Hits & Takes
John Lothian & JLN Staff
Chicago is going to get a new mayor. Chicago Mayor Lori Lightfoot was defeated in her campaign for re-election and two challengers will face a runoff election in April. She is the first Chicago mayor to lose re-election in 40 years. The runoff candidates are Paul Vallas, the only white candidate of those running, who received 36 percent of the vote, and Brandon Johnson, a Cook County Commissioner, who received 20 percent of the vote. Lightfoot came in third with 16 percent of the vote. There are still about 99,000 write-in votes to be counted, the Financial Times reported. The last Chicago mayor to lose re-election was the first woman to be mayor of Chicago, Jane Byrne, Bloomberg reported.
The Wall Street Journal weighed on the results of the Chicago mayoral election with this story, “Why Lori Lightfoot Became the First Chicago Mayor to Lose in 40 Years.” The subheadline is “Her battles with unions and Chicagoans’ fears about rising crime eroded support.”
Word has arrived from Nodal Exchange that David Cooke has been hired. David is the Eagle Scout for whom I had the privilege to serve as Scoutmaster when he was a Boy Scout in Troop 117 in Elmhurst, IL. He was one of the Scouts that the readers of this newsletter and some significant donors helped send to the World Scout Jamboree in Japan in 2015. And now he is part of our industry at Nodal Exchange. Thank you to everyone who offered suggestions and referrals for where David might apply and to Nodal Exchange for hiring him. A special thanks to Alex Lamb for the referral to Nodal Exchange.
ICE has published a piece titled “A Growing Focus on Climate-Related Financial Risks” by John Sheffield, ICE’s senior director & product architect, and Phoebe Devries, sustainable finance research and content. The subheadline is “An analysis of how financial institutions may approach physical climate risk and transition climate risk in scenario analysis.”
J. Christopher Giancarlo and Jim Harper have published a provocative piece on the American Enterprise Institute website titled “The Values of Money: Will Tyranny or Freedom Be in Your Digital Wallet?”
The World Federation of Exchange’s March issue of Focus is out, showcasing the 20 winners of its annual Women Leaders initiative, detailing the background, education, work experience and achievements of these exceptional industry leaders. You can find the March edition of Focus HERE.
The February edition of the Security Traders Association newsletter is out and it features a letter from the new STA Chair, Ryan Kwiatkowski of StoneX Group Inc., on what to expect in 2023, details on upcoming affiliate events, how to become an STA sponsor and much more. You can read the full newsletter HERE.
Barbara Schmidt-Bailey is starting a new position as senior director at CME Group.
Andy Bevers has been promoted to vice president, head of derivatives account coverage at Cboe Global Markets.
Tricia Perl has been promoted to principal, corporate meetings and events at OCC.
Michal Bussi has been promoted to executive director, deputy corporate compliance officer at CME Group.
Correction: The CME Group, through its strategic investment arm, CME Ventures, has invested in Kemiex. Other investors are DTN and the family office Wille Finance. Yesterday we wrote DTC, rather than DTN.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Women In Listed Derivatives (WILD) members and potential new members are invited to WILD’s International Women’s Day 2023 Happy Hour Hosted by Miax, on Wednesday, March 8th from 4:30 PM – 6:30 PM Central at Little Toasted, 300 S Riverside Plaza Lobby, Chicago, IL 60606. Also to celebrate International Women’s Day, WILD is hosting a virtual Fireside Chat with Marex’s Board Chair, Carla Stent, on March 8th at Noon CT, for WILD members. To register for the Happy Hour you can go here and to register for the virtual Fireside Chat you can go here. ~SR
TabbFORUM Events is hosting its inaugural Women in Digital Assets Forum 2023 hosted by TabbFORUM and Lynne Marlor, (formerly, BNY Mellon) Chair-Boston Blockchain Association, Ambassador-GBBC, Founder-Transformational Strategies, LLC. The event will celebrate women leaders who are embracing digital assets. TabbFORUM says, “We welcome the curious about the various digital assets, their respective technologies and their potential to craft future opportunities for women.” Tickets cost $95.00 – $295.00. The event takes place June 6 at The Loading Dock in Stamford, CT. You can go here for more information and to purchase tickets.~SR
Tackling Britain’s dearth of skills and workers; Fixing education, training and high inactivity is key to boosting UK productivity
The editorial board – Financial Times
Britain’s near record low unemployment belies a deep problem with its jobs market: the country has a major shortage of skills and workers. Employment remains below pre-pandemic levels, unlike in G7 peers. Vacancies are still over 300,000 higher than in early 2020. Early retirement, sickness and a change in immigration rules post-Brexit are all culprits. Meanwhile, the UK is an average performer on international education rankings, and its employers spend just half the EU average per worker on training. As this, and future, governments look to fix UK plc’s growth woes, addressing its staffing problem is a priority.
****** When I think about Brexit and the immigration rules and the impact on jobs in the U.K., I think about baseball in the U.S. and what it would look like if it was just U.S. born players in the game, rather than a kaleidoscope of international players.~JJL
Fed’s Goolsbee Says It’s a Mistake to Rely Too Much on Market Reaction; He comments in inaugural speech as Chicago Fed chief; Goolsbee didn’t comment on monetary policy in the text
Catarina Saraiva – Bloomberg
Central bankers must augment what they learn from incoming data with clues gleaned from the real economy and avoid putting too much weight on financial markets, said Federal Reserve Bank of Chicago President Austan Goolsbee. In his first public speech since taking office last month, Goolsbee acknowledged it was tempting to lean on the instant reaction of investors to incoming news, because economic data arrives with a delay.
*****Yes, read the markets, but don’t forget about the tea leaves.~JJL
JPMorgan resists attempts to depose Jamie Dimon in Epstein lawsuits; Bank says its chief executive had no knowledge of decision to keep convicted sex offender on as a client
Joe Miller and Joshua Franklin – Financial Times
JPMorgan Chase is resisting attempts by lawyers to question Jamie Dimon under oath in litigation over the US bank’s decision to retain Jeffrey Epstein as a client for 15 years, although it has agreed for one of its longtime chief executive’s key lieutenants to be deposed. In documents filed to a New York court on Tuesday, lawyers for the lender – which faces related lawsuits from an Epstein victim and the US Virgin Islands, where the late sex offender had a home – said they did not believe Dimon was an “appropriate deponent”.
****** Why do I feel this will not end well for Jamie?~JJL
Tuesday’s Top Three
Our top story Tuesday was Risk management is the alpha for a time of uncertainty, an opinion piece from CME Group CEO Terry Duffy in the Financial Times. Second was the LinkedIn page for Michael Newsham, who recently passed away after an illness. Third was The Wall Street Journal’s WSJ Tax Guide 2023, subtitled “Changes to watch for this year include disappearing charitable deductions and smaller refunds.”
27,224 pages; 243,212 edits
Wall Street Traders Have Lost Much of Their Swagger; A New York Fed study finds that due to the pandemic, the trading community no longer has the psychic strength to make fearless bets. This may fundamentally alter markets as we know them.
Aaron Brown – Bloomberg
In December, a team of researchers from the Federal Reserve Bank of New York, the University of Southern California and University College London published a study of what cognitive skills make successful traders. They’re back with a look at non-cognitive skills such as agreeableness and conscientiousness. This time their focus is not on what distinguishes traders from everyone else, but how personalities of traders and non-traders changed due to the pandemic.
Euronext Pulls $5.8 Billion Bid for Allfunds as Talks Fail; Allfunds says it considered proposal terms inadequate; Euronext sought support from Allfunds’ private equity owners
Alexandre Rajbhandari – Bloomberg
Euronext NV has withdrawn an indicative, EUR 5.5 billion ($5.8 billion) offer for investment-platform Allfunds Group Plc after both sides were unable to agree on the terms of a takeover. The board of Allfunds considered the Euronext proposal inadequate, according to a statement Wednesday. Subsequent discussions on terms with Euronext failed to produce an agreement and talks have been terminated, Allfunds said.
Over $1tn of risky US loans still shackled to Libor as deadline looms; Borrowers and lenders in $1.4tn leveraged loan market scrap over fine print of replacing scandal-hit benchmark
Harriet Clarfelt and Kate Duguid – Financial Times
More than a trillion dollars of risky US corporate loans are still tethered to Libor just four months before the tainted lending rate expires, with borrowers and investors scrapping over the fine print as the deadline approaches. Industry participants estimate only about 25 per cent of the $1.4tn US “junk” loan market has switched to Libor’s replacement, known as the Secured Overnight Financing Rate, ahead of the June 30 deadline. The rest is caught in a tug of war between the highly-indebted companies that issued the Libor-tracking debt and the investors that bought it, over the rate that different loans will pay in future.
