‘We will humble them’: four fuel traders took on Wall Street and saved $1.2bn

Jun 27, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Managed Funds Association President Emeritus Jack Gaine passed away on June 25, 2022. His obituary says he died of a broken heart, as his wife of 45 years, Tish, died 11 days earlier. Gaine was also a former general counsel of the CFTC besides being a long-serving president of the MFA. Condolences to his family, friends and colleagues.

Today we have the first episode of Options Discovery with Alex Teng, JLN’s new content creator for this program that is part of The Spread video series. The upcoming episodes will feature interviews with option industry leaders and players as part of the program. Congratulations to Alex on getting the first one up and published. I am very excited to see where this young man goes with this video program.

Tradier recently held a six-hour Tradier Options Summit in Partnership with Cboe – Summer 2022 and they have the replay of the summit available on YouTube. Here is the replay.

I am going to be headed to the Boy Scout Summit Bechtel Reserve High Adventure Base in West Virginia on July 9 and return on July 15. This is a family trip to see our daughter at SBR, where she is serving as an assistant program director for the Scout summer camp program.

Both my boys are joining my wife and me for the trip. They have been to the SBR before, but only as Scouts at a national jamboree. The SBR is enjoying quite a bit of success this summer, with strong numbers of Scouts attending summer camp. It should be a busy and crowded week at the SBR, but lots of fun.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


FIA Forum returns to Frankfurt on July 12 to address the key issues affecting listed and cleared derivatives market participants. In a program titled “Key Trends in Cleared Derivatives,” industry experts from major exchanges, clearing firms and vendors, and European regulators will discuss regulatory developments, data, operations, new sustainable finance products, and crypto futures markets. To see the program and rates and to register, you can go here.~SR


Options Discovery

Today John Lothian News is kicking off a new segment of The Spread called Options Discovery, hosted by Alex Teng. In this series viewers will learn the ins and outs of options along with Alex. He will take viewers through a wide variety of topics in the options industry, aided by interviews with experts and his own research. Our goal at JLN is to cut down your learning curve and make the world of options accessible to everyone.

Watch the video »


Supreme Court’s Roe Decision Disapproved by Majority in CBS Poll; GOP lawmakers weigh in on overturning of 1973 abortion ruling; AOC calls for aggressive strategy by Democrats to turn tide
Ian Fisher and Victoria Cavaliere – Bloomberg
A CBS News poll suggested that a majority of Americans disapprove of the US Supreme Court’s decision overturning the constitutional right to an abortion, which is inflaming a partisan divide on display in comments by senior lawmakers. The poll, conducted Friday and Saturday, found 59% disapproved of the ruling, including 67% of women. While 78% of Republicans were in favor of the decision, 83% of Democrats disapproved. The survey has a margin of error of plus or minus 3 percentage points. A concurring opinion by Justice Clarence Thomas in the Roe v. Wade decision raised the prospect for many Americans that other rights, including the rights to same-sex marriage and contraception, are now at risk.

******The Supreme Court opened a big can of worms that is going to hurt a lot of people, impact lots of companies and make life more difficult. The question is whether there is enough political will to match polls like this to come to a legislative solution. I certainly hope so and I believe so.~JJL


John Gerald “Jack” Gaine
Obituary via Legacy.com
On Saturday, June 25, 2022, from a broken heart, John Gerald (“Jack”) Gaine passed peacefully at his home in Washington, D.C. Beloved husband and father, he is preceded by 11 days in death by his wife Patricia (“Tish”) of more than 45 years, who passed away on June 14, 2022. Jack is survived by his three children, Courtney Cuddy (Chris) of Decatur, IL, Margaret Hough (Michael) of Dublin, Ireland and John Gaine (Carissa) of Bethesda and by his 10 adoring grandchildren, Carson, Caroline, Connor, Elizabeth, Gwendolen, Christopher (“Fitz”), John (“Judge”), Patrick, Ann McBride (“Bridie”) and John (“Jack”). He is also survived by his siblings, Virginia, Maureen McGowan, and Patrick (Marybeth) as well as countless in-laws, nieces, nephews and cousins. Jack is also preceded in death by his grandson John Connolly, his parents, John and Elizabeth, and his sisters Margaret, Elizabeth (“Betty”) Keegan, Joan Hutchison, and Patricia (“Patsy”).

******Jack was one of the pillars of the futures industry. He will be missed.~JJL


Opinion: If employees want to work from home, managers should let them or risk losing top money-making talent
Brian Elliot – MarketWatch
As the stock market contracts and the tech industry likely faces a downturn and belt-tightening, there’s some predictable chatter that employees working from home or hybrid may suffer. But any leader who penalizes or rolls back flexible work policies at this moment is making a massive mistake. In uncertain times, you need to keep top talent — nowadays that means providing flexibility not only in where people work, but when. I’ve led companies during the last two downturns: the dot-com bust of 2000 and the bigger drop in 2008-09. There was a lot of churn and change, but great engineers, marketers, sales people, finance wizards and people leaders are always in high demand, especially during trying times.

*****This should be self-evident, or it will become so pretty quickly.~ JJL


Friday’s Top Three
Our top story Friday was Our Coffee Trading Strategy from DRW. Second was Coinbase Rolls Out First Crypto Derivative Amid Slump in Tokens, from Bloomberg. Third was Why billionaire Ken Griffin is moving Citadel’s HQ to Miami from Chicago: riots, an employee stabbed, and the attempted hijacking of his own car, from Business Insider.


MarketsWiki Stats
26,871 pages; 239,098 edits
MarketsWiki Statistics


Lead Stories

‘We will humble them’: four fuel traders took on Wall Street and saved $1.2bn; Few airlines hedge against surging oil prices but Southwest’s small team has shown the benefit
Steff Chávez – FT
Southwest Airlines flies alone among the four biggest US carriers in hedging the cost of jet fuel. Its stubborn commitment to the policy is paying off as oil prices hover above $100 a barrel. Hedging will save the company $1.2bn this year. With the pandemic-battered airline industry returning to profitability, Southwest’s operating margins will surpass its three major peers, according to Raymond James.

Employees Scrambled to Keep Robinhood Afloat in January 2021 Meme-Stock Frenzy, House Report Finds; A deluge of trades strained Robinhood and the markets ecosystem surrounding it; here are the report’s key takeaways
Charles Forelle – WSJ
Robinhood Markets Inc. struggled to handle huge volumes of stock trading and sparred with its principal customer, market maker Citadel Securities, during the week in January 2021 when meme stocks exploded, according to a report from the Democratic staff of the House Financial Services Committee.

Russia Defaults on Foreign Debt for First Time Since 1918; The grace periods on two eurobond coupons expired on Sunday; Russia’s Finance Minister calls the default label a ‘farce’
Giulia Morpurgo and Libby Cherry – Bloomberg
Russia defaulted on its foreign-currency sovereign debt for the first time in a century, the culmination of ever-tougher Western sanctions that shut down payment routes to overseas creditors.

*****Here is the WSJ version of the story.

Businesses Are Bracing for the Political and Social Fight Post-Roe; Reeling from competing demands from stakeholders — including activists, clients, consumers, shareholders and elected officials — businesses are increasingly caught in the middle of the country’s bruising culture wars.
Ephrat Livni, Lauren Hirsch and Jenny Gross – NY Times
Yesterday’s Supreme Court decision overruling Roe v. Wade sent business leaders and employees across the nation scrambling for answers about how to react, what to say — or what not to say — and the immediate practical implications of the ruling.

Corporate Net-Zero Goals Don’t Add Up to a Net-Zero Planet; For companies, the focus on traditional carbon accounting is a convenient distraction.
Eric Roston – Bloomberg
More than 5,200 businesses have pledged to cut their greenhouse gas pollution to zero by 2050, or reach “net zero” by canceling out emissions with forestry or other projects that remove CO2 from the air. They include some of the world’s biggest companies across all sectors: Apple, Zurich Insurance, P&G, General Motors, and so on.

Crypto’s High Ideals About Freedom Take a Beating; The industry was outspoken about non-interference when the Canadian government froze assets of protesting truckers. Now platforms are telling people what they can do with their coins.
Jonathan Levin – Bloomberg
Earlier this year, the crypto community went into an uproar over news that Canadian banks had frozen financial accounts tied to protesting truck drivers who had been blockading a key boarder crossing. The truckers were angry about vaccine mandates and other Covid-19 measures, but as the narrative went, you didn’t have to agree with them to recognize that Prime Minister Justin Trudeau had used the financial system to punish political adversaries, an episode that reinforced the need for cryptocurrencies that were fully resistant to any interference. That was all well and good, until it wasn’t.

Rise of ETFs ‘destabilising’ emerging markets; Passive money most likely to be withdrawn during times of global stress, analysis finds
Steve Johnson – FT
The explosive growth of index-tracking exchange traded funds has destabilised emerging economies, increasing their vulnerability to global shocks, according to economists at the Italian central bank. Their analysis found that investment funds were far more likely than other sources of private sector funding, such as banks, insurance companies and pension funds, to withdraw funding from developing countries during global shocks.

More Hedge Funds Are Betting Against Tether as Crypto Melts Down; Professional investors got interested in shorting tether after the collapse of another stablecoin, TerraUSD
Vicky Ge Huang – WSJ
Short sellers have been ramping up their bets against tether, the world’s largest stablecoin, amid a broad market selloff that has called into doubt the financial health of some crypto companies. In the past month, more traditional hedge funds have executed trades to short tether through Genesis Global Trading Inc., one of the largest crypto brokerages for professional investors. These trades are worth “hundreds of millions” of dollars in notional value, said Leon Marshall, Genesis’s head of institutional sales. He declined to be more specific.

AFME warns Mifir review could harm liquidity; Instead, the association has laid out its own recommendations which it predicts will protect the role of a market maker as a liquidity provider and banks as shock absorbers.
Annabel Smith – The Trade
The Association for Financial Markets in Europe (AFME) has suggested that proposed changes to Mifir regulation as part of the ongoing review could damage existing liquidity pools. AFME has claimed proposed changes could harm the role of market makers as liquidity providers who dedicate balance sheets to provide pricing and immediacy of execution, as well as the role of banks as shock absorbers who limit detrimental price impacts on investors moving in and out of large positions.

A ‘default’ when flush with cash: Five signs Russia ain’t sinking yet
Guy Faulconbridge – Reuters
Russia may have defaulted for the first time on foreign bonds since the Bolsheviks refused to pay on a vast debt pile after the 1917 Revolution, but its $1.8 trillion economy is showing no sign of sinking just yet. The sanctions imposed by the West over Russia’s invasion of Ukraine delivered the biggest external shock to Russia’s economy since the 1991 fall of the Soviet Union, but the economy has – so far – been remarkably resilient.

