Hits & Takes
John Lothian & JLN Staff
Today is Suzanne Cosgrove‘s last day as an employee of John J. Lothian & Company, Inc. She is taking a new job in public relations in Chicago, but will become a consultant to John Lothian News and a member of its Advisory Committee. I can’t say enough about how much I enjoyed working with Suzanne again. We worked together in the 1980s at Commodity News Service.
Suzanne was a great example of what we try to do here at JLN in our culture, give people the opportunity and support to grow personally and professionally. And that is what Suzanne did, recording 18 podcasts and getting in front of the camera to record sessions of The Spread. We wish her all the success in the world at her new company.
Speaking of moving on, Martin Mosbacher let the world know via LinkedIn that he was leaving the firm he founded as Nycom, which later became Trimedia and then Intermarket, and today is Lansons New York. Mosbacher’s longtime partner Matt Zachowski, with whom he founded the firm 35+ years ago, passed away earlier this year. Mosbacher also worked in PR at the COMEX and is a member of the John J. Lothian & Company, Inc. Advisory Committee.
He always represented his clients incredibly well with class and humor. He is one of the people who encouraged me early in my newsletter writing years and saw the value not only of what I was doing, but of the potential of the mode of communication. This was at the time when I was blogging before blogging was called blogging.
Congratulations, Martin, on a great run at your firm, and I look forward to seeing what comes next.
Eric Saraniecki, the co-founder and head of strategic initiatives of Digital Asset, wrote a blog post titled “My New Year’s wish for the future of Open Business.” It starts: 2021 was a banner year for digital assets, blockchain, and distributed ledger technology (DLT). Market caps of cryptocurrencies eclipsed those of many Fortune 500 companies. Non-fungible tokens (NFT) dominated the collective consciousness. Nations banned crypto for the tenth year in a row. Markets reinvented shorting derivatives, and incumbents got kind of, sort of serious about participating. To read the rest, you can go HERE.
LME is holding a half-day virtual course in February on cash-settled futures with Emma Jenkins, whom they describe as an expert trainer.
CME Group’s Tim McCourt took the four-year anniversary of the launch of bitcoin futures at the CME Group to reflect on their journey in a commentary titled “4 observations from 4 years of CME Bitcoin futures.”
The latest edition of Steptoe Financial Services University is titled “FSOC 3.0 – Fully Coordinated Financial Regulatory Policy” and features Micah Green talking about the Financial Stability Oversight Council (FSOC), including what it does and why it matters as a coordinating body for all US financial regulators. Steptoe’s Matt Kulkin moderates.
The latest edition of the J.P. Morgan Center for Commodities Global Commodities Applied Research Digest (GCARD) is out.
J. Christopher Giancarlo‘s book “Crypto Dad” is now out in an audiobook version, in time for Christmas.
Women in Derivatives, or WIND, is hiring a director of membership development, a full-time position. You can see the details HERE.
Omicron has taken a bite out of college football over the holidays as the Texas A&M Aggies have withdrawn from the Gator Bowl because they did not have enough healthy players, the New York Times reported.
We will not be sending out the John Lothian Newsletter or the JLN Options newsletter on Friday because of the Christmas holiday. A Merry Christmas to all who celebrate from the JLN team!
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
John Lothian asked me to write a good-bye note, but I am not going to. What I would like to say, though, is thank you to John and JLN for the many opportunities you gave me to stretch my limits during my time at JLN (I am thinking especially of the audio and video recordings – it was a challenging experience to be in the “talent” chair for the first time). I also am proud of our team’s work – particularly the JLN Special Report: Chicago Trading Community Faces Off In Spoofing Fight, which was a high point, but also of the coverage of new areas including the nascent cannabis and hemp markets, the evolution of the weekly episodes of The Spread (check out the options “Term of the Week” contributions) and of the incredible resource JLN offers the industry on all elements of the derivatives marketplace, including cryptocurrencies, through its MarketsWiki pages. Stay in touch. ~SC
When Your Moon Shots Don’t Take Off; How science fiction and other unconventional tools can fire the imagination and lead to breakthrough growth
Nathan Furr, Jeffrey H. Dyer, and Kyle Ne – Harvard Business Review
Recently, the head of innovation at a major industrial conglomerate set up 10 cross-functional teams and gave them an audacious goal: to completely reimagine their businesses. To encourage fresh ideas and approaches, the company had the teams apply a design-thinking lens to customer research and prototype solutions using lean start-up techniques. The innovation leader expected 10 transformational proposals to come in. What he got instead were suggestions along the lines of adding a connected data stream to an industrial tool. He was dumbfounded. Where were the radical new concepts? Had no one even considered creating a digital platform, or flipping the business model, or reinventing products?
