Hits & Takes
John Lothian & JLN Staff
Here is your bad news for Monday, but you can do something about it. According to the World Health Organization, aka WHO, long working hours are a killer. —USN
So take it easy this week and get out there and enjoy the May flowers.
If you need some help relaxing, the Wall Street Journal has a story to help titled, “How to Wean Your Kids—and Yourself—Off Screens.” —WSJ
Or, for you Chicagoans and nearby music lovers, Lollapalooza is coming back to Grant Park in late July, Variety reported Thursday. See, there is some good news. — WGN-TV
Hong Kong Exchanges and Clearing Limited reported HKEX’s over-the-counter derivatives clearing subsidiary OTCClear has today cleared the market’s first SOFR-HONIA Cross Currency Swaps executed between Bank of China (Hong Kong) and HSBC. — LinkedIn
CME Group reports that its foreign exchange ADV increased 15% from April 2020. — CME Group
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign over the weekend. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The board of the New Zealand Stock Exchange (NZX) has appointed Victoria Newman as its next Future Director, effective July 1. According to the press release, the Future Directors Programme is “designed to help identify and grow the next generation of directors in New Zealand, including recognising talented executives who are interested in developing governance skills.”~SR
Taiwanese Bourse Suffers Worst Crash In Its History; SEC Sets Its Sights on Gamified Trading – The Spread
This week on The Spread, a major crash at the Taiwan Stock Exchange nets gains for bearish options bets, options traders bet on carbon, Nasdaq gets approved to launch VOLQ options, and more.
Catching up with Sterling Trading Tech on “Unprecedented” Trading
Sterling Trading Tech is one of the firms in the eye of the storm for the rise of retail equity and option traders. John Lothian News caught up with their president and head of risk management to talk about how they fared and how they continue to deal with the influx of retail customers and resulting trading activity in 2020 and 2021.
London’s Lunch Hour Gets Busier as Airports Seek Boost
Thomas Buckley and Jeremy Scott Diamond – Bloomberg
Lunch hours in London’s financial districts are showing signs of life as the city’s airports hope for a much-needed uptick in traffic. The Pret Index, based on exclusive data from U.K. sandwich chain Pret A Manger Ltd., shows that bankers, corporate lawyers and asset managers are slowly repopulating central London, with last week seeing a notable increase in business. Transaction volume in the City and Canary Wharf areas rose to nearly half of pre-Covid levels last week, the most since U.K. schools reopened in March.
*****Get ready for lots of stories about restarting the financial districts and cities in general.~JJL
The sinister PR push that links cyber criminals to CEOs; Hackers are using corporate tools, from ‘ethical’ codes to legalese, to attack companies themselves
Andrew Hill – FT
The misspelt scam email, the clumsy phishing attack, the gaudy pop-up virus threat. All these I can resist. Cyber criminals have developed an altogether more sinister weapon, though: the polite press release.
*****Yes, but are they hiring flacks to push the stories?~JJL
The Mogul in Search of a Kinder, Gentler Capitalism; Lynn Forester de Rothschild, founder of the Coalition for Inclusive Capitalism, believes change will come when hedge fund billionaires and Pope Francis work together.
David Gelles – NY Times
A self-made multimillionaire who married into a revered European banking dynasty, Lynn Forester de Rothschild now spends her time calling for higher taxes on the wealthy, stricter regulation of big business and a wholesale reordering of the capitalist system that has delivered her such privilege.
*****Kinder and gentler can work, and then we revert back to the norm.~JJL
Humanity wastes about 500 years per day on CAPTCHAs. It’s time to end this madness
Thibault Meunier – Cloudflare
Select all the buses. Click on bikes. Does this photo have traffic lights? As ridiculous as these questions are, you’re almost guaranteed to have seen one recently. They are a way for online services to separate humans from bots, and they’re called CAPTCHAs. CAPTCHAs strengthen the security of online services. But while they do that, there’s a very real cost associated with them. Based on our data, it takes a user on average 32 seconds to complete a CAPTCHA challenge. There are 4.6 billion global Internet users. We assume a typical Internet user sees approximately one CAPTCHA every 10 days. This very simple back of the envelope math equates to somewhere in the order of 500 human years wasted every single day — just for us to prove our humanity.
*****I hate CAPTCHAs. I can never tell what is a traffic light.~JJL
Long working hours are a killer, WHO study shows
Emma Farge – Reuters
Working long hours is killing hundreds of thousands of people a year in a worsening trend that may accelerate further due to the COVID-19 pandemic, the World Health Organization said on Monday.
*****Find some time to read a book. My current book is “Man of the Futures” by Leo Melamed. I just finished “Empire of Cotton: A Global History” by Sven Beckert. More on this book to come.~JJL
Friday’s Top Three
Our top story Friday was Bloomberg’s The Death and Life of the Central Business District, about how “downtown” neighborhoods like New York’s Midtown and Wall Street, Chicago’s Loop, and San Francisco’s Financial District are changing as a result of the pandemic. Our second most clicked story was Page Six’s Olivia Munn said she was ‘obsessed’ with John Mulaney years ago. I forgot why that was relevant – oh yeah, Mulaney used to be a floor clerk at the CBOT. Third was the home page for the brokerage firm Tradier.
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The World Economy Is Suddenly Running Low on Everything; ‘It is anything but efficient or normal.’ Surging corporate demand is upending global supply chains.
Brendan Murray, Enda Curran, and Kim Chipman – Bloomberg
A year ago, as the pandemic ravaged country after country and economies shuddered, consumers were the ones panic-buying. Today, on the rebound, it’s companies furiously trying to stock up. Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The frenzy is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation.
A Day in the Life of Wall Street Shows NYC at Cusp of Comeback; While the biggest banks prepare to bring workers back, a city of financiers gets shoes shined, hair dyed and beer-battered crab for lunch.