Wall Street titans confront ESG backlash as new financial risk; US fund managers highlight disputes over sustainable investing in latest annual reports
Patrick Temple-West and Brooke Masters – Financial Times
Wall Street’s largest asset managers, private equity firms and brokers have warned that a backlash against sustainable investing is now a material risk, in filings that show how acrimony over ESG principles has become a perceived threat to profits. A dozen big US financial companies including BlackRock, Blackstone, KKR and T Rowe Price added language to annual reports filed in the past month cautioning that pressures such as “divergent views” or “competing demands” on environmental, social and governance (ESG) investing could hurt financial performance.
Shenzhen sets up London Connect link, adding a second transborder funding channel between China and the UK for companies to raise capital
South China Morning Post
China and the United Kingdom will extend their three-year-old transborder investment channel with a bridge between southern China’s technology hub Shenzhen and London. The stock exchanges of Shenzhen and London signed an agreement on Tuesday to “advance the establishment” of a Shenzhen-London Connect to enhance “capital market connectivity” between China and the UK, where the two bourses will work together to issue depository receipts, indices and cross-border financing services, according to a statement by the Shenzhen exchange.
MTS and Wematch to launch new digital marketplace for interest rate swaps dealers; New solution, MTS Swaps by Wematch.live, will offer dealers increased efficiency and productivity, reduced conduct risk and improved trade protection.
Wesley Bray – The Trade
European electronic fixed income platform MTS (part of Euronext Group) and fintech Wematch are set to launch MTS Swaps by Wematch.live – a web-based interdealer trading venue for the interest rate swaps (IRS) market. MTS Swaps, which is accessible through a web browser via Wematch.live, digitises voice trading workflows while also bridging the gap between legacy voice trading models and pure electronic alternatives through an offering of negotiating functionalities.
Euronext, Allfunds deal off the table; Euronext says it has withdrawn the offer; Allfunds claims the terms of the proposal were “inadequate”.
Laurie McAughtry – The Trade
Euronext has terminated its indicative proposal to acquire 100% of Allfunds’ share capital, the pan-European exchange group announced last night. The group, which had offered EUR8.75 per share in an unsolicited acquisition proposal confirmed on 22 February, was in talks with Allfunds shareholders including BNP Paribas and private equity firm Hellman & Friedman (H&F) to finalise the deal.
The fight against global corporate graft needs to aim higher; More funds from settlements of prosecutions by rich countries need to go to victims in developing nations
Peggy Hollinger – Financial Times
In 2020, Airbus settled prosecution for a string of bribery offences in some 20 countries by paying a whopping EUR 3.6bn in penalties to anti-graft agencies in France, the UK and the US. The sanction imposed as part of a deferred prosecution agreement still stands as the largest global foreign bribery settlement on record. As a three-year probation period expires, the deal also still stands as a symbol of how developed nations are using corporate plea bargains to bolster their own coffers while rarely seeking justice for victim states.
Why Europe is the next battleground for investor control; ISS has moved against companies with unequal voting rights, opening a new front in the conflict over shareholder powers
Helen Thomas – Financial Times
It has been a bad decade for those who believe corporate voting power and economic ownership should go hand in hand. After Google in 2004 and Facebook in 2012 decided that Silicon Valley couldn’t be restrained by public shareholders, the explosion of a tech sector fuelled by private capital meant that companies with dual-class share structures became more common. Thus a record number of US listings in 2021 handed more votes to founders or certain shareholders, most without the type of time-limited sunset clause that institutional investors prefer. Markets elsewhere also shifted away from the default rule of one share, one vote. Singapore and Hong Kong allowed dual-class listings from 2018. Even the UK – something of an evangelist for shareholder democracy – softened, allowing restricted dual-class shares with a five-year time limit. Investors, it seemed, had lost the fight against structures that entrench the interests of insiders. But not so fast: another battle is just getting started.
Finance Is Failing the World’s Best Defense Against Climate Change; One African country would be happy to protect its rainforest-for a price.
Antony Sguazzin and Natasha White – Bloomberg
Gabon is sometimes described as a “giant broccoli,” and from 3,500 feet up, it’s easy to see why. During a two-hour flight from the capital, Libreville, to a cattle ranch in the southernmost province of Nyanga, the land below is a nearly unbroken stretch of textured green carpet, one of the world’s largest intact rainforests. These trees are Gabon’s superstars. They absorb and store millions of tons of earth-warming, ozone-destroying carbon dioxide each year, a critical function for the global fight against climate change.
World’s Rich Take Advantage as $1 Trillion Property Market Craters
Benjamin Stupples – Bloomberg
Zara founder Amancio Ortega, Spain’s richest person, expanded his global portfolio of commercial real estate last year, acquiring at least 10 properties across North America and the UK for more than $2 billion. Other ultra-wealthy individuals and their investment firms remained focused on the asset class, which was among the hardest-hit by the pandemic and the lasting consequences of remote work, according to Knight Frank’s 2023 Wealth Report.
Chicago mayor loses re-election bid after race dominated by crime; Race goes to a run-off next month with city’s former schools chief Paul Vallas in the lead after Lori Lightfoot concedes
Claire Bushey – Financial Times
Chicago voters ousted Mayor Lori Lightfoot on Tuesday night, making her the first mayor in the city to lose re-election in 40 years. The defeat was a remarkable reversal from the landslide four years ago that carried Lightfoot, then a political unknown, to City Hall, and made her the first black lesbian to run the third-largest city in the US.
Bundesbank warns losses from bond purchases will wipe out buffers; German central bank acknowledges provisions are unlikely to cover shortfall resulting from holdings of EUR 1tn-worth of debt
Martin Arnold and Guy Chazan – Financial Times
The Bundesbank has suffered a EUR 1bn hit from its substantial bond holdings and warned future losses would wipe out its remaining financial buffers as the German central bank grapples with the impact of higher interest rates. Joachim Nagel, Bundesbank president, told a press conference to present its annual report in Frankfurt on Wednesday that the damage to his central bank’s earnings was “ultimately the result of the extraordinarily expansive monetary policy of the past few years”.
Law firms warn of tougher fee negotiations and payment delays; Companies seek to cut legal costs by requesting discounts and payment delays
Kate Beioley and Joe Miller – Financial Times
Companies are seeking to cut their legal bills as they struggle with rising input costs and interest payments, some of the largest law firms have warned. The heads of three global firms told the Financial Times that corporate clients were asking for discounts on their legal bills or requesting payment be postponed until later in the year.
SEC, CFTC Charge FTX’s Singh With Fraud Following Criminal Plea
Nikhilesh De – CoinDesk
The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission charged former FTX director of engineering Nishad Singh with fraud allegations on Tuesday, following his guilty plea to similar charges in a federal court. The federal regulators both claim FTX lied to the public about its degree of separation from Alameda Research, a prop trading shop founded by FTX’s Sam Bankman-Fried, and the companies commingled corporate and customer funds and used these funds for various purposes, including its own investments and trading activities. According to the CFTC complaint, Singh once shifted $8 billion in Alameda liabilities to a customer account to “prevent Alameda from paying interest on its large outstanding balance.”
How FTX’s Nishad Singh, Once an Honors Student, Turned to Crypto Crime; He is the latest member of FTX’s inner circle to plead guilty to fraud
Alexander Osipovich – The Wall Street Journal
Nishad Singh followed Sam Bankman-Fried into the high-stakes world of cryptocurrency trading. Now he could help put the former FTX chief executive in prison. Mr. Singh, the 27-year-old former director of engineering at FTX, pleaded guilty this week to six criminal counts, including wire fraud. He agreed to cooperate with the government’s investigation of FTX’s collapse.
Cryptocurrency consumer advocacy group rallies retail investors to push back on SEC crackdown
Eleanor Terrett – Fox Business
A small cryptocurrency consumer advocacy group is launching a campaign against the Securities and Exchange Commission and its crackdown on crypto, FOX Business has learned. The Digital Currency Trader’s Alliance (DCTA) has launched an online advertising campaign calling on retail investors to lobby their congressional representatives to fight back against SEC Chairman Gary Gensler’s regulation by enforcement strategy, which, the non-profit group claims, is unfairly harming cryptocurrency retail investors.