Hong Kong’s Struggle to Lure Bankers Dims Its Role as a Global Finance Hub; City’s reputation as the region’s top networking center continues to suffer as Covid controls drive away international bankers, investors
Elaine Yu – WSJ
Before the Covid-19 pandemic, the Hong Kong Sevens rugby tournament was for years a highlight on Asia’s networking calendar for global bankers and their clients. Now, organizers are pushing for a downsized version of the event this fall, reflecting the challenge the city faces to maintain its status as Asia’s leading financial hub.

Hong Kong’s top finance executives bank on city to thrive as gateway to China
Selena Li, Kane Wu and Julie Zhu – Reuters
In 1997, the world watched as Britain returned Hong Kong to Chinese rule, with some pessimistic or wary about the outlook for the city and its role in the global financial system. Twenty-five years later, Hong Kong has so far retained its status as a financial hub, and some of the city’s top executives are banking on a bright future as the territory remains a crucial springboard for investment into mainland China.

Crypto Exchange FTX in Talks to Acquire Stake in BlockFi
Justin Baer – WSJ
Crypto billionaire Sam Bankman-Fried has become a lender of last resort to his beleaguered industry. He may end up owning large chunks of it as well. Mr. Bankman-Fried’s crypto exchange, FTX, is in talks to acquire a stake in BlockFi, a crypto lender that FTX gave a $250 million credit line this week, people familiar with the matter said. His other company, Alameda Research, also acquired a big ownership stake in Canadian crypto broker Voyager Digital Ltd.

G-7 Weighs Russia Oil-Price Cap Via Insurance, Shipping Ban; Mechanism would set threshold for Russian crude transportation; Agreement in principle could be reached at summit in Germany
Chiara Albanese, Samy Adghirni, and Alberto Nardelli – Bloomberg
Group of Seven nations are discussing a cap on the price of Russian oil that would work by imposing restrictions on insurance and shipping, according to people familiar with the matter. The potential mechanism would only allow the transportation of Russian crude and petroleum products sold below an agreed threshold, the people said. Discussions among G-7 leaders and officials are ongoing, and an agreement has yet to be reached, they said.

SEC Chair Gensler Aims for CFTC Collaboration to Oversee Cryptos
Bob Mason – FX Empire
Earlier this month, we discussed a likely battle between the US Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). The US agencies are vying for the responsibility to regulate the digital asset market, which is currently in its nascency compared with other asset classes. Winning approval to regulate the digital asset market would be a feather in the cap for either agency. While currently worth less than $1 trillion, the evolution of Web3 and recovery from the crypto winter could eventually see the digital asset space sit alongside the US equities and commodities markets.

One of World’s Major Wheat Buyers to Trim Imports as Prices Rise
Abdel Latif Wahba and Tarek El-Tablawy – Bloomberg
Egypt plans to cut wheat imports by 500,000 tons per year, or about 10%, by eking out more subsidized bread from its grain, Supply Minister Aly El-Moselhy said. The move comes as one of the world’s largest wheat importers struggles with soaring commodity prices as a result of the Russian invasion of Ukraine. Egyptian officials are looking to boost their reliance on local wheat production in a bid to reduce the import bill.

Crypto Stocks Show Why They’re Among the Riskiest of Risk Assets; Sector selloff is worse than meme meltdown and SPAC slump; Limited exposure strategy comes back to haunt investors
Matt Turner – Bloomberg
Crypto curious stock investors are taking little comfort in the rebound in the shares of companies linked to the digital-asset world in the past week, with the sector underperforming just about every other risky corner of the financial markets this year by a wide margin. Coinbase Global Inc., touted last year as one of the best ways to gain exposure to crypto when it was first listed on Nasdaq, has tumbled 75% since December. MicroStategy Inc. is down 62%, or more than Bitcoin, for which the software company has been seen a proxy for since Chief Executive Michael Saylor loaded up its balance sheet with the coins. Digital token mining leaders Marathon Digital Holdings Inc. and Riot Blockchain Inc. are down similar amounts, while smaller rivals such as Stronghold Digital Mining Inc. having plunged even more.

A $2 Trillion Free-Fall Rattles Crypto to the Core; A market that has gone through several major downdrafts in its short life may be facing its biggest test yet.
Emily Nicolle and Olga Kharif – Bloomberg
For a generation of alienated techies, crypto’s all-for-one ethos was its biggest draw. Now panic is spreading across this universe — and that same ethos is posing what may be the biggest threat yet to its survival. What started this year in crypto markets as a “risk-off” bout of selling fueled by a Federal Reserve suddenly determined to rein in excesses has exposed a web of interconnectedness that looks a little like the tangle of derivatives that brought down the global financial system in 2008. As Bitcoin slipped almost 70% from its record high, a panoply of altcoins also plummeted. The collapse of the Terra ecosystem — a much-hyped experiment in decentralized finance — began with its algorithmic stablecoin losing its peg to the US dollar, and ended with a bank run that made $40 billion of tokens virtually worthless. Crypto collateral that seemed valuable enough to support loans one day became deeply discounted or illiquid, putting the fates of a previously invincible hedge fund and several high-profile lenders in doubt.

Large Companies Are Leaving Chicago, And Some Are Citing Rising Crime as a Reason; Ken Griffin’s Citadel is the latest company to announce its moving out of the Chicago.
NBC Chicago
In the last several months, three large companies have announced they are moving their headquarters out of the Chicago area — and the latest one has cited growing crime in the city as one of the primary reasons for leaving. Thursday, in a letter to employees, hedge fund manager Ken Griffin — the richest man in Illinois — announced that, after more than 30 years in Chicago, his investment firm Citadel would be relocating to Miami.

Goldman Sachs Leading Investor Group to Buy Celsius Assets: Sources
Tracy Wang – CoinDesk
Goldman Sachs is looking to raise $2 billion from investors to buy up distressed assets from troubled crypto lender Celsius, according to two people familiar with the matter. The proposed deal would allow investors to buy up Celsius’ assets at potentially big discounts in the event of a bankruptcy filing, the people said.

Celsius Network hires advisors to prepare for potential bankruptcy – WSJ
Celsius Network LLC has hired restructuring consultants from advisory firm Alvarez & Marsal to advise on a possible bankruptcy filing, the Wall Street Journal reported on Friday, citing people familiar with the matter. The New Jersey-based cryptocurrency lending company froze withdrawals and transfers earlier this month due to “extreme” market conditions, in the latest sign of the financial market downturn hitting the cryptosphere. A separate report from CoinDesk said on Friday that Wall Street bank Goldman Sachs (GS.N) was looking to raise $2 billion from investors to buy distressed assets from Celsius.

How to Win the Hybrid Workforce Revolution; Instead of trying to block an unstoppable transformation in the distribution of work, employers should focus on how to manage it better.
Adrian Wooldridge – Bloomberg
The most important work-related debate of our time is stuck on repeat. Many senior executives continue to believe that working from home is tantamount to pretending to work, with Elon Musk saying out loud what his more restrained colleagues say in private, while many remote-work enthusiasts continue to believe that they have an absolute right to work where they want to, the organization be damned. The result: a never-ending cycle of get-back-to-work memos, not-on-your-nelly responses and accumulating problems.

Trump plans for Spac deal suffer further blow; Federal grand jury issues subpoenas to blank-cheque company Digital World Acquisition
Oliver Ralph – FT
Donald Trump’s plans to merge his media business with a blank-cheque company have suffered a further blow after it emerged that a federal grand jury has issued subpoenas to the company and its board. Digital World Acquisition Corp, the special purpose acquisition company, said in a regulatory filing on Monday that a federal grand jury in New York had issued subpoenas to the company and to each member of the board.

Ukraine Invasion

Far from the battlefield, Moscow’s generals fight a falling birth rate; For decades, Russia has been producing too few babies to keep its population stable, let alone build up an army
Norma Cohen – FT
Despite the vast combat operation currently under way in Ukraine, the Kremlin has refrained from a full military mobilisation and refused to admit that it is at war. There are plenty of strategic reasons for this decision, but an underlying demographic weakness may also be partly to blame: Russia has been producing too few babies since the 1991 collapse of the Soviet Union to even keep its population stable, let alone build up an army. This trend is not specific to Russia — falling fertility rates have been a characteristic of almost all developed economies for several decades. While the world is at peace, the necessary adjustments to rising longevity and falling fertility tend to focus on economic and social policies. As we have seen across Europe and the US, governments are raising state pension ages and looking at support for working mothers. War, however, casts falling fertility in a different light.

G7 aims to hurt Russia with price cap on oil exports; Talks on curbing Moscow’s energy profits to continue on Monday as India and others join Bavaria summit
Guy Chazan, Sam Fleming, and David Sheppard – FT
G7 leaders meeting for a summit in the Bavarian Alps are seeking a deal to impose a “price cap” on Russian oil as the group works to curb Moscow’s ability to finance its war in Ukraine. Talks were set to continue overnight, having begun on Sunday in the luxury resort of Schloss Elmau, where leaders want to enlist a range of countries beyond the G7 to put a ceiling on the price paid for Russian oil. They hope a cap will limit the benefits of the soaring price of crude to the Kremlin war machine while cushioning the impact of higher energy prices on western economies. The proposal has been strongly promoted by the US and recent comments by German officials suggested Berlin was also coming around to the idea.

Capping Russian Oil Prices Is Pure Fantasy; Putin has already shown that the country’s economy is of secondary importance to his imperialist ambitions.
Julian Lee – Bloomberg
US Treasury Secretary Janet Yellen is at the forefront of calls for a cap on Russian oil export prices. Sounds like a great idea. Just don’t expect it to work. Here’s the problem. Russia earns billions of dollars from exporting oil. Those dollars are helping to fund President Vladimir Putin’s invasion of Ukraine. Meanwhile, the world needs Russian oil to keep flowing because markets are already tight and nobody has spare capacity to make up for its loss. But countries in North America, Europe and parts of Asia want to cut off the flow of funds to the Kremlin’s war machine.

Europe Turns to an Unlikely Source to Replace Russian Energy: Ukraine; In a role reversal, Ukraine could be the one helping Europe after an exodus of residents left the country with surplus electricity
Joe Wallace – WSJ
Europe has turned to an unlikely source for help in its race to keep the lights on this winter: war-torn Ukraine. With Russia choking off natural gas supplies that feed furnaces and electricity generating plants, European Union members and Kyiv have accelerated plans to fully link up Ukraine’s electricity grid. The project represents a remarkable turnaround from the early days of the war, when Ukraine braced for widespread blackouts as Russia attacked the country’s infrastructure.

Russia will soon exhaust its combat capabilities, Western assessments predict; Small shifts in territorial control matter less than the overall balance of forces, which analysts say could shift back in favor of Ukraine in the coming months
Liz Sly – The Washington Post
The Russian military will soon exhaust its combat capabilities and be forced to bring its offensive in Ukraine’s eastern Donbas region to a grinding halt, according to Western intelligence predictions and military experts. “There will come a time when the tiny advances Russia is making become unsustainable in light of the costs and they will need a significant pause to regenerate capability,” said a senior Western official, speaking on the condition of anonymity to discuss a sensitive issue. The assessments come despite continued Russian advances against outgunned Ukrainian forces, including the capture on Friday of the city of Severodonetsk, the biggest urban center taken by Russia in the east since launching the latest Donbas offensive nearly three months ago.