Max Abelson, Amanda L Gordon – Bloomberg
Jon Corzine was about to leave his Upper East Side apartment at 7:25 on Wednesday morning before his wife, Sharon, stopped him. “Your mask,” she reminded the former head of Goldman Sachs Group Inc. Corzine, who’s now running the hedge fund JDC-JSC, stepped into the elevator and out onto Fifth Avenue to walk to the midtown Manhattan office where he spent nine months alone. But things are changing. A trader joined him in March, and next week he’s going to take his first in-person meeting since Covid-19 began ravaging New York more than a year ago.
Tokyo Stock Exchange Eyes Longer Trading Hours, Nikkei Says
Gearoid Reidy and Min Jeong Lee – Bloomberg
Hours may extend into afternoon, evening, scrap lunch: report; If realized, move would apply to cash equity trades from 2024
The Tokyo Stock Exchange is considering expanding trading hours for cash equities in a move designed to attract retail investors and foreign traders, the Nikkei newspaper reported, without citing anyone. The bourse, which currently ends trading at 3 p.m. Tokyo time, is considering expanding hours into the afternoon or evening in a change that could be in time for a system renewal in 2024, the report said. An advisory body plans to meet as early as this week and solicit opinions from brokerages and institutional investors, according to the Nikkei.
UK carbon trading system likely to lead to government intervention, traders warn; Pent-up demand and strict emission targets expected to result in sustained rally in carbon credits price
David Sheppard and Camilla Hodgson – FT
The UK’s effort to put a price on carbon pollution through a new trading system that launches this week is likely to lead to government intervention to reduce the cost to companies within months, traders have warned. Pent-up demand and the UK’s strict emission targets are expected to lead to a sustained rally in the price of carbon credits on the UK Emissions Trading Scheme (ETS) when it goes live on Wednesday. Under its rules, the government must consider measures to reduce the cost of allowances that companies have to buy to offset their emissions if they consistently trade at more than double their average price of the previous two years.
Drag Commodity Traders Out of the Shadows
Javier Blas and Jack Farchy – NY Times
In the final days of Donald Trump’s presidency, all eyes in Washington were on the unprecedented second impeachment of a sitting president following the riots on Capitol Hill. No one noticed when, on Jan. 15, the Treasury quietly eased sanctions on a man it had previously described as profiting from “corruption and misconduct.”
The Factors Driving Crypto Markets’ Boom and the Challenges Ahead; Bitcoin and other digital currencies have exploded in value during the pandemic, but hurdles to widespread adoption remain
Peter Santilli, Caitlin Ostroff and Paul Vigna – WSJ
Cryptocurrencies such as bitcoin, ether and dogecoin have surged to highs that few investors would have predicted a year ago. The furious run has even the most optimistic traders asking: Can it last? The forces underpinning the crypto mania mirror those that saw GameStop Corp. shares tear higher earlier this year. Excess money from stimulus checks aimed at helping the most vulnerable make rent has also found its way to brokerage accounts that offer free trading. Meanwhile, people globally have spent more time at home and in front of screens as the pandemic shut businesses.
BlackRock’s Rick Rieder Learned the Value of Moderation From 1980s Bond Blowup; The asset manager’s fixed-income chief is adjusting his asset positions to account for inflation and interest-rate hazards, and spreading his bets widely
Julia-Ambra Verlaine – WSJ
BlackRock bond chief Rick Rieder learned long ago that making big bets is the easiest way to end up with outsize losses. The head of fixed income at the world’s largest asset manager says he is distributing his wagers broadly in the face of unprecedented times. He doesn’t expect the pandemic recovery and fiscal stimulus to spur a wave of inflation that ends the long bull market in bonds, but he is also hedging those wagers after learning early in his career that being right isn’t the same thing as making money.
DOJ seeks to extend stay in JPMorgan spoofing case
Maria Nikolova – FXNewsGroup.com
DOJ seeks to extend stay in JPMorgan spoofing case
The United States Department of Justice (DOJ) is pushing for extending the stay of a civil action accusing JPMorgan and several of its traders of spoofing. This becomes clear from documents filed by the DOJ with the New York Southern District Court on May 15, 2021.
The headhunters leading Wall Street’s systematic-trading and data-science hiring frenzy
Alex Morrell – Insider
The market for quant and data-science specialists has perhaps never been hotter. And the technologists, researchers, scientists, and traders developing cutting-edge investment strategies and platforms aren’t just coveted by hedge funds.
Goldman Sachs is going through a massive transformation under CEO David Solomon
Goldman Sachs is going through some big changes under CEO David Solomon. The Wall Street bank has taken steps involving transparency and inclusion to change up its culture. After its first-ever investor day in early 2020, the firm is executing on targets including multi-year cost-cutting plans. And it’s making big pushes into wealth management and consumer banking.
Bitcoin passes the ransom test
Gina Chon – Reuters
The classic ransom is a suitcase full of unmarked U.S. dollar bills. Bitcoin’s role in the Colonial Pipeline hack shows the global currency of crime has a rival. That’s a sort of sign of bitcoin’s success, but it also sets the scene for regulators to step up their interventions.
Bitcoin Wallet Used by DarkSide for Ransom Payments ID’d by Elliptic
Kevin Reynolds – Coindesk
The wallet used by the DarkSide ransomware group to receive bitcoin ransom payments has been identified, according to data analysis firm Elliptic, citing intelligence collection and analysis of blockchain transactions.
That New Hybrid Office May Not Be as Flexible as You Hoped For; The post-pandemic workplace risks being complex for bosses to run and unsatisfying for employees.
Lucy Meakin – Bloomberg
Fourteen months after coronavirus confined the world’s office-workers to their homes, companies are embarking on another great experiment — how to get their teams back together, in-person, at least some of the time. It’s a task that is briefly uniting the titans of global finance and leaders of nimble startups, all of whom are having to plan for staff coming in two or three days each week, at least for now. Driven in some places by Covid concerns and in others by a desire to embrace workplace change, hybrid work is the new center ground — at least in the short term.
Empty offices on Mondays and Fridays spell trouble; Most of us enjoy working at home at the start and end of the week — but that may not last
Pilita Clark – FT
Since this column always appears at the start of the week, it was troubling to come across an academic study the other day suggesting workers are at their rudest on Mondays.
