Hits & Takes
John Lothian & JLN Staff
Saturday I was in the North Lawndale neighborhood of Chicago, one of the poorest in Chicago and home to many black families, for the Eagle project of William Khoury. William is the son of Robert Khoury, a longtime industry executive whom I first met when he was at GETCO
The younger Khoury is a Boy Scout with Troop 1 from the North Side of Chicago. He and some friends from the troop and troop leaders were in this Chicago neighborhood five miles west of the loop that was once a bustling haven for refugees from the Great Chicago Fire of 1871.
William’s Eagle project was to build a pergola at the site of a project developed by local community groups to build a cut flower growing and retail operation and an accompanying cafe, for which the pergola would shelter the seating area. The property is owned by the Stone Temple Baptist Church across Douglass Boulevard. The church also has a nearby vegetable and fruit growing area to provide fresh produce for this economically depressed area.
During my stay in North Lawndale, William’s father Robert shared with me that he had just published a book, the result of his desire to do something productive during the extra time he had during the pandemic. The title of the book is “How to Intern Successfully,” with a subtitle of “Insights & Actions to Optimize Your Experience.” Robert wrote the book with John Selby.
Robert, who is is the founder and CEO of Agile Rainmakers, a high-impact business development consulting and advisory firm based in Chicago’s Gold Coast, shared Saturday that he began to think more about interns after presenting in 2018 at the JLN MarketsWiki Education World of Opportunity event at the Stuart School of Business of Illinois Tech. Before his presentation he had only had one previous intern. Since the intern event, he has had a total of nine. You can find Robert’s book on Amazon HERE.
Cash-settled, three-month futures on the Bloomberg Short-Term Bank Yield Index (BSBY) are now trading. — CME Group
Heiner Seidel is starting a new position as lead litigation & special situations PR at EY. Since leaving Deutsche Boerse in 2018, Seidel has served as a senior communications lead (Germany & Austria) for Freshfields Bruckhaus Deringer and has been senior communications lead for Thomas Lloyd Group.
The New York Post has a story by Charles Gasparino about Gary Gensler’s battle with Robinhood which is accompanied by a photoshopped image of Gensler as a SEC-tattooed middle-weight boxer taking on a boxer with a Robinhood logo as its head.
In Dade County, Florida, a state where the governor signed an executive order banning the wearing of masks at schools, 15 members of the Dade County School District passed away from COVID-19 in the last 10 days, Yahoo News reported.
Don’t miss this week’s The Spread, including Suzanne Cosgrove’s Options News update, my tribute to former Bloomberg reporter Matt Leising (he is off to cryptoland) and the Term of the Week from TastyTrade’s Jermal Chandler.
If you would like to contribute a term of the week to The Spread, please contact me or Suzanne Cosgrove.
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign over the weekend.
A teammate from my baseball team when I was nine-years-old, Robert (Bubba) Carlson, passed away Sunday at the age of 61. He and I were not close, but he was a memorable baseball player for his ability to hit the ball a ton. Carlson was later a Village of Williams Bay (Wisconsin) employee in the village hall for many years. RIP Bubba!
The Chicago Cubs baseball team, who traded away many of their best players before the August 1 trade deadline, is the hottest team in baseball having won six games in a row. Though they are out of the running for postseason play, they are at least making it fun for their fans with a crew of previously unknown players. — ESPN
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 FOW Asia conference is two days away, but you can still register. It is online and will cover such topics as ESG, carbon-emission trading in Asia, the options for growing equity derivatives, China’s latest access policies for foreign investors, and the changing landscape of digital assets. You can see the full agenda and register here. ~SR
Options Traders Brace for Fall Action; OCC Volume Sets Monthly Record; John’s Take on Financial Journalists; Straddling Market Uncertainty – The Spread – September 3, 2021
— In this week’s options news: Delta variant dents U.S. jobs data; Will fall bring a further equity market correction?; Options volume robust despite dog days of August; Cboe and Nasdaq post near tie for most options traded.
— A tribute to a departing crypto journalist in John’s Take.
— And Jermal Chandler explores the use case for straddles in the options “Term of the Week.”
Financial literacy — learn now, benefit later; The FT supports a new charity to improve public understanding of money
The Editorial Board – FT
In Britain, a curious sense of pride attaches to admitting you are terrible at maths. Yet the consequences of poor numeracy skills are no laughing matter when it comes to managing money. The UK scores poorly for financial literacy. Half the population has low confidence in making decisions to do with money, according to research by the Financial Conduct Authority. Numerous studies link high levels of economic deprivation with low levels of financial understanding. Groups with the least knowhow include those on low incomes, young people, women and ethnic minorities. For those whose budgets leave little margin for error, a good financial decision could be transformative, a bad one catastrophic.
***** Financial literacy pays dividends!~JJL
Covid-19 Resurgence Clouds Business Travel Rebound; Companies were counting on corporate travelers to return this fall, but more businesses are keeping workers home
Alison Sider and Chip Cutter – WSJ
Companies are delaying sending employees back on the road this fall amid another surge in coronavirus cases. Airlines and hotels had hoped that business travel—one of the most lucrative pillars of their business—would start to bounce back in the coming months. Those hopes are fading as the busy summer travel season peters out, and the spread of the Delta variant of Covid-19 postpones some companies’ plans to return to offices and resume in-person meetings and events.
***** Uncertainty is the new constant.~JJL
US retail investors drive summer surge in stocks; JPMorgan warns of ‘melt-up’ in stocks because of runaway demand
Joshua Oliver – FT
Record levels of stock buying by retail investors have helped to keep US equities marching higher through the summer months, and been the “dominant force” powering a relentless rally in the market, according to analysts at JPMorgan.
****** The force is with retail and it is strong.~JJL
Wallets Are Over. Your Phone Is Your Everything Now.
Mobile payments replacing credit cards was just the start. Digital versions of your work ID, driver’s license and other card holdouts are coming to your smartphone.
