low Latency (LL) shared extranet switch infrastructure in July, 2021. All existing 1G LL cross connects must be migrated to the upgraded 1G LL shared extranet switch infrastructure.
Cboe Global Markets To Present At The Credit Suisse Financial Services Virtual Conference Wednesday, February 24
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, announced today that Chris Isaacson, Executive Vice President and Chief Operating Officer, and Brian Schell, Executive Vice President, Chief Financial Officer and Treasurer, will present at the Credit Suisse Financial Services Virtual Conference on Wednesday, February 24 at 1 p.m. ET.
Murphy & McGonigle Launches Expanded Version of the M&M Defend App
Murphy & McGonigle
Financial services law firm Murphy & McGonigle today announced the launch of an improved version of its M&M Defend app, a smart phone application that guides individuals, businesses and in-house counsel with instantaneous information during legal crisis situations.
Refinitiv Rolls Out MarketPsych ESG Analytics to Analyze Corporate Sustainability-Related News and Social Media in Near Real-Time; Institutional Investors, Governments, Regulators, Analysts to benefit from comprehensive numerical ESG insights on companies and countries.
Building on its commitment to drive positive change through its data and insight, Refinitiv today announced the launch of MarketPsych ESG Analytics, a new analytics tool to provide numerical ESG insights on companies and countries based on news and social media monitoring.
Trading Technologies overhauls senior leadership under new CEO; CFO and president at Trading Technologies Michael Kraines has stepped down after chief executive Rick Lane left to pursue another opportunity.
Annabel Smith – The Trade
Chicago-based technology provider Trading Technologies (TT) has reshuffled its leadership team following the departure of chief financial officer and president, Michael Kraines, shortly after appointing a new CEO.
Origin Launches Airbrush, A Universal Data Standard Aiming To Optimise Bond Issuance
Origin, the London-based fintech digitising debt capital markets, has announced the launch of Airbrush, an interface data standard that will aim to act as a universal language for bond issuance market participants. The initiative is being launched with the support of Clearstream and the Luxembourg Stock Exchange (LuxSE), and follows Origin’s $7 million Series A funding round.
Tesla $1.5B Bitcoin Purchase Was Facilitated By Soon-To-Go-Public Coinbase: Report
Shivdeep Dhaliwal – Benzinga
Cryptocurrency exchange Coinbase facilitated the $1.5 billion purchase of Bitcoin (BTC) by Tesla Inc (NASDAQ: TSLA), the Block reported Wednesday. What Happened: The purchase for the Elon Musk-led company was executed in the first week of February over the course of several days, as per the Block.
Bitcoin Briefly Crossed $50K. Regulators Are Circling.
Liz Moyer – Barron’s
Bitcoin’s climb above $50,000 for the first time on Tuesday marks a psychological milestone for investors—but it could trigger extra regulatory scrutiny.
Cryptocurrency Sleuths Point to Robinhood as Dogecoin Whale
Brandon Kochkodin and Olga Kharif – Bloomberg
Biggest wallet holds about 29% of all coins in circulation; Blockchain tracker Elliptic says broker is most likely owner
There’s a prime suspect as to the identity of the owner of the world’s biggest Dogecoin cryptocurrency wallet and it’s a name that should be familiar: Robinhood Markets. The timing of the creation of the initial digital wallet used for storage in June 2018 tracks with Robinhood’s offering Dogecoin trading to its customers in July of that year. That’s according to blockchain data tracker Elliptic and echoed by online sleuths on Reddit’s Dogecoin forum.
With Bitcoin Breaking $50,000, Even Wall Street Skeptics Must Pay Attention; Signaling a shift in sentiment, the surging cryptocurrency is finding its way into portfolios and balance sheets.
Michael P. Regan – Bloomberg
For many professionals involved in the traditional financial system, it’s been tempting to just ignore Bitcoin and hope it goes away. To them the digital currency makes no sense as an investment or a currency; they note it’s not backed up by any asset, underlying business, or government. Some call Bitcoin a digital tulip, a reference to the surge and eventual crash of flower-bulb prices in the Netherlands in the 17th century.
First Bitcoin ETF in North America Is Launching in Canada
Sam Potter – Bloomberg
Purpose Investments says new fund will start trading Thursday; Debut comes as U.S. issuers continue to seek SEC approval
The first exchange-traded fund tracking Bitcoin in North America begins trading in Toronto on Thursday, in a potential milestone moment for both the cryptocurrency and ETF industries. The Purpose Bitcoin ETF (ticker BTCC) provides exposure to the world’s largest cryptocurrency by investing directly in “physical/digital Bitcoin,” issuer Purpose Investments Inc. said in a statement. The fund will be available both in Canadian dollar and U.S. dollar units.