****Former FIA executive Joanne Morrison posted this to LinkedIn and mentioned me, calling me a “good friend” and mentioning that I had repeatedly said that “pioneers are the loneliest people on the planet.” I have also said, “Do you know how you can tell who the pioneers are? They are the ones with the arrows in their backs.” Joanne suggested this is an important read and I concur.~JJL
Nick Bloom: ‘It is becoming pretty clear now that hybrid working is here to stay’; The Stanford professor argues that the revolution in homeworking could usher in a new era of globalisation in services
Delphine Strauss – FT
It is almost two years since the first wave of Covid-19 forced the world into a mass experiment in homeworking. Yet, as UK office workers are once again told to hunker down at their kitchen tables, there is still no consensus among economists on how a lasting shift to remote work might affect the structure of developed economies — in particular, when it comes to workforce productivity.
*****Add hybrid working to the list of things you can’t get rid of along with timeshares and some things I can’t mention in a family friendly newsletter.~JJL
Britons shun restaurants and bars as Omicron drives economic slowdown; Christmas dining and shopping hit as economists warn recent GDP gains could be reversed
Valentina Romei – FT
Expectations that lower consumer spending will drive an economic contraction in December and January have been fuelled by a drop in restaurant bookings and coffee shop spending in the UK due to the Omicron variant.
*****Has hell frozen over that the Brits are shunning bars? Oh, they are still in the pubs? OK, whew!~JJL
Mick Jagger, Financial Planner Extraordinaire; A retirement-planning trade group is underwriting the Rolling Stones’ latest tour, and a close look at their classic songs suggests they’ve been offering financial tips from the start
Joe Queenan – WSJ
When a friend pointed out that the current Rolling Stones tour was being sponsored by the Alliance for Lifetime Income, he could not conceal his contempt. Surely, this was the final nail in the countercultural coffin, when the band that personified rebellion and insolence was reduced to having their tour sponsored by a retirement-planning trade group. Surely, this exposed the Stones as frauds, phonies, hypocrites.
******I thought Metamucil was the sponsor of this tour.~JJL
Wednesday’s Top Three
Our top story Wednesday was the Financial Times opinion piece Why bitcoin is worse than a Madoff-style Ponzi scheme. Second was an opinion piece from Bloomberg called The Wall Street That I Once Knew No Longer Exists. Third was our lead story, From Trading Desk to Noodle Stall: A Singapore Success Story.
26,680 pages; 236,633 edits
The Remote Work Revolution Spawns a New Class of Supercommuters; With employees now marooned in far-flung locales, their trip back to the office might require an airplane.
Sarah Holder – Bloomberg
Getting a new job in Philadelphia seemed like a good idea when Donnell Riley accepted the position at the Department of Defense in January. Sure, he lived deep in the Poconos, more than a hundred miles from the office, but that didn’t matter during the many pandemic months he was able to work from home.
Wall Street Is No Fun Anymore; Also (lira, lira), spoofing and satirical securities disclosure.
Matt Levine – Bloomberg
Is Wall Street boring?