The property developers still betting on London offices; The market is splitting in two, between modern, flexible spaces and older buildings whose value is likely to decline
George Hammond – FT
Just beyond the northern frontier of the City of London, a nondescript plot of development land is the subject of a fierce bidding war. The site’s price has soared in recent weeks on the back of offers from some of the world’s biggest developers and investors. Each of them is confident they can turn a profit by making a bet on the future of London offices.
How to Rally a Jittery Workforce Back at the Office; Some workers are returning sad, anxious or burned out—here’s what organizations can do to show support and help everyone feel more like a team again
Rachel Feintzeig – WSJ
Graham Chapman’s team is getting back to work. But things are weird. People don’t chat like they used to, he’s noticed. Through the glass wall of his office, the manager of 15 can see workers’ shoulders tensing up. When he walks the halls he hears them sighing.
World’s Worst Stock Rout Deepens as Taiwan Tightens Virus Curbs
Shikhar Balwani – Bloomberg
Benchmark Taiex index sinks as much as 4.2% on Monday; Taiwan reported a record 333 new local virus cases on Monday
Taiwan stocks slumped, extending their biggest rout in more than a year, as the government tightened restrictions on people and businesses to control its worst outbreak of the coronavirus.
Can Digital Cash Make Inflation Worse? Central banks should slow down their space race to offer digital currencies until after price pressures ease.
Andy Mukherjee – Bloomberg
Inflation is coming. Or wait, it’s already here. Bond investors are looking at the 4.2% annual rate that U.S. consumer prices jumped to in April and wondering if it’s all because of depressed levels from last year. Could it be that the Federal Reserve is wrong about higher prices being transitory?
BlackRock Plans Staff Return in September, With Some Remote Work
Annie Massa – Bloomberg
BlackRock Inc. will ask U.S. employees to return to offices in September, when it will begin a trial period allowing some remote work each week. The world’s largest asset manager will allow up to two days a week of remote work on average for U.S. staff, a spokesman for New York-based BlackRock said Friday.
Covid Is Airborne, Scientists Say. Now Authorities Think So, Too
Jason Gale – Bloomberg
WHO, CDC recognize risk of virus aerosols in tweaked advice;l Scientists seek ventilation overhaul to address airborne germs
A quiet revolution has permeated global health circles. Authorities have come to accept what many researchers have argued for over a year: The coronavirus can spread through the air. That new acceptance, by the World Health Organization and the U.S. Centers for Disease Control and Prevention, comes with concrete implications: Scientists are calling for ventilation systems to be overhauled like public water supplies were in the 1800s after fetid pipes were found to harbor cholera.
Vaccine Shortfall Leaves Nations Vulnerable as Covid Spreads
James Paton – Bloomberg
Covax’s struggles increase calls for richer nations to share; UNICEF director worries India’s deadly surge is a precursor
The campaign to deliver Covid-19 vaccines to vast parts of the world is grappling with a significant supply shortage, leaving many nations vulnerable and piling pressure on wealthy governments to share doses. The initiative known as Covax expects the shortfall to reach about 190 million doses next month, UNICEF, one of its partners, said on Monday. Covax has shipped less than 40% of the doses it had intended to distribute by now, hurt by delays in supplies from hard-hit India, a global hub of vaccine production.
India Boosting Vaccination to Prevent Another Wave of Infections
Bibhudatta Pradhan – Bloomberg
Government says it’s prepared to tackle third wave of virus; Ruling party official Panda speaks to Bloomberg TV Asia
India has scaled up vaccination for its 1.3 billion population, apart from boosting heath care infrastructure as it prepares for a third wave of coronavirus infections, Baijayant Panda, vice president of the ruling Bharatiya Janata Party, said. “The biggest bet of course we are making is that our vaccination roll out has been scaled up enormously,” the BJP leader, known as Jay Panda, said in an interview to Bloomberg TV Asia on Monday. “By end of the year, we hope to have a majority of Indians vaccinated.”
GSK seeks to make up ground in vaccine race; UK group and France’s Sanofi release trial data of Covid jab showing strong immune response
Hannah Kuchler – FT
GlaxoSmithKline is banking that it can come back from behind in the race for a Covid-19 vaccine and play an important role preparing for new pandemics after releasing positive trial data.
Covid-19 Vaccine Works, Even if Side Effects Differ for All, Doctors Say; Age and other factors may play a role, but scientists say the shots provide immunity, including in the absence of fatigue, chills or other symptoms
Peter Loftus – WSJ
Infectious-disease specialists are working to reassure people that they are still getting protection from Covid-19 vaccines, even if they don’t experience the flulike side effects that hit some people after vaccination.
Covid-19 Wrecked the Algorithms That Set Airfares, but They Won’t Stay Dumb; Using more live data to set fares has become a necessity for carriers during the pandemic, and may lead to greater price discimination in the future
Jon Sindreu – WSJ
Summer vacations are coming back. So are the airline algorithms that know how much you are prepared to pay for them. In the leisure market, domestic air travel is normalizing in terms of both bookings and fares. Crucially, vaccinations are making people start to book further out: Online travel agency Skyscanner estimates an average booking horizon of around 75 days in March, compared with a low of 55 last July.
Singapore’s Unlinked Virus Cases Tied to Indian Variant
Philip Heijmans – Bloomberg
Six unlinked cases on Sunday test positive for strain; About 1.3 million people have gotten both doses of vaccine
The highly transmissible strain of Covid-19 that surfaced in India has become more prominent among Singapore’s growing number of unlinked cases, in a sign that hidden chains of transmission of the variant have existed for some time. Of the 17 unlinked cases identified on Sunday, six patients whose ages range from 29 to 57 years old preliminarily tested positive for the strain known as B.1.617, according to updated Ministry of Health data published overnight. Among them is a driver who was tested for the virus after developing a runny nose, an auxiliary police officer who had body aches, and an unemployed Malaysian national who saw a doctor after experiencing fever and cough. Among them, two had gotten their first vaccine dose already.
CDC recommends U.S. schools continue to use masks
Schools in the United States should continue to use masks for the 2020-2021 academic year as all students will not be fully vaccinated, the U.S. Centers for Disease Control and Prevention (CDC) said on Saturday.