Jeffrey Gundlach Says Bitcoin May Be a Better Bet Than Gold
Lynn Thomasson – Bloomberg
Cryptocurrency hits all-time high, crossing $52,000 this week; Gundlach turns neutral on gold, calls Bitcoin stimulus asset
DoubleLine Capital LP chief and long-time gold bull Jeffrey Gundlach has changed his mind on the metal and considers Bitcoin a better trade. Gundlach tweeted he’d been a long-term gold bull and U.S. dollar bear, but has turned neutral on both. Bitcoin may well be “the stimulus asset,” he said, a reference to the cryptocurrency’s rally amid a wave of cash pumped into the financial system during the pandemic.
Single dogecoin account holds $2 billion fortune
Noah Manskar – NY Post
Dogecoin may have started as a joke, but one of its holders is sitting on some serious dough. A single cryptocurrency account contains about $2 billion worth of the meme-inspired coin whose price has been pumped up by celebrities such as Elon Musk, Snoop Dogg and Gene Simmons.
Christie’s Auction House Will Now Accept Cryptocurrency; Although for the time being, it’s for only one artwork.
James Tarmy – Bloomberg
Last October, the digital artist Mike Winkelmann, who goes by Beeple, put a digital artwork in an edition of 100 up for sale. Each work cost $1, and the entire set sold out in less than one second. Today the non-fungible tokens (NFTs) representing the digital artworks are trading on Nifty Gateway, an NFT marketplace run by the Winklevoss twins, for “well over $50,000,” Winkelmann says. (The site lists the average resale price as $6,559, but the artist says that number is misleading, as it includes early, low-priced sales.)
CME’s first week of Ether futures trading sees $34 million in daily volumes
Aislinn Keely – The Block
CME completed its first full week of ether futures trading last Friday, and it nearly sustained the volume of its opening day. Over the course of the week, an average of 371 contracts was traded each day at 50 ETH per contract. That’s about 18,600 ETH or $34 million. Monday’s volume was 19,400 ETH or $33 million at the time.
The derivatives exchange announced it would launch cash-settled ether futures in mid-December. They began trading on Sunday evening, with the first contracts purchased at 6:00 PM ET on Feb. 7. Since then, CME has seen 121 unique, active accounts trading the offering.
Japan’s SBI Investing ‘Eight-Figure’ Sum in Swiss Crypto Bank Sygnum
Tanzeel Akhtar – Coindesk
SBI Holdings, a Japanese financial services firm, is to lead an ongoing strategic fundraising round for Swiss digital asset bank Sygnum. Sygnum, which holds a Swiss banking license, said Tuesday it has secured an “eight-figure” U.S. dollar investment from SBI’s subsidiary, SBI Digital Asset Holdings, which will be used to help the firm grow its client base and expand into new markets across Europe and Asia. The firm, which has bases in Switzerland and Singapore, said the fundraising effort will have brought in investment of around $30 million over the past six months, helping the firm grow its assets under administration, which stood at over $500 million as of January 2021.
Bitfinex Launches Increase Position And Bitfinex Borrow Features For Paper Trading
Bitfinex, a state-of-the-art digital token trading platform, has launched Increase Position and Bitfinex Borrow features for paper trading, enabling users to explore and better understand these features in a simulated market environment without the use of real funds. Users
Bitcoin Is a ‘Self-Fulfilling Bubble,’ Roubini Warns
Nouriel Roubini, a professor at New York University’s Stern School of Business, discusses the surge in Bitcoin and says the cryptocurrency has no value and is in a bubble. He speaks on “Bloomberg Surveillance.” (Source: Bloomberg)
Wirex Partners with Zero Hash Ahead of US Launch
Digital payments platform, Wirex, today announced their partnership with Zero Hash to support their upcoming US launch. This will allow Wirex to launch their revolutionary product across the United States in April, giving over 300 million Americans instant access to crypto.
‘Now It’s Coming Back to Bite Them’: Democrats See an Opening in G.O.P. Oversight of Texas Grid; As the state reels from power outages, Democrats look to turn the tables on the Republicans who dominate state government.
David Montgomery, Simon Romero and James Dobbins – NY Times
For the Republicans who have run Texas state government for years, trying to undermine the Democrats who lead the state’s largest cities has been a blood sport for years. They have sought to overrule local officials on disputes involving everything from pandemic restrictions and plastic bag bans to protections for immigrants.
Texas Could Have Kept the Lights On; Republicans are blaming renewable energy, when it’s the state’s powerful utilities that failed to prepare for the worst.
