Why Crime Could Kill Crypto

Jun 21, 2021

First Read

$46,041/$300,000 (15.3%)

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Small Exchange Scores a First With Cannabis Futures Contract
By Suzanne Cosgrove – John Lothian News

The Small Exchange is known for its bite-size futures products aimed at retail customers, including the Small U.S. Dollar, Small Stocks 75 and Small Precious Metals contracts. Its latest product, which was launched on Monday, fits that bill, but Small Cannabis Equity Index futures also make their mark in another way — as the first cannabis-related futures to trade in the U.S.

“It’s pretty exciting,” said Donnie Roberts, president and CEO of the Small Exchange, in an interview with JLN. Launching the futures contract before cannabis is federally legal in the U.S. is a “gutsy move,” he acknowledged, but he added that investor interest is there, especially since the cannabis sector has been outperforming the broader equity market.

“Right now is the time,” Roberts said. “It’s best to offer it now so people can hedge their risks going forward,” he said, noting growth of the industry and customer demand even without federally legal status.

According to researchers at Colorado-based BDSA, U.S. legal cannabis sales rose 46% from 2019 to 2020.

To read the rest of this story, go HERE.

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Hits & Takes
John Lothian & JLN Staff

Today’s Lead story from the Wall Street Journal by Justin Lahart and Telis Demos reports on a 2019 paper by researchers Sean Foley, Jonathan Karlsen and Talis Putnins that “estimated that 46% of bitcoin transactions conducted between January 2009 and April 2017 were for illegal activity.” — WSJ

If that type of activity represents the true “economic purpose” of bitcoin, then what we are doing in the markets is making the spreads tighter for this illicit activity and it supports my arguments from 2017 that bitcoin was created to better launder money. Money laundering is by some estimates the third largest business in the world, so why would players there not want to invest in better technological ways to launder money?

Don’t get me wrong, there are lots of good things about bitcoin too and the crypto revolution it has inspired. Good things can come from bad beginnings. But other than investing, or HODLing, what is the economic purpose of bitcoin? What are the underlying transactions that it is used for? Who is Satoshi Nakomoto? I am still waiting for an answer to that question.

The page counter for MarketsWiki at the bottom of the top box reflects that we have updated the underlying software, MediaWiki, for the site. It also reflects the fact that the upgrade took out the embedded page counter in the software and we have had to install a new external counter.

BTW, a big shoutout to CIO Jeff Bergstrom for his great work and dedication to getting MarketsWiki migrated to the new MediaWiki software. He put in hours and hours searching for solutions to outdated apps that did not work with the new updated MediaWiki software. Thank you, Jeff, for your great work!

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign over the weekend. Thank you to all who have given and all who have yet to give. Support our efforts to preserve industry history by giving to our GoFundMe campaign.

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

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The Health Benefits of Coffee; Drinking coffee has been linked to a reduced risk of all kinds of ailments, including Parkinson’s disease, melanoma, prostate cancer, even suicide.
Jane E. Brody – NY Times
Americans sure love their coffee. Even last spring when the pandemic shut down New York, nearly every neighborhood shop that sold takeout coffee managed to stay open, and I was amazed at how many people ventured forth to start their stay-at-home days with a favorite store-made brew.
/nyti.ms/3xFm6fE

*****They had me at coffee.~JJL

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Michael Burry Warns Retail Traders About the ‘Mother of All Crashes’; The fund manager of ‘Big Short’ fame issued a stark series of tweets about cryptocurrencies and meme stocks.
Charlie Wells – Bloomberg
Michael Burry, who became a household name after his winning bet against mortgages was featured in “The Big Short,” issued a series of tweets on Thursday warning individual investors about losses “the size of countries” in the event of crypto and meme-stock declines.
/bloom.bg/3cY1eZ7

****** Prescient or noise? Which one?~JJL

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Jane Street, DRW Traders Made Billions as Virus Hit Markets
Tom Maloney, Lisa Lee, and Annie Massa – Bloomberg
Both firms saw revenues and earnings jump more than 50%; Jane Street’s results show its growing importance in markets
Proprietary trading shops are notoriously secretive, so when markets went topsy-turvy in 2020, it was almost impossible to know how successful many firms were. It turns out: Very. Financial results from some of the niche’s key players are quietly making the rounds on Wall Street as the companies seek loans to fund their operations. They show extraordinary gains amid last year’s pandemic turmoil.
/bloom.bg/3cY7eRm

******Good luck is where preparation meets opportunity. They had lots of both and the results prove it.~JJL

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Ag Firm Ceres Subpoenaed by U.S. Regulators Over Oat Trading
David Marino – Bloomberg
Ceres Global Ag Corp. received subpoenas from the U.S. Department of Justice focusing on trading in the oat market, the company said in a brief statement late Friday. The company, based in Minneapolis, also received a voluntary document request from the U.S. Commodity Futures Trading Commission, and is cooperating with both investigations, it said in the statement.
/bloom.bg/3zKPH8W

******This is not connected to the restaurant/bar Ceres in the CBOT Building where they (used to) serve lots of oatmeal. ~JJL

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Man Invests $20 in Obscure Cryptocurrency, Becomes Trillionaire Overnight, at Least Temporarily
Jack Dutton – Newsweek
When Chris Williamson put $20 into cryptocurrency Rocket Bunny, he didn’t expect to become a trillionaire overnight. Yet, temporarily at least, that appeared to be what happened. The Georgia nursing school student had dabbled in cybercurrencies for around eight months and invested in the currency on Monday. On Tuesday, its value had soared to more than $1.4 trillion.
/bit.ly/2ShYzlO

*****GET ME OUT!!!! ~JJL

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Friday’s Top Three
Our top story on Friday was the sad story U.S. financial executive dies by suicide as firm faces fraud claims, from Yahoo News. Second was, again in the top three, the Amazon.com page for “The Obesity Code,” which John touted in Hits & Takes. Third was How to build your personal brand and boost your career, from Devexperts.