Gold Rises as Some G-7 Nations to Ban New Imports From Russia; US, UK, Japan and Canada to pledge move at summit in Germany; US, European markets already mostly closed under sanction
Emily Ashton, Jordan Fabian, and Josh Wingrove – Bloomberg
The US, UK, Japan and Canada plan to announce a ban on new gold imports from Russia during a summit of Group of Seven leaders that’s getting underway Sunday. Prices of the precious metal climbed Monday. Underpinned by London’s central role in the gold trade, “this measure will have global reach, shutting the commodity out of formal international markets” and delivering a “huge impact” on President Vladimir Putin’s ability to raise funds, the UK government said in a statement.

Zelenskiy says Ukraine will win back lost cities, admits war is tough to bear
Ukrainian President Volodymyr Zelenskiy on Saturday said Ukraine would win back all the cities it had lost to Russia, including Sievierodonetsk, and admitted the war was becoming tough to handle emotionally. In a late-night video address, he also said Ukraine had been hit by 45 Russian missiles and rockets over the previous 24 hours, which he described as a cynical but doomed attempt to break his people’s spirits. “Therefore all our cities – Sievierodonetsk, Donetsk, Luhansk – we’ll get them all back,” he said.

Swiss Customs Say Russian Gold Import Arrived From the UK; Over 3 tons of gold was recorded as imported from Russia; Russia’s gold became taboo following the invasion of Ukraine
Eddie Spence – Bloomberg
Gold recorded as originating from Russia arrived in Switzerland from the UK last month, according to the Swiss Federal Customs Administration. More than 3 tons of gold — worth about $200 million — was recorded as being imported from Russia to Switzerland last month, according to customs data. The industry has been abuzz with speculation about the trade, especially after the association of Swiss refiners said its members hadn’t imported the metal.

G-7 Weighs Russia Oil-Price Cap Via Insurance, Shipping Ban; Mechanism would set threshold for Russian crude transportation; Agreement in principle could be reached at summit in Germany
Chiara Albanese, Samy Adghirni, and Alberto Nardelli – Bloomberg
Group of Seven nations are discussing a cap on the price of Russian oil that would work by imposing restrictions on insurance and shipping, according to people familiar with the matter. The potential mechanism would only allow the transportation of Russian crude and petroleum products sold below an agreed threshold, the people said. Discussions among G-7 leaders and officials are ongoing, and an agreement has yet to be reached, they said.

Russians Exploiting Geneva as Espionage ‘Hotspot,’ Swiss Say; ‘Several dozen’ Russian spies based in Swiss city: official; Relations with Russia soured after Swiss adopted EU sanctions
Hugo Miller – Bloomberg
Geneva remains a “hotspot” for international espionage and the number of Russian agents operating there could grow from the “several dozen” there currently, Switzerland’s intelligence service said. “Recently, various European states have expelled Russian intelligence officers, which might lead the Russian services to deploy their forces in states, like Switzerland, which have not carried out any expulsions,” the Swiss Federal Intelligence service (FIS) said in its latest situation report published on Monday

Zelenskiy asked G7 for air defence systems, tougher Russia sanctions – official
Ukrainian President Volodymyr Zelenskiy on Monday asked for anti-aircraft defence systems, more sanctions on Russia and security guarantees as he addressed leaders of the Group of Seven summit, a European official said. Addressing the summit in the Bavarian Alps via video link, Zelenskiy also asked for help to export grain from Ukraine and for reconstruction aid, the European official said, speaking on condition of anonymity.

Exchanges, OTC and Clearing

NinjaTrader, Tradovate Among First to Offer New Nano Bitcoin Futures from Coinbase Derivatives Exchange; Commission-Free Offering, Accessible Technology Give Individuals Affordable New Path to Investing, Hedging in Crypto
NinjaTrader Group, LLC
NinjaTrader Group, LLC, a global leader in clearing, brokerage and technology solutions for active traders through its subsidiaries NinjaTrader and Tradovate, today announced that that its firms are among the first to offer the new Nano Bitcoin futures (BIT) contract just launched by Coinbase Derivatives Exchange. Individuals can trade this cryptocurrency futures contract via NinjaTrader or Tradovate without any commissions or mar

Coinbase to Offer Nano Bitcoin Futures Contracts via Third Party Brokerages
David Thomas – BeInCrypto
This will be the first product listed on the Coinbase Derivatives Exchange, offering investors the opportunity to buy a contract linked to the price of one-hundredth of a bitcoin. Customers can purchase the Nano futures contract through third-party brokerages. Customers will not be able to buy the nano futures contract from Coinbase directly until the exchange receives a license to operate as a futures commission merchant. The exchange first applied for the license on Sept. 16, 2021.

CME Group appoints new senior director of BrokerTec Products; New director joins from Coex Partners and previously held roles at BNP Paribas, Westpac Institutional Bank, Lloyds Banking Group and HSBC Investment Bank.
Wesley Bray – The Trade
BrokerTec, part of CME Group, has appointed Altaz Dagha as its new senior director of BrokerTec Products. Based in Singapore, Dagha will report to Robert Siddons, senior director, US Treasuries, APAC. As part of his new role, Dagha will be responsible for US Treasuries client relationship management, sales and onboarding and BrokerTec’s hybrid platform in off-the-run US Treasury Instruments.

Saudi Exchange to allow single-stock futures trading on selected shares in July
Saudi Arabia’s stock exchange will launch futures trading on single stocks on July 4, amid efforts to bolster liquidity and lure investors into the region’s biggest bourse. The first tranche of the futures contracts will include Al Rajhi Bank, Saudi Aramco, Saudi National Bank, Alinma Bank, SABIC, Saudi Kayan, Saudi Telecom Co., Saudi Electricity Co., Almarai, and Ma’aden. A single-stock future is a type of futures contract between two parties to exchange a specified number of stocks in a company for a price agreed today with delivery occurring at a specified future date. The move will “enable local and international investors to hedge and manage portfolio risks more effectively as well as diversify products available for trading and hedging in the market,” Tadawul said in a statement. Single-stock futures will be the second derivatives product on the Kingdom’s bourse, after the launch of index futures in late 2020.

Saudi Exchange announces its intention to launch Single Stock Futures Contracts on the 4th of July 2022
PR Newswire – The Saudi Exchange
The Saudi Exchange today announced its intention to launch Single Stock Futures (SSFs) contracts, the second derivatives product to be introduced in the Saudi Exchange. From the 4th of July 2022, the new contracts will be available to trade, that will commence on enabling local and international investors to hedge and manage portfolio risks more effectively as well as diversify products available for trading in the market. SSFs contracts are standard futures contracts with an individual stock as its underlying asset. The underlying stocks have been selected from the largest and most liquid companies listed on the Saudi Exchange. SSFs are traded on the Exchange, similar to other cash market products. SSFs contracts will be cleared and settled by Securities Clearing Center Company “Muqassa” in line with international best practices.

IGBM index new composition for the second half of 2022
The index will continue to comprise 115 stocks, following the inclusion of Atrys Health, and the exclusion of Zardoya Otis
The Indice General de la Bolsa de Madrid (IGBM) Management Committee, during its ordinary index review meeting has decided that the Indice General de la Bolsa de Madrid (IGBM) and the Indice Total will be made up of 115 stocks in the second half of the year, following the inclusion of Atrys Health, and the exclusion of Zardoya Otis.

MARF admits a new 25 million euro Commercial Paper Programme from AENOR
BME’s Fixed Income Market, MARF, today admitted a new Commercial Paper (CP) Programme for 25 million euros from certifier AENOR Internacional. This is the first time AENOR has accessed the capital markets to raise finance and diversify its resources. The CPs to be issued under the programme will have a nominal value per unit of 100,000 euros and maturities of up to 2 years.

Eurex Bitcoin Futures Exceed EUR100m Traded
So far, 2022 marked quite an impressive year for the BTCetc ETN Futures. The traded notional exceeded EUR 100 million compared to last year’s EUR 20 million (+408%).
Since launch in September 2021, the traded notional climbs up to EUR 120 million. The open interest is presently at approximately EUR 10 million notional.
The increase in volatility in the markets have triggered higher activity in the product.

MiFID II/MiFIR: Transaction reporting according to Article 26 (5) MiFIR for non-MiFIR firms: Announcement of Release 1.1 of the Regulatory Reporting Solution (RRS)
Following the migration to a new technical solution for transaction reporting pursuant to Article 26 (5) MiFIR, which we informed you about in Eurex circular 043/21, and documentation updates, which were announced in Eurex circular 004/22, this circular announces RRS Release 1.1 and provides details on its simulation and production start date as well as on the availability of the updated dedicated documentation.

Trading Fee Waiver Extension for Hong Kong Stock Futures Market Makers
With reference to the circular (ref: MKS/EQD/54/21) dated 3 December 2021, the existing trading fee waiver for Hong Kong Stock Futures (“HK Stock Futures”) Market Makers will be extended for the period from 1 July 2022 to 30 June 2023, both days inclusive. The trading fee waiver will not be applied to the HK Stock Futures on Tracker Fund of Hong Kong and Hang Seng China Enterprises Index ETF1. Below is the summary of the trading fee schedule for HK Stock Futures.

ICE Semiconductor Index Selected as Benchmark for Mega International’s New Taiwan-Listed ETF
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced that the ICE Semiconductor Index (ICESEMI) was selected by Mega International Investment as the benchmark for the Mega ICE Semiconductor ETF, which is listed on the Taiwan Stock Exchange.

Launch of Real-time Calculation of Prime, Standard, and Growth Market Indices
Today, JPX Market Innovation & Research, Inc. commenced real-time calculation for the Tokyo Stock Exchange Prime Market Index, Tokyo Stock Exchange Standard Market Index and Tokyo Stock Exchange Growth Market Index.

Moscow Exchange provided participants with simultaneous access to the repo and deposit markets with the CCP
Since June 27, 2022, the Moscow Exchange has provided professional market participants with simultaneous access to the repo market and the central counterparty (CC) deposit market. Thus, banks, brokers and management companies that have a professional participant license can simultaneously use liquidity management tools in the repo market and place funds on deposits with the CCP without the need to open mutual limits.

19th Consecutive Nasdaq Closing Cross Sets Record For Number Of Shares Traded During 2022 Russell US Indexes Reconstitution
Nasdaq, Inc. (Nasdaq: NDAQ) today announced the Nasdaq Closing Cross had a record day as it was used for the 19th consecutive year to rebalance Nasdaq-listed securities in the entire family of Russell US Indexes, part of leading global index provider FTSE Russell, during its annual reconstitution.