Joanna Stern – WSJ
If you need someone to predict the future, Spike Feresten is your guy. In the summer of 1997, in the “Seinfeld” writers room, Mr. Feresten boldly told Jerry Seinfeld that wallets were over. Jerry disagreed. This led to a wallet throw-down, in which writers opened their wallets, as “it slowly dawned on them that they were carrying all of this garbage everywhere, everyday,” Mr. Feresten, an Emmy-nominated writer and producer on the show, told me.
****** My wallet also no longer explodes. I have taken up the Michael Gorham approach of just having a small front pocket wallet. Once driver’s licenses are in your phone though, wallets will be a goner. Remember when people used to have pictures of their families in their wallets? ~JJL
Friday’s Top Three
Our top story Friday was Reuters’ China’s new stock exchange plans fuel fears of a bourse war. Second was Bitcoin Uses More Electricity Than Many Countries. How Is That Possible? from The New York Times. Third was The regulatory merger we all need, an opinion piece from The Trade blog urging a merger of the SEC and the CFTC.
26,612 pages; 235,762 edits
Traders Return With Trepidation to London’s Iconic Metals ‘Ring’
Mark Burton and Jack Farchy – Bloomberg
London’s metal brokers have been out buying suits and train passes before the city’s iconic open-outcry trading floor reopens this week. But the future of “the Ring” remains so uncertain that at least one dealer is keeping the sales tag on his jacket — just in case. After 18 months away, brokers return Monday to the red leather couches of the London Metal Exchange’s floor, where they set benchmark prices of metals such as copper and aluminum by screaming orders at one another. Traders say they fear volumes will be sharply lower than before the Ring was closed last year as Covid-19 spread through the city. And the raised voices and close quarters mean an outbreak on the floor remains an ever-present threat.
Banking Could Go the Way of News Publishing; Tech giants pose a far bigger challenge to brick-and-mortar lenders than fintech startups that don’t have the scale of platform businesses.
Andy Mukherjee – Bloomberg
Will banking meet the sorry fate of newspapers? With the tech industry creeping up on licensed deposit-taking institutions in India, it’s time to take the question seriously. Alphabet Inc.’s Google already provides one of the two most popular payment wallets in the country. But now Google Pay wants to push time-deposit products of small Indian banks that don’t have much of a retail liability franchise of their own. According to a press release, Equitas Small Finance Bank will offer Google Pay customers up to 6.85% interest on one-year funds as part of a “branded commercial experience” on the platform. The Mint newspaper, which has reviewed the application interface built by Setu, a Bangalore-based fintech, says other lenders may also sign up.
Crypto’s Rapid Move Into Banking Elicits Alarm in Washington; The boom in companies offering cryptocurrency loans and high-yield deposit accounts is disrupting the banking industry and leaving regulators scrambling to catch up.
Eric Lipton and Ephrat Livni – NY Times
BlockFi, a fast-growing financial start-up whose headquarters in Jersey City are across the Hudson River from Wall Street, aspires to be the JPMorgan Chase of cryptocurrency. It offers credit cards, loans and interest-generating accounts. But rather than dealing primarily in dollars, BlockFi operates in the rapidly expanding world of digital currencies, one of a new generation of institutions effectively creating an alternative banking system on the frontiers of technology.
The Federal Reserve Faces Its Greatest Pandemic Test Yet; After the growth shock of 2020 and the inflation shock of 2021, markets are not ready for a policy shock in 2022.
Lena Komileva – Bloomberg
The Federal Reserve has met the historic challenge of navigating the world’s largest economy through a pandemic. But as the central bank prepares to reduce its emergency Covid stimulus, finding the next normal — for monetary policy, markets and the economy — will be its greatest test yet.
Global dealmaking set to break records after frenzied summer
High profits, cheap credit and lofty share prices have pushed value of deals to almost $4tn since January
James Fontanella-Khan – FT
A frantic summer of dealmaking has put 2021 on track to break records, with almost $4tn of deals already agreed since the start of the year, as companies rush to exploit cheap financing and bumper profits.
Banks Warn They’re Not Ready for ECB’s Historic Climate Test
Frances Schwartzkopff and Nicholas Comfort – Bloomberg
Industry is lobbying for secrecy around the ECB’s assessment; Financial regulators are losing patience with ESG laggards
A milestone moment for European regulators risks ending as a flop as banks warn they won’t have the client data they need in time for climate stress tests next year, according to a survey of the industry conducted by Bloomberg. The European Central Bank has already voiced concern that lenders appear unprepared for the upheaval that’s ahead as extreme weather becomes more frequent and carbon emissions grow increasingly costly. Behind the scenes, the ECB is ratcheting up pressure on the finance industry to adjust, according to people familiar with the process. The stakes are high, and banks that fall behind risk more onerous capital requirements, leaving less for shareholders.
Americans Who Say They Pay Taxes Are Probably Lying; Even in normal times, 45% of U.S. households pay nothing to the federal government. It may be time to institute a minimum rate.
Jared Dillian – Bloomberg
The Urban-Brookings Tax Policy Center recently released a report saying that 61% of U.S. households had paid no federal income tax in 2020, up from 44% in 2019, as the pandemic led to high unemployment and loss of income. Although the number will likely revert to the mid-40% range over time, now is probably a good time to have a discussion about what the right percentage of people paying taxes should be.
Regulators Investigate Crypto-Exchange Developer Uniswap Labs; SEC probe comes amid heightened scrutiny of fast-growing decentralized markets
Dave Michaels and Alexander Osipovich – WSJ
The Securities and Exchange Commission is investigating the startup behind one of the biggest cryptocurrency exchanges, as regulators probe further into parts of the digital-asset market that have resisted oversight, according to people familiar with the matter.
Big European Banks Get Prodded on Climate Promises; Investor activist ShareAction says many lenders are lagging in their commitment to cut financing to carbon polluters
Simon Clark – WSJ
Europe’s largest banks have pledged to phase out financing carbon dioxide emissions by 2050. But an activist group supported by big shareholders says the lenders aren’t doing enough to meet their goals. ShareAction, a London-based nonprofit that coordinates investor campaigns to push banks including Barclays BCS 0.48% PLC and HSBC Holdings HSBC -0.04% PLC on the environmental action, said the lenders are slow to back their commitments with practical steps.