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MarketsWiki Stats
26,415 pages; 233,839 edits
MarketsWiki Statistics

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Lead Stories

Why Crime Could Kill Crypto; Cryptocurrencies helped enable a cybercrime wave, placing them in the crosshairs of regulators
Justin Lahart and Telis Demos – WSJ
The strongest argument against cryptocurrencies used to be that they had yet to show they were much good for anything. Now the strongest argument against them may be that they have become far too good at one thing: enabling crime. Not long after the first of the private digital currencies, bitcoin, launched in 2009, crooks recognized its appeal. While law enforcement is proving increasingly adept at tracking bitcoin transactions and at times seizing ill-gotten money, the ability to make digital payments without financial intermediaries has facilitated activities such as the selling of illegal goods and services online and money laundering. In a 2019 paper, researchers Sean Foley, Jonathan Karlsen and Talis Putninš estimated that 46% of bitcoin transactions conducted between January 2009 and April 2017 were for illegal activity.
/on.wsj.com/3wFjgai

China steps up crackdown on bitcoin mining industry; Intervention is latest by global authorities to toughen scrutiny of sprawling market
Christian Shepherd – FT
China’s largest bitcoin producing provinces have intensified a crackdown on cryptocurrency mining in the latest sign of how global authorities are toughening their stance on the rapidly growing digital asset markets.
/on.ft.com/3zK2AQU

What Investors Can Learn From the History of Inflation; Price spikes post-World War II and the 1970s show how inflation can dominate stock market returns
Paul J. Davies – WSJ
Inflation is on the rise, hitting some of the highest levels seen since the early 1980s. Back then, the Federal Reserve’s Paul Volker killed off rampant price rises, hitting the economy hard initially, but ushering in decades of repeated rallies in stocks and bonds.
/on.wsj.com/3zH56HA

Climate Fight Brews as SEC Moves Toward Mandate for Risk Disclosure; Asset managers push for more information; energy, transportation companies say climate-change risks aren’t easily measured
Dave Michaels – WSJ
The Securities and Exchange Commission is preparing to require public companies to disclose more information about how they respond to threats linked to climate change—and businesses are gearing up for a fight.
/on.wsj.com/3xHoIcT

A Rare Look Inside a Hedge Fund Mogul’s Tax Returns; The multimillionaire Boaz Weinstein disclosed why he paid no or little taxes for several years.
Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
If rich people lose money, should they pay tax?
Last week, ProPublica published an article about the tax records of Boaz Weinstein, the multimillionaire hedge fund manager famous for betting against the JPMorgan Chase trader known as the “London Whale.” The article reported that Mr. Weinstein and his wife, Tali Farhadian Weinstein, who is running for Manhattan district attorney and may inherit an investigation into Donald Trump’s New York State taxes, paid no or very little federal tax in “four of six recent years” between 2010 and 2018.
/nyti.ms/3iYl4ao

How meme lords fuelled a boom in the ‘stonk market’; Financial memefication is evolving from a niche corner to grow deep roots in markets
Robin Wigglesworth – FT
In 1944, two psychologists showed their students a simple film depicting a big triangle, a small triangle and a little ball bouncing around what looked like a schematic layout of a house. The results were fascinating — and relevant to markets today.
/on.ft.com/3xC2wk7

Meet the ETF Portfolio Managers Trying Their Luck With Meme Stocks AMC and GameStop; Some stock pickers are embracing a high-risk approach for traditionally lower-risk exchange-traded funds
Michael Wursthorn – WSJ
Some brand new exchange-traded funds are dabbling in meme stocks, chasing returns in a bid to pull in assets. Shares of GameStop Corp., AMC Entertainment Holdings Inc. and BlackBerry Ltd. have surged this year on the back of individual investors who talk up their trades on social media. Many professional stock pickers have largely sat out the mania, with some on Wall Street, like Morgan Stanley Chief Executive James Gorman, calling the dramatic run-up in share prices dangerous.
/on.wsj.com/2TUMtze

DeFi Crash Accelerates With Some Once-Hot Investments Losing 50%
Vildana Hajric – Bloomberg
Scores of tokens have lost more than 50% over past 24 hours; Bitcoin breaks below $36,000 as sentiment sours once again
Cryptocurrencies sold off as a crash in tokens used in decentralized-finance applications accelerated, deflating the value of some once-hot investments by more than 50%. DeFi coins, which gained popularity this year to become one of the hottest sectors in the already volatile market, came back down to earth Friday. Tokens including Galaxium and Crypto Village Accelerator have each lost more than 60% over the past 24 hours, according to data from CoinMarketCap.com. More established ones, such as Uniswap — which is one of the best-known in the space — lost roughly 7%, while Chainlink retreated 8%.
/bloom.bg/35DjIKa