In “Liar’s Poker,” Michael Lewis memorably describes showing up at work for his first day as a bond salesman at Salomon Brothers. “Oddly enough, I didn’t really imagine I was going to work, more as if I were going to collect lottery winnings”:
Nation’s January Goal: Stay Open, Despite Omicron; Companies, schools, governments and families are trying to apply lessons learned from two years of the pandemic to make life and business more normal
Chip Cutter, Douglas Belkin, Ruth Simon – WSJ
Businesses, schools, hospitals and governments are preparing for a new year with a sense of déjà vu, as the spread of Covid-19’s Omicron variant brings a familiar challenge: how best to navigate another surge. This time, they’re hopeful they can stay open and operating. In the short term, many big employers have delayed plans to reopen their offices in January. Some universities and schools in the U.S. have switched, temporarily, to remote instruction. Professional sports leagues have canceled games. Governments in Europe and Asia are imposing travel restrictions. And major events in January, such as the annual gathering of world leaders and chief executives in Davos, Switzerland, are being put off.
Bitcoin Worth $15 Quintillion Is Just Another Day in Crypto; The industry is still plagued by trading glitches, infrastructure snafus, hacks and weirdness — just as it’s been from the start.
Nick Baker and Olga Kharif – Bloomberg
Cryptocurrencies made a giant leap in 2021, expanding well beyond their niche among geeks and Redditors. Wall Street strengthened its embrace, with Morgan Stanley Chief Executive Officer James Gorman declaring it no fad. New York Mayor-elect Eric Adams said he’ll initially get paid in Bitcoin. And tokenmania invaded pop culture, from sports, entertainment and gaming to high-end auctions. Even Major League Baseball umpires wore the FTX exchange’s logo on their chests.
A Flotilla of U.S. LNG Cargoes Is Headed to Fuel-Starved Europe
Sergio Chapa – Bloomberg
Cold-stricken Europe is drawing a flotilla of U.S. liquefied natural gas cargoes amid an energy crisis that has sent gas prices to record levels. Facing a winter shortage and little relief from the continent’s main supplier Russia, natural gas in Northwest Europe is trading for about $57.54 per million British thermal units, up almost a third from a week earlier. That’s roughly $24 higher than Asian prices and more than 14 times higher than gas being sold on U.S. benchmark Henry Hub.
Europe’s over-complex bank rules increase risk, watchdogs warn; Regulators in danger of missing the big picture, say Danish and Norwegian authorities
Laura Noonan – FT
Europe’s thousands of pages of banking rules and directives have become so onerous to enforce they threaten regulators’ ability to see the real risks building in their financial systems, Denmark and Norway’s financial supervision chiefs have warned.
Best execution post-RTS 27: Building consensus in the industry; The removal of RTS 27 execution reports does not negate the importance of best execution, and with the expected regulatory divergence between the UK and EU markets, greater collaboration among market participants to agree on standards is of paramount importance.
Charlotte Decuyper – The Trade
With greater divergence between EU and UK regulators post-Brexit, standards that are the result of collaboration between market participants have never been more important. FIX Protocol’s Tag 851 is one such standard, that continues to evolve in response to market needs for best execution.
Acquisition of Trading Technologies by 7RIDGE now complete; Keith Todd will assume the role of CEO to drive the firm’s next phase of growth.
Anita Hawser – The Trade
Growth equity firm 7RIDGE, has completed its acquisition of derivatives trading software and SaaS provider Trading Technologies International. The acquisition by 7RIDGE was first announced on October 31, and took just under two months to complete, on 21 December. With 7RIDGE as its new owners, Keith Todd will assume the role of CEO, replacing Tim Geannopulos, former CEO and chairman of the board of Trading Technologies International, who will remain actively engaged with the company.
The TRADE predictions series 2022: regulatory divergence in the UK and Europe post-Brexit; Following Brussel’s recent changes to MiFID II in November and with the results of the UK’s Wholesale Markets Review due to come into play early next year, these participants expect regulatory divergence to take centre stage in 2022.
Continued divergence in regulation between Europe and the UK may see London wrestle back some of that European share trading business from Amsterdam and Paris during 2022. With a significant amount of business executed in European names done on behalf of international investors, further curbs on dark trading and on business consumed by Systematic internalisers (SIs) may lead to an increase in the cost of getting business done in Europe next year, particularly for larger sized institutional business that today looks to those alternatives to mitigate the impact of trading on lit order books.