G7 urged to donate ’emergency’ supplies to vaccine-sharing scheme
Emma Farge – Reuters
The head of UNICEF on Monday asked G7 countries to donate supplies to the COVAX vaccine-sharing scheme as an emergency measure to address a severe shortfall caused by disruption to Indian vaccine exports.
South Africa Widens Vaccine Rollout With Pfizer Doses Monday
Felix Njini – Bloomberg
South Africa said it will broaden its Covid-19 vaccine rollout to health-care workers and people over the age of 60 starting Monday.
Exchanges, OTC and Clearing
ICE Benchmark Administration Launches GBP SONIA Spread-Adjusted ICE Swap Rate ‘Beta’ Settings
ICE Press Release
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that ICE Benchmark Administration Limited (“IBA”) has launched GBP SONIA Spread-Adjusted ICE Swap Rate® ‘Beta’ settings.
IBA is publishing daily, indicative GBP SONIA Spread-Adjusted ICE Swap Rate ‘Beta’ settings for an initial testing period. The settings are designed to support the market in transitioning non-linear derivatives, structured products and cash market instruments that currently reference GBP LIBOR ICE Swap Rate.
Enhanced opportunities with new ETF options from Eurex
Already providing the broadest choice of ETF derivatives in Europe, Eurex has recently introduced another five new ETF options. We discussed the interesting market opportunities these options will provide with Michael Delew, Director, Capital Markets, at Wisdom Tree, the leading New York-based ETF sponsor and asset manager, and Matthew Riley, Equity & Index Sales EMEA at Eurex.
Nasdaq Announces 2021 Annual Meeting of Shareholders
Nasdaq, Inc. (Nasdaq: NDAQ) has scheduled its 2021 Annual Meeting of Shareholders for June 15, 2021 at 9:00 AM ET. Shareholders of record will be able to vote and ask questions online during the meeting. The virtual meeting website will be accessible 15 minutes prior to the meeting start by visiting: www.virtualshareholdermeeting.com/NDAQ2021.
CME AIR Futures on the FTSE 100 Total Return Index launching June 7, 2021 – Effective June 7, 2021
On June 7, 2021, CME will launch trading in our second Adjusted Interest Rate (AIR) contract, a GBP-denominated future on the FTSE 100 Declared Dividend Total Return Index. The initial contract, on the S&P 500 Total Return Index was launched on September 18, 2020, with open interest currently above 115K.
TSX Selects IHS Markit For ESG Reporting And Data
IHS Markit has entered into a strategic alliance with Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) (the Exchanges) to deliver its multi framework ESG reporting and data distribution platform, ESG Reporting Repository™, to issuers listed on the Exchanges. As part of the agreement, TSX and TSXV will recommend the use of the Repository to approximately 2300 public companies listed on the Exchanges at no additional cost.
CME Group to Launch Micro WTI Futures on July 12
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will expand its suite of micro-sized futures contracts with the introduction of Micro WTI futures. The contracts are expected to launch on July 12, pending regulatory review. Micro WTI futures will be one-tenth the size of the company’s global benchmark WTI Crude Oil futures contract and cash-settled. They will enable market participants – from institutions to sophisticated, active, individual traders – to fine-tune exposure to crude oil markets and enhance their trading strategies in an efficient, cost-effective way.
Lithuanian fintech under scrutiny over potential role in Wirecard fraud; UAB Finolita Unio processed tens of millions of euros that went to now fugitive executive
Olaf Storbeck, Richard Milne in Oslo and Stefania Palma – FT
Prosecutors suspect a Lithuanian payments company was used to steal more than EUR100m from Wirecard weeks before it collapsed, with some of the money channelled to the German group’s now fugitive second-in-command Jan Marsalek.
Wave Labs adds three liquidity providers to eLiSA credit trading system; Fixed income platform eLiSA founded by former Nordea Asset Management trading head adds connections to Bloomberg, UBS BondPort and MTS ahead of launch.
Hayley McDowell – The Trade
A new credit execution system established by the former global head of trading at Nordea Asset Management has expanded its partners ahead of launch with three liquidity providers and connectivity to several key data sources. Wave Labs, founded by Miles Kumaresan in 2018, has made various partnerships as it prepares to begin a three-month phase of controlled trading with one or two asset management clients before the platform goes live in September.
Nomura to launch electronic FX trading engine in Singapore; The launch of the FX pricing engine in Singapore by Nomura comes as part of a regulatory scheme to make the region a trading hub.
Annabel Smith – The Trade
Investment bank Nomura has launched an electronic foreign exchange pricing and trading hub in Singapore with the support of the Monetary Authority of Singapore (MAS). The launch comes as part of a wider regulatory initiative by MAS to attract some of the largest banks to Singapore in a bid to make it a major trading and corporate treasury hub.
‘$40 billion’ Robinhood app tries to vault SEC hurdles
Charles Gasparino – NY Post
It’s a lot of money for a stock-trading app that’s supposedly free. Robinhood is slated to launch an initial public offering before summer’s end that could value the Silicon Valley-based company at $40 billion or more, people close to the underwriting group say. That would make it among the biggest deals of the year — and certainly the most anticipated as the day-trading app became a cultural phenom during the pandemic.
Yes, Windows 10 Has Ransomware Protection: Here’s How To Turn It On
Brooke Crothers – Forbes
Windows 10 ransomware protection remains the first line of defense for consumers using Windows in 2021. Ransomware not only denies access to your data but demands a ransom be paid. And criminals are increasingly turning to so-called “double extortion,” where they threaten to expose sensitive user data if a separate ransom isn’t paid.
More ransomware websites disappear in aftermath of Colonial Pipeline hack
Raphael Satter – Reuters
Two more ransomware operators appear to have disappeared from the web, a cybersecurity researcher said on Sunday, in another potential aftershock following this month’s hack of U.S. fuel transport company Colonial Pipeline. The sites, run by groups dubbed “AKO” and “Everest”, appear to have become unreachable over the weekend, according to Allan Liska, a researcher with cybersecurity firm Recorded Future. And while hackers’ websites can often be unstable “it’s unusual to see two of the bigger names go down for 24 hours,” Liska told Reuters. “That makes me think it’s a conscious choice to take their site offline.”