The Most Important Number of the Week Is $8 Trillion; The unprecedented amount of money on the Fed’s balance sheet may create a new “conundrum” for the U.S. central bank as it begins pulling back on stimulus.
Robert Burgess – Bloomberg
Overlooked this week amid all the talk about the Federal Reserve starting the process of eventually paring back on its unprecedented stimulus efforts was the fact that the central bank’s balance sheet assets surpassed $8 trillion for the first time. This milestone should be a reminder that just because the Fed may soon start reducing, or “tapering,” the $120 billion a month it has been pumping into the financial system since the start of the pandemic, it doesn’t mean the forces that have underpinned markets are going away anytime soon — perhaps not for years.
/bloom.bg/3wLy1bC

Half of London Firms Plan for Home Working Five Days a Week
Lizzy Burden – Bloomberg
Businesses look to cut costs by having staff out of the office; Mondays and Tuesdays to be busiest in office, LinkedIn says
Almost half of London companies whose staff can work from home expect them to do so up to five days a week after the pandemic finishes, and smaller businesses are more likely than larger ones to move ahead with remote working. That’s according to a poll of 520 business leaders by the London Chamber of Commerce and Industry, which also found that slightly more companies said employees’ main reason for concern about returning to the office was the risk of contracting Covid-19 when commuting — rather than at the office.
/bloom.bg/3iXh2iz

Banks Chart Cautious Crypto Policy With Regulators Taking Aim
Silla Brush, Katherine Chiglinsky, and Matthew Leising – Bloomberg
Lenders exploring how to engage with the nascent asset class; Basel Committee calling for tough crypto capital requirements
Banks looking to expand into the wild world of crypto got a pointed reminder from regulators this month of the risks involved. The Basel Committee on Banking Supervision said June 10 that they’re planning to assign Bitcoin, among other crypto products, the toughest capital requirements for any bank that wants to hold it. The standard setters said that the risks to financial stability would be significant if banks do expand their offerings in the volatile market.
/bloom.bg/3xDIciA

Bank TSB to Ban Crypto Purchases Over Fraud Fears: Telegraph
Selcuk Gokoluk – Bloomberg
TSB Banking Group Plc. is set to ban more than 5 million customers from buying cryptocurrencies amid fears over “excessively high” fraud rates on trading platforms, according to a report by the U.K.’s Telegraph newspaper.
/bloom.bg/3xCQSWl

Cloud is Fundamental to Market Infrastructure
Shanny Basar – MarketsMedia
Magnus Haglind, head of product management at Nasdaq Market Technology, said a big trend from the Covid-19 pandemic is firms being much more confident in buying software-as-a-service solutions. Nasdaq commissioned consultancy Celent to survey chief information officers and senior technology leaders of market infrastructure operators worldwide to understand their focus, priorities, and investments around the creation of their future technology platforms.
/bit.ly/3cTj9jx

Hong Kong seeking closer integration with mainland China, Lam says
Reuters
Hong Kong’s strategy to strengthen the city’s global financial hub status is through greater integration with mainland China, now that Beijing has helped restore “stability” in the city, Chief Executive Carrie Lam said on Sunday. Contributing to China’s financial reform and opening will inject fresh vigour into Hong Kong’s economy, Lam told a financial forum in Beijing.
/reut.rs/3xwPe8y

Banks fear Fed crackdown on AI models; Dealers say agencies’ request for info could prompt new rules that stifle model innovation
Steve Marlin – Risk.net
US regulators are pushing banks to disclose more information about their use of machine learning (ML) – a move that some fear could stymie the development of promising approaches to modelling everything from credit decisioning to regulatory stress scenarios, where techniques used to power models can defy easy explainability.
/bit.ly/3iTUDCF

SOFR alternatives remain on track despite regulatory warnings; Pointed criticism from FSOC has done little to dampen interest in credit-sensitive rates Risk.net montage
Helen Bartholomew – Risk.net
Banks and index providers still plan to offer a menu of Libor replacements for use in loans and derivatives contracts despite recent regulatory criticism of credit-sensitive alternatives to the secured overnight financing rate, or SOFR. Senior US supervisors railed against the use of credit-sensitive benchmarks in derivatives contracts at a June 11 meeting of the Financial Stability Oversight Council. Securities and Exchange Commission chair Gary Gensler was especially scathing about Bloomberg
/bit.ly/3zKXa7Y

Coronavirus

Don’t Count on Needing a Covid Booster Shot, WHO Scientist Says
Jason Gale – Bloomberg
Data on immune protection are still emerging, Swaminathan says; Booster shots are likely to be rolled out in U.K. in the fall
As some governments and pharmaceutical officials prepare for Covid booster shots targeting more-infectious virus variants, health authorities say it’s too early to tell if they will be required.
/bloom.bg/2ST2buF