Europe Wants to Ban Combustion Engines. Italy Says ‘Not So Fast’
Chiara Albanese, Daniele Lepido, and Alberto Brambilla – Bloomberg
Rome government in talks with EU on exemption, minister says; EU proposes 2035 phase-out; member states may seek amendments
As Europe prepares to ban combustion engines, Italy, home of high-powered, high-testosterone sports cars made by Ferrari NV and Lamborghini SpA, is already looking for ways around the proposed restrictions.
Crypto firms snap up ex-regulators, but some struggle to keep them; Rule-setters in demand in hard-charging crypto industry, with mixed results
Joe Rennison, Philip Stafford and Eva Szalay – FT
Former regulators at the heart of mainstream US financial markets over the past decade are wrestling with new roles in the fast changing cryptocurrency industry, with some key appointments lasting just months in the job. In the past six months, crypto firms have snapped up a series of officials from every corner of the byzantine US regulatory network, keen to prepare for a potentially tighter set of rules for an industry that has so far slipped through the cracks while drawing in billions of dollars from consumers and funds.
London City Flights Return in Sign of Pickup in Banking Trips
Charlotte Ryan – Bloomberg
Bookings and occupancy levels edge higher, hub’s COO says; BA, Lufthansa resume services to European financial centers
London City Airport, a favorite of regional business travelers, is seeing a tentative reawakening as British Airways and Deutsche Lufthansa AG restore flights to key financial centers. Services to Zurich, Frankfurt and Rotterdam are resuming this month, the airport’s chief operating officer, Alison FitzGerald, said in an interview.
Goldman Sachs plans IPO for $5bn Petershill Partners; Alternative assets portfolio lined up for London listing amid global private equity boom
Harriet Agnew and Stephen Morris – FT
Goldman Sachs plans to cash in on the global boom for private equity by listing Petershill Partners, which buys stakes in alternative asset managers, in a deal that could value the portfolio at more than $5bn.
UK employers plot return of office workers; Companies have created hybrid working models that are being rolled out this month
Bosses across the City of London are hoping that most staff will this month start to spend at least some of the time at their offices, combining inducements such as social events and free food alongside policies that will insist on a minimum number of days’ attendance.
Cryptocurrencies: developing countries provide fertile ground; Sometimes dismissed as a fad in advanced economies, crypto holds more appeal in countries with a history of financial instability
Jonathan Wheatley and Adrienne Klasa – FT
In Lagos, Nigeria’s commercial capital, a software coder bills her client in London and is paid in bitcoin, sidestepping a costly banking system and the naira currency’s miserly official exchange rate. In São Paulo, Brazil, a dentist puts his monthly savings into an exchange traded fund investing in a basket of cryptocurrencies that is the second most popular ETF on the local bourse. Individuals and businesses in Vietnam invest, trade and transact so much in bitcoin and other cryptocurrencies that the south-east Asian nation has the world’s highest rate of crypto adoption.
Big asset managers missing from revamped UK stewardship code; Third of those that applied to be signatories failed to pass review process, says FRC
Attracta Mooney – FT
Several of the world’s biggest asset managers, including Schroders, State Street Global Advisors and JPMorgan Asset Management, are absent from a list of signatories to the UK’s influential stewardship code following a revamp that imposed tougher reporting requirements on investors.
Main Street Pensions Take Wall Street Gamble by Investing Borrowed Money; Municipalities have assumed about $10 billion in debt this year to shore up retirement obligations
Heather Gillers – FT
Many U.S. towns and cities are years behind on their pension obligations. Now some are effectively planning to borrow money and put it into stocks and other investments in a bid to catch up. State and local governments have borrowed about $10 billion for pension funding this year through the end of August, more than in any of the previous 15 full calendar years, according to an analysis of Bloomberg data by Municipal Market Analytics. The number of individual municipalities borrowing for pensions soared to 72 from a 15-year average of 25.
The Communist Dotcom Bubble Is a Dead Giveaway; The more China’s tech companies pledge to dole out to the government’s favored social causes, the more the stock market says they’re worth.
Matthew Brooker – Bloomberg
Call it the Communist dotcom bubble. Pinduoduo Inc. shares surged 22% in the U.S. on Tuesday after it became the latest Chinese technology giant to pledge a big donation to social aid, as the country’s corporate leaders respond to President Xi Jinping’s drive for “common prosperity.” These days, it seems, the more Chinese internet companies give away, the more they’re worth.
The evolution of an IDB
Dan Barnes – FI Desk
TP ICAP has assembled a team of diverse talents including cadres of former Newedge and UBS colleagues amongst the employees of Tullett Prebon, ICAP, COEX and now Liquidnet that have been organically brought together through acquisition. It has also picked individual talent from other market players such as Toronto Stock Exchange (TMX) and RBC Capital Markets.
Mask mandates are constitutional; An appeal to the Supreme Court would lose, a Chicago lawyer writes.
Thomas H. Griseta – Crain’s Chicago Business
In the name of freedom and wrapped under the mantle of the Constitution, parents in Texas are tearing protective face coverings from teachers’ faces, governors are withholding funds from schools that mandate masks and violent threats are being made at a school board vote on mandates in Tennessee. These Americans believe that allowing a school to make decisions about virus prevention is a violation of our constitutional freedoms worth combating with American lives.
Singapore Vows Quick Action to Slow Exponential Covid Outbreak
Stephen Stapczynski – Bloomberg
Government seeks to curb infections through more testing; Singapore urges to limit social gatherings for next two weeks
Singapore, one of the word’s most vaccinated countries, will take quick action to dampen the likelihood of an exponential increase in Covid-19 cases through stricter testing after new infections nearly doubled in the last week.
China’s Sinopharm seeks to develop its own mRNA Covid vaccine; Biotech’s jab could give the technology a boost amid concerns over efficacy of conventional shots
Primrose Riordan and William Langley – FT
Sinopharm is developing a homegrown mRNA inoculation for Covid-19, becoming one of the first big Chinese pharmaceutical groups to pursue the technology to combat the disease.