Krebs on Biden’s cybersecurity executive order: ‘It’s a really ambitious plan’
Mychael Schnell – The Hill
Christopher Krebs, the nation’s former top cybersecurity official, said President Biden’s executive order aimed at improving federal cybersecurity is “a really ambitious plan,” in the wake of the U.S.’s Colonial Pipeline being targeted of a ransomware attack. Biden on Wednesday signed an executive order that requires the establishment of baseline cybersecurity standards for all software sold to the federal government. it also calls on all software utilized by the government to meet those standards within nine months.
Cybersecurity: How talking about mistakes can make everyone safer
Danny Palmer – ZD Net
The healthiest way to approach keeping people safe from online threats is to talk about misjudgements and errors – and to do so in a way that lets them understand that almost everyone has made a cybersecurity mistake at some point. Encouraging discussion around the threats people have faced can go a long way to helping others becoming more aware of what to look out for – and to avoid falling victim to cyber criminals themselves.
First NFT includes the personal signature of László, two-time Nobel Prize nominee
Ervin László, the twice Nobel Peace Prize nominated quantum theorist, philosopher, and piano virtuoso is issuing a series of official Non-Fungible Tokens (NFTs) through ViciNFT representing his own works in support of charity. The first NFT auction begins Friday May 14, 2021 at 9 AM Eastern Time and ends 5 PM Eastern Time May 18, 2021 on Mintable at the official Ervin László NFT auction.
You Can Earn 6% Interest on Bitcoin. Is It Worth the Risk? Crypto savings accounts that pay yield to borrow your tokens may sound tempting, but there are no guarantees.
Brandon Kochkodin – Bloomberg
It’s not just the outlandish returns that some Bitcoiners are bragging about these days. There’s also the yield. At a time when interest rates on conventional bank deposits are pinned to the floor—often below 0.5%— financial technology companies are offering to pay owners of Bitcoin and other cryptocurrencies annual percentage yields of 2% to 6% and sometimes more. You can deposit your coins with a few taps on one of their smartphone apps.
Elon Musk Just Reopened an Old Wound in the Bitcoin World
Joe Weisenthal – Bloomberg
Earlier this year, when Tesla added Bitcoin to its balance sheet, CEO Elon Musk became an instant hero in the cryptocurrency’s community. Then he started tweeting about Dogecoin — which is a parody of the whole thing — and started to go from hero to troll. Then last week, Tesla announced that it would no longer accept Bitcoin as a payment because to energy consumption, making the heel-turn complete.
Asset managers express caution on cryptocurrency after price swings; Adoption by mainstream finance industry remains in question, executives say
Michael Mackenzie and Madison Darbyshire – FT
The recent volatility in bitcoin prices triggered by Tesla’s Elon Musk has raised new doubts among institutional fund managers over the future of cryptocurrencies as an asset class.
Crypto bros take the fight back to Elon as prices tank; Bitcoin might have scarcity, but the intelligence of the crypto crowd is infinite.
Jemima Kelly and Jamie Powell – FT
If there’s one thing the market’s learned over the past few years, it’s to avoid putting too much hope in Elon Musk. Whether you’re a short seller, a retail investor, New York state or even a customer, a relationship with anything Musky seems to end in some form of disappointment.
How to Invest in Bitcoin Without Buying Bitcoin
Katharine Gemmell and Donald Moore – Bloomberg
The events of the past week have shown exactly why some people have been wary of investing in Bitcoin. One tweet from a billionaire and nearly 15% was wiped off the cryptocurrency’s value. Thankfully for some investors, there are other ways to make a bet on the future of cryptocurrency. Maybe you know nothing about Bitcoin, but you’re interested in the rise of cryptocurrencies. Or perhaps you know a lot about Bitcoin — and you don’t want to touch it, cautious about seemingly random price dips. Or you own Bitcoin already, and you’re looking to invest more broadly in the future of cryptocurrencies. The number of ways to get exposure is growing.
Microsoft is closing down its Azure Blockchain Service in September
Michael McSweeney – The Block
Software giant Microsoft said this week that it will close down its long-running blockchain-as-a-service offering in September. “On September 10, 2021, Azure Blockchain will be retired. Please migrate ledger data from Azure Blockchain Service to an alternative offering based on your development status in production or evaluation.,” reads a blog post published May 10. Yet Azure customers will have new options on the blockchain front in the form of ConsenSy’s Quorum offering. ConsenSys announced the same day that it was working with Microsoft to bring Quorum, which it acquired from JPMorgan last year, to the Azure customer base.
Yes, Your Crypto Is Taxable. Here’s How to Report Virtual Currency to the IRS
Kendall Little – Next Advisor
Taxes are one of life’s only certainties, and cryptocurrency is no exception. Yes, your Bitcoin is taxable. The IRS considers cryptocurrency holdings to be “property” for tax purposes, which means your virtual currency is taxed in the same way as any other assets you own, like stocks or gold. For most people who buy and trade crypto within online exchanges, accounting for it in your tax return is relatively easy. But like most things related to digital currency, things can get a lot more complicated the more active you are. Here’s what you need to know about which activity you might need to report to the IRS, and how you can begin planning ahead for your 2021 taxes.
Vitalik Buterin Burns $6B in SHIB Tokens, Says He Doesn’t Want the ‘Power’; The amount destroyed equates to almost half of SHIB’s total circulating supply.
Jamie Crawley – Coindesk
Ethereum co-founder Vitalik Buterin has burned 90% of his Shiba Inu coin (SHIB) holdings, an amount worth $6.7 billion. The trove of over 410 trillion tokens was sent to a dead blockchain address late on Sunday, taking them out of circulation. Buterin had been gifted half of SHIB’s total supply in recent weeks, in what appeared to be a marketing stunt.