NGX Reaffirms Commitment To Build Innovative Structures Towards SMEs Funding
Nigerian Exchange Limited (NGX), has restated its determination to provide SMEs access to investors, seeking viable returns on investments. The Chief Executive Officer, NGX, Temi Popoola made this disclosure during his keynote address at the 2022 Annual Business Luncheon organised by the Capital Market Solicitors Association on Thursday, 23 June 2022, at Radisson Blu Hotel, Lagos.

Shanghai International Energy Exchange has released the Circular on Adjusting the Deliverable Crude Stream for Crude Oil Futures
Shanghai International Energy Exchange has released the Circular on Adjusting the Deliverable Crude Stream for Crude Oil Futures as follows:


India’s central bank cracks down on fintech startups
Manish Singh – TechCrunch
For nearly all fintech startups, lending has long been the end game. A notice from India’s central bank this week has thrown a wrench into the ecosystem, scrutinizing just who all can lend. The Reserve Bank of India has informed dozens of fintech startups that it is barring the practice of loading non-bank prepaid payment instruments (PPIs) — prepaid cards, for instance — using credit lines, in a move that has prompted panic among — and existential threat to — many fintech startups and caused some to compare the decision to China’s crackdown on financial services firm last year.

Coinbase Phasing Out ‘Coinbase Pro’ for ‘Advanced’ Mode in Main App
Crypto exchange Coinbase will phase out its trader-focused “Coinbase Pro” in favor of “Advanced Trade,” a similar exchange service that lives alongside Coinbase’s other crypto investment products, unlike Pro. “The Hash” panel discusses the latest move from Coinbase and what this means for accessibility.

Citi and JP Morgan report 30% reduction in trade fails after AccessFintech collaboration; Initiatives focused on securities settlements between the two dealers, with specific emphasis on European markets as a prelude to the recently implemented CSDR regulation.
Jonathan Watkins – The Trade
Two of the largest investment banks in the world have experienced a 30% reduction in trade fails and a 76% drop in email traffic for operational processes after a year-long collaboration. Citi and JP Morgan have worked with AccessFintech over the past 12 months in a bid to achieve operational efficiencies through data and workflow collaboration.


Hackers Steal $100 Million by Exploiting Crypto’s Weak Link; Harmony has notified authorities and forensic experts; Hackers have stolen more than $1 billion from bridges
Olga Kharif, Sidhartha Shukla, and Emily Nicolle – Bloomberg
Hackers looted about $100 million from a so-called cryptocurrency bridge, again exposing a key vulnerability in the digital-asset ecosystem. Blockchain Harmony said in a tweet that the hack of its Horizon bridge, which lets people swap coins between different blockchains, took place Thursday morning. It has “begun working with national authorities and forensic specialists to identify the culprit and retrieve the stolen funds.” Most of the crypto world is divided into silos: The Bitcoin and Ethereum networks, for example, can only operate using Bitcoin and Ethereum tokens. As more cryptocurrencies gain adoption and traders demand the ability to interact seamlessly with one another, projects like Harmony are developing platforms known as bridges that can accept a variety of tokens and move them fluidly between blockchains.

Hackers Steal $100 Million in Crypto From Harmony Blockchain Bridge; Tech company Harmony says it is working to retrieve funds and identify who is behind the theft on one of its blockchain bridges
Omar Abdel-Baqui – WSJ
Hackers have stolen roughly $100 million in cryptocurrency from a blockchain bridge, technology company Harmony said Thursday. Harmony, which hosts the Horizon bridge that allows users to send crypto between different blockchains, said on Twitter it is working with the Federal Bureau of Investigation and forensic specialists to identify who is behind the theft.

Wall Street Banks Quietly Test Cyber Defenses at Treasury’s Direction; Banks, markets are seen being only as safe as weakest links; Wall Street embraces cooperative ethos in cyber fight
Christopher Condon and Craig Torres – Bloomberg
With global tensions rising over Ukraine, the cutthroat competitiveness of the US financial sector is yielding to partnership over the conviction that a cyberattack against even a group of minor banks — or a third-party service provider — could imperil everyone in a highly connected system. Some of the nation’s largest banks are now working with the Treasury Department, engaging in role play and sharing information they would have guarded closely in the past. “You’re only as good as your weakest link,” said Ron O’Hanley, chief executive officer of State Street Corp., one of the largest US money managers and custody banks. “Networks are put together not just by what you’re doing, but the vendors you’re relying on, the counter-parties you’re dealing with, even regulators you’re dealing with,” he said in an interview.

White hat hacker attempts to recover ‘millions’ in lost Bitcoin, finds only $105; “We didn’t make money, but we definitely made new friends,” said Lavar, who originally purchased the Bitcoin in 2016.
Turner Wright – CoinTelegraph
Joe Grand, a computer engineer and hardware hacker known by many for recovering crypto from hard-to-reach places, spent hours breaking into a phone only to find a fraction of a Bitcoin. In a YouTube video released on Thursday, Grand traveled from Portland to Seattle in an effort to potentially recover “millions of dollars” in Bitcoin (BTC) from a Samsung Galaxy SIII phone owned by Lavar, a local bus operator. Lavar originally purchased the BTC in July 2016 in a “super sketchy” way, paying a person at a cafe and storing the crypto in a wallet on the phone before putting it in storage and losing track of the device.

How much does it cost to orchestrate a cyber attack in 2022? It’s probably less than you think.
Sceaf Berry – FT
How much does it cost to orchestrate a cyber attack in 2022? Truthfully, not a lot. For less than $100, you can probably subscribe to a lifetime’s supply of cyber attacks on the targets of your choosing. Really.

Cybersecurity’s bad and it’s getting worse
Joseph Marks – The Washington Post
There are few analogues in history for how cybersecurity has surged in importance as a government policy issue during the past eight years.
It’s gone from a relatively back-burner issue embraced by a handful of government officials and lawmakers to a top national security concern — one that prompts partisan squabbles in Congress and heated confrontations between U.S. and Russian presidents.


Why Margin Calls and Bot Liquidations Are Roiling Crypto
Olga Kharif – Bloomberg
It’s a vicious circle long familiar to those in traditional finance: trades made with borrowed money coming apart when the value of their collateral put up against the loans drops, forcing liquidations that in turn push prices down further. That pattern, driven by so-called margin calls, has come to cryptocurrency markets in a big way since prices began to slump broadly — with some additional crypto-only twists.

Crypto swindlers prey on ethnic Chinese women looking for love; Fraudsters establish online romances before duping victims in highly methodical cyber scams
Eleanor Olcott – FT
Qiao Er was idly scrolling through Douyin, the Chinese version of TikTok, one hot summer day in the southern Taiwanese port city Kaohsiung, when she came across a profile of a wealthy and attractive Chinese man. She liked a couple of videos, clips of him playing tennis, cruising around in a Ferrari and feasting on a lobster the size of a child’s bike.

Crypto Exchanges Hunker Down as Everything Goes Wrong in India; ‘It’s literally crypto winter here:’ WazirX vice president; A 1% tax on crypto transactions takes effect on July 1
Sidhartha Shukla and Suvashree Ghosh – Bloomberg
India’s largest digital assets exchanges are bracing for a drawn-out crypto winter — one with some unwelcome local twists. With token prices plummeting, customers unable to transfer money to their accounts and a dreaded transaction tax on cryptocurrencies just around the corner, exchanges like Binance-backed WazirX have put expansion plans on the back burner. “We have cut down all our non-critical costs,” said Rajagopalan Menon, WazirX’s vice president. “We are hiring only critical hires, we aren’t spending money at all. It’s literally crypto winter here,” he said, using industry jargon for an extended bear market. WazirX isn’t alone. Rival exchanges Unocoin and BuyUcoin are also responding to vanishing trading volumes in a market that just last year ranked second in the world for crypto adoption.

Crypto Now Braced For A $2 Billion Goldman Sachs Bombshell As The Price Of Bitcoin, Ethereum, BNB, XRP, Solana, Cardano And Dogecoin Swing
Billy Bambrough – Forbes
Bitcoin, ethereum and other major cryptocurrencies have bounced back from a huge market meltdown this month (that some think could reveal the future tech giants). The bitcoin price has rebounded 20% since crashing to a low of under $18,000 per bitcoin last week—despite a dire China warning—with ethereum and other top ten cryptocurrencies BNB, XRP, solana, cardano and dogecoin also making gains. Now, reports have emerged Wall Street giant Goldman Sachs is looking to raise $2 billion to snap up the assets of embattled crypto lender Celsius which has been hard hit by the latest bitcoin and crypto crash.

‘Heading To Zero’—China Issues Shock Bitcoin Price Warning Amid Huge $2 Trillion Crypto Crash
Billy Bambrough – Forbes
Bitcoin and cryptocurrencies have been rocked by a huge $2 trillion crash this year—though it could reveal the future “Amazons and eBays.” The bitcoin price dropped under the closely-watched $20,000 per bitcoin level this week before rebounding slightly, however, some fear it has further to fall. Now, after Tesla billionaire Elon Musk revealed a surprise crypto bet, a Chinese Communist Party (CCP) newspaper has warned investors should be prepared for the bitcoin price to hit zero.

Mike Novogratz on His Big Crypto Mistake and What’s Ahead for Bitcoin
Jen Wieczner – New York Magazine
When I spoke with Novogratz this week — in the wake of the stunning $50 billion collapse of the luna cryptocurrency and its blockchain ecosystem — I reminded him of that earlier conversation and his plug of luna. “Yeah, erase that one,” he said ruefully. (To be fair, in our last conversation, around cryptocurrency’s peak last year, he did advise newly rich crypto investors to “be prudent, take some chips and buy yourself a house if you can afford it.”) The crypto crash, in luna and the industry more broadly, has burned Galaxy’s portfolio and, presumably, a chunk of Novogratz’s net worth. (In recent days, the price of bitcoin fell below $20,000 from a high of nearly $70,000, while ethereum — the second-largest cryptocurrency — fell under $1,000 after topping out at almost $5,000.)

Have the Crypto Bosses Learned Anything At All?; The crash should have been a humbling moment for the industry. Instead, companies are doubling down.
Will Gottsegen – The Atlantic
Last Monday marked one of the biggest TV events of June—Game 5 of the NBA finals. So naturally the crypto exchange Coinbase used the opportunity to air an ad poking fun at crypto’s more enthusiastic doomsayers. A series of tweets declaring “Crypto is dead”—some new, others nearly a decade old—fades in and out over a rendition of Chopin’s funeral march. Then a new slogan rises up in a harsh blue font: “Long live crypto.” The very next day, Coinbase laid off 1,100 employees, about a fifth of its workforce.