Why a Covid-19 Vaccine for Children Is Taking So Long; Researchers testing shots in children face serious challenges, starting with making the lower dose under study
Jared S. Hopkins – WSJ
The countdown started as soon as researchers removed the Covid-19 vaccine vials from the freezer at Senders Pediatrics. They had just two hours once the vials thawed to prepare the shots and give them to young children in the clinical trial.
Child Covid-19 Cases Rise in States Where Schools Opened Earliest; Number of infections climbed in states where school has been in session for weeks; thousands of students see closures and quarantines
Yoree Koh – WSJ
The recent spread of the highly contagious Delta variant has thrown back-to-school plans into disarray, temporarily driving tens of thousands of students back to virtual learning or pausing instruction altogether. Since the school year kicked off in late July, at least 1,000 schools across 31 states have closed because of Covid-19, according to Burbio, a Pelham, N.Y., data service that is monitoring school closures at 1,200 districts nationwide, including the 200 largest.
15 Miami-Dade Public School Staff Members Die Of COVID In Just 10 Days
Mary Papenfuss – Yahoo News
A 30-year teaching veteran was one of 15 Miami-Dade County public school staff members who died of COVID-19 in just 10 days as Florida continues to reel amid the continuing, overwhelming toll of an unfettered pandemic. “It’s a tremendous loss,” said a school official, referring to the death of longtime teacher Abe Coleman, 55, earlier this week.
Kentucky governor says the state’s Covid surge is ‘dire.’
Kentucky recorded a seven-day average of 4,423 new daily cases on Saturday, according to a Times database.
New Zealand Lifts Lockdown Outside of Auckland
Matthew Brockett – Bloomberg
Ardern says country again within sight of virus elimination; Alert Level 2 settings tightened to reflect risks with delta
New Zealand Prime Minister Jacinda Ardern lifted a nationwide lockdown outside largest city Auckland but said it is too soon to declare victory over a delta coronavirus outbreak.
The Unvaccinated Are a Risk to All of Us
Kristen V Brown – Bloomberg
In this week’s edition of the Covid Q&A, we look at the impact unvaccinated people are having on the pandemic. In hopes of making this very confusing time just a little less so, each week Bloomberg Prognosis is picking one question sent in by readers and putting it to experts in the field. This week’s question comes to us from Robert in Northridge, California. Robert asks:
Being fully vaccinated reduces odds of long-term Covid-19 symptoms by half, UK study suggests
Jacqueline Howard, CNN
A new study of breakthrough Covid-19 infections finds that vaccines not only reduce the risk of severe disease and hospitalization, but can lower the odds of having long-term Covid-19 symptoms too.
Exchanges, OTC and Clearing
Traders Return to London Metal Exchange’s 144-Year-Old Ring; Storied trading pit for setting global metal prices reopened with vaccines, tests and hand sanitizer to try to prevent a Covid-19 outbreak
Joe Wallace and Will Horner – WSJ
Traders returned to the London Metal Exchange’s storied ring in a test of the City of London’s ability to bring back workers. Staff from the exchange’s eight dealing firms arrived early for work Monday, 18 months after Covid-19 swept through London and the 144-year-old LME closed the open-outcry ring for the first time since World War II. Dealers checked if equipment that matches trades and “squawks” orders back to their head offices was working before commencing trading that would determine prices used in metal contracts world-wide.
Four Spanish companies listed on BME, nominated for the European Small and Mid-Cap Awards
The nominees are Almagro Capital, Making Science and Soluciones Cuatroochenta, from BME Growth, and Soltec, from the main market; The awards, promoted by the European Commission and the Federation of European Stock Exchanges (FESE), will be presented in November in Slovenia
Soltec, Almagro Capital, Making Science, Soluciones Cuatroochenta have been nominated for the European Small and Mid-Cap Awards. These awards, created in 2013 by the European Commission and the Federation of European Stock Exchanges (FESE) , seek to promote best practices and success stories among European small and mid-cap companies.
RPT-Singapore Exchange’s SPAC rules seen giving market much-needed boost
Anshuman Daga – Reuters
Singapore Exchange’s new rules for special purpose acquisition companies (SPACs) are likely to help it attract regional funds and fast-growing firms, as it seeks to revitalise a staid market for equity listings, market participants said.
Azelis to Raise $1 Billion in Biggest Belgian IPO Since 2007
Kat Van Hoof – Bloomberg
New and existing shares to be sold in a private placement; Azelis is among the first of an expected deal rush in the fall
Specialty-chemical and food-ingredient distributor Azelis SA plans to raise 880 million euros ($1.04 billion) in an initial public offering on Euronext Brussels in what could be the biggest stock-market listing in Belgium in 14 years.
Euronext expands Eurozone Banks Index derivatives suite; The new option contract will beat competitors’ offerings with stronger financial advantages, the exchange operator claimed.
Wesley Bray – The Trade
Euronext has launched an option contract based on its Eurozone Banks Index, co-designed with market participants to meet their demands for an alternative product. The announcement follows the launch of a future contract on the Euronext Eurozone Banks Index in May earlier this year, which it claimed to have traded more than 10,500 lots with a total nominal value traded of EUR290 million.
Euronext launches option contract on Euronext Eurozone Banks Index Future
Euronext today announced the launch of an option contract on the Euronext Eurozone Banks Index which has been co-designed with market participants. The launch of this option contract follows the successful launch of a future on the Euronext Eurozone Banks Index in May 2021. Over 10,500 lots have been traded on the contract, representing a total nominal value traded of EUR290 million.
ASX Group Monthly Activity Report – August 2021
A tale of two titans: Microsoft vs. Bloomberg; Bloomberg has fended off rivals to its business for years but Jo believes a more credible threat may be emerging.
Josephine Gallagher – Waters Technology
Since Bloomberg and its ubiquitous Terminal took hold of Wall Street more than three decades ago, companies of all sizes have tried to disrupt the data giant’s business—with limited success. From Thomson Reuters and Eikon, to Money.Net, to Symphony, the idea of a so-called “Bloomberg Killer” has become oxymoronic, as buy-side firms have not been willing to part with their precious Terminals, despite the lofty $20,000-plus price tag.