Richard Parker – NY Times
On Sunday in San Antonio, April Saenz, a medical worker, went to visit her mother. Because of the terrible road conditions brought on by the ongoing cold snap, she chose to stay the night. Together, they passed 36 hours in the shivering darkness. Food thawed in the freezer, and Ms. Saenz eyed her mother’s insulin in the fridge, worried it would go bad. “It was really upsetting. It was crazy,” she told me. “These were complete man-made failures.”
A Shadowy but Powerful Wall St. Firm Has Its Moment in Washington; Citadel and its sister business, Citadel Securities, were all over the GameStop debacle. Its founder will face sharp questions on Thursday.
Matt Phillips and Kate Kelly – NY Times
The GameStop saga was a David-versus-Goliath story pitting small traders against big hedge funds and a cautionary tale about what happens when fast-moving Silicon Valley collides with the heavily regulated world of Wall Street. Among its ensemble cast is one of the finance world’s most influential — and perhaps least visible — figures, the Chicago billionaire Kenneth C. Griffin.
Who Are Keith Gill and Other Key Players at the GameStop Congressional Hearing? Panel to focus on recent volatility in shares of GameStop and other companies
Eliza Collins – WSJ
The House Financial Services Committee is calling several witnesses in a hearing Thursday, including individual investor Keith Gill, to find out what happened during the retail-investor-led run-up of GameStop Corp. GME -7.21%
What We Want to Know About GameStop; The questions lawmakers should ask at a hearing today.
Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
Senator Mitt Romney has joined the lineup for the DealBook DC Policy Project on Feb. 22-23. Speakers include Treasury Secretary Janet Yellen, Robinhood’s Vlad Tenev, the New York attorney general Letitia James and others discussing what’s next for business and policy. Register here to attend, from anywhere in the world, free of charge.
Robinhood’s exchanges with Senator Warren preview congressional scrutiny.
Lauren Hirsch – NY Times
Robinhood has responded to a long list of questions from Senator Elizabeth Warren, Democrat of Massachusetts, about its businesses practices, and what went wrong during the height of the so-called meme stock mania. The DealBook newsletter got the first look on Wednesday at the broker’s 195-page response.
For Griffin’s return to Washington, Citadel is a ‘bigger target’; With Capitol Hill awakening to the Chicago hedge fund’s power, the firm may have much to lose if the government gets serious about overhauling rules that underpin the U.S. stock market.
The reach of Citadel founder Ken Griffin’s empire was on full display during the rise and fall of GameStop Corp.—and Washington took note.
Acting Chairman Rostin Behnam Names Alicia L. Lewis Special Counsel
Commodity Futures Trading Commission Acting Chairman Rostin Behnam today announced that Alicia L. Lewis has rejoined his office as of yesterday and will serve as his Special Counsel. Lewis has served at the CFTC since 2009 and is the fourth African American in the CFTC’s history to hold such a role.
Time to Digitize Trade Reporting
In September 2009, it took just nine words – OTC derivative contracts should be reported to trade repositories – for the Group of 20 (G-20) to unleash one of the most ambitious and complex initiatives in the history of derivatives markets. Despite the obvious rationale for improving transparency to give regulators better insight into market activity and emerging risks, trade reporting has proven exceptionally challenging. It’s now time to take a technology-first approach to this challenge, and we have a plan to put that into action.
Apollo Names Ex-SEC Chairman Jay Clayton as Lead Independent Director; Newly created board role is latest step in sweeping overhaul of corporate governance at investment firm
Miriam Gottfried – WSKJ
Apollo Global Management Inc. APO 0.84% has appointed former Securities and Exchange Commission Chairman Jay Clayton to the newly created role of lead independent director on its board, the latest step in a sweeping overhaul of corporate governance at the investment firm.
Acting Chairman Elad Roisman Public Calendar
FCA exposes unregistered trading firm as 199 new firms receive licenses
Steve Kaaru – Coingeek
United Kingdom’s financial watchdog has issued a public warning against an unregistered firm that has been offering trading services in digital currencies. The platform known as Dalsari also offers trading in indices, stocks and commodities.
Factbox: The U.S. agencies probing the GameStop ‘Reddit rally’ saga
Chris Prentice, Pete Schroeder – Reuters
A raft of federal agencies are probing last month’s “Reddit rally” in which Reddit users trading on low cost retail platforms banded together to push up GameStop Corp and other stocks, burning hedge funds that had bet against the companies.