Financial market transactions should not be taxed or restricted
Tom Schatz – The Hill
During a week in which the Dow Jones Industrial and S&P 500 averages reached record highs, Congress held yet another hearing to fix “problems” in the financial markets, including the imposition of a financial transaction tax (FTT) and stricter regulations on short selling. The May 6, 2021 House Financial Services Committee hearing was the third on “market volatility,” which was also the subject of a March 9, 2021 Senate Banking, Housing, and Urban Affairs Committee hearing.
Meritocracy, Not Democracy, Is the Golden Ticket to Growth; The price of abandoning it will be less wealth and more poverty.
Adrian Wooldridge – Bloomberg
Meritocracy is under assault from all directions. For progressives, it is a tool of White male privilege; for right-wing populists, an instrument of androgynous cosmopolitan elites; and for ambitious parents, a nightmare of sleepless nights and anxiety-ridden children. Black Lives Matter, one of the most successful protest movements of recent decades, puts meritocracy high on its list of targets. Even some of the more distinguished ornaments of the meritocratic system have given up defending it: Harvard’s Michael Sandel calls it a “tyranny” while Yale’s Daniel Markovits dismisses it as a “trap.”
Federal Court Orders Virginia Resident to Pay More Than $5 Million for Futures and Options Fraud
The Commodity Futures Trading Commission announced today that Judge John A. Gibney, Jr., of the U.S. District Court for the Eastern District of Virginia entered a Consent Order for Permanent Injunction, Restitution and Ancillary Equitable Relief against defendant Leonard J. Cipolla finding, among other things, that Cipolla fraudulently solicited individuals to place funds in a commodity pool to trade futures and options while misappropriating more than $5 million of the money he was given to trade. The order requires that Cipolla pay restitution of $5,102,283.51 and imposes permanent trading and registration bans.
Mind the (Data) Gaps; Keynote Address at the 8th Annual Conference on Financial Market Regulation (CFMR)
Commission Caroline A. Crenshaw – SEC
Commissioner Caroline A. Crenshaw
Good afternoon. It’s great to be here at the annual Conference on Financial Market Regulation. I’ve enjoyed the discussions so far, and I am looking forward to hearing more. And I want to welcome Jessica Wachter, our new Chief Economist, to the SEC. I am very pleased that you are joining us, and I am looking forward to working with you.
ESAs’ report on the implementation and functioning of the securitisation regulation
The Joint Committee of the European Supervisory Authorities (ESAs – European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority) published today its analysis of the implementation and the functioning of the EU Securitisation Regulation (SECR), including recommendations on how to address initial inconsistencies and challenges, which may affect the overall efficiency of the current securitisation regime. The Report is meant to provide guidance to the European Commission in the context of its review of the functioning of the SECR. It also provides initial inputs to the ongoing discussion on the efficiency of the securitisation framework given the role that securitisation could play in the recovery post the Covid-19 pandemic.
FCA announces plans to stop CMC phoenixing
The FCA has announced proposals to stop the practice of ‘claims management phoenixing’, by banning Claims Management Companies (CMCs) from managing Financial Services Compensation Scheme (FSCS) claims where they have a relevant connection to the claim.
Investing and Trading
One Way GameStop Might Have Changed the Market; The VIX probably isn’t saying very much about fear anymore.
Tracy Alloway – Bloomberg
One of the big mysteries in markets this year has been the persistently high level of the Cboe’s Volatility Index, better known as the VIX. Even as the S&P 500 touched all-time highs early this year, the VIX remained stubbornly elevated. For something that’s often been described as ‘Wall Street’s Fear Gauge,’ the index didn’t seem to be doing a very good job of matching actual sentiment in the market. So what gives?
Elon Musk, Chamath Palihapitiya and Cathie Wood Face a Reddit Reckoning; Profits beat prophets in today’s stock market.
Chris Bryant -Bloomberg
Back in January I highlighted three people who’d become the face of the booming stock market: Tesla Inc. boss Elon Musk, serial SPAC promoter Chamath Palihapitiya and stock picker Cathie Wood of Ark Investment Management LLC. The trio are evangelists for innovation and each, in their way, has encouraged investors to pour money into extravagantly valued tech stocks and speculative cryptocurrency. Would Musk, Wood and Palihapitiya be as adored when tech mania subsides, I wondered. We’re about to find out.
Charging 589% Interest in the Pandemic Is a Booming Business
Graphics by Christopher Cannon – Bloomberg
The terms of the loans were frightening: $5,000 in principal, with payments due every couple weeks at annualized rates as high as 589%. Interest charges would pile up at such a blindingly fast clip, Jamie Johnson told himself, that he’d have to prioritize debt repayment over everything else. And so he did. This was early April 2020, just as the pandemic was breaking out, and Johnson, a 44-year-old metals worker, had suddenly found himself out of a job and in desperate need of cash. When beefed-up unemployment insurance checks started arriving in his mailbox in Detroit a month later—$965 each week—he set aside big chunks of them to pay back the debt.
CEO Behind 5,300% Stock Gain Says Secret Is Raising Salaries
Min Jeong Lee and Toshiro Hasegawa – Bloomberg
Tange buys small software-testing firms, boosts staff pay; By cutting out middle men, he can still charge less to clients
Masaru Tange says the strategy that turned his company into one of Japan’s best-performing stocks may be surprising: He buys smaller firms and boosts their workers’ pay. Tange’s Shift Inc., a software tester, acquires other businesses near the bottom of the industry supply chain and raises their engineers’ salaries. He says he’s able to do this and still charge competitive prices by cutting out layers of companies that serve as middlemen in the outsourcing process. And having more workers leads to higher sales.
Spacs lose their deal ‘pop’ as fever fades; Instead of popping, share prices now typically slide on takeover announcements
Ortenca Aliaj, Miles Kruppa and James Fontanella-Khan – FT
Shares in special purpose acquisition companies are sliding following takeover announcements, a marked reversal of the enthusiasm for these vehicles earlier this year which could threaten their ability to do deals. Of the 13 Spacs that have announced acquisitions in May, only one is trading above $10, the level at which shares in blank-cheque companies are originally priced, according to a Financial Times analysis of Refinitiv data.
What is the FX Market Going to Do About Last Look?