After David Solomon’s series of Goldman Sachs mishaps, he’s targeting a new golden goose: Asset management
Will Daniel – Fortune
Goldman Sachs CEO David Solomon was in the hot seat on Tuesday at his firm’s second-ever investor day. Not long ago, Solomon was riding high as Goldman took advantage of the IPO and SPAC boom of 2020 and 2021, leading the firm’s stock to soar more than 200% between the COVID-lows of March 2020 and its September 2021 peak. The shoe is on the other foot now.
BNP Loses Belgium as Largest Investor as Country Cuts Stake; Disposal will reduce holding to about 5% from about 8%; Belgium became a BNP investor in 2009 after Fortis rescue
Ksenia Galouchko and Steven Arons – Bloomberg
Belgium is selling about a third of its stake in BNP Paribas SA in a move that will end the country’s run as the bank’s largest shareholder. A Belgian government-owned investment company, known as SFPI-FPIM, plans to sell a stake equivalent to about EUR2.2 billion ($2.3 billion) in the French lender, according to terms seen by Bloomberg. The disposal will reduce the investment company’s holding to about 5.1% from about 7.8%. BNP Paribas fell as much as 4.6% in Paris trading, the steepest drop since June. The disposal comes as rising interest rates boost valuations of banks after years of subpar returns, giving governments a window to exit lenders they bailed out during the financial crisis. Other banks that have seen governments reduce their stakes include Dutch lender ABN Amro NV and Natweest Plc. in the UK.
Crypto Crisis: A Timeline of Key Events; The industry’s troubles began months before FTX filed for bankruptcy
Candice Choi – The Wall Street Journal
The crisis roiling the crypto industry captured public attention with the collapse of FTX this past November and the arrest soon after of the exchange’s founder, Sam Bankman-Fried. The industry’s troubles began months earlier-and have continued to spread. Below is a look at the key dates in the crisis.
Sorry, Twitter. Elon Found His Next Shiny Object.
Parmy Olson – Bloomberg
For all his childish behavior on Twitter, Elon Musk would still like us to believe in his noble ambitions to make the world a better place. His space exploration company will make humans an interplanetary species, electric car maker Tesla Inc. will move us toward sustainable energy and his newly acquired Twitter will become a haven of free speech and healthy debate.
Ford Battery Supplier Says F-150 Lightning Fire Is ‘Rare’
Keith Naughton – Bloomberg
Ford Motor Co.’s battery supplier says the defect that led to a fire in an electric F-150 Lightning and halted production earlier this month is not a fundamental flaw in the design of the power source. SK On, the automotive battery unit of South Korea’s SK Innovation Co. Ltd, worked with Ford to identify the problem and is implementing a fix, the company said Monday in an emailed statement. The fire in a holding lot near the Lightning’s Dearborn, Michigan, factory spread to two other trucks on Feb. 4 and has shut down the plant into a fourth week.
Investors pull around $6 billion out of Binance’s stablecoin
Elizabeth Howcroft – Reuters
Binance’s stablecoin, Binance USD, has seen around $6 billion of outflows following a U.S. regulatory crackdown on the company that issues the token, according to market tracker CoinGecko. Paxos Trust Company, which issues Binance USD, said on Feb. 13 that the U.S. Securities and Exchange Commission (SEC) had told the company it should have registered the product as a security and is considering taking action against the platform.
DLT Not Efficient Enough to Power CBDCs: BOE’s Cunliffe
Jack Schickler – CoinDesk
Distributed ledger technology (DLT) is too clunky to be reliably used for a central bank digital currency (CBDC), a senior Bank of England official told lawmakers Tuesday, pouring cold water on industry claims about the technology that underpins crypto.
Drones fly deep inside Russia; Putin orders border tightened
Susie Blann – AP
Drones that the Kremlin said were launched by Ukraine flew deep inside Russian territory, including one that got within 100 kilometers (60 miles) of Moscow, signaling breaches in Russian defenses as President Vladimir Putin ordered stepped-up protection at the border. Officials said the drones caused no injuries and did not inflict any significant damage, but the attacks on Monday night and Tuesday morning raised questions about Russian defense capabilities more than a year after the country’s full-scale invasion of its neighbor.
How Ukraine is trying to make Russia pay for crimes against women
Sarahkshi Rai – The Hill
Horrifying stories of sexual violence perpetrated by Russian soldiers have been piling up on prosecutors’ desks as Ukrainian officials and human rights groups document the crimes committed in the first year of Moscow’s invasion. “In one village we found several victims of sexual violence. There were five victims on one street. It’s awful. These crimes took place in every city that was under the occupation,” recalled Anna Orel, an activist with the Andreev Foundation, a group that provides sexual assault victims with psychological aid.
‘Unprecedented’ casualties for Russian troops
Julius Lasin – USA Today
The number of Russian troops who have died in the first year of the war in Ukraine has surpassed that of all Russian wars since World War II, a new study says. Hi, it’s Julius with an update on Ukraine. An analysis by the Center for Strategic International Studies estimates that 60,000 to 70,000 Russian soldiers have died in Ukraine since the Kremlin invaded in February 2022.
Russian Oil Exports Resilient Despite Full Force of Western Bans; Russia shipped 7.32m b/d of crude, fuels in February: Kpler; EU banned most oil imports in December, fuel in February
Russia’s seaborne oil exports remained resilient in February, as the nation found new buyers even as the full force of Western restrictions was brought to bear. Oil-market watchers are closely following Russian export data for signs of disruptions after the European Union and the majority of Group of Seven nations banned most seaborne imports of oil and fuel in condemnation of the invasion in Ukraine.
Putin’s War Rhetoric Rallies Russian Border Towns, but Nerves Fray; Casualties haven’t so far shaken Pskov, region that is home to elite paratrooper division that occupied Bucha
Evan Gershkovich – The Wall Street Journal
A jackhammer pounded the frozen ground on a recent afternoon as gravediggers uncovered fresh soil to provide the resting place for the body of a Russian soldier killed in Ukraine. At the Vybuty village cemetery in the western region of Pskov, the digging, the men said, has become a near daily job. But even as the fatalities rise-Western officials estimate nearly 200,000 Russians have been killed or wounded in Ukraine-there is little resistance in places such as Pskov to Russian President Vladimir Putin’s invasion.
Russia Presses Attempt to Encircle Eastern Ukraine’s Bakhmut; President Zelensky hails progress in restoring energy supply despite months of attacks
Marcus Walker – The Wall Street Journal
Russian forces pressed their offensive around Bakhmut in an effort to surround the eastern Ukrainian city that for months has been the site of the bloodiest fighting in Russia’s slow-moving invasion. Russian troops hadn’t achieved any new gains in the Bakhmut area the past day, according to the general staff of Ukraine’s armed forces. But heavy shelling and constant infantry assaults, especially by the Wagner mercenary group, are putting the city’s defenders under growing pressure, Ukrainian officials have said.
What could Chinese artillery and ammunition mean for Putin’s war in Ukraine? Help from Beijing could be a crucial boost for the Kremlin’s hopes of success as the war grinds into a second year, experts told NBC News, with the front lines dominated by artillery duels.
Mithil Aggarwal – NBC News
Western warnings about the possibility of China sending lethal military aid to Russia are well-placed, military analysts told NBC News, as help from Beijing could be a crucial boost for the Kremlin’s hopes of battlefield success in the months to come.
Ukraine war live updates: Russian mercenary boss says ‘fierce resistance’ seen in Bakhmut; Kyiv says its fighters are under ‘insane pressure’
Holly Ellyatt – CNBC
Ukraine President Volodymyr Zelenskyy signaled Kyiv is preparing its soldiers for counteroffensives and praised soldiers for defending the country despite the “insane pressure” they’re currently under as the war grinds on. “We are preparing for the return of our warriors to actions for the liberation of our land,” the president said in his nightly address Tuesday, alluding to an expected counteroffensive Ukraine is likely to launch in spring.
Wagner Group propaganda video: Recruits will be ‘in good shape for the upcoming WW3’
Erin Burnett – CNN
New videos show Russian forces targeting Bakhmut, Ukraine with warplanes, while Wagner Group mercenaries target the ground. CNN’s Fred Pleitgen reports.
Rouble slides to 10-month low as falling energy prices bite; Russian currency has lost around 20 per cent of its value in gradual decline since start of December
Anastasia Stognei – Financial Times
The Russian rouble has fallen to its weakest level in 10 months, losing around 20 per cent of its value since the start of December, as western sanctions, Moscow’s waning energy revenues and high military spending exert pressure on the currency. With capital controls in place and foreign trading in the currency largely moribund, analysts said the value of the currency no longer reflected a forward-looking assessment of the state of the economy but more of a short-term snapshot.