Investing and Trading
The Great Stock Rally of 2021 Seen Powering Ahead in Europe
Michael Msika – Bloomberg
Banking, commodity shares are seen outperforming in 2021; Vaccination, bet on economic recovery drive bullish forecasts
A vaccine-fueled economic recovery and investors’ surging appetite for risk mean that the European equity rally can keep going in 2021, according to strategists. After strong gains since the start of the year, the bull case for Europe has now partially played out. Still, on average, the 21 strategists surveyed by Bloomberg are positive on European equities, seeing about 2% upside for the Stoxx Europe 600 Index this year, and nearly 3% for the Euro Stoxx 50, compared with Tuesday’s close. The biggest bear in the poll sees the Stoxx 600 falling less than 5%.
Americans Who Made Fortunes During Covid Save on Taxes by Giving It Away; The Covid-19 pandemic and the Black Lives Matter movement prompted some wealthy donors to put their charitable donations to work.
Suzanne Woolley – Bloomberg
The bull market in stocks, and a little bitcoin, helped fuel a blitz of philanthropic giving in 2020 from accounts that provide big tax breaks for donors, a new report shows. Two million grants worth $9.1 billion flew out of accounts that wealthy people use to park money for donations at Fidelity Charitable, the non-profit arm of Fidelity Investments, according to the company’s annual report on giving. The company reported increases in pandemic and social-justice related giving.
Treasuries Now Rival Italian Bonds for Japan’s Yield Hunters
Stephen Spratt – Bloomberg
Yen-hedged Treasury, Italy 10-year spread tightest since 2015; European bonds are losing appeal for Japanese investors
A rout in Treasuries this year has changed the equation for Japanese investors in global markets, with the U.S. bonds now offering them almost as much yield as riskier issuers such as Italy. Treasuries now give Japanese funds, some of the biggest owners of global debt, higher currency-hedged returns than all of Europe’s high-grade sovereign paper.
Palantir Faces Big Test as 80% of Shares Unlock for Trading
Lizette Chapman – Bloomberg
Palantir Technologies Inc. has amassed a long list of shareholders in the nearly two decades since it was founded. On Thursday, almost all of them will have the option to sell as much of their stock as they’d like for the first time. Four-fifths of shares will become eligible to trade when the market opens, the result of an unusual restriction placed on stockholders when Palantir went public. Such lockups are common after initial public offerings but less so for companies that list their shares directly on an exchange, as Palantir did on the New York Stock Exchange in September.
More than 10% of ETFs have made changes to their index, data show; Investors should read communications and check their holdings regularly, industry figures suggest
Emma Boyde – FT
Exchange traded funds climbed to prominence on their promise of a low-fee, broad-based approach with a relatively safe path for investors who followed a long-term, buy-and-hold regimen.
Shipping Container Shortage Gives Commodity Prices Extra Boost; Traders face soaring rates to move goods by sea in 40-foot steel boxes, snarling global supply chains for some raw materials
Joe Wallace – WSJ
It has rarely been more expensive to move sugar, coffee and copper around the world by sea. Ocean freight rates began to soar last summer, and haven’t let up. That is partly because consumers, unable to spend money in restaurants, have splashed out on goods that move by sea. Retailers and manufacturers, meanwhile, have rushed to rebuild inventorie
The Bubble’s Final Paroxysm May Be Months Away; Timing a speculative frenzy is a fool’s errand; sometimes, we have little choice.
John Authers – Bloomberg
One of the last things any investor should do is try to time a bubble. But when a bubble is upon you, you don’t have much choice. Although there are always ways to hedge bets, you need some clear concept of the likely upside risk and sequence of events as speculation takes over. So, it appears necessary to take a look at the possibilities for bubble-timing.
Environmental, Social and Corporate Governance
Beer Maker Signs Record $10.1 Billion Sustainability-Linked Loan
Jacqueline Poh – Bloomberg
Deal sets record for largest ever ESG-linked facility; Even before the deal, ESG loans were up 71% year-on-year
Anheuser-Busch InBev SA/NV, maker of beer brands Budweiser and Stella Artois, has signed a $10.1 billion debt facility that costs more to service if the company falls short on a set of sustainability targets.
Frozen Texans Rely on Wits and Dogs to Find Warmth and Water
Justin Bachman and Josh Saul – Bloomberg
They seek basic needs in a state crippled by snow and ice; In crisis, ‘Every single person I talk to is in survival mode’
Bonzer and Quigley got Cassie Moore through the night. After days without power in the Houston suburb of Jersey Village, the 35-year-old writer and educator could see her breath in the house. Her plants were dying. So Moore and her husband built a tent with living-room curtains in front of their gas fireplace. They slept in shifts Tuesday night — with their two Australian shepherds sharing their body heat.
Bond Market Twins Show It’s Good to Go Green; A pair of German bunds shows investors are willing to pay up for environmentally friendly debt.