Colin Lambert – The Full FX
The last week has provided no little insight into how the FX market views the still tricky subject of last look. The Global Foreign Exchange Committee started the ball rolling with a draft guidance paper on the issue – it is seeking feedback from market participants up until the end of May – and then XTX Markets published its own paper on the practice, seeking to debunk some “myths” around last look.
XTX Paper Takes Aim at “Invisible Tax” from Hold Times
Colin Lambert -The Full FX
A new paper from XTX Markets, Last Look Myths Debunked, argues that additional hold times within last look windows and the use of last look generally for commercial, rather than risk, purposes, represents “an invisible tax on clients and a distortion of their true costs of execution”.
Large-cap US stocks with high ETF ownership have underperformed; Finding could support value investor view that rise of ETFs is just the ‘madness of crowds’
Steve Johnson – FT
Visit our ETF Hub for investor news and education, market updates and analysis and easy-to-use tools to help you select the right ETFs. Large-cap US stocks favoured by exchange traded funds have underperformed the wider market in recent years, raising fears that “crowding” in popular companies is damaging returns.
Central banks seek out riskier assets for reserves in yield drought; Survey shows willingness to buy equities, corporate bonds and emerging market debt
Tommy Stubbington – FT
Central bankers who manage foreign currency reserves have been turning to new — and riskier — investments to compensate for the global collapse in bond yields ushered in by the pandemic, according to a new survey.
Environmental, Social and Corporate Governance
KKR to Buy Sustainability Consultancy ERM From Canada Funds
Dinesh Nair and Jan-Henrik Foerster – Bloomberg
Deal values ERM at about $2.7 billion, including debt: sources; Businesses are paying ever-closer attention to green issues
KKR & Co. has agreed to buy sustainability consultancy ERM Group Inc. at a time when the business world is paying ever-closer attention to green issues amid pressure from investors. The private equity firm has acquired a majority stake in ERM from Canada’s Omers Private Equity and Alberta Investment Management Corp., according to a statement Monday confirming an earlier Bloomberg News report. ERM’s management team and partners will remain minority investors.
Companies That Made #BlackLivesMatter Pledges Have Fewer Black Employees; But the tech industry’s financial commitments, totaling $4.6 billion, could have an impact.
Ellen Huet and Karen Toulon – Bloomberg
After the murder of George Floyd last year prompted widespread protests, dozens of companies released public pledges to promote racial justice. However, their support of the Black community wasn’t reflected in the demographics of their workforces.
Carbon is now a buzzword on corporate earnings calls; Trebling in number of mentions comes at a time of heightened interest in ESG investing
Justin Jacobs – FT
Top executives are saying the word “carbon” on corporate earnings calls at a rapidly rising rate, in the latest sign of the increased importance investors place on environmental credentials. Mentions of carbon and associated keywords have tripled over the past three years to about 1,600 per quarter, according to a UBS analysis of earnings call transcripts. Searches for the word in a financial context on Google have also reached an all-time high, according to the Swiss bank.
Asset managers must drive ESG transparency
Tom King – The Asset
While the focus on environmental, social and governance (ESG) investing has been gathering momentum in recent years, 2020 saw the dialogue pivot from interest to allocations, with substantial inflows into a range of ESG products. Investing sustainably was pushed further into the mainstream due to the global Covid-19 pandemic, equality and discrimination issues, and the threat of a looming climate crisis.
ESG Investors Turn to Emerging Markets, Defying Skeptics
Leo Laikola and Hanna Hoikkala – Bloomberg
There’s a growing number of money managers in green finance turning to markets not usually associated with sustainability. Fund bosses in Europe’s North, where climate-friendly investing has gone mainstream, have started looking much further afield to find cheap assets they say will eventually meet their environmental, social and governance goals. Nordea Bank Abp’s $450 billion asset management unit is among those trying out the strategy, and has just launched a fund targeting ESG assets in emerging markets.
No Pipeline, No Problem as Energy Leads the Stock Market Higher
Michael Bellusci – Bloomberg
It’s going to take more than a pesky pipeline shutdown to knock energy stocks off their pedestal as this year’s best performing group in the S&P 500. Indeed, while the market focuses on popular meme stocks, alternative energy plays, tech and Tesla, the best place to make money in 2021 has been that old warhorse, the crude patch.
Russian businesses start counting cost of EU carbon border tax; Some of Europe’s metal groups call for a different approach as they weigh up billions of dollars in fees
Nastassia Astrasheuskaya and Mehreen Khan – FT
Russian companies stand to be among the biggest losers from the EU’s proposed carbon tax on imports, prompting accusations of protectionism from Moscow.
Natural Gas, America’s No. 1 Power Source, Already Has a New Challenger: Batteries; A decade after the fracking boom took off, the fuel faces disruption by a new combination on the electric grid: renewable energy and electricity storage
Katherine Blunt – WSJ
Vistra Corp. owns 36 natural-gas power plants, one of America’s largest fleets. It doesn’t plan to buy or build any more. Instead, Vistra intends to invest more than $1 billion in solar farms and battery storage units in Texas and California as it tries to transform its business to survive in an electricity industry being reshaped by new technology.
JPMorgan Reopens Offices Across U.S. as Pressure Grows on Rivals
Hannah Levitt – Bloomberg
For JPMorgan Chase & Co., it’s another step toward post-pandemic normal, but for the U.S. financial industry it’s a bellwether. The nation’s largest bank, which often sets norms for the financial world, reopened offices to employees across the U.S. on Monday. The move includes locations in Ohio, Texas and Arizona that — unlike the bank’s New York headquarters — had been left at least partially shut in the wake of pandemic lockdowns. It’s all part of the firm’s plan to call back its entire U.S. workforce, at least on rotations, in early July.
Commodities broker Marex eyes London IPO of 500 mln pounds
Eric Onstad, Anna Irrera – Reuters
Commodities broker Marex announced on Friday it was considering a flotation in London that a source estimated could value the company at 500 million pounds ($703 million). The move comes amid a boom in commodities markets and after the private equity owners of Marex spent several years unsuccessfully seeking to sell the firm and exit their investment, financial industry sources said.