The west must give Ukraine what it needs; This war is a vital national interest of European countries and the US
Martin Wolf – Financial Times
The first anniversary of Russia’s assault on Ukraine has been greeted with soaring rhetoric. Notably, US president Joe Biden stated in Warsaw that “Our support for Ukraine will not waver, Nato will not be divided, and we will not tire. President Putin’s craven lust for land and power will fail. And the Ukrainian people’s love for their country will prevail.” These sentiments are admirable. But is the commitment genuine? Will they in fact do whatever is needed to ensure Ukraine’s survival as an independent democracy?
The Satellite Hack Everyone Is Finally Talking About; As Putin began his invasion of Ukraine, a network used throughout Europe-and by the Ukrainian military-faced an unprecedented cyberattack that doubled as an industrywide wake-up call.
Katrina Manson – Bloomberg
Andreas Wickberg loves snowmobiling to the house he built in the icy reaches of Lapland, north of the Arctic Circle. Each month come spring, he and his wife relocate for a week or so to a “very, very isolated” spot about 335 miles northwest of their usual home near Umea, a Swedish university town. Up in Lapland, it’s just them and three other houses. Wickberg develops payment-processing software for a Swedish e-commerce company. What makes this possible is satellite internet: For 500 krona ($45) a month, he and his wife can make work calls by day and stream movies by night.
In an Epic Battle of Tanks, Russia Was Routed, Repeating Earlier Mistakes; A three-week fight in the town of Vuhledar in southern Ukraine produced what Ukrainian officials say was the biggest tank battle of the war so far, and a stinging setback for the Russians.
Andrew E. Kramer – The New York Times
Before driving into battle in their mud-spattered war machine, a T-64 tank, the three-man Ukrainian crew performs a ritual. The commander, Pvt. Dmytro Hrebenok, recites the Lord’s Prayer. Then, the men walk around the tank, patting its chunky green armor.
Exchanges, OTC and Clearing
Euronext Launches MTS Swaps
Euronext announced that MTS, one of the leading European electronic fixed income platforms, and Wematch, the award-winning fintech digitising buy- and sell-side firms’ dealing workflows, have joined forces to launch MTS Swaps by Wematch.live, a web-based interdealer trading venue for the Interest Rate Swaps (IRS) market. MTS Swaps, which can be accessed through a web browser via Wematch.live, digitises voice trading workflows, and bridges the gap between legacy voice trading models and pure electronic alternatives by offering innovative negotiating functionalities.
ASX appoints new Group Executive, Markets
ASX today announced the appointment of Darren Yip as its new Group Executive, Markets. Mr Yip is a highly-skilled executive who brings more than 20-years’ experience in global financial markets with a background in prime brokerage and equity markets. Having spent 12 years leading teams in the Asia Pacific from his base in Hong Kong, Mr Yip was most recently with Morgan Stanley as Managing Director and Co-Head of Prime Brokerage from 2013 to 2021.
Cboe Global Markets to Present at the Raymond James Institutional Investor Conference on March 6
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced that Ed Tilly, Chairman and Chief Executive Officer, Dave Howson, Executive Vice President and Global President, and Brian Schell, Executive Vice President, Chief Financial Officer and Treasurer, will present at the Raymond James Institutional Investor Conference on Monday, March 6 at 8:40 a.m. ET.
The return of inflation – here to stay?
Ahead of the Derivatives Forum Frankfurt, Eurex caught up with Thilo Rossberg, head of FICC markets at LBBW, to discuss his outlook for inflation in 2023 and how it will shape fixed income markets. The return of inflation around the world and central banks’ battle to combat that trend with rate hikes and quantitative tightening marked a reversal in fixed income markets last year, as volatility returned to trading desks. The path for market conditions in 2023 is uncertain though, with some predicting a new era of higher or longer inflation and others seizing on the early signs of disinflation to predict rate cuts.
Euronext withdraws its indicative offer for Allfunds
Euronext, the leading pan-European market infrastructure, today announced that it has informed the Board of Allfunds that Euronext withdraws its indicative offer to acquire 100% of Allfunds’ share capital. This follows the statement regarding recent press speculations published on 22 February 2023.
Euronext Lisbon Awards 2023 – 12th edition
Euronext distinguishes Portuguese capital market participants ; Euronext announced today the list of nominees and winners of the 12th edition of the Euronext Lisbon Awards. Created in 2011, the Euronext Lisbon Awards distinguish issuers, financial intermediaries, and other institutions and people who, in the year prior to the attribution, stood out in the capital market.
Designation of Securities Under Supervision (Confirmation): SHL-JAPAN Ltd.
TSE has designated an issue as Securities Under Supervision (Confirmation) as follows.ï¼’ï¼ŽIssue Name: SHL-JAPAN Ltd. stock (Code: 4327, Market Segment: Standard Market) ï¼’ï¼ŽPeriod of Designation as Securities Under Supervision (Confirmation).
Anticipated Contract Adjustment; Uni-Select Inc. (UNS) Plan of Arrangement
The Bourse and CDCC wish to inform you that LKQ Corporation (Nasdaq:LKQ) (“LKQ”) and UniSelect Inc. (TSX: UNS) (“Uni-Select”) announced that they have entered into a definitive agreement for LKQ to acquire all of Uni-Select’s issued and outstanding shares for CAD $48.00 per share in cash, representing a total enterprise value of approximately CAD $2.8 billion (US$2.1 billion) (the “Transaction”).
NSE receives regulatory nod to launch WTI Crude Oil and Natural Gas futures contracts
India’s leading stock exchange, National Stock Exchange (NSE), has received the approval from Securities & Exchange Board of India (SEBI), to launch the rupee denominated NYMEX WTI Crude Oil and Natural Gas (Henry Hub) futures contracts in its Commodity derivatives segment. Earlier, NSE had signed a data licensing agreement with CME Group allowing NSE to list, trade and settle rupee denominated NYMEX WTI Crude Oil and Natural Gas (Henry Hub) derivatives contracts on its platform. The addition of these contracts will expand NSE’s product offering in the Energy basket as well as its overall commodity segment. These contracts are designed to provide the market participants with a more efficient way to manage their price risk.
Press Release No. 1 News about Adani Enterprises Limited
The media had reports that Adani says has secured $3 billion credit from sovereign wealth fund. The Exchange, in order to verify the accuracy or otherwise of the information reported in the media and to inform the marketplace so that the interest of the investors is safeguarded, has written to the company. Response from the company is awaited.
Market Structure Proposals Overview – Market Structure Series
The Securities and Exchange Commission during an open meeting on December 14 proposed four separate rulemakings related to market structure. In this first video in our series, Head of Market Structure Research, Larry Tabb, and Senior Associate, Jackson Gutenplan, provide a high-level overview on each proposal.
Landmark moment for UK fintech with the launch of CFIT
Centre for Finance, Innovation and Technology
The Centre for Finance, Innovation and Technology (CFIT) was set up following the Kalifa Review of Fintech (2021) to position the United Kingdom as a global leader in financial innovation. CFIT’s purpose is to unblock barriers to growth for financial technology by bringing together the best minds from across the UK in order to drive better outcomes for consumers and SMEs. CFIT wants to lead the world in financial innovation, and in doing so, maximise economic growth across all regions of the UK.
Fixed Income DeFi Platform Term Finance Readies for Business
Ian Allison – CoinDesk
Term Finance, a decentralized finance (DeFi) protocol for fixed interest borrowing, is preparing to go live around the end of March, and is looking to reassure institutional investors in the wake of last year’s crypto scandals. Term Labs, the platform’s builder, raised $2.5 million in a seed round led by Electric Capital with participation from Coinbase Ventures, Circle Ventures, Robot Ventures and MEXC Ventures. There was also angel investment from the founders of DeFi stalwarts Aura, Balancer, Hashlow and Llama.
GMEX Group Wins ‘Best Solution for Trading Digital Assets’ Award
GMEX Group (‘GMEX’), a leader in digital business and technology solutions for capital, commodities and sustainability markets, is proud to announce that it has won ‘Best Solution for Trading Digital Assets’ at the A-Team TradingTech Insight Europe Awards 2023. The winners were selected by way of an industry-wide vote and were announced during the TradingTech Summit in London on 28th February 2023.
Generative AI is sowing the seeds of doubt in serious science; Researchers have already developed a bot that could help tell the difference between synthetic and human-generated text
Anjana Ahuja – Financial Times
Large language models like ChatGPT are purveyors of plausibility. The chatbots, many based on so-called generative AI, are trained to respond to user questions by scraping the internet for relevant information and assembling coherent answers, churning out convincing student essays, authoritative legal documents and believable news stories.