Thiel-backed Bitpanda Cuts Hundreds of Jobs on Crypto Tumult; Crypto exchange to lower headcount to 730 from more than 1,000; Peter Thiel-backed firm was valued at $4.1 billion last year
Marton Eder – Bloomberg
Bitpanda GmbH is eliminating almost a third of its workforce as the crypto exchange turned investment platform looks to weather a bout of market volatility and plunging asset prices. The Peter Thiel-backed firm will reduce headcount to about 730 from more than 1,000 as part of cost-cutting measures announced in reaction to the uncertain market environment. Bitcoin, the largest cryptocurrency, has tumbled about 70% from an all-time high reached in November. “We need to make fundamental changes in how we operate and sharpen our focus by getting back to the basics,” Bitpanda said in a letter to employees posted on its website. The company said it will focus on “safety and compliance, user experience, education and community, while deprioritizing everything else.” The job eliminations follow similar reductions across the sector, including at Coinbase Global Inc., Gemini Trust Co. and BlockFi Inc.

Energy costs are soaring, bitcoin’s price is plummeting — and that’s why big crypto miners are selling tokens at a discount
George Glover – Business Insider
Bitcoin miners are struggling to remain profitable as energy prices soar and crypto prices tank, putting some major players at risk of collapse. Publicly-listed companies are selling their mined tokens at a deep discount to repay bitcoin-backed loans and cover rising operating costs, which analysts told Insider could eventually lead to liquidations in the troubled sector. Electricity costs are surging worldwide, thanks in part to higher prices for natural gas and coal in the fallout from Russia’s war on Ukraine, and in the US, prices will rise 5% this summer, the EIA forecasts.

Binance Launches New Platform for VIP and Institutional Investors
Cameron Thompson – CoinDesk
Cryptocurrency exchange Binance is launching Binance Institutional, an advanced platform for institutional investors to trade digital assets. The exchange announced the product in a tweet on its new account dedicated to the product, noting the decision to launch the product comes amid “an effort to upgrade its institutional offerings and services.”

Restricted crypto withdrawals, India’s CoinDCX says
Pradipta Mukherjee – Forkast
“There is a larger compliance requirement due to evolving regulatory needs resulting in increased scrutiny,” a senior executive at the Coinbase Ventures and B Capital backed cryptocurrency exchange said.

Crypto and meme corporate bonds may follow their own path; Creditors are unlikely to take their cues from the equity market
Ellen Carr – FT
The writer is a bond portfolio manager at Barksdale Investment Management and co-author of ‘Undiversified: The Big Gender Short in Investment Management’ The crash of some of the flagbearers of the equity bubble in recent years has been painful for investors. We have seen “pandemic winner” Netflix dive 75 per cent from 2021 peaks, crypto exchange operator Coinbase plunge 86 per cent and the one-time meme stock and cinema chain AMC lose 80 per cent.

Crypto broker Voyager Digital issues default notice to Three Arrows Capital
Business Times
CRYPTO broker Voyager Digital has issued a notice of default to hedge fund Three Arrows Capital (3AC)for its failure to make required payments on a loan of 15,250 BTC and $350 million USDC, Voyager said in a statement on Monday (Jun 27).


Inside Citigroup’s Attempt to Rally Wall Street to Pressure Gun Sellers; The bank adopted new gun policies after the 2018 Parkland shooting, but rivals didn’t follow. ‘We were kind of lonely,’ the former CEO recalled.
David Benoit – WSJ
In 2018, after a 19-year-old killed 17 students and staff at a high school in Parkland, Fla., Citigroup Inc. told retailers it didn’t want their business if they sold guns to people under 21. The bank wouldn’t lend to them or hold their deposits. It wouldn’t advise them on mergers, bond sales or stock offerings. Citigroup, its executives hoped, would be the first of many, the institution that rallied Wall Street around a plan to curb gun violence. No one followed. On May 24, an 18-year-old gunman killed 19 students and two teachers at an elementary school in Uvalde, Texas. Days earlier, an 18-year-old shot up a supermarket in Buffalo, N.Y., killing 10. Each new mass shooting revives the debate about America’s gun laws and renews calls from proponents of stricter gun controls for American corporations to act. It is part of a broader push for companies to get involved in societal issues, rather than focusing tightly on maximizing profits for shareholders. Banks are especially powerful, the thinking goes, because they direct the flow of money throughout the economy.

CEOs Didn’t Make the Roe Decision. It’s Still Their Problem to Solve.
Sandra Sucher – Barron’s
“It’s not my fault, but it is my problem,” declared the first woman to head an investment bank in Saudi Arabia, Sarah Al Suhaimi, as she faced a trust meltdown in the company she had been asked to lead. That mantra may be the best way for CEOs to think about how to respond to the Supreme Court’s decision to strike down Roe v. Wade and the federal protection of abortion access for women in the United States. The Supreme Court decision will be judged by many as a breach of trust. It overturns a legal precedent that stood for 50 years, raising questions about the legitimacy of a decision made by six conservative justices appointed by presidents to do what they have just done. Equally important, it takes a way a right – the ability of women and their families to make decisions about their health, family lives, and future and turns the decision about the conditions under which that right can be exercised to the states, 22 of which have enacted laws to restrict access to abortion now that the Supreme Court has made its ruling.

Ending Roe Is Institutional Suicide for Supreme Court; It’s no exaggeration to say that the abortion decision, written by Justice Samuel Alito and joined by four other conservatives, is one of the worst decisions in the court’s history.
Noah Feldman – Bloomberg
Modern constitutional law as we have known it ended today. When the Supreme Court overturned Roe v. Wade and Casey v. Planned Parenthood, it repudiated the very idea that America’s highest court exists to protect people’s fundamental liberties from legislative majorities that would infringe on them. What the dissent aptly called a “catastrophic” decision is not only a catastrophe for women, who now can be forced to carry unwanted pregnancies to term. It is a catastrophe for all Americans — and for people all over the world who have built their own modern constitutional courts on the US model. The tyranny of the majority won the day.

The Supreme Court rulings represent the tyranny of the minority
Max Boot – The Washington Post
Everyone knows that the Founders were afraid of the tyranny of the majority. That’s why they built so many checks and balances into the Constitution. What’s less well known is that they were also afraid of the tyranny of the minority. That’s why they scrapped the Articles of Confederation, which required agreement from 9 of 13 states to pass any laws, and enacted a Constitution with much stronger executive authority. In Federalist No. 22, Alexander Hamilton warned that giving small states like Rhode Island or Delaware “equal weight in the scale of power” with large states like “Massachusetts, or Connecticut, or New York” violated the precepts of “justice” and “common-sense.” “The larger States would after a while revolt from the idea of receiving the law from the smaller,” he predicted, arguing that such a system contradicts “the fundamental maxim of republican government, which requires that the sense of the majority should prevail.”

‘To the detriment of our entire society’: CEOs react to the Supreme Court’s decision to overturn Roe v. Wade
Tristan Bove – FORTUNE
The U.S. Supreme Court’s decision to reverse Roe v. Wade will likely lead to abortion access being cut off in dozens of states. The historic ruling has captured national attention, and is pressuring business leaders to take a stance on women’s reproductive rights. The court’s likely decision has been known for nearly two months, since a copy of justices’ majority opinion was leaked by Politico on May 3. But the announcement has still sent shockwaves throughout the American business world, with many CEOs now tasked with figuring out how to adjust their policies towards female employees in response to potential changes in abortion laws. After Politico reported on the majority opinion, some companies—including Amazon, Apple, Yelp, and Citigroup—announced that they would begin covering travel expenses for female employees who needed to seek treatment out of state. Others, including Disney and Walmart, remained largely silent.

America’s Abortion Ruling Should Worry Us All; Roe v. Wade was a beacon for those fighting for the rights of women and minorities. Its end will now inspire those working against those basic freedoms.
Clara Ferreira Marques – Bloomberg
The decision to overturn Roe v. Wade, the 1973 ruling that recognized the constitutional right to abortion, was made by America’s highest court. The bleak consequences for basic liberties and democracy, however, will go far beyond its borders. From the start, Roe had unusually significant ripples. It came a time when the US and a large swathe of the world was moving toward greater freedoms for women and minorities, and further democratization. For rights activists it was a milestone — a symbol of what could be achieved.

Joe Biden to block Boris Johnson’s answer to global food crisis
Tony Diver – The Telegraph
Joe Biden will on Monday attempt to block Boris Johnson’s plan to move away from green fuels amid a transatlantic split over how to tackle the global cost of living crisis. Mr Johnson will address G7 leaders at a summit in Germany and ask them to repurpose land currently used for crop-based biofuels to grow more food.

Macron warned he risks giving Putin ‘a licence to manipulate the world’
Tony Diver – The Telegraph
Boris Johnson has warned Emmanuel Macron that a peace deal with Russia would cause “enduring instability” and give Vladimir Putin licence to manipulate the world. The Prime Minister and the French president met at the G7 summit in Germany on Sunday after criticism of Mr Macron and his perceived desire to bring an early end to the conflict in Ukraine. A Downing Street spokesman said that the two leaders had agreed that more support for Ukraine from Western leaders was needed, but that Mr Johnson had warned Mr Macron away from a negotiated settlement.

UK’s Boris Johnson: cost of Russian victory in Ukraine is too high
World leaders must recognise the price of supporting Ukraine including the surge in energy and food costs but must also acknowledge that the price of allowing Russia to win would be far higher, British Prime Minister Boris Johnson said.

Number of Britons Seeking Irish Citizenship Surges 1,200% Since Brexit: Report
Morwenna Coniam – Bloomberg
The number of British people granted Irish citizenship has soared almost 1,200% since the UK voted to leave the European Union in 2016, the Irish Times said, citing government figures.


Credit Suisse Convicted of Failing to Stop Money Laundering; Top Swiss Criminal court rules in landmark suit against lender; Ex-relationship manager also convicted of money laundering
Myriam Balezou and Hugo Miller – Bloomberg
Credit Suisse Group AG was convicted of failing to prevent money laundering by a Bulgarian cocaine trafficker, in the first ever criminal conviction of a major Swiss lender in the country’s history. The verdict, in which a former relationship manager at the bank was also convicted on money laundering charges, was handed down by Switzerland’s top criminal court on Monday afternoon. Credit Suisse will be fined two million Swiss francs ($2.1 million) over the conviction, the court ruled.

China Probes Nab Ex-Officials From Banking, Insurance Watchdog
China expelled two former officials at the banking and insurance regulator from the Communist Party and dismissed a third one from public office, as an anti-corruption campaign targeting the financial sector accelerated. Han Yi, former head of the China Banking and Insurance Regulatory Commission’s Shanghai branch, was kicked out of the ruling party for violations including a failure to effectively implement policies as well as bribery, the Central Commission for Discipline Inspection said in a statement Sunday. Han was removed from his previous job in December.

UK financial watchdog investigates Wise chief over tax default; Kristo Käärmann has already been fined by HM Revenue & Customs over the matter
Emma Dunkley – FT
The UK’s Financial Conduct Authority has launched an investigation into Kristo Käärmann, the co-founder and chief executive of payments app Wise, over deliberately defaulting on tax payments. The investigation comes after HM Revenue & Customs included Käärmann, a billionaire, on a list of individuals who had received a penalty over the matter, in a document published last September.