Covid Counting Sees New Era as Threat Shifts Away From Cases
Todd Gillespie – Bloomberg
Vaccines start to break the link between infections and deaths; Hospitalizations become the primary measure of virus risk
After more than a year of obsessively tracking Covid-19 case numbers, epidemiologists are starting to shift focus to other measures as the next stage of the pandemic emerges. With rich countries vaccinating growing proportions of their vulnerable populations, the link between infection numbers and deaths appears to be diminishing. Now, in some places the focus is on learning to live with the virus — and on the data that matter most to avoid fresh lockdowns.
/bloom.bg/2SOqs5b

Cuba’s homegrown Covid vaccine shows promise; Three-jab Soberana 2 has 62% efficacy after two doses, interim trial data show
Donato Paolo Mancini – FT
One of Cuba’s coronavirus vaccines has shown 62 per cent efficacy in late-stage trials, using just two out of the three recommended doses. Phase 3 interim results presented over the weekend for the Soberana 2 vaccine, named after the Spanish word for sovereign, surpassed efficacy thresholds required for approval by regulators and health agencies worldwide, including the World Health Organization.
/on.ft.com/3zB2T0a

Delta variant begins to spread, threatening EU’s Covid progress; Strain that swept UK has become dominant in Portugal and appeared in clusters across Germany, France and Spain
Anna Gross and Leila Abboud and John Burn-Murdoch – FT
The Delta coronavirus variant that swept the UK has become dominant in Portugal and appeared in clusters across Germany, France and Spain, prompting European health officials to warn further action is needed to slow its spread.
/on.ft.com/3iTXWK9

Models predict U.S. coronavirus infections could surge this fall if vaccination rates lag, former FDA chief says; Scott Gottlieb also expressed concern about U.K. study showing brain-tissue shrinkage after covid-19
Jeanne Whalen – Washington Post
The Washington Post is providing this important information about the coronavirus for free. For more free coverage of the coronavirus pandemic, sign up for our Coronavirus Updates newsletter where all stories are free to read. The transmission of the more contagious delta variant in the United States could spur a fall surge in coronavirus infections if only 75 percent of the country’s eligible population is vaccinated, former Food and Drug Administration chief Scott Gottlieb said Sunday.
/wapo.st/3xIHOzn

‘Two Americas’ may emerge as Delta variant spreads and vaccination rates drop; Biden’s 70% vaccination target by Fourth of July likely to fall short as efforts to entice people to get shots have lost their initial impact
Edward Helmore – NY Times
With Covid vaccination penetration in the US likely to fall short of Joe Biden’s 70% by Fourth of July target, pandemic analysts are warning that vaccine incentives are losing traction and that “two Americas” ma
/bit.ly/3zLE55F

Delta variant infecting mounting number of people in rural Kansas and Missouri
Marlete Lenthang – ABC News
The delta coronavirus variant is infecting a mounting number of people in rural Kansas and Missouri. The variant, first detected in India in October, was upgraded by the Centers for Disease Control and Prevention
this week from a “variant of interest” to a “variant of concern.” The CDC estimates the delta variant accounts for about 10% of new cases in the U.S.
/yhoo.it/3cUlPNK

‘There are viruses just waiting in the wings’: how do we stop the next pandemic? Understanding the connection between humans, animals and the environment is key to planning for future pandemics, experts warn
Melissa Davey – The Guardian
In late 2019, Kirby Institute virologist Prof Stuart Turville was looking for another job. N”The funding rates were too low to survive,” he says. But before he could leave, the Covid-19 pandemic hit. He now runs the institute’s high-security containment lab at the University of New South Wales, where the virus that causes Covid-19 is studied and grown. He and his skeleton team work long hours analysing hundreds of Covid samples from around the country, studying variants and working on treatments. When Turville gets home, after briefly seeing his children, he writes funding grants, and now it’s easier to secure them.
/bit.ly/3j2vllN

Exchanges, OTC and Clearing

Magellan and Enterprise Team up With Intercontinental Exchange for New Houston Crude Oil Futures Contract
Intercontinental Exchange, Inc.
Magellan Midstream Partners, L.P. (NYSE: MMP), Enterprise Products Partners L.P. (NYSE: EPD) and Intercontinental Exchange, Inc. (NYSE: ICE) today announced the establishment of a new futures contract for the physical delivery of crude oil in the Houston area. The Midland WTI American Gulf Coast contract (ICE: HOU) is being launched in response to market interest for a Houston-based index with greater scale, flow assurance and price transparency. It will utilize the capabilities and global reach of ICE’s industry-recognized, state-of-the-art trading platform and is due to be launched by ICE by early 2022, subject to regulatory approval.
/bit.ly/3gMlC0o

CME Group to Launch Nature-Based Global Emissions Offset Futures on August 1
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will launch a Nature-Based Global Emissions Offset (N-GEO)™ futures contract on August 1, 2021, pending all relevant regulatory reviews. N-GEO futures will be the company’s latest market-based solution to help create a more transparent and efficient voluntary emissions offset market.
/prn.to/3wMu7iL

Komplett lists on Oslo Børs
Euronext
Euronext today congratulates Komplett on its listing on Oslo Børs (ticker code: KOMPL). Komplett Group is a leading online-first electronics and IT products retailer with operations in Norway, Sweden and Denmark. Komplett operates an efficient and scalable business model that supports cost leadership and enables a competitive product offering.
/bit.ly/3zKqV9h