Mark Gilbert – Bloomberg
Portfolio managers are increasingly under pressure to demonstrate their green credentials, but they’re understandably reluctant to risk losing clients if socially responsible investments turn out to be duds. I’m optimistic, though, that the sheer volume of money flowing into the sector will boost its relative value. And the German bond market is helping to make the argument that conscientious investing needn’t come at the expense of returns.
Vestas Looks at Wind Turbines Made of Wood With Startup Stake
Will Mathis – Bloomberg
Vestas takes minority interest in Swedish firm Modvion; Using wood instead of steel would help cut emissions
Vestas Wind Systems A/S bought a minority stake in a Swedish startup that builds turbine towers out of wood. The move by the world’s largest manufacturer of wind turbines could help remove hard to recycle and fossil fuel-intensive materials like steel from the production process.
How the Rich Can Escape America’s Unreliable Power Grid; When Wim Coekaerts built his dream home, he decided to bypass the local utility and engineer his own microgrid.
Dana Hull – Bloomberg
When Wim Coekaerts bought a hillside lot to build his California dream house, there was an old horse barn, a grove of olive trees and lovely views of Silicon Valley. But there was no electricity, and the nearest utility pole to his bucolic acre was 550 feet away. The town of Woodside requires new homes without utility service to pay for wires to be buried underground. Coekaerts faced a choice: pay PG&E Corp. roughly $100,000 for engineering work and foot the enormous additional cost of the trenching, or engineer a more personal fix.
Australia Green Fund Asked to Back Coal in Latest Climate Riddle
David Stringer – Bloomberg
Lawmakers aim to widen scope of national clean energy investor; Government already urging more backing for gas power
A group of Australian legislators is pushing for a A$10 billion ($7.8 billion) national clean energy fund to be allowed to invest in coal or nuclear power, opening a fresh front in the country’s fractious emissions debate.
Big Oil’s big money push into UK offshore wind raises eyebrows; High auction prices risk increasing consumers’ energy costs or reducing investor returns
Mark Lewis – FT
With the UK preparing to host COP26 in Glasgow, the most important UN climate-change conference since Paris in 2015, last week’s auction of 8 gigawatts of offshore-wind capacity in England and Wales under new bidding arrangements raises two pressing questions.
No, Wind Farms Aren’t the Main Cause of the Texas Blackouts; The state’s widespread electricity failure was largely caused by freezing natural gas pipelines. That didn’t stop advocates for fossil fuels from trying to shift blame.
Dionne Searcey – NY Times
As his state was racked by an electricity crisis that left millions of people without heat in frigid temperatures, the governor of Texas took to television to start placing blame.
A Plan to Future-Proof the Texas Power Grid;
The state’s massive blackouts are the result of a failure to insure against extreme weather.
Jesse Jenkins – NY Times
As the power crisis in Texas stretches into its fifth day, the blame game is well underway. Frozen wind turbines, unsubstantiated allegations of nefarious power plant outages, the state’s libertarian approach to electricity markets and its deliberately isolated power grid have all been targets of pundits and politicians quick on the takes but light on the facts.
The Role of Financial Institutions In Tackling The Challenges Of Climate Change, Federal Reserve Governor Lael Brainard At The “2021 IIF U.S. Climate Finance Summit: Financing A Pro Growth Pro Markets Transition To A Sustainable, Low-Carbon Economy” Hosted By The Institute Of International Finance, Washington, D.C.
I want to thank the Institute of International Finance for inviting me to join this discussion. Let me start by noting that these are my own views and do not necessarily reflect those of the Federal Reserve Board or the Federal Open Market Committee. 1 Climate change is already imposing substantial economic costs and is projected to have a profound effect on the economy at home and abroad. 2 Futu
Bloomberg Intelligence: Rapid Increase In ESG ETF Flow Suggests Long-Term Switch
ESG ETFs saw net inflows of US$89 billion in 2020 – three times higher than 2019 Climate-focused ETFs could see inflows accelerate record pace in 2021 ESG ETFs record net inflows of US$89 billion las year – almost three times more than the US$31 billion recorded in 2019, and ten times the US$9 billion in 2018, according to analysis from Bloomberg Intelligence (BI).
The Carlyle Group ties a $4.1 billion credit line to board diversity.
Lauren Hirsch – NY Times
The private equity firm Carlyle Group plans to announce on Wednesday a $4.1 billion credit line for its portfolio companies that will tie the price of debt to the diversity of a company’s board, the DealBook newsletter reports.