Factbox-The SEC’s response to the ‘meme stock’ rally
A year-and-a-half after a “meme stock” rally roiled Wall Street, the U.S. Securities and Exchange Commission is considering broad changes to curb the frenetic trading of stocks based on social media activity. The proposed overhaul would be the biggest change to Wall Street’s rules since 2005 and would affect nearly every corner of the market, from commission-free brokerages to market makers and exchanges. The U.S. House Committee on Financial Services on Friday called for the SEC, along with other regulators, to do more to protect the markets from similar events.

CFTC Orders Starberry Limited to Pay Over $1.37 Million for Failing to Register as a Futures Commission Merchant
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against Starberry Limited for acting as a futures commission merchant (FCM) without being registered. Specifically, Starberry accepted and placed orders and accepted money in connection with those orders from a foreign customer for NYMEX West Texas Intermediate (WTI) crude oil futures contracts.

Report on Use of 2021 Fine Monies
FINRA is a not-for-profit, self-regulatory organization (SRO) dedicated to promoting investor protection and market integrity in a manner that facilitates vibrant capital markets. One of FINRA’s tools for achieving this objective is fair and effective enforcement of member firms’ compliance with securities laws and regulations. FINRA’s highest priority when it identifies misconduct is to seek restitution for harmed investors. However, like many other self-regulatory organizations in the securities industry, FINRA also imposes fines on its member firms to discourage further misconduct.

Fake Online Hiring Scams: Don’t Fall for Job Fraud
Some companies and recruiters use online job sites and video technologies as a convenient and cost-effective way to communicate with applicants. Unfortunately, fraudsters are using them too, and they aren’t looking to offer you a job
Individuals claiming to be involved in the hiring process for legitimate organizations—including FINRA—have turned to LinkedIn, Zoom and other online platforms as a way to phish for your personal information and money. In fact, similar tactics—and the tips to avoid falling victim—may also apply to phone interviews, mail and email exchanges, and even face-to-face job interviews.

SEC Obtains Preliminary Injunction and Appointment of a Receiver in Pre-Ipo Stock Fraud by Unregistered Broker-Dealer
The Securities and Exchange Commission has obtained a preliminary injunction, appointment of a receiver, and continued partial asset freeze order against StraightPath Venture Partners LLC, StraightPath Management LLC, Brian K. Martinsen, Michael A. Castillero, Francine A. Lanaia, and Eric D. Lachow (collectively, “Defendants”). The Court appointed a receiver over StraightPath Venture Partners LLC, StraightPath Management LLC, and the SP Ventures Partners Funds Defendants managed and advised. The Court also required that Mr. Martinsen, Mr. Castillero, and Ms. Lanaia, who were subject to the initial temporary asset freeze order, pay more than $15 million into the receivership estate and continued a freeze over their real estate holdings.

Former Sigma Healthcare general manager sentenced for insider trading
On 27 June 2022, Mr Michael Story, of Elwood, Victoria, was sentenced to 14 months imprisonment for insider trading. The Court ordered Mr Story be released forthwith upon a recognizance in the sum of $5,000 and on condition to be of good behaviour for three years. In addition, Mr Story was ordered to pay a fine of $30,000.

ESMA Publishes Results Of Its Call For Evidence On ESG Ratings
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a letter to the European Commission (EC) providing its findings from the Call for Evidence to gather information on the market structure for ESG rating providers in the European Union (EU).

FMA warning: Infintix Limited
FMA New Zealand
We are concerned that Infintix Limited (‘Infintix’) and their website infintix.com (‘the website’) are involved in a scam. The website claims to offer trading services in crypto, forex, shares and indices via an MT4 trading platform. We have received a report about them unreasonably withholding client funds.

SFC reprimands and fines CES Capital International (Hong Kong) Co., Limited $3.2 million for failures in managing private funds
Securities and Futures Commission – Hong Kong
The Securities and Futures Commission (SFC) has reprimanded and fined CES Capital International (Hong Kong) Co., Limited (CESHK) $3.2 million over its failure to discharge its duties as an investment manager of two funds between February 2015 and July 2017 (Note 1).

Investing and Trading

Europe’s Bond Traders Haven’t Seen Swings This Wild in Years; Recession fears turn a bond rout into a sudden rally; This week EU inflation data, policy makers’ gathering in focus
Libby Cherry and James Hirai – Bloomberg
Investors are changing their mind on Europe’s bonds. And fast. On Thursday alone, German two-year yields plunged the most since the height of the 2008 crisis, just a week after their biggest one-day rise in a month. The rate on the 10-year security has tumbled almost 50 basis points from a peak earlier in June, the fastest drop in over a decade. The sentiment filtered into other markets, with short-dated UK gilts posting their biggest weekly swing since the pandemic struck. A batch of bad economic data was the catalyst, driving traders back into the safety of government debt, with commentators increasingly expecting further gains.

Metals Haven’t Crashed This Hard Since the Great Recession; Prices for copper, tin and other metals plummeted last week as recession fears grow.
Mark Burton – Bloomberg
Industrial metals are on track for the worst quarter since the 2008 financial crisis as prices are pummeled by recession worries. Copper, the great economic bellwether, has ricocheted into a bear market from a record four months ago, while tin just tumbled 21% in its worst week since a 1980s crisis froze London trading for four years. It’s a dramatic reversal from the past two years, when metals surged on a wave of post-lockdown optimism, inflationary predictions and supply snarls. Now, inflation is here and supplies are still tight. But prices are plummeting as worries about a slowdown in industrial activity across major economies dovetail with slumping demand in China.

Oil CEOs Get Olive Branch From Granholm in Gas-Price Huddle
Jennifer A. Dlouhy and Ari Natter – Bloomberg
The US energy chief struck a conciliatory tone in a high-stakes meeting with top oil executives to discuss soaring gasoline prices on Thursday, though the huddle yielded little progress on a plan to address the supply crunch. For more than an hour, Energy Secretary Jennifer Granholm met in Washington with leaders of some of the nation’s top oil companies, discussing possible waivers of air pollution limits on fuel and other changes that could help ease pump prices. The meeting was described by multiple people familiar with the discussion who asked for anonymity because it was closed to the public. Granholm stressed that the administration wants to collaborate with the industry to bolster refining capacity and boost gasoline production, the people said. Her opening comments attempted to preempt some oil industry arguments by emphasizing that the administration recognizes refiners need more regulatory certainty and supportive market signals from Washington to drive investment in the sector, according to the people.

This ‘underappreciated’ black swan could bring fresh chaos to the global economy
Barbara Kollmeyer – MarketWatch
New week, same bounce. Stock futures point to fresh gains as investors grow optimistic that a bond rout is ending, and the Fed’s rate-hike plans will get pruned due to a global slowdown. Of course, that optimism comes as discontent grows around the world from high commodity prices that have driven up food prices, crimped U.S. summer driving plans and left some poorer countries in total crisis. “The real world where companies sell their products isn’t looking too special for H2,” writes OANDA’s Jeffrey Halley.

Mexico Winning the Hearts of FX Traders as Brazil’s Appeal Dims; End to Brazil rate hikes, upcoming election may weigh on real; BRL/MXN has breached 200-DMA, opening room for move to extend
Davison Santana – Bloomberg
Traders of Latin American currencies have fallen out of love with this year’s star performer and shifted their focus northward. Fueled by big leaps in policy rates, improved terms of trade and flows into the local stock market, the Brazilian real has been this year’s standout, at one stage rising as much as 21% versus the greenback. More recently, however, it has underperformed the region’s other big hitter: the Mexican peso. Buttressed by strong remittances, attractive volatility-adjusted interest rates and the potential for US companies to shift production to Mexico from China, the peso is climbing relative to emerging-market peers.

World’s Most Aggressive Central Bank Raises Key Rate to 200%; Zimbabwe lifts rate from 80% to curb currency speculation; Central bank expressed ‘great concern’ about inflation
Ray Ndlovu and Godfrey Marawanyika – Bloomberg
Zimbabwe’s central bank raised interest rates to a record and the government officially reintroduced the US dollar as legal currency to rein in surging inflation and stabilize the nation’s tumbling exchange rate.

Environmental, Social and Corporate Governance

Global CEOs urge G7 leaders to step up climate action; Companies including Shell and Bank of America call for ‘clarity and stability’
Simon Mundy – FT
Major global companies are pushing world leaders to step up action to tackle climate change at the G7 summit in Germany this weekend, calling for large-scale carbon pricing and measures to boost demand for clean technology. In an open letter ahead of the three-day gathering that begins on Sunday in the Bavarian resort of Schloss Elmau, more than a dozen heads of large corporations including Bank of America and Shell pleaded for ambitious government climate policies “that offer the private sector clarity and stability”. “Once businesses can be certain of a stable and predictable policy environment with well-established goals, we will do all in our power to help society get there,” they wrote.

European energy crisis reignites debate over closure of Groningen reserve; Russia’s war in Ukraine could force rethink of plans to end production at Europe’s largest gasfield despite its link to earth tremors
Andy Bounds – FT
Damaging earth tremors linked to the giant Groningen gasfield in the Netherlands have plagued local residents such as Laurens Mengerink for a quarter of a century. But asked whether the Dutch government should prolong production as a way to limit Europe’s reliance on Russian gas he has a simple answer: “Yes. It’s an opportunity to be independent of Russia. That’s OK by me,” the 64-year old told the Financial Times from his home that is propped up by wooden struts after it was damaged by a series of quakes triggered by the extraction process. The future of the Groningen field in the far north-east corner of the country has taken on new importance since Russia’s full invasion of Ukraine in February exacerbated a surge in energy prices.

Germany Pushes for G-7 Reversal on Fossil Fuels in Climate Blow
Alberto Nardelli, Chiara Albanese and Jessica Shankleman – Bloomberg
Germany is pushing for Group of Seven nations to walk back a commitment that would halt the financing of overseas fossil fuel projects by the end of the year, according to people familiar with the matter. That would be a major reversal on tackling climate change as Russia’s war in Ukraine upends access to energy supplies. A draft text shared with Bloomberg would see the G-7 “acknowledge that publicly supported investment in the gas sector is necessary as a temporary response to the current energy crisis.” The caveat in the proposal is that such funding is done “in a manner consistent with our climate objectives and without creating lock-in effects.”

A shale booster shot: ‘Re-fracs’ rise as cheap way to lift U.S. oil output
Liz Hampton – Reuters
(Reuters) -U.S. shale oil producers are returning to existing wells and giving them a second, high-pressure blast to lift output for a fraction of the cost of a finishing a new well. These “re-fracs” are taking hold as shale oil producers look to take advantage of $100 a barrel crude without making big investments in new wells and fields.