OTC IRS Production Advisory – Unscheduled Holiday for CLP IRS
CME Group
Please be advised that CME will observe the “Unscheduled Holiday” in the Santiago holiday calendar on Monday June 21, 2021. This observation is in response to the Chilean Congress approving a new national holiday in Chile (el Día de los Pueblos Indígenas), which will fall on June 21st this year. This is in line with the EMTA Guidance Note on CLP/USD Non-Deliverable FX and Currency Option Transactions Under the EMTA Template Terms that was issued on June 17, 2021 and the Closed Days Template Guidance provided by ISDA on June 18, 2021, applicable to relevant FX and Interest Rate Derivatives transactions under the 2006 ISDA Definitions and the 1998 FX and Currency Option Definitions.
/bit.ly/3zHanim

OTC FX Production Advisory – Unscheduled Holiday for USD/CLP NDFs
CME Group
Please be advised that CME will observe the “Unscheduled Holiday” in the Santiago holiday calendar on Monday June 21, 2021. This observation is in response to the Chilean Congress approving a new national holiday in Chile (el Día de los Pueblos Indígenas), which will fall on June 21st this year. This is in line with the EMTA Guidance Note on CLP/USD Non-Deliverable FX and Currency Option Transactions Under the EMTA Template Terms that was issued on June 17, 2021.
/bit.ly/3gKsVWe

Delisting of Certain Previously-Listed Contract Months of the WTI Houston Crude Oil Futures Contract and Delisting of the WTI Houston Crude Oil Option Contract and Other Related Products
CME Group
Earlier today New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) delisted certain previously-listed contract months of the WTI Houston Crude Oil Futures contract as described in Table 1 below and the WTI Houston Crude Oil Option contract and related contracts as described in Table 2 below. There is no open interest in the delisted contract months of the WTI Houston Crude Oil Futures contract or in the contracts listed in Table 2.
/bit.ly/3cXrx1u

Notice of Summary Action
CME Group
MEMBER FIRM: Marex Spectron International Limited
NYMEX RULE VIOLATION: 526.F. BLOCK TRADES
Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.
PENALTY: On June 2, 2021, pursuant to Rule 512, a fine in the amount of $2,500 was assessed against Marex Spectron International Limited for its violation of NYMEX Rule 526, and NYMEX Rule 526.F.
/bit.ly/3xwJewy

Notice of Summary Action
CME Group
MEMBER FIRM: DEUTSCHE BANK AG
RULE VIOLATION: Rule 536.B.2 Electronic Audit Trail Requirements for Electronic Order Routing/Front-End Systems
Entities certified by the Exchange to connect an order routing/front-end system to the Globex platform through the CME iLink® gateway are responsible for creating an audit trail of each message entered into Globex. Clearing members guaranteeing a connection to Globex are responsible for maintaining or causing to be maintained the electronic audit trail for such systems. This electronic audit trail must be maintained for a minimum of 5 years and clearing members must have the ability to produce this data in a standard format upon request of Market Regulation. Each such electronic audit trail must be complete and accurate and account for every electronic communication such system receives or generates, including any electronic communication such system receives from Globex.
PENALTY: On June 1, 2021, pursuant to Rule 512 (“Reporting Infractions”), Deutsche Bank AG was issued a $1,000 fine for its violation of Rule 536.B.2.
/bit.ly/3xA4gug

Refinitiv FXall to connect to LSEG’s LCH for OTC clearing; New connectivity will allow traders on FXall to accelerate their access to clearing of FX OTC trades through LCH’s ForexClear.
Wesley Bray – The Trade
Refinitiv FXall has set out plans to connect with the London Stock Exchange Group’s (LSEG) clearinghouse LCH for FX OTC transactions.
/bit.ly/3j59U3o

IHS Markit integrates pre-trade bond and liquidity data into thinkFolio; Through connectivity with Lucera and Neptune Networks, mutual clients of the thinkFolio platform will gain access pre-trade data and liquidity signals.
Annabel Smith – The Trade
IHS Markit has established a connectivity with Neptune Networks and Lucera to add pre-trade data and liquidity signals to its investment management platform thinkFolio.
/bit.ly/3cNP4BF

OSE to Launch Timestamp Data Service etc. due to Go-Live of J-GATE 3.0
JPX
We Osaka Exchange, Inc. will start providing time stamp data from September 21, 2021 (Tuesday), which is the scheduled Go-Live date of J-GATE 3.0, as part of the alternative data service. It is provided through the Public Cloud Environment (AWS) provided by Amazon Web Services. Full Order Information (ITCH data) distributed by J-GATE via ITCH protocol will be newly provided via AWS after changing from the previous CSV format to the binary format. (Note that the current FTP service and provision via JPX Data Cloud will be abolished.)
/bit.ly/35DvlAE

Borsa Istanbul Announces The Constituent Changes To The BIST Stock Indices For The Third Quarter Of 2021
Mondovisione
/bit.ly/3gGHsU7