Credit Suisse Investment Bankers Set to Take Home Higher Bonuses
Patrick Winters – Bloomberg
CFO Mathers says overall bonus pool declined 7% for 2020; CEO Gottstein says other divisions had flat-to-lower bonuses
Credit Suisse Group AG’s investment bankers are set for higher bonuses, with those in other divisions likely to see flat or lower payments after the overall pool for discretionary pay was cut. The Swiss bank — which posted a fourth quarter loss of 353 million francs ($393 million) after hits related to U.S. legal cases and a hedge fund impairment — reduced the bonus pool by about 7% for last year, Chief Financial Officer David Mathers said on a conference call. Payments will be better-than-expected for some bankers, after Bloomberg had previously reported that Credit Suisse was considering reducing the pool by at least 10%.
Citi Can’t Have Its $900 Million Back; Also Morningstar CMBS ratings, just another SPAC, SPAC lawsuits and ClubHouse.
Matt Levine – Bloomberg
Last August, Citigroup Inc. wired $900 million to some hedge funds by accident. Then it sent a note to the hedge funds saying, oops, sorry about that, please send us the money back. Some did. Others preferred to keep the money. Citi sued them. Yesterday Citi lost, and they got to keep the money. I read the opinion, by U.S. District Judge Jesse Furman, expecting to learn about the New York legal doctrine of finders keepers—more technically, the “discharge-for-value defense”—and I was not disappointed. But I was also treated to a gothic horror story about software design. I had nightmares all night about checking the wrong boxes on the computer.
Credit Suisse Seeks to Move Past 2020 With January Rebound
Patrick Winters – Bloomberg
Loan loss provisions, key businesses did better than forecast; Fourth-quarter loss caused by legal charges and impairment
Credit Suisse Group AG signaled a strong start to the year as clients trade and invest more, providing relief to Chief Executive Officer Thomas Gottstein after a first year marred by a series of legacy issues. Switzerland’s No. 2 bank on Thursday posted its first quarterly loss in three years in an uneven quarter that saw it write down a hedge fund investment and set aside money for U.S. litigation. While its traders trailed Wall Street peers for a second straight quarter, equity-underwriting fees more than tripled and loan-loss provisions were less than forecast, helping to limit the damage.
A Value Manager on How Most Value Managers Are Getting It All Wrong
Joe Weisenthal and Tracy Alloway – Bloomberg
As you might have heard, so-called value investing has not had a good run. At least from a quantitative standpoint, strategies that aim to buy low-valued stocks (based on metrics such as price-to-earnings or price-to-book) are quite out of favor, as fast growing names, loaded up on intangible capital, have outperformed. So is there any way to resuscitate the concept of value, or do investors just need to wait for the tides to change? On the latest Odd Lots, we speak with Rafe Resendes, a portfolio manager and co-founder of the Applied Finance Group, who argues for another way of reconceptualizing value, beyond just cheapness, in a way that works across market environments.
Barclays restarts dividend despite drop in profits; Bank boosts investment bank bonus pool 6% to £1.6bn
Stephen Morris – FT
Barclays chief executive Jes Staley predicted a “robust” bounceback in consumer spending in the second half of the year and restarted the British bank’s dividend, buoyed by declining coronavirus-related loan loss provisions and strong investment banking performance.
NatWest to pull out of Ireland and focus on UK market; Exit of third-largest bank will concentrate role of Irish government in the sector
Arthur Beesley, Nicholas Megaw and Stephen Morris – FT
NatWest is preparing to start a phased withdrawal from the Republic of Ireland after more than a century in the country, in a move to free up capital and focus on its core UK market, according to people familiar with its plans.
Credit Suisse Posts Loss Despite Boost From Investment Bank; The investment banking side booked bumper fees from companies raising stock and bonds
Margot Patrick – WSJ
Credit Suisse Group AG CS -1.80% said a strong start to the first quarter is fueling its growth ambitions this year, after hefty legal charges and write-downs pushed it to a fourth-quarter loss. The Swiss bank reported a loss of 353 million Swiss francs Thursday, equivalent to $393 million, for the fourth quarter. Analysts expected a loss of about 566 million Swiss francs.
Barclays Trading Arm Provides Lifeline Through Pandemic; Vigorous market trading makes up for Covid-19-related challenges at the bank
Simon Clark – WSJ
Barclays BCS -1.50% PLC posted a profit in 2020 as buoyant securities trading made up for a lackluster performance in the U.K., where the bank expects pent-up savings to give the economy a boost as the coronavirus pandemic wanes. Net profit at the London-based bank fell 38% from a year earlier to £1.53 billion, equivalent to $2.12 billion. Profit at Barclays’s corporate and investment bank rose 29% to £2.55 billion.