Israel’s fintech community readies for ‘dramatic’ changes in banking sector
Ricky Ben-David – The Times of Israel
Israel’s fintech (financial tech) ecosystem has been readying for potentially “dramatic” banking reforms that will pave the way for more competitive rates and new financial services for customers.
The proposed reforms are part of the Economic Arrangements Bill that accompanies the state budget, which passed its first reading on Thursday evening in a major milestone for the coalition of Prime Minister Naftali Bennett. It was the first time budget legislation was approved by parliament since 2018. Recurrent government collapses and repeated elections since the end of that year have left Israel without a budget for over two years.
Financial Institutions are Increasingly Adopting AI for Supporting AML as Fintech Adoption Rises: Report
Omar Faridi – CrowdFund Insider
There has been a special focus on anti-money laundering (AML) in the industry during August 2021, with accelerations in the use of artificial intelligence for AML, as well as certain updates made to regulatory guidelines, according to a report from Banking Circle.
Payments specialist Banking Circle reveals that they reached out to industry professionals for their views on AML, AI, and combating financial crime amid the “increasing speed of transactions.”
AxeTrading buy-side EMS head departs for Liquidnet to drive sell-side growth; New sell-side business development executive at Liquidnet has previously held sales roles at Bloomberg, MarketAxess and AxeTrading.
Annabel Smith – The Trade
The head of buy-side fixed income trading solutions at fixed income trading software provider AxeTrading has left the firm to join TP ICAP’s institutional trading network Liquidnet.
BBVA electronic sales trading head departs for FIS Global; New head of strategic accounts at FIS Global previously spent 14 years as global head of electronic sales trading at BBVA. Annabel Smith – The Trade
The global head of electronic sales trading at BBVA has departed to join markets technology provider FIS Global as its new managing director and head of strategic accounts. Based in Madrid, Simon Haque joins FIS Global after 14 years at Spanish bank BBVA as global head of electronic sales trading.
UBS invests in AI investment research platform; The global markets team at UBS has rolled out the Lynk research platform to institutional investor clients following a recent funding round.
Annabel Smith – The Trade
The investment bank division at UBS has led a funding round in an artificial intelligence-powered platform that aims to streamline investment research processes for market participants.
Cybersecurity is tough work, so beware of burnout
Danny Palmer – ZDNet
Working in cybersecurity can be challenging, but it’s important for information security professionals to maintain a healthy work/life balance – otherwise they risk burnout.
All parts of the technology industry have their own pressures, but the demand on security staff has certainly increased recently. Businesses of all sizes need a cybersecurity team to help keep users secure and the organisation safe from phishing, malware, ransomware, and other cyber threats. Defending the network against data breaches and cyber criminals was already tricky, but things have only got tougher in the past 18 months as many cybersecurity teams have needed to adapt to the rise of remote working, which has made keeping users safe from online threats even more difficult.
Lawmakers to hold cybersecurity hearing
How best to improve cybersecurity across the state will be the focus of a public hearing at the Massachusetts Statehouse this week.
The Joint Committee on Advanced Information Technology, the Internet and Cybersecurity will hold the virtual hearing on Wednesday at 1 p.m.
Zero trust and cybersecurity: Here’s what it means and why it matters
Liam Tung – ZDNet
It seems that every tech security vendor is talking up ‘zero trust’ as an answer to increasingly dangerous cyberattacks, but UK cybersecurity experts warn customers its definition is a bit slippery and they should proceed with caution.
The UK’s National Cyber Security Centre (NCSC) this week said zero trust has become a “very fashionable term” in the tech world. To address the slipperiness of its definition, NCSC has outlined a few traps and pitfalls that organizations running a zero trust migration should be mindful of.
Cybersecurity is crucial for small businesses
David Prosser – MoneyWeek
Small and medium-sized businesses (SMEs) are under-protected from cybersecurity risk, while the pandemic has increased their vulnerability to attacks. The European Union Agency for Cybersecurity (ENISA) says a third of SMEs have experienced a cyber incident over the past five years. Half believe that a serious incident could completely sink their company.
Despite this level of risk, most SMEs have only basic protections in place. The majority of smaller firms have taken steps such as installing firewalls and anti-virus software, but only a minority routinely train staff on cybersecurity issues or use more sophisticated protection tools.
5G and Cybersecurity – A Realistic Path Forward
5G Technolgy has been increasing in popularity among the telecom companies creating it and organizations that consume wireless networks. The reasons for this are not trivial.
It is expected that in 2022, the total data traffic across mobile networks will reach 77 exabytes per month (that is 1 million terabytes of internet traffic every month). Only 5G with its mmWave technology will be able to deal with that massive traffic burden.
Sam Bankman-Fried’s crypto exchange FTX plans to list cardano and polkadot spot trading as it tries to attract retail investors
Harry Robertson – Business Insider
Sam Bankman-Fried’s crypto exchange FTX is planning to list spot trading in cardano, polkadot and avalanche in the coming months, as the platform makes a concerted push to draw in more retail investors. “There’s a lot of blockchains we want to list that are fairly significant,” the 29-year old crypto billionaire told Insider last week.
How Blockchain Can Transform the Financial Services Industry
Paulina Likos – U. S. World & News Report
Blockchain technology is one of the leading innovations in the finance industry, holding promise to reduce fraud, ensure quick and secure transactions and trades, and ultimately help manage risk within the interconnected global financial system. Blockchain accomplishes this through advanced cryptography that is designed to be resistant to hacking, adding trust to the transaction ecosystem.
Binance removes Singapore products on main platform after regulator’s warning
Alun John – Bloomberg
Embattled Binance, one of the world’s largest cryptocurrency exchanges, said it will restrict its services in Singapore days after the city state’s central bank said it should stop offering payment services.
Token of Ethereum Rival Solana Jumps to Seventh in Crypto Top 10
Joanna Ossinger – Bloomberg
Solana’s SOL has tripled in price over the past three weeks; Limelight increasingly falling on tokens other than Bitcoin
The cryptocurrency linked to the Solana network has jumped to seventh spot among the world’s top 10 largest virtual coins amid optimism that the blockchain could be a long term competitor to Ethereum.