Chicago Fed Letter, No. 463, November 2021Crossref; Bank Exposure to Commercial Real Estate and the Covid-19 Pandemic
Kyle Binder, Emily Greenwald, Sam Schulhofer-Wohl, Alejandro H. Drexler – Chicago Fed
The Covid-19 pandemic had an immediate and substantial impact on the commercial real estate (CRE) market—emptying workplaces, shopping centers, and hotels, thus affecting the cash flows of businesses occupying commercial space and in turn the ability of commercial space owners to meet their debt obligations.
UK watchdog’s hedge fund fine shows blunter teeth
Britain’s financial regulator is looking like a low-impact version of its American cousin. The Financial Conduct Authority has fined hedge fund BlueCrest Capital 41 million pounds for conflict of interest failings in setting up a fund for staff. Its gripe, relating back to 2011 to 2015, was with money managers switching from running an external fund to the staff-only structure without proper processes.
How Covid Arbitrage Became the Trade of the Year; Those with money and means were able to choose the most convenient places to wait out the pandemic.
Tim Culpan – Bloomberg
It was a warm spring evening in Taipei and more than a hundred celebrities, founders, venture capitalists and tech executives gathered for cocktails and hors d’oeuvres. The headline event, a fireside chat, was just an excuse for Taiwan’s best-connected people to socialize, enjoying the kinds of freedoms the rest of the world lacked amid another wave of Covid shutdowns.
Most of the World’s Vaccines Likely Won’t Prevent Infection From Omicron; They do seem to offer significant protection against severe illness, but the consequences of rapidly spreading infection worry many public health experts.
Stephanie Nolen – NY Times
A growing body of preliminary research suggests the Covid vaccines used in most of the world offer almost no defense against becoming infected by the highly contagious Omicron variant.
Beneath a Covid Vaccine Debacle, 30 Years of Government Culpability; Washington has rejected plans to revamp vaccine preparedness for decades and repeatedly paid a price. The Biden administration is at a similar crossroads.
Chris Hamby and Sheryl Gay Stolberg – NY Times
WASHINGTON — As the Biden administration tries to stanch yet another wave of the coronavirus pandemic, senior White House officials have also been considering a proposal to ensure the nation is better prepared for the next infectious disease outbreak. Key to the plan is the creation of a taxpayer-funded “vaccine hub” where experienced drug makers would partner with the government, reliably churning out millions of doses under federal oversight.
– [[https://bloom.bg/3Jg2Vzm|Three Sinovac Doses Fail to Protect Against Omicron in Study – Bloomberg]]
– The Latest Thing Keeping Parents From the Office Is a Shortage of Vaccinated Nannies – Bloomberg
– Waning Omicron Defense Prompts Need for Fourth Shot, Israel Says – Bloomberg
– AstraZeneca Covid Booster Increases Antibodies Against Omicron – Bloomberg
– Is the Covid-19 Vaccine Safe for Children? – AP via Bloomberg
– China locks down 13m to contain Covid outbreak ahead of Winter Olympics – FT
– AstraZeneca booster raises antibodies against Omicron less than Pfizer, study shows – FT
– Covid-19 Marches Toward Endemic Status in U.S. as Omicron Spreads – WSJ
– Opinion: A new generation of vaccines could turn covid-19 from a pandemic to just a problem – Washington Post
– How Covid-19 Has Migrated Across America – WSJ
– With Omicron Cases Surging, Here’s How and When to Test for Covid-19 – WSJ
Exchanges, OTC and Clearing
Nodal and IncubEx Expand World’s Largest Exchange Listed Environmental Derivatives Suite To 100 Distinct Contracts
Nodal Exchange and IncubEx today announced the upcoming launch of four brand new environmental futures on January 7, 2022, bringing the largest market for environmental products in the world to 100 futures and options contracts.
STAR7 S.p.A. lists on Euronext Growth Milan
43rd listing of 2021 on Euronext Growth Milan; STAR7 S.p.A. brings the total number of companies listed on Euronext Growth Milan to 174; Total placement volume of the offering equal to EUR15.0 million
Milan – 23 December 2021 – Borsa Italiana, part of the Euronext Group, today congratulates STAR7 S.p.A. on its listing on Euronext Growth Milan.