Fintech

Morgan Stanley Backs Blockchain With Investment in Securitize
Mary Biekert – Bloomberg
Firm gathers $48 million in its Series B fundraising round; Teixeira of Morgan Stanley to join Securitize’s board
Startup Securitize Inc., which is developing a blockchain platform for investors to buy and sell shares in closely held companies and other assets, gathered $48 million in a fundraising round co-led by Morgan Stanley.
/bloom.bg/3gMjTYR

****The Securitize press release is here.

Revolut boss expects digital bank to return to profit;p British fintech ramps up spending on new staff as it aims to turn round losses
Nicholas Megaw and Stephen Morris – FT
Revolut’s chief executive said the digital bank expected to return to profit despite falling enthusiasm for cryptocurrencies after buoyant markets helped offset the negative impact of the pandemic.
/on.ft.com/3xEeGJg

Deutsche Bank Jumps Back Into Payments With Fiserv Deal; Germany’s largest lender sets up joint venture with U.S. payments giant Fiserv, reentering market it exited nearly a decade ago
Patricia Kowsmann – WSJ
Deutsche Bank AG DB -3.43% wants to get back into the suddenly valuable business of digital payments, nearly a decade after getting out of it. Germany’s largest lender is setting up a joint venture with U.S. payments giant Fiserv Inc. FISV -1.37% to offer customers payments-processing services. The joint venture will allow Deutsche Bank’s business clients to accept payments from customers, both in person and digitally, through Fiserv’s platform called Clover, which reads credit cards, debit cards and mobile wallets, and records orders and inventory.
/on.wsj.com/3cY2ivI

BBVA looks to grow quantitative business with ALPIMA platform; The ALPIMA platform will be delivered on a white-label basis and will be tailored to meet the specific needs of BBVA.
Annabel Smith – The Trade
BBVA has implemented a software as a service (SaaS) platform from FinTech firm ALPIMA to scale up its quantitative investment solutions business division. The Spanish bank will use the cloud-based platform on a white label basis for investment strategy design, portfolio construction, money management and clients services.
/bit.ly/2Upd87N

Groupama Asset Management executes first trade on eLiSA execution system; First live trade on eLiSA platform with Groupama Asset Management was in coordination with Bank of America Merrill Lynch and Morgan Stanley.
Hayley McDowell – The Trade
Paris-based Groupama Asset Management has executed the first bond trade on the eLiSA credit execution system soon to be launched by start-up Wave Labs. Wave Labs founder and CEO, Miles Kumaresan, confirmed that Groupama Asset Management executed the live transaction with Bank of America Merrill Lynch and Morgan Stanley.
/bit.ly/3xE8Ojq

FX algos and auto-pricing on the rise as traders look to minimise market impact, says Bloomberg FXGO head; Bloomberg’s Tod Van Name said algos, automation for NDFs and options pricing and trading grids have risen dramatically in the last year.
Annabel Smith – The Trade
FX algorithmic trading and automated pricing has surged in the last year as traders seek best execution and minimal market impact, according to the head of Bloomberg’s FX electronic trading platform.
/bit.ly/3zzWx16

CLS sees buy-side adoption of post-trade platform grow after State Street integration; Increased traction demonstrates demand from the buy-side to manage all FX post-trade workflow within one platform, claimed CLS.
Wesley Bray – The Trade
Asset management adoption of the post-trade monitoring and reporting platform from FX settlement specialist CLS has surged following an integration with State Street. CLS said its CLSTradeMonitor post-trade monitoring and reporting platform was linked to State Street’s centralised post-trade dashboard, TradeNeXus, to give asset managers an integrated view of their CLSSettlement information across their accounts with different custodians.
/bit.ly/3cY0eEc

AcadiaSoft Is Now Acadia
Move comes in conjunction with new focus on integrated risk management
Acadia
AcadiaSoft Inc., the leading industry provider of integrated risk management services for the derivatives community, has today re-branded as Acadia.
The brand refresh comes after the company further bolstered its risk management capabilities in February with the acquisition of Dublin-based Quaternion, a culmination of Acadia’s transformation from a pure software company to an industry standard platform over the past decade. Acadia enables a network of banks and other derivatives firms to improve efficiency and mitigate costs.
/bwnews.pr/3cZPQf3

Discover makes a crypto move with new hire
Lynne Marek – PaymentsDive
U.S. credit card companies are racing to respond to rising global demand for new digital payment products and ways to use cryptocurrencies in payment processes. The increased attention to distributed-ledger technology and cryptocurrencies followed a jump in the value last year of the most popular cryptocurrency, Bitcoin.
/bit.ly/3vTTBJT

Wedbush Securities Joins Blockchain-Based Paxos Settlement Service
Wedbush
Wedbush Securities, one of the nation’s leading independent financial services providers, is pleased to announce it has joined the Paxos Settlement Service, the blockchain stock settlement network powered by Paxos Trust Company. Paxos is the first regulated blockchain infrastructure platform that uses technology to tokenize, custody, trade and settle assets.
/bit.ly/3vHPX5n

Cybersecurity

The Cybersecurity 202: Legal scholars are working on new rules for international hacking conflicts
Joseph Marks – The Washington Post
Top international legal experts are beginning work on a five-year project to hammer out what’s in and out of bounds in international cyber conflict.
The result will be the third version of a NATO-sponsored document called the “Tallinn Manual on the International Law Applicable to Cyber Operations.” The manual isn’t legally binding, but government lawyers in the United States and elsewhere are increasingly pointing to it as they debate which offensive hacks are legally defensible and when it’s appropriate to retaliate.
/wapo.st/3xIbpsF