ESG Book Finalizes $35M Series B to Build ESG Data Platform
Omar Faridi – Crowdfund Insider
ESG Book, which focuses on sustainability data and technology, has announced that it closed $35 million in Series B funding. The new capital will be used “to advance ESG Book’s next-generation technology capabilities, enabling clients to meet increasingly complex sustainability requirements, and accelerate the company’s expansion as it responds to growing demand for technology-enabled ESG data solutions.”

EU countries to discuss options to jointly curb gas demand
European Union countries’ energy ministers will on Monday discuss options for how they could jointly curb gas demand, as the bloc grapples with cuts to Russian supplies and prepares for possible further supply shocks.


Deutsche Bank’s Leadership Takes Financial Hit on Staff Use of WhatsApp; German lender has come under criticism from regulators; Deutsche Bank is rolling out new monitoring technology
Steven Arons – Bloomberg
Deutsche Bank AG’s management board agreed to take a pay cut after criticism from regulators of widespread use of private communication channels among staff via applications such as WhatsApp, according to people familiar with the matter. Top executives are set to see a 75,000 euro ($79,000) cut to bonuses given for last year’s performance that start getting delivered from next year, one of the people said, asking not to be identified discussing a private matter. The lender is among several financial firms under investigation by US authorities over the use of private messaging that can’t be archived. It recently introduced a new app that allows the retrieval of messages on company phones. A spokesman for Deutsche Bank declined to comment.

Morning Coffee: Risk of bonus clawbacks for bankers who made millions last year. Deutsche Bank’s surprisingly cheap WhatsApp penalty
Daniel Davies – eFinancialCareers
As Kenny Rogers sang, you shouldn’t count your winnings while you’re still sitting at the table. This advice is particularly apposite in the case of a leveraged buyout deal. Although the transaction might have been completed and the fees booked, you don’t really know how much money you made until all the debt is syndicated and sold. In the current environment, the market for junk debt is more or less frozen, with secondary market prices indicating writedowns; that means that a lot of deals which looked great at the time are going to look much worse in retrospect.

Big Employers Say They’ll Pay for Abortion Travel After Roe Reversal; JPMorgan, CVS, Disney and others to cover out-of-state care; Firms face employee pressure, but risk conservative blowback
Jeff Green and Matthew Boyle – Bloomberg
Some of the most recognized companies in the US indicated that they would extend coverage of out-of-state medical care, decisions that will cover more than a million employees after the Supreme Court overturned a half-century-old ruling that protected abortion rights. Bellwether corporations from the worlds of finance, media, technology and health care said they would bankroll travel for workers who need access to safe, legal abortions and other procedures. The court’s decision overturned a decades-old precedent that backers say reshaped the modern economy by increasing opportunities for women. JPMorgan Chase & Co., the largest bank in the US, will pay for its employees to travel to another state if needed to obtain a legal abortion, according to information that was sent to all US employees this month. The benefit will go into effect July 1.

How top banks like Goldman Sachs and JPMorgan train young advisors to work with ultra-rich clients
Hayley Cuccinello – Business Insider
America’s wealthy continue to get richer, and the world’s top banks are fighting for their business. Even banks with household names are competing for talent to service this niche clientele, which often have at least $10 million in assets. But getting hired is just the first step. Wall Street banks put analysts through their paces before letting them work with the most coveted clients. It can take hundreds of hours of lessons, sometimes spread out over years or condensed into a matter of weeks, as well as exams, case studies, and — more exams. Here’s our running list of training programs for aspiring private bankers at top US banks.

Should European Banking Really Be More Like US Banking? Cross-border M&A could bring about efficiencies for the industry. But a Banking Union might also lead to deeper divisions between states, just like America.
Paul J. Davies – Bloomberg
European bank mergers and acquisitions are back! Or, well, a bit of chat about the possibility is anyway. It’s easy to be carried away: Top banking regulators are hungry for the efficiency, profitability and better service that pan-European banks could deliver.

UBS courts US investment heavyweights to boost valuation; Executives want to convince investors it is a global bank, not a European institution
Owen Walker and Stephen Morris – FT
UBS has begun courting large US investment houses to become top shareholders, as the Swiss lender attempts to improve its market value to be closer aligned with Wall Street peers. New chair Colm Kelleher and chief executive Ralph Hamers have been holding a series of meetings with influential US fund managers in recent months to tempt them to increase their stakes in the bank, according to people with knowledge of the discussions.

Wellness Exchange

Vaccines Don’t Prevent Covid; Some of my family members were fully vaccinated and boosted and still contracted Covid-19 not once, but twice.
I’m not an expert, but I have to dispute the claim that Covid-19 is a “vaccine-preventable” illness made in a June 14 letter. Some of my family members were fully vaccinated and boosted and still contracted Covid not once, but twice. I support vaccinations, but they do not prevent infection, though they can mitigate the negative effects of Covid. Even after vaccination, people can contract Covid, often asymptomatically or with mild symptoms, and transmit it to others.

How to get a vaccine against monkeypox in the US. Who should get one?
Mike Snider – USA Today
Cases of monkeypox are increasing across the U.S., and as health officials maintain the threat to the general population is low, efforts to vaccinate those at risk have begun. The disease, which is caused by a virus and was first identified in humans in 1970, according to the World Health Organization, has usually been seen in parts of Central and West Africa. Scientists think it has jumped occasionally from animals, probably rodents, to people. Since May 2022, there have been more than 4,100 confirmed cases of monkeypox reported – and one death – in 47 countries across Europe and South America, according to the Centers for Disease Control and Prevention. In the U.S., there have been more than 200 cases of monkeypox reported in 25 states as of Friday, the CDC says. States reporting cases include California, Florida, Illinois, Massachusetts, New York, Texas, Utah, Virginia and Washington.

Should I Worry About Monkeypox?
Kristen V Brown – Bloomberg
As monkeypox cases have risen, it’s been hard to resist thinking: “Not this again!” But it’s important to keep in mind that monkeypox and Covid are two distinct viruses. They don’t spread the same way, and the symptoms are different. While Covid has killed more than a million people in the US alone, so far just one death has been linked to monkeypox in the current outbreak across more than 40 nations. “Most cases are not serious but do require isolation,” says Katrine Wallace, an epidemiologist at the University of Illinois at Chicago. There have been more than 100 monkeypox cases spotted in the US, and more than 2,500 globally. (The World Health Organization is weighing changing the name of the virus, which many scientists have said is stigmatizing and discriminatory.)

Monkeypox outbreak in U.S. is bigger than the CDC reports. Testing is ‘abysmal’
Michaeleen Doucleff – NPR
On June 13, a man in New York began to feel ill. “He starts to experience swollen lymph nodes and rectal discomfort,” says epidemiologist Keletso Makofane, who’s at Harvard University. The man suspects he might have monkeypox. He’s a scientist, and knowledgeable about the signs and symptoms, Makofane says. So the man goes to his doctor and asks for a monkeypox test. The doctor decides, instead, to test the man for common sexually transmitted diseases. All those come back negative. “A few days later, the pain worsens,” Makofane says. So he goes to the urgent care and again asks for a monkeypox test. This time, the provider prescribes him antibiotics for a bacterial infection. “The pain becomes so bad, and starts to interfere with his sleep,” Makofane says. “So this past Sunday, he goes to the emergency room of a big academic hospital in New York.”

Shanghai’s Leader Calls Two-Month Lockdown ‘Completely Correct’; Li Qiang tells Communist Party event the city has won battle; Financial hub presented China with biggest test since Wuhan
Shanghai’s leader declared victory in defending the financial hub against Covid-19, describing a two-month lockdown that confined millions of people to their homes and spurred sporadic unrest as “completely correct.” Shanghai “broke the repeated stalemate of the ­epidemic, realized and ­consolidated the fruits of dynamic clearance in society, and won the battle to defend Shanghai,” Li Qiang said at the city’s Communist Party congress on Saturday, echoing triumphant claims in state media earlier this month. Li also gave credit “to the important instructions of General Secretary Xi Jinping.” Shanghai eased more of the rules that have curtailed normal daily activity since late March, announcing plans to let restaurants in some areas deemed lower risk resume dine-in services this week. The Chinese city reported just four local cases for Sunday, with two found outside quarantine.

Hong Kong Sees Rising Covid Cases Ahead of Planned Xi Visit
Olivia Tam – Bloomberg
Hong Kong reported a total of 1,917 new daily Covid cases, health officials said Sunday, continuing a steady uptick in infections days ahead of a planned visit by President Xi Jinping to mark the city’s 25th anniversary of Chinese rule. Authorities said at a briefing that 118 of the new infections were imported, with the rest locally acquired. The city reported no new new Covid-related deaths nor infected patients that are in critical condition. On Saturday China’s official Xinhua News Agency reported that Xi would attend the annual July 1 ceremonies in Hong Kong — his first trip to the former British colony since the sweeping crackdown on its pro-democracy opposition. The Chinese president will also attend the swearing-in of new Hong Kong Chief Executive John Lee set for the same day, the agency said without providing further details.

Pfizer’s Omicron-Targeting Covid-19 Vaccines Generate Stronger Immune Response; One shot that was tested targeted Omicron specifically, while another was modified to work against the strain and the original virus
Jared S. Hopkins and Jonathan D. Rockoff – WSJ
Pfizer Inc. and BioNTech SE vaccines modified to target the Omicron variant produced a significantly larger immune response than the companies’ currently available vaccine in a study, they said. A modified booster shot targeting Omicron specifically increased neutralizing antibody levels 13.5 to 19.6 times higher than the current shot in study volunteers a month after administration, depending on the dose, the companies said Saturday. A booster targeting both Omicron and the original virus increased neutralizing antibody levels 9.1 to 10.9 times, depending on the dose, the companies said. Both of the tweaked vaccine candidates were well tolerated by subjects in the study, the companies said. The results, coming after Moderna Inc. also found its Omicron-targeting booster produced a stronger immune response, suggest possible benefit to modifying the shots to improve protection against an evolving virus.


JSR’s Eric Johnson: ‘I encourage people to tell me exactly how they think’; The chief of Japan’s leading semiconductor materials maker explains how he restructured the company through honest dialogue with staff and stakeholders
Antoni Slodkowski – FT
When Eric Johnson took over at the helm of leading semiconductor supplier JSR three years ago, he planned to split his time between his native US and the company’s Tokyo headquarters. The aim was to build on his experience running its US operations to grow the group’s global footprint. But the next three years would drastically change those plans. Only weeks into his job, amid a row with Seoul, Japan banned exports to South Korea of photoresists, the thin layers of material used to transfer circuit patterns on to semiconductor wafers. Johnson’s JSR is the top global supplier of the material: it has up to 40 per cent of the market, which is expected to be worth $14.2bn by 2029. Its clients range from Samsung to Taiwan’s TSMC, the world’s largest contract chipmaker.