Visa Says It’s Not Slowing Down Plans for Crypto Products
Mathew Di Salvo – Decrypt
Payments company Visa has said it is not slowing down with its cryptocurrency plans-despite news reports hinting otherwise amid a brutal bear market. The U.S. company’s Head of Crypto Cuy Sheffield said in a series of tweets Tuesday that a Reuters story claiming both Visa and Mastercard were slowing down their crypto push was “inaccurate” when it comes to Visa.
A business case for automating the middle office ahead of the move to T+1; Mack Gill, chief operating officer of Torstone Technology, stresses the importance of automation ahead of the roll-out of T+1 in the US and Canada.
Mack Gill – Global Custodian
The industry has been on tenterhooks waiting for the US Securities and Exchange Commission (SEC) to announce the date for T+1 implementation in the US. In February, the long-awaited day arrived as an SEC communiquÃ© confirmed the go-live date for the shortened settlement cycle as 28 May 2024. There’s been mixed reaction in the industry to the news. In recent months, many firms have lobbied against the SEC’s initially suggested date of 31 March, arguing that a more appropriate target would have been September 2024. This later date would also have facilitated the move for Canada, which needs to move in lockstep with the US.
Forget the spy balloon. China-linked hackers collect far more information, report says.; China-linked cyberespionage groups targeted 39 industries on nearly every continent, according to the CrowdStrike cybersecurity company.
Ken Dilanian – NBC NEws
Even as the Chinese spy balloon floated across the U.S., China-linked hackers were gathering far more information by breaking into computer networks in America and around the world, according to a new report by a leading cybersecurity firm. CrowdStrike says in its annual global threat report that it observed China-linked cyberespionage groups targeting 39 industries on nearly every continent.
Hacking attack prompts Russian regional broadcasters to issue air alert warnings
A hacking attack caused some Russian regional broadcasters to put out a false warning on Tuesday urging people to take shelter from an incoming missile attack, the emergencies ministry said. “As a result of the hacking of servers of radio stations and TV channels, in some regions of the country information about the announcement of an air alert was broadcast,” the ministry said in a statement.
TikTok answers three big cybersecurity fears about the app
Joe Tidy – BBC
Spare a thought for TikTok executives. In 2020, they narrowly escaped seeing their smash-hit app banned in the US by then-president Donald Trump, and faced a daily storm of questions about the cybersecurity risks posed by TikTok. Thanks to numerous complex legal challenges, the debate largely fizzled out – and was eventually put to rest in 2021, when President Joe Biden overturned Trump’s proposal.
Ransomware attack on chip supplier causes delays for semiconductor groups; US-based MKS Instruments says attack would cost at least $200mn in lost or delayed sales
Tim Bradshaw and Mehul Srivastava – Financial Times
Disruption from a ransomware attack on a little-known supplier to the world’s largest semiconductor equipment manufacturers will continue into March, in a new setback to chip production after years of coronavirus-related delays. US-based MKS Instruments told investors and suppliers this week that it had yet to fully recover from a “ransomware event”, first identified on February 3, in an attack that has strained supply chains for the global chip industry.
Belgium’s cyber security agency links China to spear phishing attack on MP; European governments are increasingly challenging Beijing over suspected cyber offences
Yuan Yang – Financial Times
Belgium’s cyber security agency has linked China-sponsored hackers to an attack on a prominent politician, as European governments become increasingly willing to challenge Beijing over alleged cyber offences. Samuel Cogolati, a Belgian MP, was named by authorities last month as being the subject of a cyber attack around January 2021 when he wrote a resolution to warn of “crimes against humanity” against Uyghur Muslims in China.
Bankman-Fried’s Inner Circle Continues to Crumble With Singh Guilty Plea
Ava Benny-Morrison, Chris Dolmetsch and Bob Van Voris – Bloomberg
Former FTX engineering chief Nishad Singh pleaded guilty to fraud as part of a cooperation deal with prosecutors, the third member of the collapsed cryptocurrency exchange’s inner circle to flip against co-founder Sam Bankman-Fried. Singh said at a hearing on Tuesday that he was “unbelievably sorry for my role in this and the harm it caused.” He admitted he knew for months that Alameda Research, the exchange’s trading arm, was borrowing billions of dollars in funds from FTX without customers’ knowledge.
FTX’s Nishad Singh pleads guilty to fraud charges
Former engineering director Nishad Singh admitted six charges, which included three counts of conspiracy to commit fraud on Tuesday. The plea comes after FTX founder Sam Bankman-Fried has been accused of 12 criminal charges, which he denies. FTX filed for bankruptcy last year, leaving many users unable to withdraw their funds.
Binance-branded crypto token hit by $6bn outflow after US crackdown; New York regulatory move accelerates withdrawal from BUSD stablecoin
Scott Chipolina – Financial Times
Investors have pulled more than $6bn out of a Binance-branded digital token in the past month, in a sign that a recent US regulatory crackdown on digital assets is putting pressure on the world’s largest crypto exchange. New York’s financial regulator last month halted new issuance of the stablecoin, known as BUSD, citing “several unresolved issues” relating to Binance’s relationship with Paxos, the company responsible for minting the dollar-pegged token.
Crypto Lender Voyager Received Single-Page Value Statement From Hedge Fund Three Arrows Capital
Jamie Crawley – CoinDesk
Just weeks before filing for bankruptcy, crypto hedge fund Three Arrows Capital (3AC) sent lender Voyager Digital a one-page net asset value (NAV) statement, court documents filed Tuesday show. A single due-diligence call was conducted between the two firms. Voyager, which itself filed for bankruptcy in July 2022, reported a $654 million loan to 3AC that accounted for almost 58% of its loan portfolio.
China digital currency: Shenzhen lures Hong Kong tourists to use e-CNY with shopping discounts
South China Morning Post
China is hoping to drive cross-border use of its sovereign digital currency by offering shopping discounts to tourists from Hong Kong who open and pay with e-CNY wallets in the southern technology hub of Shenzhen. Hong Kong residents can now obtain a physical e-CNY card via a dedicated machine at the Lo Wu border crossing, according to a report by the state-backed Shenzhen News on Tuesday.
FTX Survivor LedgerX Dumps Silvergate for Signature Bank: Report
Andrew Asmakov – Decrypt
LedgerX, a trading platform offering derivatives products based on Bitcoin and Ethereum cryptocurrencies, is no longer using Silvergate Bank to receive domestic wire transfers, according to a Bloomberg report. Going forward, LedgerX will use Signature Bank instead, the company said in an email to customers.
What’s a ‘Britcoin’? (Podcast); The UK is moving toward launching a central bank-backed digital currency.
Muhammad Farouk Abdulrahman – Bloomberg
The Bank of England and the UK Treasury are moving forward with a plan to launch a digital currency, which has been dubbed “Britcoin”. The action is part of a global effort to stay ahead of various new currency options and prepare for a future in which consumers adopt card payments backed by companies instead of governments. Yet, some critics are calling it a “solution in search of a problem”, particularly in light of the country’s already-strong fintech industry.
Singapore Crypto Lender Hodlnaut’s Founders Propose Selling Business Rather Than Liquidating Firm
Suvashree Ghosh – Bloomberg
The founders of Singapore-based crypto lender Hodlnaut Pte proposed selling the business as a better option for creditors than liquidating the embattled firm. Simon Lee said in an affidavit seen by Bloomberg News that he and Hodlnaut’s other co-founder Zhu Juntao have reached out to a number of “potential white knight investors.”
The Future of Crypto Markets Will Be Driven by Developments in the East
Noelle Acheson – CoinDesk
As political experts focus on the diplomatic dance amid building tensions between the United States and China (punctuated by some balloon-shaped comic relief that might end up being not so funny after all), a more benign battle is brewing in the halls of financial regulators. While local for now, nothing stays local for long in global markets.
Coinbase Launches New Ad Campaign and Reveals 50M Americans Now Own Crypto
Connor Sephton – CoinMarketCap
Two-thirds of Americans believe that the global financial system needs an overhaul, amid fears that it is unfairly skewed toward the interests of the most powerful. But despite optimism that digital assets could be the answer, the Coinbase poll revealed that this doesn’t necessarily translate into the ownership of cryptocurrencies. Just 20% of Americans – the equivalent of 50 million people if the results are extrapolated – own crypto right now. And while you could argue that this is healthy progress, this figure has been largely unchanged since the dizzying heights of the bull run in late 2021 and early 2022.
Explainer: Can Republicans topple Biden’s ESG investing rule in court?