India Visa Curbs for Chinese Workers Hurting Taiwan Tech Giants
Shruti Srivastava and Sudhi Ranjan Sen – Bloomberg
India said to insist on employment permits instead of visas; Firms moving supply lines to India struggle to take off
Geopolitical tensions between India and China are beginning to hurt some of Taiwan’s biggest technology companies, including suppliers to Apple Inc. and hindering New Delhi’s much-vaunted incentive program for electronics manufacturing.
BOJ’s Record Stock Gains Add Pressure for Flexibility on ETFs
Toru Fujioka – Bloomberg
Trillions of yen worth of unrealized gains in just the last few weeks are likely to add pressure on the Bank of Japan to rethink how it buys Japanese stock funds at a policy review next month. Paper gains on the BOJ’s holdings of exchange-traded funds hit a record of 15.8 trillion yen ($149 billion) this week as the Nikkei 225 Stock Average climbed to a three decade high, according to calculations by Shingo Ide, an expert on the purchases at NLI Research Institute.
City of London should turn to night-time economy for its revival; Clubs and culture can fill empty office space; Plus500 loses out to its punters
Jamie Powell – FT
In the mid-2010s, haunting photos of China’s ghost towns began gracing the pages of international media as cracks emerged in its economy. Once the worst of the pandemic is over, the City of London needs to prevent its own excess empty commercial spaces from meeting a similar fate.
Chinese stocks touch record as traders return after lunar new year; CSI 300 briefly surpasses 2007 peak on positivity surrounding economic recovery
Hudson Lockett and Thomas Hale – FT
Chinese stocks briefly climbed to an all-time high on optimism for the country’s economic recovery from Covid-19 as traders returned from the lunar new year holiday.
How Amsterdam is stealing a march on rivals as Brexit trading hub
Tommy Wilkes, Toby Sterling, Abhinav Ramnarayan, Huw Jones – Reuters
All the talk was of Frankfurt or Paris luring London’s financial business as Britain peeled away from the EU. Yet it is Amsterdam that is proving the most visible early winner. Data last week showed the Dutch capital had displaced London as Europe’s biggest share trading centre in January, grabbing a fifth of the 40 billion euros-a-day action, up from below a tenth of trading pre-Brexit. Yet that is just one of several areas the city has quietly stolen a march on its rivals as it attracts businesses from Britain, evoking memories of its history as a global trading powerhouse in the 17th century.
China’s rare earth export curbs push Australian miner to fast track Africa project as nations step up diversification plans
Su-Lin Tan – South China Morning Postby
Amid geopolitical concerns over China’s plans to curb exports, Australian rare earth miner Ionic Rare Earths, which has previously fielded interest from governments, has secured commitments to raise A$12 million (US$9.3 million) in new funding to fast track its Makuutu project in Uganda.The concerns over China’s intentions were heightened on Monday when Chinese sources indicated that Beijing could restrict the export of rare earth metals to the United States, a move that could hurt its weapons…
After Brexit: the UK and EU risk a state of ‘permanent alert’; Disputes over issues such as Northern Ireland and trade leave London and Brussels unsure of their future relationship
George Parker and Peter Foster and Sam Fleming – FT
Six weeks after Brexit became a reality, Britain’s new relationship with the EU has already run into trouble. Trade has been disrupted, border tensions have flared in Northern Ireland, City of London business has leached across the North Sea to Amsterdam and the two sides are locked in a stand-off after Britain refused to grant full diplomatic status to the EU embassy in London.
Brexit negotiator Frost to take charge of UK-EU relations; Architect of Johnson’s ‘hard Brexit’ strategy gets seat in cabinet after internal fight
George Parker, Peter Foster and Sebastian Payne- FT
Boris Johnson’s former Brexit negotiator Lord David Frost is to take charge of the UK’s future relationship with the EU and take a seat in the cabinet, after a power struggle at the heart of Downing Street.
‘Slash and burn’ of EU rules ruled out post-Brexit; Duncan Smith says reform group advising PM would seek ‘fast and sensible’ regulatory changes
George Parker – FT
Boris Johnson’s adviser on regulatory reform, Iain Duncan Smith, has said he will not lead a “slash-and-burn exercise” when it comes to changing Britain’s post-Brexit rules.
The equivalence tussle is giving UK a lesson in Brexit power politics; Brussels is fighting to make the EU more competitive in financial services
Robert Shrimsley – FT
Sometimes casual phrases reveal. So it is with the talk of a “hotline” between a senior British minister and an EU commissioner to de-escalate flare-ups around Northern Ireland. The truth is more prosaic; they have each other’s mobile numbers. But for all the bonhomie between Michael Gove and Maros Sefcovic, the cold-war terminology highlights the reality of increasingly antagonistic relations between London and Brussels.