Chinese Firms Are Dominating Key Parts of Hong Kong’s Economy; Mainland firms are snapping up land, dominating city’s bourse; Chinese businesses look to transform Hong Kong’s economy
Kiuyan Wong, Shirley Zhao, and John Cheng – Bloomberg
Half way to the point when Hong Kong will officially be enveloped by China, Beijing is not just calling the shots politically, but in vast swathes of the city’s $344 billion economy. From the stock exchange to brokerages, construction projects to the retail sector, Chinese state-controlled firms are increasingly dominating, taking market share away from the local tycoons and British trading houses that thrived under the final decades of UK rule. Those behind the growing Chinese influence view Hong Kong’s economy as stagnant, slow to embrace the technology-driven, new economy industries that have been catalysts for growth on the mainland. Chinese enterprises have been handed more political power in the city, including a recent revamp of the electoral system that reduced the influence of local businesspeople and added greater representation for state-backed companies.

Malaysia’s Top Talent Is Fleeing to Singapore; A long-awaited reopening has begun. But the best and brightest are heading south, while lower-skilled workers are just trickling in.
Daniel Moss – Bloomberg
Malaysia’s economy is cranking up after the pandemic. Land borders with Singapore have reopened, bringing in millions of visitors. Kuala Lumpur’s notorious traffic jams are back and shoppers are flocking to malls. The revival also has a rich irony: So many workers have left for better-paid jobs in the country’s wealthy southern neighbor that businesses are struggling to meet demand. From tourism to agriculture, an absence of staff is constraining the recovery. It’s also adding to deeper strains in an upper middle-income economy that was once a model for the developing world but has since suffered from a long-term slowdown in growth — one that started well before Covid-19. To graduate to the next tier of prosperous economies, Malaysia must staunch the flow of talented citizens abroad.

Japan Shouldn’t Raise Taxes on Its Retail Investors; Prime Minister Fumio Kishida has hemmed and hawed about a capital gains levy as a way to boost income. He ought to follow his South Korean counterpart and just get on with it.
Gearoid Reidy – Bloomberg
Japan is definitely considering thinking about possibly lifting its capital gains tax rate. Maybe. Prime Minister Fumio Kishida’s back-and-forth on this subject has dominated discussion since he was elected last year. The premier is broadly popular but has regularly attracted opprobrium for his singular response to any and all questions: “I’m considering it.” Nowhere has his indecision been more infuriating than when it comes to the subject of capital gains taxes — the levies on dividends and the sales of shares, which currently stands at 20%. (That compares with the 15% that applies to most individual investors in the US.) Having strongly suggested he would raise taxes while campaigning for leader of Japan’s ruling party with one ally positing a rate of 25%, Kishida seemed to reverse course after markets tumbled. Another aide suggested earlier this year the policy was a nonstarter, only for Kishida to go and say earlier this month that discussions were ongoing. The debate is “definitely not over,” he said in May.

China’s Quest for Iron; Guinea’s Simandou mountains hold the largest untapped iron-ore deposit on the planet. Now a consortium of China-connected companies is moving ahead with a plan that jeopardizes one of the most biologically rich ecosystems in Africa.
Sheridan Prasso – Bloomberg
The 500-mile drive across the West African nation of Guinea takes three days. The route traverses forests, mountain ridges, savannas, several rivers, the downtowns of four cities, and hundreds of villages of thatched roundhouse huts. The mostly dirt roads, pocked with craters, are choked by swirling laterite particles kicked up by rumbling vehicles and clouds of black exhaust. Goats and chickens wander among the carcasses of abandoned trucks, which are flipped over like helpless turtles. Yet still the trucks come, transporting heavy equipment. We are all going to Simandou.

Japan tells business and public to save power to avert Tokyo blackout; Energy crunch in the capital and surrounding areas will revive debate on restarting nuclear reactors
Kana Inagaki and Leo Lewis – FT
The Japanese government on Monday called on businesses and the public in the Tokyo area to cut electricity use, saying a lack of generating capacity risked plunging the capital into a power blackout. The blackout alert, the second this year after a warning issued in March, is likely to revive contentious debate about restarting Japan’s nuclear plants ahead of elections to the upper house of parliament in July.

Lithium producer Lake Resources downplays short selling bonanza; Sell-off of Australian-listed company’s shares triggered after resignation of chief executive and as supply glut warnings increase
James Fernyhough – FT
The chair of one of the world’s most ambitious emerging lithium producers said oversupply predictions “defies logic”, despite a sell-off of the company’s shares following the resignation of its chief executive and as warnings grow over a glut.

Saudi Arabia Injects $13 Billion in Liquidity-Starved Banks; Central bank places funds as deposits to ease tight liquidity; Banks face unprecedented stress for period of high oil prices
Matthew Martin – Bloomberg
The Saudi Central Bank placed about 50 billion riyals ($13 billion) as time deposits with commercial lenders, according to people familiar with the matter, seeking to ease the worst liquidity crunch in over a decade. The intervention started just before the US Federal Reserve’s interest-rate hike this month, and consisted of money provided to banks at a discount to the three-month Saudi Interbank Offered Rate, or Saibor, used as a benchmark to price loans, the people said, asking not to be identified as the information is private. The central bank, also known as SAMA, didn’t respond to a request for comment.

Taiwan holders of Russian bonds say haven’t received payments -sources
Emily Chan – Reuters
Some Taiwanese holders of Russian Eurobonds have not received interest due on May 27 after a grace period expired on Sunday evening, two sources said, potentially setting Moscow on track for its first major external sovereign default in over a century.

German Farmers Are Raising the Fewest Pigs Since Reunification; The country’s hog herd is rapidly dwindling as feed and fuel costs surge for livestock farmers.
Megan Durisin – Bloomberg
In a country renowned for its sausages, the pig herd has plummeted to its smallest level in decades. Germany’s hog herd fell to 22.3 million animals as of May 3, data from the federal statistics office showed Monday. That’s the lowest since at least 1990, when the country reunified, and nearly 10% smaller than a year earlier.

Turkish bank regulator limits lira loans for firms holding foreign exchange; Under-pressure currency climbs in response but analysts say move is further step towards capital controls
Laura Pitel – FT
Turkish companies could be forced to start selling their foreign currency holdings after a new directive was issued that bankers and analysts described as a fresh step down the path towards capital controls.

Heat wave and fires damaging Tunisia’s grain harvest
A heat wave and fires are badly damaging Tunisia’s grain harvest, leadig the farmers union to forecast that output will fall well short of government hopes.

Ecuador to Stop Pumping Oil in 48 Hours, Energy Ministry Warns; Vandalism during anti-government protests hammer production; Ecuador’s oil production down 50% in two weeks of protests
Stephan Kueffner – Bloomberg
Ecuador’s oil production is likely to halt completely within 48 hours if road blocks and vandalizing of oil wells continue, the Energy Ministry said in an emailed statement. Anti-government protests launched June 13 risk shutting down the former OPEC member’s oil industry “due to the acts of vandalism, takeover of wells and closing of roads, supplies and diesel necessary to maintain operations has not been possible.”
As of Sunday, production has dropped more than 50% below the average 520,000 barrels a day Ecuador extracted from its Amazon territory before the protests began. A total 1,176 oil wells have been forced to stop pumping. Led by umbrella indigenous organization CONAIE, demonstrators are demanding higher fuel subsidies, a moratorium on new oil and mining projects, and a slowdown of moves to privatize state assets amid broader criticism of conservative President Guillermo Lasso’s plan to overhaul the economy with support from the International Monetary Fund.

US wants farmers to boost wheat production amid a global food shortage. They can’t afford to
Joey Garrison and Michael Collins – USA Today
Clay Schemm’s great grandfather moved to Kansas in the 1920s with a tractor and not much else. The cash crop was wheat. Today, Schemm, 26, continues that tradition at farms in his home of Sharon Springs, Kan. near the state’s western border and a few hundred miles away in eastern Kansas. On the other side of the world, Russia’s war in Ukraine has Schemm rethinking this year’s harvests, just as the Biden administration is encouraging U.S. farmers to produce more wheat in response to the disruption of the market caused by the war in Ukraine — one of the world’s top producers.

The high cost of producing cheap food; Intensive farming in America’s midwest has consequences for our health and the planet with falling returns to farmers
Rana Foroohar – FT
Anyone who wants to better understand the costly economic and political externalities that come with cheap food should spend some time in America’s Midwestern farm country. I did last week, driving from Wisconsin to Missouri through hundreds of miles of corn and soyabeans, the vast majority of which is grown not as food but as feed for cattle.


Winklevoss Twins Take Sh*tty Band on the Road While Their Startup Flounders; The Facebook-famous billionaires seem thrilled about the launch of their band Mars Junction. Former employees are not so happy.
Emily Shugerman and Noah Kirsch – The Daily Post
As spotlights flared in Asbury Park, New Jersey, earlier this month, Tyler Winklevoss clasped a microphone, closed his eyes, and bleated the lyrics to Don’t Stop Believin’—standing, as always, next to his identical brother, Cameron. It was a fitting song for two of the principal mascots of crypto, a movement reliant on epic sums of blind faith. But as the crypto market melts down, the brothers appear to have lost some of their interest in the industry and their beleaguered startup Gemini, instead leaning into their “hard-hitting rock band,” Mars Junction. They have embarked on a 10-stop cross-country tour and launched a line of accompanying NFTs.

Explorers Find WWII Navy Destroyer, Deepest Wreck Discovered
AP – Bloomberg
A U.S. Navy destroyer that engaged a superior Japanese fleet in the largest sea battle of World War II in the Philippines has become the deepest wreck to be discovered, according to explorers. The USS Samuel B. Roberts, popularly known as the “Sammy B,” was identified on Wednesday broken into two pieces on a slope at a depth of 6,985 meters (22,916 feet). That puts it 426 meters (1,400 feet) deeper than the USS Johnston, the previous deepest wreck discovered last year in the Philippine Sea also by American explorer Victor Vescovo, founder of Dallas-based Caladan Oceanic Expeditions. He announced the latest find together with U.K.-based EYOS Expeditions.

Why You Should Quit Your Job After 10 Years; Labor experts say a radical career shift every decade or two can be good for both workers and employers.
Arianne Cohen – Bloomberg
Greg Wilson spent much of autumn 2021 peering out from behind his laptop as his wife and their three small children headed off to the zoo or a playground near their St. Louis home, returning hours later, bubbly and smiling. “I kept getting jealous,” says the 43-year-old. “They were having fun every day, and I wanted to join them.” But as program manager at a large financial brokerage, a line of work he’d entered in his twenties, Wilson felt he couldn’t take time off. So last November, he quit to start writing a lifestyle blog.

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The unsustainable hype around ESG

First Read Hits & Takes John Lothian & JLN Staff Fifty years ago today, SEC Commissioner A.A. Sommer, Jr. issued a paper titled "The SEC in the Midst of Revolution." Here is a summary of his speech: The securities industry is undergoing a significant...