NFTs Boom Anew as DOG Coin Becomes $550 Million Asset Overnight
Justina Lee – Bloomberg
Retail demand spikes for non-fungible tokens based on memes; Asset known as Loot (for Adventurers) is also soaring in value
The frenzy for digital artwork is breaking new ground as one of the Internet’s best-known memes gets turned into a near $550 million asset overnight. The DOG coin — a fraction of the non-fungible token depicting the famous Doge meme — has doubled in value in less than 24 hours of trading, according to CoinGecko data. That makes it one of the most valuable NFTs yet.
El Salvador becomes a crypto laboratory with bitcoin gamble; Latin American nation will on Tuesday become first country to accept digital currency as legal tender
Christine Murray – FT
Like millions of Salvadorans, chauffeur Ricardo López has spent the past few weeks trying to get his head around Bitcoin. Once the digital currency becomes legal tender this week, he is not sure he will accept it, but if he does he will convert it immediately into US dollars.
Sen. Elizabeth Warren says ‘crypto is the new shadow bank’
Michael McSweeney – The Block
U.S. Senator Elizabeth Warren (D-MA), a long-standing critic of cryptocurrency, told the New York Times that, in her view, cryptocurrency is “the new shadow bank.”
The Taliban invited The Telegraph to tea, and issued a chilling warning to the West
Ben Farmer – The Telegraph
The neatly arranged office toys and management guru books were still on the desk from the previous government official. But their Taliban replacement had added his own executive touches, including one of the movement’s white religious banners and a captured M4 carbine once used by an Afghan commando.
The end of the Angela Merkel era poses big questions for Europe
Dave Lawler – Axios
Angela Merkel has been the face of European leadership, a global power broker, a force for stability and a trusted friend to multiple U.S. presidents. But she’s about to hand over the keys to Europe’s economic powerhouse and one of the world’s most respected countries.
Biden faces demands to replace the world’s most powerful banker
Russell Lynch – The Telegraph
When Jay Powell became the 16th chairman of the Federal Reserve – and the world’s most powerful central banker – three years ago, he promised to “wear the carpets of Capitol Hill out” in a bid to restore the reputation of an institution tarnished in the eyes of policymakers by the financial crisis.
Afghanistan’s Fall Is 9/11’s Latest Unlearned Lesson; America remains the “indispensable nation,” but its future effectiveness depends on seeing other parts of the world as they really are and recognizing the limits of the possible.
Max Hastings – Bloomberg
There have been many dark moments in the two decades since 9/11, some of them in Kabul last month. I remain especially haunted by a snapshot from 2007 Iraq. British political adviser Emma Sky was riding a Blackhawk with U.S. commander Gen. Raymond Odierno. She mentioned to her boss over the intercom a glimpsed graffiti on a building wall in Baghdad: “THE HERO, THE MARTYR SADDAM HUSSEIN.”
EU Threatens to Block $150 Million to Poland for Anti-LGBTQ Laws
Alberto Nardelli – Bloomberg
The European Union threatened to block as much as 126 million euros ($150 million) of cohesion funds to local Polish governments over anti-LGBTQ zones introduced in five provinces. The European Commission, the bloc’s executive arm, sent letters to the governors of the provinces last week warning that if the resolutions weren’t rescinded the money would be withheld, according to Polish media reports and confirmed by an official with knowledge of the situation.
Suga Calls Time on a Truly Miserable Year Running Japan; Covid is collecting political scalps across the region. Japan’s leader was just the next in line.
Daniel Moss – Bloomberg
Who wants to be a national leader in the pandemic era? Yoshihide Suga declared he was done after a year and relinquished leadership of Japan, which is wrestling with an inconsistent economic recovery and soaring infections. Governing in the Covid years is especially fraught for premiers that lack a popular mandate; it’s hard enough for those who actually won elections.
Special Purpose Acquisition Companies and the Investment Company Act of 1940
Ramey Layne, Michael Holmes, Robert Ritchie, and Zach Swartz – Vinson & Elkins
Last week, a stockholder in three special purpose acquisition companies (“SPACs” – Pershing Square Tontine Holdings, Ltd. (“PSTH”), GO Acquisition Corp. and E.Merge Technology Acquisition Corp) brought novel claims against each SPAC, its sponsor and its directors.1 The suits claim that each SPAC is an unregistered investment company and that the compensation paid by the SPAC to its sponsor and its directors (notably the founder shares and warrants, or comparable interests in the case of PSTH) was illegal and void under the Investment Company Act of 1940 (the “Act”).2 The suits have received a fair amount of press, in part because PSTH and its attempted investment in Universal Media Group (“UMG”) are high profile, and in part because two of the lawyers representing the plaintiff in the suit are Robert J. Jackson, Jr., a New York University law professor and former Securities and Exchange Commission (“SEC”) commissioner (who served in that role roughly two years from January 2018 to February 2020), and John Morley, a Yale Law School professor.
Gensler’s brewing battle with Robinhood could prove bloody
Charles Gasparino – NY Post
It’s no secret that Gary Gensler wants to make life miserable for the people at Robinhood, the no-commission brokerage firm that has become a sensation among the growing ranks of amateur day traders. Less known is what I’m hearing from the people at Robinhood: They are planning to make life pretty miserable for Gensler.
Crypto exchange developer Uniswap ‘in SEC crosshairs’
Lydia Moynihan – NY Post
One of the largest names in the burgeoning cryptocurrency space is in the crosshairs of a newly aggressive Securities and Exchange Commission, according to a report. The investigation of Uniswap Labs, which is the developer behind the biggest so-called decentralized cryptocurrency exchange, underlines the scrutiny crypto-related activities are likely see under new SEC Chairman Gary Gensler.
SEC Investor Advisory Committee to Meet Remotely on Sept. 9
The Securities and Exchange Commission’s Investor Advisory Committee will hold a public meeting on Sept. 9 by remote means. The meeting will begin at 10 a.m. ET, is open to the public via live webcast, and will be archived on the committee’s website for later viewing.