Daniel Wiessner – Reuters
The Republican-led U.S. House of Representatives voted on Tuesday to block a Biden administration rule allowing employee retirement plans to consider environmental, social and corporate governance (ESG) factors when selecting investments. President Joe Biden has promised to veto the bill if it passes the Senate, but Republican-led states and the oil industry are also challenging the rule in federal court in Texas.
Pandemic food assistance that held back hunger comes to an end
Allison Aubrey – NPR
Millions of Americans will have less to spend on groceries as emergency food assistance that Congress enacted early in the pandemic has ended. On average, individuals will get about $90 less this month in benefits from the Supplemental Nutrition Assistance Program, known as SNAP. Some households will see a cut of $250 a month or more, according to an analysis by the Center on Budget and Policy Priorities, a non-partisan research institute.
US lawmakers increase scrutiny of China with new House committee; Panel pledges to investigate ‘ideological, technological and military threat’ of Chinese Communist party
Demetri Sevastopulo – Financial Times
US lawmakers on a new House committee on China slammed the Chinese Communist party over issues from espionage to human rights abuses in an inaugural hearing that exhibited Washington’s increasingly tough bipartisan stance on Beijing. In opening comments that set a sharp tone for the Select Committee on the Chinese Communist party, chair Mike Gallagher said the panel would “investigate and expose the ideological, technological and military threat posed by the Chinese Communist party”.
Creation of U.S. digital dollar would ‘crowd out’ crypto: ex-Biden advisor
Dylan Butts – Forkast
A U.S. central bank digital currency (CBDC) would “crowd out” the private cryptocurrency ecosystem and protect national security, according to a former top presidential adviser at a U.S. Senate Banking Committee hearing on Tuesday.
Glencore sentenced to pay $700 million in US after bribery guilty plea
Luc Cohen – Reuters
A U.S. judge on Tuesday ordered Glencore Plc to pay $700 million in connection with its guilty plea over a decade-long scheme to bribe foreign officials across several countries. The sentence handed down by U.S. District Judge Lorna Schofield in Manhattan federal court consisted of a $428.5 million fine and $272 million in forfeiture, in line with a plea deal reached last May between the mining and commodity trading giant and federal prosecutors in Manhattan.
Inside the secret talks that broke Brexit deadlock on Northern Ireland; EU recognised Sunak’s willingness to plunge into detail of potential solutions after confrontation of Johnson years
George Parke, Sam Fleming and Andy Bounds and Jude Webber – Financial Times
When Rishi Sunak and Ursula von der Leyen unveiled the Brexit deal that reset Britain’s broken relationship with the EU on Monday, it was the culmination of almost four months of diplomacy that began on the shores of the Red Sea and ended in the shadow of Windsor Castle. Von der Leyen, European Commission president, called the UK prime minister “Dear Rishi” as the pair launched the “Windsor framework”, the agreement which aims to end the bitter dispute over Northern Ireland’s post-Brexit trade regime.
Russia Seen Favoring India Even as China’s Oil Demand Rebounds; Russia shipped 1.85 million b/d to India in February: Kpler; Russian oil deliveries to India are on delivered-at-port basis
Russia will keep selling as much oil as it can to India despite the rebound in Chinese demand, according to commodity-data firm Kpler. India purchased almost no Russian oil a year ago, but has become a crucial market after the US and European Union imposed sanctions on Moscow. The Asian country imported around 1.85 million barrels a day from Russia in February, close to its potential maximum of about 2 million barrels a day, said Viktor Katona, lead crude analyst at Kpler.
UK Banking Regulator to Propose Rules on Issuing, Holding Crypto
Camomile Shumba – CoinDesk
The Prudential Regulation Authority (PRA), which regulates banks in the U.K., is planning to propose rules on issuing and holding digital assets, Vicky Saporta, executive director of prudential policy at the Bank of England, said in a speech Monday.
Ohio Joins $22.5M Multistate Settlement Against Crypto Lender Nexo
Camomile Shumba – CoinDesk
The Ohio Division of Securities has joined a $22.5 million settlement against crypto lender Nexo, it said Tuesday. The North American Securities Administrators Association and the U.S. Securities Exchange Commission (SEC) announced in January the settlement reached with the Cayman Islands-based company.The agreement was the result of a working group of state securities regulators that investigated Nexo’s Earn Interest Product (EIP), where the company had told investors they can passively earn interest on digital assets.
Commissioner Pham Announces New Subcommittees of the CFTC’s Global Markets Advisory Committee and Seeks Nominations by March 14
Commodity Futures Trading Commission Commissioner Caroline D. Pham announced today the Commission has established the Global Market Structure Subcommittee, the Digital Asset Markets Subcommittee, and the Technical Issues Subcommittee under the CFTC’s Global Markets Advisory Committee (GMAC). Commissioner Pham is the sponsor of the GMAC and is seeking membership nominations for each Subcommittee. The deadline for submissions is March 14, 2023.
Statement of Commissioner Christy Goldsmith Romero on Electric Vehicles, Electric Power Grids, and Renewable Energy Before the Energy and Environmental Markets Advisory Committee, Nashville, TN (Virtual)
I want to express my gratitude to the members of the Energy and Environmental Markets Advisory Committee (“EEMAC”) for your service. I also want to recognize Commissioner Mersinger for her leadership over EEMAC and the staff for their work in taking EEMAC on the road to Nashville, a town with good music and good food. The last time I was in Nashville, I found myself eating dinner in the same restaurant as Al Gore, who as you know, was one of the earliest leaders to seek solutions to climate change.
Opening Statement of Commissioner Summer K. Mersinger before the Energy and Environmental Markets Advisory Committee
I want to welcome you all to Nashville, Tennessee and thank our host, the Nashville Public Library, for the opportunity to hold the second meeting of the Energy and Environmental Markets Advisory Committee (EEMAC) in this beautiful space. I also want to thank my fellow commissioners for participating and for their interest in this committee.
CFTC Whistleblower Alert: Blow the Whistle on Romance Investment Frauds in the Commodities and Derivatives Markets
Whistleblower – CFTC
Under the Whistleblower Program of the Commodity Futures Trading Commission (CFTC), individuals may become eligible for both financial awards and certain protections by assisting the CFTC with identifying perpetrators and facilitators of romance investment frauds under the CFTC’s jurisdiction, such as solicitations related to digital assets, precious metals, and/or over-the-counter foreign currency exchange (forex) trading.
CFTC Charges FTX Co-Owner with Fraud by Misappropriation and Aiding and Abetting Fraud Related to Digital Asset Commodities; Nishad Singh to Concede Liability in Proposed Consent Order
The Commodity Futures Trading Commission today filed fraud charges against Nishad Singh, an FTX senior executive, in a complaint filed in the U.S. District Court for the Southern District of New York. The two-count complaint charges Singh with fraud by misappropriation and with aiding and abetting fraud committed by Samuel Bankman-Fried, FTX Trading Ltd. d/b/a FTX.com (FTX), and Alameda Research LLC (Alameda).
Robinhood says it was subpoenaed by the SEC soon after FTX crashed as regulators crack down on the crypto world
Zahra Tayeb – Business Insider
Robinhood said it received a subpoena from the Securities and Exchange Commission over its crypto business shortly after the collapse of FTX, according to a 10-K filing. The investigative subpoena asked for information regarding the company’s “supported cryptocurrency listings, custody of cryptocurrencies, and platform operations,” it said. Robinhood did not immediately respond to Insider’s request for comment.
SEC Charges Nishad Singh with Defrauding Investors in Crypto Asset Trading Platform FTX
The Securities and Exchange Commission today charged Nishad Singh, the former Co-Lead Engineer of FTX Trading Ltd. (FTX), for his role in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform started by Singh along with Samuel Bankman-Fried and Gary Wang. Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.
SEC Charges Nishad Singh with Defrauding Investors in Crypto Asset Trading Platform FTX
The Securities and Exchange Commission today charged Nishad Singh, the former Co-Lead Engineer of FTX Trading Ltd. (FTX), for his role in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform started by Singh along with Samuel Bankman-Fried and Gary Wang. Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.
Glencore Subsidiary Sentenced, Ordered to Pay $30 Million to Medical Company; The restitution order comes on top of $700 million in penalties that a Glencore subsidiary was sentenced to pay during a hearing on Tuesday
Dylan Tokar and Richard Vanderford – The Wall Street Journal
A federal judge in Manhattan has approved a settlement between Glencore PLC and prosecutors, ordering it to pay nearly $30 million in restitution to the founders of a healthcare company that sought to provide medical services to miners in the Democratic Republic of Congo. The restitution order by U.S. District Judge Lorna Schofield adds to a growing pile of penalties that the Anglo-Swiss mining and trading company has been forced to pay after admitting to bribery and market manipulation misconduct in many developing countries. A Glencore lawyer on Tuesday said the company now expects to pay as much as $1.5 billion in total penalties, up from the $1.2 billion it initially agreed to pay last year.