I thought Brexit would be hard for small businesses like mine – but not this hard
Sarah McCartney – The Guardian
I wasn’t taken by surprise, exactly. I run a small perfume business, and in mid-December we stopped sending deliveries to European Union countries because we wanted to ensure nothing was caught in the rush to beat any new trading rules. In some ways, I had been preparing for such issues ever since the Brexit referendum was called several years ago. I always feared there would be difficulties for small businesses. A little more than a month into the new regime, and it’s clear that with every new hurdle, there are extra fees to pay. Whether it’s importing raw materials or sending our products around the EU, additional forms need filling in and costs are nudged up. Our perfumery is dealing with new customs rules and new VAT regulations, and losing access to the EU cosmetics market. At midnight on 31 December, all our perfume products automatically became illegal in the EU.
LME brokers plan EU outposts to resolve Brexit effects
Laurence Fletcher and Henry Sanderson – FT
London Metal Exchange brokers Sucden Financial and Mitsui Bussan Commodities are planning to open offices in the EU, providing the latest examples of how Brexit is forcing investment firms to adapt to win clients based in the bloc. Sucden, one of the LME’s major brokers, plans to open an office in Hamburg and has already hired two staff members, according to its chief executive Marc Bailey. The company’s next step is to seek approval from BaFin, the German financial regulator. “It is a pain,” Bailey said. “You have to file another set of accounts, you’re going to need to have BaFin-trained compliance staff. It’s a cost of doing business that wasn’t there — you can’t get away from that.”
How the UK’s vaccine success can drive life after Brexit
Simon Kuper – FT
People like me — Remainers, as we used to be called — have spent five years banging on about the UK’s weaknesses. And there has been much to bang on about, from Brexit through hard Brexit to an exceptionally disastrous death toll from the coronavirus. The government has repeatedly killed people by closing down late or opening up prematurely, while the economy collapsed regardless. Now, though, we need to acknowledge a British triumph: the fastest vaccine rollout of any large country. The UK has administered nearly 24 doses per 100 people, compared with about five for the EU.
Brexit bonus for the big consultants
Gill Plimmer – FT
The UK’s largest consulting firms have been paid more than £306m over the past two years to advise the government on Brexit, according to published contract data. At least 31 contracts have been agreed between government departments and consulting firms including PwC, Deloitte and McKinsey between September 2018 and February 2020 for work related to the UK’s departure from the EU, according to Tussell, a research company monitoring government contracts. Examples of Brexit work included an attempt to set up a new system for customs declarations to manage the consequences for universities and the science sector. Millions of pounds more will have been spent on consultants for work where the EU is not directly cited but which addresses the knock-on effects of the UK’s departure, Tussell adds.
The ‘audacious lie’ behind a hedge fund’s promise to sustain local journalism
Margaret Sullivan – Washington Post
When Alden Global Capital announced Tuesday that it was positioned to buy the Chicago Tribune and several other major newspapers, its statement might have sounded promising. But only if you knew nothing about how this hedge fund has sucked much of the life out of the newspapers it already owns in places like Denver and San Jose.
Sin, a New Film About Michelangelo, Reveals Genius as a Dirty Business; The real lesson of artistic success? Put in the work.
James Tarmy – Bloomberg
At its essence, the new movie Sin is a grand film about the decidedly unglamorous logistics of making art. Directed by Andrei Konchalovsky, the movie follows the high Renaissance painter Michelangelo (Alberto Testone) as he moves between Rome, Florence, and Carrara, Italy, hustling to finish projects without getting killed or going bankrupt. The film premiered at the Rome Film Festival in 2019, but its U.S. theatrical release was delayed until now; it premieres on Film Forum and Laemmle’s sites on Feb. 19.
A Ford Family Estate Is Auctioning Off More Than 650 Treasures; The contents of the three homes owned by Kathleen DuRoss Ford, the third wife of Henry Ford II, are now up for sale at Christie’s.
James Tarmy – Bloomberg
On March 30, Christie’s will auction about 250 lots from the estate of the late Kathleen DuRoss Ford, the widow of auto titan Henry Ford II. A few weeks later, the auction house will host a separate sale from her estate in London, where she had an apartment on Eaton Square.
Big Tech versus journalism: publishers watch Australia fight with bated breath; Consequences of Facebook and Google’s radically different approaches unclear for other news groups
Richard Waters and Hannah Murphy and Alex Barker – FT
In trying to force a new economic settlement between the news industry and Big Tech, did the Australian government just save journalism — or break it?