SEC Charges The Kraft Heinz Company and Two Former Executives for Engaging in Years-Long Accounting Scheme
Company Will Pay $62 Million to Settle Charges Related to Inflated Cost Savings that Caused it to Restate Several Years of Financial Reporting
The Securities and Exchange Commission today charged The Kraft Heinz Company with engaging in a long-running expense management scheme that resulted in the restatement of several years of financial reporting. The SEC also charged Kraft’s former Chief Operating Officer Eduardo Pelleissone and its former Chief Procurement Officer Klaus Hofmann for their misconduct related to the scheme.
Statement Regarding Information Bundling and Corporate Penalties
Caroline A. Crenshaw. – SEC
In March of this year, I gave a speech to the Council of Institutional Investors suggesting that the SEC should reconsider its approach to assessing penalties against corporate wrongdoers. Rather than calibrating penalties to actual misconduct, some Commissioners have viewed corporate benefits as a limiting constraint on penalty amounts. This approach posits that any penalty that exceeds the easily quantifiable benefits resulting directly from a securities law violation unfairly burdens the corporation’s shareholders. As I explained in March, this approach is flawed.
Investing and Trading
Rats, drought and labour shortages eat into global edible oil recovery
Mei Mei Chu and Naveen Thukral – Reuters
In a sprawling oil palm plantation in the Malaysian state of Perak, watermelon seedlings are sprouting from freshly ploughed earth between palm saplings while rented cows graze in overgrown areas of the estate.
Emerging Currencies Are in ‘Sweet Spot’ for Carry Trades Again
Colleen Goko, Karl Lester M. Yap and Selcuk Gokoluk – Bloomberg
Central banks in developing nations will take center stage this week as assurances that the Federal Reserve is in no hurry to raise interest rates lay the groundwork for an extended rally in emerging-market currencies.
A Third of Investment Firms Fail U.K.’s Revamped Oversight Code
Benjamin Robertson -Bloomberg
Stewardship code guides firms acting for savers, pensioners; Financial Reporting Council names successful applicants
Around a third of investment firms failed in their bids to be signatories to the U.K.’s revamped stewardship code, which sets standards for companies acting for savers and pensioners. The Financial Reporting Council named the successful applicants in a statement on Monday, which includes major firms such as BlackRock Inc., Vanguard Group Inc. and the U.K.’s abrdn Plc. It didn’t name those that failed among the 189 applicants seeking to sign up to the code, which outlines principles on the allocation, management and oversight of capital.
Indiabulls’ Bond Sale Is Test of Confidence for Shadow Banks
Rahul Satija – Bloomberg
Lender seeks funds in public market after three-year absence; Hopes to be a regular issuer in public debt markets: Banga
Indiabulls Housing Finance Ltd., one of India’s largest mortgage lenders, is seeking to raise funds in the local public bond market after an absence of three years by the group, in a deal that will test investor confidence in the nation’s non-bank financiers.
EY under scrutiny after second-largest bankruptcy in Swiss history; Zeromax bought jewellery and made irregular offshore transfers while the Big Four firm gave it clean audits
Sam Jones – FT
EY auditors failed to raise the alarm over multimillion-dollar jewellery purchases and approved huge payments to opaque offshore companies in the years before one of Switzerland’s biggest-ever corporate collapses. Zeromax, a conglomerate based in the Swiss canton of Zug, had a business empire in Uzbekistan with interests ranging from textile processing to natural gas extraction that made it the Asian country’s largest employer, accounting for as much as 10 per cent of gross domestic product.
Aluminium prices hit decade high on Guinea coup; West African country is world’s second-largest producer of raw material bauxite
Henry Sanderson and Neil Hume – FT
Aluminium prices hit their highest levels in a decade on Monday following news of a coup in Guinea, the world’s second-biggest producer of raw material bauxite.
This Year’s Cannabis Deals Look Safer Than the Last Crop; Recent M&A might provide a welcome boost for U.S. marijuana growers’ weak share prices
Carol Ryan – WSJ
An early wave of cannabis mergers and acquisitions burned investors. A fresh round is now under way, but they have other things to worry about than history repeating itself. This year is on track to set a record for purchases of U.S.-based marijuana companies. Transactions worth $5.5 billion have closed so far in 2021, according to Viridian Capital Advisors, compared with roughly $3 billion last year and $3.7 billion in 2019. On the first day of this month alone, three acquisitions were announced, including TerrAscend’s purchase of Michigan-based Gage for $545 million.
When Financial Experts Refer to a ‘Blowoff Top,’ Here’s What They Are Talking About; They aren’t exactly an everyday occurrence in financial markets, but they can have a big impact on investors
Simon Constable – WSJ
Lately, some financial-market experts have been using the phrase “blowoff top” to describe how prices for certain assets have behaved. While blowoff tops aren’t an everyday occurrence, they can have an impact on investors—potentially producing big profits or devastating losses.
Environmental, Social and Corporate Governance
Deutsche Bank’s ESG Probe Triggers Review at Asset Managers
Steven Arons, Frances Schwartzkopff and Nicholas Comfort – Bloomberg
European asset managers are reviewing their ESG labeling and marketing claims following news of probes into the investing arm of Deutsche Bank AG, according to people close to the process.
Speed Limit on the Autobahn? It’d Be Great for the Planet; Slowing down can help reduce transport pollution. Electrification will help us speed up again.
Chris Bryant – Bloomberg
Could Germans’ cherished right to drive as fast as they like on the Autobahn soon be outlawed? With the country’s center-left Social Democrats now leading the polls ahead of this month’s federal election, we shouldn’t rule it out: If voted in, they promise to limit motorway speeds to a maximum of 130 km per hour (81 miles per hour). Possible coalition partners, the Greens and Left party, also want a highway speed cap. 1
Heir to $10 Billion JCB Fortune Forms Fund for Hydrogen Bets
Benjamin Stupples – Bloomberg
Bamford family have invested in fund seeking 1 billion pounds; U.K. wants to push hydrogen production to fight climate change
Jo Bamford, a member of the family behind one of the world’s largest construction-equipment makers, has co-founded an investment fund to focus on the hydrogen sector. HYCAP has raised more than 200 million pounds ($277 million) to invest primarily in British businesses as it aims to boost the production and supply of hydrogen made from renewable energy, according to a statement Monday. Bamford set up the fund with multifamily office Vedra Partners, co-founded by Max Gottschalk. Managed in the U.K., the Luxembourg-based fund is looking to raise 1 billion pounds and has already identified more than three-dozen possible investments.