NYSE Options: Annual Penny Program Rebalancing
Effective January 3, 2022, NYSE American Options and NYSE Arca Options (“NYSE Options”, each an “Exchange”) will update the list of issues in the Permanent Penny Interval Program for Options (the “Penny Program”) pursuant to the Annual Review provided for in the Penny Program, as described below. Detailed changes to Penny Program issues can be found here.
— Initial Listing of Six (6) Container Freight (FBX) (Baltic) Futures Contracts – CME
— EBS Market Integration Notice – CME
— NCME STP Notices: December 23, 2021 – CME
— CME Globex Notices: December 20, 2021 – CME
— Amendments to Rule 10103.B. (“Live Graded Deliveries”), Rule 10103.C. (Carcass Graded Deliveries”), and Related Delivery Affidavits to Prohibit Redelivery of Cattle Within the Current Delivery Period in Live Cattle Futures – CME
— Product Modification Summary: Amendments to Rule 10103.B. (“Live Graded Deliveries”), Rule 10103.C. (Carcass Graded Deliveries”), and Related Delivery Affidavits – Effective February 07, 2022 – CME
Amazon’s AWS Restores Service After Third Outage in a Month
Michael Tobin – Bloomberg
Amazon.com Inc.’s online services business suffered at least its third outage in the past month, knocking a number of websites offline, but service was restored by Wednesday morning.
Sidewalk Robots Find Foothold on College Campuses; Starship’s 50 robots at James Madison University showcase the potential of automated delivery bots.
Kyle Stock – Bloomberg
Robot 509 from Starship Technologies is both patient and skittish. The autonomous machine, which resembles a Yeti cooler crossed with a Waymo minivan, moves around like a mammal near the bottom of the food chain. It freezes up in crowds and, even when utterly alone, scoots forward in halting spurts, seemingly suspicious of fallen leaves.
Log4j Reveals Cybersecurity’s Dirty Little Secret
Mark Manglicmot – DarkReading
When tech media starts reporting that the “internet is on fire,” you know you have a significant situation on your hands. Over time, the severity, scope, and impact of the Log4j vulnerability, also known as Log4Shell, has only increased. The US Cybersecurity and Infrastructure Security Agency is recommending immediate action, as is its UK counterpart, and modern tech’s household names are among those we know are immediately — and gravely — vulnerable to one of the most significant zero-day threats in years.
A Cybersecurity Arms Race: Trends and Developments to Understand for 2022
Ben Smith – CPO Magazine
You and I are living in the middle of an arms race in cybersecurity – can you feel it?
Adversaries are leading the way through constant evolution of attacks via new tactics or techniques, or simply new combinations of old techniques. The good guys reconfigure and retool their threat detection and response capabilities to recognize this new threat vector, which frustrates but typically does not deter the adversaries, who inevitably come back via some other path, And the cycle continues.
Diversity in cybersecurity: Barriers and opportunities for women and minorities
Michelle Drolet – CSO Online
Our world is getting increasingly digitized, and cybercrime continues to break new records. As cyber risks intensify, organizations are beefing up defenses and adding more outside consultants and resources to their teams. But to their sad misfortune, they are getting hit by a major roadblock—a long-standing shortage of qualified cybersecurity talent.
A closer look at the numbers reveal an even more startling statistic: women comprise only 25% of the cybersecurity workforce, according to research from ISC2, despite outpacing men in overall college enrollment.
Can AI Virtual Assistants Help Close The Gaps In Cybersecurity?
Anurag Gurtu – Forbes
In recent years, many leading companies have fallen victim to high-profile cyberattacks and data breaches. Cybercriminals and hackers around the world develop new methods and techniques to break into and compromise even the most advanced security systems and gain access to sensitive information. This has led to the exposure of not only trade secrets but also the private information of millions of users.