Investing and Trading
There Was Nowhere for Investors to Hide in February’s Market Reversal; The best one could get was a 1.4% slide in high-yield bonds; Least-bad asset has been worse only one other time in decades
Lu Wang and Isabelle Lee – Bloomberg
Bets on cooling inflation and lower rates proved misplaced in February and investors hit the sell button across assets. From stocks to fixed income and commodities, just about everything fell in a reversal of January’s spirited rally. Shelter was hard to come by: the least-bad return among major US assets was a decline of 1.4% through Monday from high-yield bonds. That was followed by a drop of roughly 2.5% each in Treasuries and the S&P 500 Index, a 3.2% slide in investment grade and a 5% slump in commodities.
Cash Is Paying More Than Traditional Stock-Bond Portfolio; Six-month T-bill yields surpass 5% for first time since 2007; Higher rates cut incentives for investors to buy risky assets
Ye Xie – Bloomberg
For the first time in more than two decades, some of the world’s most risk-free securities are delivering bigger payouts than a 60/40 portfolio of stocks and bonds. The yield on six-month US Treasury bills rose as high as 5.14% Tuesday, the most since 2007. That pushed it above the 5.07% yield on the classic mix of US equities and fixed-income securities for the first time since 2001, based on the weighted average earnings yield of the S&P 500 Index and the Bloomberg USAgg Index of bonds.
Years after Woodford’s crash, what have fund managers learnt about illiquid assets?; Regulators are still grappling with liquidity rules as investors risk being left in the dark
Emma Dunkley – Financial Times
The ghost of Neil Woodford continues to haunt the fund management industry. His eponymous boutique came crashing down in 2019, leaving thousands of investors nursing losses. Most of them are still awaiting redress. At the heart of Woodford’s problem, aside from a degree of hubris, was his open-ended Equity Income fund’s exposure to illiquid assets. Those companies can offer outsized growth opportunities but come with greater risks.
Bank CDs Are an Insult to America’s Savers; Big financial institutions don’t feel the need to offer competitive rates on certificates of deposit, which are universally below the world’s safest asset: Treasury bills.
Alexis Leondis – Bloomberg
Certificates of deposit are one of the oldest, safest bank products around, but investing in shorter-term CDs right now just isn’t worth it. Yet people are still flocking to them. Data from the Federal Reserve shows that savers have been putting a lot more money into “small-denomination time deposits,” or CDs with balances of less than $100,000. As of the end of last year, those deposits totaled $357 billion – more than four times the amount a year earlier.
Environmental, Social and Corporate Governance
California has something to say about climate accountability — are you listening?
Nico McCrossan – Greenbiz.com
When California speaks, corporations listen. Since the late 1960s, the state has used its waiver under the Clean Air Act to set stricter emissions and air pollution standards than the federal government for vehicles sold in the state. The influence of those rules extends far beyond the 10 percent of U.S. car sales that California accounts for – California’s standards are followed by 14 states and the District of Columbia. Its influence is undeniable, and right now, California has a lot to say about private-sector climate accountability disclosures. So corporations, tune in.
There’s a Gap Between EV Range Estimates and Real-World Results; Government-certified ranges for electric cars are based on tests that never go above 60 miles per hour, putting them at odds with highway and road-trip travel.
Kyle Stock – Bloomberg
When Bryan Nakagawa purchased an Audi e-tron in 2018, he fell in love with the car’s interior and handling, the space for his kids and surfing gear and, of course, its small carbon footprint. But the Salem, Oregon-based dentist soon discovered that his affection was fleeting – it flew away right around 70 miles per hour.
Biden nominates Ajay Banga as World Bank president
Todd Phillips – World Bank
US president Joe Biden has nominated former Mastercard executive Ajay Banga as president of the World Bank. In doing so, the White House has made clear it expects Banga to elevate climate issues at the global development institution. Banga is the former president and chief executive officer of Mastercard, and is currently the vice chairman at General Atlantic, a private equity firm. He became a US citizen in 2007 after being born and educated in India. In announcing the nomination, Biden said:”Ajay Banga will be a transformative World Bank president as the institution works to deliver on its core development goals and address pressing global challenges, including climate change.”
US Postal Service to Buy 9,250 Electric Vehicles From Ford; Plan is part of $10 billion effort to electrify delivery fleet; Agency says it’s also purchasing some gas-powered vehicles
Ari Natter – Bloomberg
The U.S. Postal Service is buying more than 9,000 battery-powered delivery vans made by Ford Motor Co. as part of a $10 billion push to electrify its aging fleet. The Ford E-Transit Battery EVs, which the Postal Service expects to take delivery of this December, are part of plan to electrify 75% of the its service trucks over the next five years, the agency said in a statement Tuesday.
Investors’ Audit Gap blank
Vibeka Mair – ESG Investor
Enbridge Eyes $1 Billion of Projects to Turn Food Waste Into Gas
Kevin Orland – Bloomberg
Enbridge Inc. is committing as much as $1 billion to building plants that turn discarded food into renewable natural gas as part of a pledge to reduce its emissions and provide customers with greener products. North America’s largest pipeline company also is investing $80 million in Divert Inc., the company that created the waste-to-gas technology that will be used in the plants, according to a release on Wednesday. Current investor Ara Partners is leading a group that’s investing an additional $20 million.
UK Regulator Bans Lufthansa Ad Over Misleading Climate Claims; The German airline can’t use an advertising campaign that claims to “Protect the Future” of the planet, the Advertising Standards Authority said.
Olivia Rudgard and William Wilkes – Bloomberg
Britain’s advertising regulator has banned Lufthansa from using an ad that appears to suggest the German airline is protecting the planet and urged it not to mislead consumers about the impact of air travel on the climate. The ad in question, part of a campaign run by Deutsche Lufthansa AG last summer, features the front of a plane in flight, where the bottom half is an image of Earth from space overlaid with the slogan “Connecting the World. Protecting its Future.”
WRI’s Stories To Watch 2023
World Resources Institute Podcast
Each year, WRI presents a line-up of key stories that we think are worth watching in the year ahead, drawing on the Institute’s collective insights and wisdom. In 2023, we’ve chosen four: the long-term impact on global energy supplies following Russia’s invasion of Ukraine, whether new leadership will mark a rebound for the world’s tropical forests, how proposed reforms to the global financial system will impact climate finance for vulnerable nations, and how three monumental pieces of legislation are transitioning the U.S. to a clean energy economy. In this podcast, WRI’s President Ani Dasgupta explains the reasoning behind these stories to host Nicholas Walton. How did the events of 2022 shape the background to the stories? How did we choose these ones? And what are the key elements to watch that will let us know how those stories are shaping up during 2023 and beyond?
Investors rarely engage on improving the audit function, but this sorely needs to change, say stewardship proponents. The massive financial and social costs of high-profile accounting scandals are well documented. The infamous collapse of US energy firm Enron in 2001 cost shareholders US$74 billion, saw 20,600 staff lose their jobs, along with the 20,000 employees working at its accountant Arthur Andersen, after prosecutors indicted the entire company and put it out of business. But despite the constant dÃ©jÃ vu of accounting scandals since, few investors actively engage on the issue. This puzzles Paul Lee, Head of Stewardship and Sustainable Investment Strategy at UK-based investment consultant Redington, who says accounting standards are fundamental to the information flows that come to investors.
Goldman’s ‘Confusing’ Message Weighs on Stock as Solomon’s Pitch Fizzles; Fate of consumer unit overshadows company’s investor day; Bank plays up prospects for asset and wealth management
Sridhar Natarajan – Bloomberg
Goldman Sachs Group Inc. set out to reset the narrative and breathe new life into its stock. Investors aren’t buying it just yet. One after another at the bank’s investor day on Tuesday, Goldman’s top brass offered a glossy portrait of the firm’s strengths and underscored it can consistently belt out predictable profits in years ahead. But a dearth of ambitious new targets and messaging whiplash over what’s to happen with the troubled consumer business underwhelmed the market.
Endowment Pros Look to Funnel Trillions to Diverse Fund Managers
Amanda Albright – Bloomberg
Big asset managers including pension funds and family offices will soon be able to use a fintech platform to gain easy access to a database of about 900 women and minority investment professionals. The list of managers was started as a Google spreadsheet by executives for the endowments of the University of Rochester, which oversees about $3.5 billion, and Trinity Church Wall Street, an Episcopal congregation that manages $7 billion.