UN Urges Climate Laggard Australia to Set Emissions Target
James Thornhill – Bloomberg
Australia increasingly isolated in not adopting net zero goal; Decarbonization a huge opportunity for Australia, Hart says
Australia should join its Group of 20 counterparts in committing to a net zero emissions target “as a matter of urgency,” the United Nations’ chief climate adviser will tell a conference in Canberra on Monday.
Spain Plans to Raise 5 Billion Euros From Debut Green Bond Deal
Charles Penty and William Shaw – Bloomberg
Sale is likely to see strong demand, says ING’s Bouvet; Syndicated ethical bond sales in Europe at record 286b euros
Spain is set to raise 5 billion euros ($5.9 billion) from its debut green bond this week, according to two people familiar with the matter, the first in a flurry of sovereign sales expected this month.
What’s in your mutual fund? The collapse of Infinity Q is a warning to investors
Gretchen Morgenson – NBC News
Marshall Glickman is a careful investor who says he works too hard to take chances with his nest egg. Back in 2016, his research identified the Infinity Q mutual fund as a holding that could do well even if the stock market didn’t. He slowly built up his stake in the fund, watching its performance, and felt comfortable enough to place 30 percent of his substantial savings into the fund.
UBS Hedge Fund May Offer Direct Access to China Strategy
Bei Hu – Bloomberg
A UBS Group AG hedge fund unit is considering giving investors direct access to its China strategy, after it navigated through a raft of regulatory interventions that threw doubt on the country’s investment potential.
Goldman’s Petershill to List $5 Billion Vehicle in London
Benjamin Robertson, Ruth David and Jan-Henrik Förster – Bloomberg
Goldman Sachs Group Inc.’s Petershill unit, which specializes in buying stakes in alternative asset managers, plans to list a new investment vehicle in London that could be valued at more than $5 billion.
Goldman Hires Citigroup, HSBC Bankers as Mideast Deals Surge
Matthew Martin, Dinesh Nair and Nicolas Parasie – Bloomberg
Goldman Sachs Group Inc. is hiring bankers from rival firms Citigroup Inc. and HSBC Holdings Plc as the U.S. lender seeks to expand its business in the Middle East amid a surge in deals from the region.
Shanghai Suspends Key Approval on Route to Offshore Listings
Officials in China’s financial capital of Shanghai are closing a route used for decades by companies operating in the technology sector to draw foreign investment. Startups that have recently applied to Shanghai’s National Development and Reform Commission for permission to inject money into affiliated entities incorporated in places like the Cayman Islands are being turned away, according to people familiar with the matter. Such outbound direct investment is one common way Chinese companies have established and then put money into so-called variable interest entity structures — a process used to attract foreign investment and list overseas.
SPACs Expected to Help Singapore Break Driest IPO Spell in Years
Filipe Pacheco and Ishika Mookerjee – Bloomberg
Blank-check companies could revive Singapore’s languishing market for initial public offerings as stock exchanges from Mumbai to Seoul profit from blockbuster deals. Singapore Exchange Ltd. last week presented rules for the listing of special purpose acquisition companies, or SPACs, as it attempts to get a slice of what has become a worldwide frenzy. It is allowing SPACs to list under a rulebook that is more lenient than initially envisioned and more in line with the framework in the U.S.
Saudi Internet-Services Firm Seeks Up to $966 Million From IPO
Shaji Mathew – Bloomberg
Saudi Telecom Co.’s internet-services unit is seeking to raise as much as 3.62 billion riyals ($966 million) from an initial public offering in Riyadh, the latest in a clutch of share sales in the kingdom. Arabian Internet and Communications Services Co., also known as solutions by stc, set the price range for the offering at 136 riyals to 151 riyals per share. The company is selling 24 million shares, it said in a statement on Sunday.
Tikehau Capital Joins Race for Singapore’s First SPAC
Ishika Mookerjee – Bloomberg
European firm could raise as much as S$300 million in SPAC IPO; City-state’s blank-check firm framework took effect Sept. 3
Investment manager Tikehau Capital SCA is planning to raise as much as S$300 million ($223 million) by listing a special purpose acquisition company in Singapore, according to people familiar with the matter, joining firms jostling to take advantage of the city-state’s new listing framework.
China’s Vice Premier Liu Reassures Businesses Amid Crackdowns
China’s Vice Premier Liu He made a strong pledge to continue supporting private businesses after a spate of regulatory crackdowns in sectors from after-school tutoring to Internet platforms rocked financial markets.
Brazil suspends beef exports to China after cases of mad cow disease; World’s biggest producer says no risk to humans after confirming ‘atypical’ incidents in two states
Bryan Harris – FT
Brazil has suspended beef exports to China, its largest market, after this weekend confirming two cases of “atypical” mad cow disease in separate meat plants.
With no tourist handouts, hungry Bali monkeys raid homes
Firdia Lisnawati and Niniek Karmini – AP News
Deprived of their preferred food source — the bananas, peanuts and other goodies brought in by tourists now kept away by the coronavirus — hungry monkeys on the resort island of Bali have taken to raiding villagers’ homes in their search for something tasty. Villagers in Sangeh say the gray long-tailed macaques have been venturing out from a sanctuary about 500 meters (yards) away to hang out on their roofs and await the right time to swoop down and snatch a snack.
Go ahead, have that third cup of coffee. You just might live longer, new research suggests
Mike Snider – USA Today
There’s more data that being a coffee drinker can be good for your health. Downing up to three cups of coffee daily is associated with lower risks for stroke and death from cardiovascular disease, as well as death from all causes, suggests research presented at the European Society of Cardiology Congress in France last week.