Alibaba Employee First Spotted Log4j Software Flaw but Now the Company Is in Hot Water With Beijing
Liza Lin and David Uberti – WSJ
In late November, an Alibaba Group Holding Ltd. researcher found and alerted an open-source software foundation about a global software vulnerability that is now troubling governments and companies world-wide.
This week, the company found itself in hot water in China for what officials said was its failure to report the Log4j2 software flaw to Beijing in a timely fashion. The Chinese ministry in charge of technology suspended a cybersecurity partnership with Alibaba’s cloud-computing unit over the matter, Chinese state media reported.
SETL To Take Part In Asset Tokenization Pilot With SWIFT and Other Market Participants
SETL is proud to announce that it will be working with SWIFT on an innovation pilot , as the cooperative explores how it can support interoperability in the development of the tokenized asset market.
SEC Rejects Valkyrie, Kryptoin Spot Bitcoin ETF Applications; Crypto asset managers Valkyrie and Kryptoin have both seen their physical Bitcoin ETF proposals disapproved by the SEC.
Andrew Asmakov – Decrypt
The U.S. Securities and Exchange Commission (SEC) has rejected two more physically-backed Bitcoin exchange-traded funds (ETFs) proposed by Valkyrie and Kryptoin, respectively.
What the top crypto execs predict for the industry in 2022: Regulation and a Big Tech ‘brain drain’
Kate Rooney – CNBC
Bitcoin, the world’s largest digital asset, has seen a roughly 65% gain since January — with some ten to twenty percent swings in between. It brought in a crop of new, individual investors along the way as payment giants like PayPal started letting users trade crypto. More billionaires and institutional investors dove in to help legitimize the asset class.
Germany takes Russia’s RT Deutsch off air within days of launch
Miranda Murray and Alexander Marrow – Reuters
The new German-language broadcast of Russia’s international television station RT went off the air days after its launch after German authorities ruled that it did not have the licence it needed to operate in the country.
Russia’s Putin lays Europe gas price crisis blame on Germany
Katya Golubkova and Vladimir Soldatkin and Susanna Twidale – Reuters
President Vladimir Putin said on Thursday that Germany is reselling Russian gas to Poland and Ukraine rather than relieving an overheated market, adding that Moscow was not to blame for Europe’s gas price crisis.
How Europe Can Break Its Dependence on Russian Energy; Faster adoption of renewables and expanded use of nuclear power would bolster the continent’s security and help the climate, too.
Editorial Board – Bloomberg
As if the pandemic and rising inflation weren’t enough, Europeans face another source of wintry discontent: an energy crisis. A supply crunch has caused the price of power to hit record highs, just in time for the coldest season. It also risks exacerbating a worrying situation in Ukraine. With Russia massing forces on the border, Europe’s dependence on Russian gas limits the West’s options for stopping an invasion.
Thirty Years Gone, the Soviet Union Is Not Quite Dead; Like the body of its founder Vladimir Lenin, the USSR is an unburied corpse, and some of its worst ideas could yet come back to life.
Leonid Bershidsky – Bloomberg
The Soviet Union officially ended 30 years ago — if one had to pick a specific date, then on Dec. 25, 1991, with the lowering of the Soviet flag from the roof of the Kremlin’s Senate Palace and the handover of the nuclear button from the last Soviet President, Mikhail Gorbachev, to the first Russian President, Boris Yeltsin. But the USSR is not really gone. It’s an unburied corpse, like the body of its founder Vladimir Lenin still on display from 10 a.m. till 1 p.m. in a granite mausoleum on Red Square. Its stench still lingers in many a corner of the world, not just in Vladimir Putin’s Russia, its legal and — though Putin would deny it — spiritual successor.
CFTC Staff Issues No-Action Letter Regarding Certain Reporting Requirements for Swaps Transitioning from Certain LIBORs to Risk-Free Rates
The Commodity Futures Trading Commission’s Division of Data (DOD) issued today a no-action letter regarding certain Part 43 and Part 45 swap reporting obligations for swaps transitioning under the ISDA LIBOR fallback provisions from referencing certain London Interbank Offered Rates (LIBORs) to referencing risk-free rates (RFRs) following the cessation or non-representativeness of those LIBORs on December 31, 2021.