Ransomware attacks: How should the U.S. respond?
Patricia Mah – Yahoo News
Ransomware attacks are increasingly targeting companies’ computer systems, demanding money in exchange for returning access and data. Last month, hackers breached Colonial Pipeline — which supplies 100 million gallons of fuel daily along a 5,500-mile pipeline — and gained access to its business networks. In response, Colonial shut down pipeline operations, which led to nearly a week of widespread fuel shortages along the East Coast.
/yhoo.it/3cUNFcz

UK Bank TSB Set to Ban Crypto Buying Due to E-Wallet Scam Concerns: Report; The company is the latest U.K. bank to act to crack down on cyber-crime.
Kevin Reynolds – The Guardian
U.K. bank TSB is set to ban its more than 5 million customers from purchasing cryptocurrencies amid concerns over “excessively high” rates of fraud on trading platforms, according to a report in The Times.
/bit.ly/2UczVU7

Tech Has Advanced Rapidly—And Cybersecurity Needs To Catch Up
Andrzej Kawalec – Forbes
Imagine this: You’ve moved to a new house in a new neighborhood, and on your first night, you forget to lock your doors and windows.
Now, that doesn’t mean you’ll get broken into. In fact, because it’s only a single night, you’ll probably be fine. However, the keyword is “probably” because you’re not familiar with the area or your new neighbors. Although chances are everything will be fine, there’s still a chance you’ll wake up without a refrigerator.
That’s the situation that businesses — especially small and medium-sized enterprises (SMEs) — find themselves in today.
/bit.ly/3d0Zeiu

Cryptocurrencies

Bitcoin Falls to Two-Week Low as China Cracks Down on Crypto
Joanna Ossinger – Bloomberg
Bitcoin trades near $33,000 amid worries over market froth; China’s harder regulatory stance on crypto is rattling traders
Bitcoin fell to a two-week low amid an intensifying cryptocurrency crackdown in China. The largest virtual currency fell 8% to $33,070 as of 11:12 a.m. in London. Ether declined 12% to $1,993. China has ordered payment platform Alipay and domestic banks to not to provide services linked to trading of virtual currencies. The institutions were also ordered to cut off payment channels for crypto exchanges and over-the-counter platforms, the People’s Bank of China said in a statement.
/bloom.bg/2SNIxQI

What the Crypto Crowd Doesn’t Understand About Economics; Digital currency has always been a highly unusual asset class, but it won’t stay that way forever.
Tyler Cowen – Bloomberg
Just last week I argued that cryptocurrency is here to stay. Now I’d like to explain to some of my crypto friends why parts of the mainstream economics and financial world do not take them more seriously. To put it bluntly: Many of you do not understand monetary economics very well. There are two common mistakes.
/bloom.bg/3qctlJp

Ex-Morgan Stanley Traders Turn Crypto Startup Into Unicorn
Zheping Huang – Bloomberg
A group of former Morgan Stanley traders has turned their cryptocurrency venture into a unicorn by bringing Wall Street strategies to the brave new world.
/yhoo.it/2UhKkOl

UK regulator commits more resources to assessing crypto firms, says HM Treasury
Ryan Weeks – The Block
John Glen, economic secretary to the Treasury and City minister, has said that the Financial Conduct Authority (FCA) has “increased considerably” the resources it has allocated to assessing applications to the cryptoasset register.
/bit.ly/3xHAiVp

SEC’s ‘Crypto Mom’ says Ripple’s XRP doesn’t have to be a security’s “When we think about a cryptoasset as being a security what we’re doing is we’re saying it’s being sold as part of an investment contract.”
Rick Steves – FinanceFeeds
SEC Commissioner Hester Peirce, also known as “crypto mom”, has said the ongoing lawsuit opposing the Securities and Exchange Commission and blockchain company Ripple Labs could add to regulatory clarity.
/bit.ly/3zHy0qR

Venture Capital Makes a Record $17 Billion Bet on Crypto World
Brandon Kochkodin – Bloomberg
VC funds already eclipsed annual amount for crypto investments; $10 billion Bullish Global raise largest in industry history
For a sense of just how big everything crypto has become, you can, of course, just take a look at coin and token prices. And then you can check again five minutes later to see if the space’s notorious volatility has markedly changed the first observation.
/bloom.bg/3gNLDw8

Novogratz’s Galaxy Provides Liquidity on Goldman Bitcoin Futures
Olga Kharif – Bloomberg
Goldman restarted its crypto trading desk earlier this year; Galaxy expects to add additional investment banks as customers
Galaxy Digital Holdings Ltd. will serve as a liquidity provider on Bitcoin futures for Goldman Sachs Group Inc. as the securities firm re-enters the cryptocurrency markets. The digital-asset firm started by billionaire investor Michael Novogratz, a former Goldman partner, will provide futures block liquidity on CME Group Inc. for the Bitcoin cash-settled products, according to a statement. Liquidity providers typically make markets by agreeing to buy and sell assets at certain prices.
/bloom.bg/3gPH5Fx