Deutsche Bank launches new FIC coverage model
Dan Barnes – FI Desk
Deutsche Bank has set up a new coverage model for its fixed income and currencies (FIC) sales team, intended to be more tailored to the changing behaviours and needs of institutional clients as fixed income markets evolve.
Control of Tribune media group looks set to go to hedge fund; Long-shot efforts to block Alden’s takeover of the US company have fallen apart
Anna Nicolaou – FT
Tribune journalists took to the streets over the weekend to voice their disapproval of the likely sale of one of America’s largest newspaper companies to Alden, a hedge fund that has been a leading consolidator in the beleaguered local news industry.
US banks could cut 200,000 jobs over next decade, top analyst says; Wells Fargo’s Mike Mayo predicts biggest reduction in industry’s headcount in its history
Imani Moise – FT
US banks stand to shed 200,000 jobs, or 10 per cent of employees, over the next decade as they manoeuvre to increase profitability in the face of changing customer behaviour, according to a banking analyst.
Ex-Northill team reunites to buy asset management stakes; Jon Little seeks to raise $2bn to exploit consolidation drive in fund management industry
Harriet Agnew – FT
Fund industry dealmaker Jon Little has returned to the market with a new venture that is seeking to raise up to $2bn to buy equity stakes in asset management boutiques.
UBS confirms plans to launch US outsourced trading desk; New outsourced trading desk by UBS will look to cut costs and take the pressure off asset managers and hedge funds in the US.
Annabel Smith – The Trade
UBS has become the latest major market participant to launch an outsourced trading desk in a bid to help buy-side traders with their growing workloads. The outsourced trading desk will launch in the US to assist asset managers and hedge funds as they look to cut costs, while easing workloads for traders.
UK’s STO divergence could exclude Europe from liquidity, Liquidnet report warns; With three quarters of trading taking place between the UK and international institutional counterparties, European asset managers could be left at a disadvantage.
Annabel Smith – The Trade
European asset managers could be excluded from significant pools of liquidity following the UK’s decision to axe the share trading obligation (STO) following Brexit, a Liquidnet report has warned. The liquidity landscape report found that between April and September 2019 75% of trading occurred between the UK and international institutional counterparties, with only 25% including EU asset managers.
Citi promotes Gutiérrez-Orrantia to head EMEA banking, capital markets and advisory -memo
Pamela Barbaglia – Reuters
Citigroup has promoted Ignacio Gutiérrez-Orrantia, one of its most senior bankers in Madrid, to lead its banking, capital markets and advisory (BCMA) franchise for Europe, the Middle East and Africa, a memo seen by Reuters shows.
Goldman Sachs seeks to hire more than 400 employees in China, Hong Kong; The American investment bank reached an agreement to take full control of its mainland joint venture in December; Foreign banks are expanding their presence as China further opens up its financial markets
Chad Bray – South China Morning Post
Goldman Sachs is hiring more than 400 employees in mainland China and Hong Kong, the latest foreign bank to seek to further expand its presence in the world’s second-biggest economy, according to a person familiar with the matter.
Hong Kong’s Old Boys Club Is Living on Borrowed Time; Putting more women on the city’s male-dominated boards is overdue and will improve its competitiveness with London and New York.
Matthew Brooker – Bloomberg
Hong Kong’s cozy all-male boards have been put on notice. Rules that could become effective within months will force them to appoint at least one woman director. It’s an overdue change that may go some way to bolstering the city’s dented status as an international financial center.
Bankers Flee Wall Street, Head Home to Virus-Free Australia
Nabila Ahmed – Bloomberg
About 25,000 Australians returned home from overseas last year; The Australian migration is firing up the property market
On Wall Street, it might sound like a 9,929-mile ticket to nowhere. And yet here was Catherine McCormack, trading a plum job at Goldman Sachs Group Inc. in New York for a finance job back home — in Australia. That might seem like a career-killer, but McCormack, 39, says the pros outweigh the cons in a world still crippled by the lasting impact of the pandemic.
Singapore Alleged Nickel Hoaxer Gets New Charges As Victims Grow
Chanyaporn Chanjaroen and Alfred Cang – Bloomberg
Ex-Stanchart commodities head, construction boss among victims; Envy’s Ng faces seven new charges in alleged $740 million scam
Ng Yu Zhi, the Singapore businessman charged for allegedly raising funds from investors for nickel trades that didn’t exist, faces additional charges of cheating seven individuals and firms, taking the number of purported victims to about 300.
Huarong Secures Funding Backstop From State Banks Through August
Lenders including ICBC to provide funds if needed, people say; Huarong’s bonds have resumed declines in recent days
China Huarong Asset Management Co. has reached funding agreements with state-owned banks to ensure it can repay debt through at least the end of August, by which time the company aims to have completed its 2020 financial statements, people familiar with the matter said.
Kyrgyzstan faces international legal battle over gold mine; Canadian company Centerra Gold files arbitration suit to stop Bishkek from nationalising Kumtor
Nastassia Astrasheuskaya and Neil Hume – FT
Kyrgyzstan is facing an international legal battle after the government of new president Sadyr Japarov fined the country’s biggest foreign investor $3bn and moved to take control of a huge gold mine.
How to Get Schooled by Chinese Education Stocks; Investors have been ignoring political risk for too long
Jacky Wong – WSJ
Investors who didn’t do their homework on Beijing’s educational revision plans have been schooled by volatility in Chinese education stocks. Shares of Chinese tutoring companies took a dive after Reuters reported Thursday that China may introduce tough rules in June on the country’s private tutoring sector, which could include banning weekend classes. Shares of New York listed TAL Education dropped 11% on Thursday, while New Oriental Education fell 14% the same day. Shares of TAL and New Oriental have now lost around 40% from their February peaks. Cram schools are popular in China as parents and students strive to get an edge in the increasingly competitive education system.
Sadiq Khan calls for Londoners to ‘support British businesses’ as restrictions eased
England’s Big Night Out
Sadiq Khan has called on Londoners to “support British businesses” and to come back into central London as Covid restrictions are eased further in England today. Khan said people outside the capital should not despair about the limited opportunities to currently travel overseas and that “everything you need is in London”.