CFTC Staff Extends Temporary No-Action Letter to Derivatives Clearing Organizations Regarding Amended Daily Reporting Requirements
The Commodity Futures Trading Commission’s Division of Clearing and Risk (DCR) announced today that it is extending the temporary no-action letter previously issued to registered derivatives clearing organizations (DCOs) regarding the amended daily reporting requirements in CFTC Regulation 39.19.
CFTC Staff Revises No-Action Letters Regarding Market Participants Transitioning from LIBOR
The Commodity Futures Trading Commission announced today that the Division of Clearing and Risk (DCR), Division of Market Oversight (DMO), and Market Participants Division (MPD) have each issued revised no-action letters to swap dealers and other market participants related to the industry-wide initiative to transition from swaps that reference the London Interbank Offered Rate (LIBOR) and other interbank offered rates to swaps that reference alternative benchmarks.
UK regulator fines BlueCrest Capital £40m for ‘reckless’ conduct; FCA says former hedge fund did not manage risk of moving money managers from external to staff investment fund
Laurence Fletcher – FT
UK regulators have fined former hedge fund BlueCrest Capital Management UK more than £40m for “reckless” conduct in failing to manage a conflict of interest affecting its investors, echoing a US regulatory finding last year. The Financial Conduct Authority said in a provisional decision on Wednesday that BlueCrest, a firm set up by billionaire Mike Platt, failed to manage the risk that moving its fund managers from a fund for external investors to a fund investing staff money could disadvantage external investors. This, it said, led to “a substandard” service for clients.
Warning: Fixed term deposit scams
ASIC is alerting investors about fake fixed term or high interest deposits in various currencies claiming to be a ‘new breed of investment’; Offers appear to include common phrases such as ‘beating inflation’ and ‘meeting liabilities’; These offers often include the unauthorised use of the Australian Government Coat of Arms and ASIC’s and/or APRA’s logos.
Warning: Treasury Bond investment scams
ASIC is alerting investors about the existence of several fake Treasury Bond offers. These are scams.; Financial institutions are not authorised to issue Treasury Bonds on behalf of the Australian Government or on-sell them outside of the ASX to the public; Legitimate Treasury Bonds can only be bought on the ASX through licensed ASX brokers.
Investing and Trading
Where to Find Cheaper Alternatives to Expensive Stocks; Small companies, value shares and foreign markets have been horrible performers in recent years, which is precisely why they merit another look.
Nir Kaissar – Bloomberg
With cash yields near zero and safe bonds paying little more, many U.S. investors say they have no choice but to take more risk if they want to grow their money. While that may be true, investors also appear to be chasing the same investments in their quest for higher returns, stretching valuations and ratcheting up risk.
Philanthropic Advisors List Five Biggest Issues in America Today; How to make modest, but effective, change in criminal justice reform, broadband access, unequal health-care outcomes, and more.
Mark Ellwood – Bloomberg
The past two years have been a stress test for America’s social and governmental systems, as well as the protections many take for granted. So far the results haven’t been good: Whether it’s the pandemic crushing our health-care institutions, the assault on the sanctity of the election process, protests against police brutality after the death of George Floyd, or a deadly power outage that spread across Texas, the crises of 2020-21 have revealed weaknesses that will need to be addressed if the country is to protect all citizens equally.
Billionaire businessman targets UK listing for ‘caviar of iron ore’ project; Mining magnate Robert Friedland says London is the ‘natural place’ to list Nimba deposit
Neil Hume – FT
High Power Exploration, the mining company controlled by billionaire businessman Robert Friedland, is planning a UK stock market flotation for its Guinean mine. In an interview with the Financial Times, Friedland said London would be the “natural place” to list its Nimba project, which owns some of the world’s best iron ore — the key ingredient needed to make steel.
Environmental, Social and Corporate Governance
How to Make the ‘S’ in ESG More Relevant; New financial instruments backed, at least at first, by a federal guarantee can spur promising medical research and other social-welfare goals.