Paul Tudor Jones-Backed Quant Manager Returns 20% Using Crowdsourced Ideas; Numerai solicits trading ideas from amateur data wonks; Open-for-all vision is unconventional on Wall Street
Justina Lee – Bloomberg
A Paul Tudor Jones-backed hedge fund that harnesses the stock-picking skills of amateur quants has nabbed another $100 million of inflows after soaring 20% in last year’s market turmoil. San Francisco-based Numerai LLC invests based on the wisdom of crowds by collating trading ideas from the likes of freelance data wonks, engineers and scientists, who are then rewarded with its native cryptocurrency.
German Prosecutors Raid Homes of HSBC Employees Over Cum-Ex; Officers raid 16 homes of bank employees in Dusseldorf region; Frankfurt prosecutors separately charged former Fortis banker
Karin Matussek – Bloomberg
German prosecutors raided homes of 16 HSBC Holdings Plc employees and former top managers as part of their vast probe into the Cum-Ex tax dividend scandal. The searches started Tuesday morning, people familiar with the matter said. Among the suspects targeted are former management board members and employees from various departments at the bank, according to one of the people.
FTSE China Index Series Quarterly Review – Q1 2023
FTSE Russell, a leading global index provider, has today announced the results of the FTSE China Index Series quarterly review for March 2023.
Goldman Sachs tries to be an investment bank again; A look inside the Trafigura fiasco and the potential problem with private equity-backed insurers
One thing to start: JPMorgan Chase is resisting attempts by lawyers to question Jamie Dimon under oath in litigation over the US bank’s decision to retain Jeffrey Epstein as a client for 15 years, although it has agreed for one of its longtime chief executive’s key lieutenants to be deposed.
JPMorgan says CEO Dimon ‘not relevant’ to lawsuit over bank’s Epstein’s ties
Jonathan Stempel – Reuters
JPMorgan Chase & Co on Tuesday rejected the U.S. Virgin Islands’ demand that it turn over more documents concerning Chief Executive Jamie Dimon for a lawsuit accusing the bank of aiding in Jeffrey Epstein’s sex trafficking.
Goldman Sachs CEO David Solomon says Marcus ‘lacked certain competitive advantage’
Alexandra Canal – Yahoo Finance
Goldman Sachs (GS) executives led by David Solomon outlined a new path forward for the firm at its second-ever investor day on Tuesday. “Our franchise is strong,” the CEO told the crowd during his opening remarks, addressing recent Wall Street chatter the bank has lost its way. “Success is not a given. Sometimes we fall short, sometimes we don’t execute, but we always learn and adapt.”
David Solomon’s New Goldman Sachs Isn’t New Enough; The bank’s second-ever investor day failed to distract from its consumer missteps.
Paul J. Davies – Bloomberg
What investors wanted from Goldman Sachs Group Inc.’s second-ever investor day on Tuesday was a clear vision of a future of higher and more reliable returns. What they got was a sales pitch on how great things already are. They were unimpressed. The stock dropped 3.8% on the day, making it one of the worst performers in the S&P 500.
BNP Ordered to Pay A Banker Fired Years After Alleged Sexual Harassment; Ruling is second in less than a year that’s gone against bank; Bankers involved were only fired in 2017 when case went public
Hugo Miller and Gaspard Sebag – Bloomberg
BNP Paribas SA was ordered to pay a banker it only fired after sexual harassment allegations made against him came to light in a newspaper article, as French judges turned the blame on the bank for failing to act years before the matter was made public. The Paris court of appeals highlighted “the absence of any true disciplining” by BNP when a female colleague complained in 2012 about Jean-Christophe Wantz and his boss, and questioned “more broadly its policy concerning the handling of sexual harassment.” Both men were given just a warning and continued to be employed by the bank.
Work & Management
Pimco strikes deal for London offices as demand for modern workplaces grows; Asset manager to pay 11mn pounds in annual rent for five floors of new Marylebone building
Joshua Oliver – Financial Times
Pimco has struck a multimillion-pound deal with landlord Derwent London to let office space in a newly developed block in central London, in a move that underscores companies’ desire for green, modern buildings as workers gradually return to the office. The international asset manager has agreed to pay 11mn pounds in annual rent over a 15-year lease on five floors in the new building at 25 Baker Street in Marylebone, which is due to be ready in 2025. The new, larger office will replace Pimco’s premises nearby. The FTSE 250 landlord said the agreement with Pimco, which promises a building with a top environmental rating and a rooftop garden, points to high demand for desirable office locations in central parts of London.
No One Really Knows How Much COVID Is Silently Spreading … Again
Katherine J. Wu – The Atlantic
In the early days of the pandemic, one of the scariest and most surprising features of SARS-CoV-2 was its stealth. Initially assumed to transmit only from people who were actively sick-as its predecessor SARS-CoV did-the new coronavirus turned out to be a silent spreader, also spewing from the airways of people who were feeling just fine.
If Health Is Wealth, America Is Dirt Poor; In 2021, life expectancy in the US fell to 76.1 years – a figure that hasn’t been seen since 1996.
Jessica Karl – Bloomberg
Remember in the early 2010s when everyone decided to go gluten-free? Most people didn’t actually have a wheat allergy or celiac disease. “Not eating bread makes me feel lighter – and this stuff is actually so filling,” people would say, holding up a fistfull of flaxseed crackers. But a few years later, that went out of style. Body positivity! No makeup-makeup! Wellness is dead; martinis are good!
Global Bird Flu Outbreak Leaves China Facing Baby Chick Shortage; US suppliers are grappling with the deadliest wave on record; China imports breeding stock for white-feather broiler chicken
Jinglu Gu – Bloomberg
An unprecedented global bird flu outbreak that has killed off 58 million birds in the US alone in a little over a year is causing pain in the world’s second-largest poultry producer: China is running short of baby chicks. Since the start of the year, prices have soared in China, threatening to drive up food inflation but also exposing a weak link in Beijing’s efforts to shore up food security.
Eli Lilly to Cut Prices of Insulin Drugs by 70%; Drugmaker says it is taking other steps to make it easier for patients to afford the products
Peter Loftus – The Wall Street Journal
Eli Lilly & Co., facing pressure to curb diabetes-treatment costs, will cut the list prices for its most commonly prescribed insulin products by 70% and take other steps to make it easier for patients to afford the drugs. The Indianapolis-based company said Wednesday the 70% price cuts will take effect in the fourth quarter for Humalog and Humulin, its two biggest-selling insulin products.
China scoffs at FBI claim that Wuhan lab leak likely caused COVID pandemic
The FBI has assessed that a leak from a laboratory in the central Chinese city of Wuhan likely caused the COVID pandemic, director Christopher Wray said on Tuesday, a claim China said had “no credibility whatsoever”.
Quest for World’s Biggest Diamonds Gives De Beers a Headache; Lucara sells large gems through HB Antwerp for polished prices; Botswana has cited sales approach in deal talks with De Beers
Antony Sguazzin – Bloomberg
To the southeast of the teeming herds of wildlife in the Okavango Delta in Botswana, an offshoot of the Lundin mining dynasty is extending its search for the world’s biggest diamonds. Lucara Diamond Corp. is sinking an 800-meter (2,624-foot) shaft to ensure the kimberlite orebodies at its Karowe mine keep producing the 1,000-carat-plus gems that set it apart.
Sweden Is Ditching Cash. Just Wait for the Fallout; Switching to digital money risks shutting out some of the most vulnerable members of society.
Lionel Laurent – Bloomberg
Bjorn Ulvaeus, one-quarter of Swedish pop group ABBA, became a standard-bearer for a world without cash after his son got burgled. Ditching coins and banknotes would hurt criminals and tax-dodgers while helping businesses and government budgets, he reckoned. “Sweden would be the ideal country to make cashless,” he told Bloomberg in 2014. “I think that should be the future.”
John Textor’s football empire: ‘It’s not the Wall St devil we’re talking about’; US tech entrepreneur part of a new breed of club owners seeking to buy into teams across different leagues
Josh Noble – Financial Times
John Textor was hailed as a saviour when he bought Brazilian football team Botafogo last year. “I go down to Rio and I’m treated like a king everywhere I go,” he said of his early days in charge. But after selling a player in January to Olympique Lyonnais, also owned by Textor’s Eagle Football, fans felt betrayed and the US businessman started receiving death threats. “Off one player deal I had to change my phone number,” he said.” You wouldn’t believe how quick and how reactive things can be.”