Karen Petrou – Bloomberg
Environment, social and governance investing is all the rage, but most all investment goes into the “E” and, to a lesser extent, the “G” and not the “S.” We neglect social-welfare investment at grave risk and for no good reason. But there is a way to quickly change this by making ESG meaningful for an urgent social good: speeding treatment and even cure for diseases and disability.
Highest-Ranked ESG Fund in the U.K. Is Betting Big on India
Loukia Gyftopoulou – Bloomberg
Stewart Investors India fund returned 31.2% through November; Fund is among few ESG leaders not relying on tech giants
A major bet on India as a growth market for low-carbon projects just propelled a U.K. fund to the top of this year’s ESG rankings. The Stewart Investors India Subcontinent Sustainability fund, which is domiciled in Britain but manages its 442 million pounds ($592 million) of client money from Singapore, returned 31.2% in the year through November according to Morningstar Inc. data. That’s better than any other U.K. fund using environmental, social and governance investing strategies over the same period, according to Morningstar classifications.
Hedge Funds and Private Equity Lure Billions From Rich Asians
Denise Wee – Bloomberg
Wealthy Asians are pouring money at a record pace into alternative assets through private banks and high-end investment firms to escape low interest rates and volatile listed markets. The haul at JPMorgan Chase & Co.’s private banking arm from Asian clients more than doubled this year to an all-time high. HSBC Holdings Plc hit a record, with more than half of its inflows coming from Asia. Firms such as Credit Suisse Group AG and Apollo Global Management have made key personnel moves to step up in a region that’s seeing the fastest growth in wealthy people.
Third Point fund chair quits after ‘personal threats’ in escalating activist spat; Dan Loeb says ‘juvenile antics’ by rebel shareholders ‘smack of desperation and inexperience’
Harriet Agnew and Sarah Provan – FT
The chair of Third Point Investors Ltd, a London-based investment fund connected to Dan Loeb’s activist group, has stepped down after he received “personal threats” amid an escalating fight with rebel investors.
Non-transparent ETFs face up to first big tax test; Low redemptions plus limited ability to use custom baskets restricts most potent ways managers can wash away gains, analysts say
Jackie Noblett – FT
Managers that stuff active strategies into the non-transparent ETF structure have found that the wrapper minimises the tax impact of portfolio moves and paper gains.
ETFs Claim More of Muni Market; Low costs lure bond investors, but using the funds to navigate market turmoil can be tricky
Heather Gillers – WSJ
Municipal bond investors are piling into exchange-traded funds, attracted by low costs and the ability to trade quickly. Muni ETFs held $80 billion as of the end of the third quarter, up from less than $50 billion two years ago, Federal Reserve data shows. Citigroup projects they will hold $125 billion by December 2022.
Hedge fund boss Dan Loeb slams ‘juvenile’ activist as ‘stain’ after Third Point chair forced to quit; Steve Bates has resigned as chair after what Third Point said were ‘personal threats’ made against him in private meetings with activist investors
ew York hedge fund boss Dan Loeb has attacked the activist investors targeting his London-listed investment vehicle, calling them a “stain” on the City engaged in “juvenile antics.” The strong comments come after Third Point’s UK chair Steve Bates resigned from the board, citing pressure from activists.
Container Shortage Sparks Coffee Shipping Experiment
Archie Hunter and Tatiana Freitas – Bloomberg
In the coffee trading world, a ship steaming across the Atlantic Ocean is garnering a lot of attention. A break-bulk vessel named Eagle has wound its way from Lampung in Sumatra, through the Mediterranean and is now headed for New Orleans. Transporting robusta coffee bags stacked in its hold to the U.S. — where roasters are starved of supply — it’s one of the first shipments of this kind in over 20 years.
Do not write off London’s IPO market as a lost cause; Deliveroo and Alphawave risk detracting from promising progress on UK tech listings
Cat Rutter Pooley – FT
It was the year that London’s equity markets got what they wanted. Large tech listings from founder-led businesses in growth sectors. It was just a pity that two of them were Alphawave IP and Deliveroo.