Politics

Canada Says Border Won’t Fully Reopen Until 75% Vaccination Rate
Natalie Obiko Pearson – Bloomberg
Fully vaccinated population in Canada still lags at 18%; “We’re not there yet,” Canada border chief tells CBC
The U.S. border is unlikely to be completely reopened until 75% of Canadians are fully vaccinated, Canada’s border chief said on Sunday in comments likely to fuel mounting impatience in both countries at the restrictions.
/bloom.bg/2SSb33R

Hong Kong to Cut Quarantine Time for Vaccinated Travelers
Felix Tam and Alfred Liu – Bloomberg
First phase for residents to be introduced at the end of June; City faced growing backlash to strict rules as others open up
Hong Kong will shorten mandatory hotel quarantine to seven days for fully vaccinated people traveling from all but a handful of high-risk places, in a significant easing of some of the world’s strictest border curbs.
/bloom.bg/3iUahOo

U.K. Signals Overseas Travel Limits Will Remain as Covid Spreads
Reed Landberg – Bloomberg
Justice secretary says ‘normal’ holidays aren’t an option; Government is looking at ways to adjust restrictions
The U.K. government signaled it will keep restrictions on overseas travel in place for now to control a surge in coronavirus infections and the risk of new variants of the virus taking hold. Justice Secretary Robert Buckland said “normal” holidays were “never going to be the case” this year because of increasing Covid-19 cases. His comments indicate increasing concern about a third wave of cases in the U.K. despite one of the world’s most aggressive vaccination programs.
/bloom.bg/3gO4Opx

Sweden Sinks Into Political Chaos as PM Ousted in Key Vote
Niclas Rolander and Ott Ummelas – Bloomberg
Sweden’s Prime Minister Stefan Lofven lost a confidence vote in parliament, toppling his minority coalition and plunging the largest Nordic economy into political chaos.
/bloom.bg/2SOr6j7

Biden will meet U.S. financial regulators on Monday
Reuters
President Joe Biden will meet with financial regulators on Monday for an update on the country’s financial systems and institutions, press secretary Jen Psaki said on Friday. “The meeting will cover regulatory priorities including climate-related financial risk and agency actions to promote financial inclusion and to responsibly increase access to credit,” she said.
/reut.rs/2SGT4NP

How China broke the Asian model; Beijing has challenged the geopolitical order that enabled the rise of east Asia
Gideon Rachman – FT
“What do you think is unique about the China model?” That was the question posed to me by a television reporter, last time I was in Beijing. My answer was that I don’t think there was a specific Chinese economic model.
/on.ft.com/3cYiHR1

Taiwan Receives 2.5 Million Vaccine Doses Under Biden Pledge
Mario Parker – Bloomberg
The U.S. sent 2.5 million doses of Moderna Inc.’s vaccine to Taiwan, reflecting part of President Joe Biden’s pledge to donate 25 million shots worldwide to stem the Covid-19 pandemic.
/bloom.bg/2UnnGEt

Bitcoin (BTC) price drops on China crypto mining crackdown
Ryan Browne – CNBC
Bitcoin sank Monday on reports that China has intensified its crackdown on cryptocurrency mining.
The world’s largest digital currency fell 7% to a price of $32,801 Monday morning, dropping below $33,000 for the first time since June 8, according to data from Coin Metrics. It was last trading at $33,243 as of 5:50 a.m. ET. Smaller rivals like ether and XRP also tumbled, down 8% and 7% respectively.
/cnb.cx/3gO7bIX

Crypto start up launched by former Morgan Stanley traders hits unicorn status
Zheping Huang – Fortune
A group of former Morgan Stanley traders has turned their cryptocurrency venture into a unicorn by bringing Wall Street strategies to the brave new world.
Amber Group, founded in 2018, raised $100 million from investors including DCM Ventures and Tiger Global Management, ramping up its valuation tenfold to $1 billion in just 18 months. The Series B fundraising also includes China Renaissance Group, Tiger Brokers, Gobi Partners and existing backers such as Coinbase Global Inc. and Pantera Capital, Hong Kong-based Amber said.
/bit.ly/3gMINHP

Coinbase-backed cryptocurrency trading firm hits $1 billion valuation
Arjun Kharpal – CNBC
Amber Group, a cryptocurrency financial services firm, has raised $100 million as investors rush to back companies in the industry.
The fresh funding round values the Hong Kong-based start-up at $1 billion.
Investment bank China Renaissance led the round with participation from other high-profile investors including New York-based Tiger Global Management. Existing investors, which includes Coinbase’s venture arm, were involved.
/cnb.cx/3cX3U9l

Banks Chart Cautious Crypto Policy With Regulators Taking Aim
Silla Brush, Katherine Chiglinsky and Matthew Leising – Bloomberg
Banks looking to expand into the wild world of crypto got a pointed reminder from regulators this month of the risks involved.
The Basel Committee on Banking Supervision said June 10 that they’re planning to assign Bitcoin, among other crypto products, the toughest capital requirements for any bank that wants to hold it. The standard setters said that the risks to financial stability would be significant if banks do expand their offerings in the volatile market.
/bloom.bg/3cWdFnW

Regulation

Ex-commodities chairman Timothy Massad calls for more regulation of tether, stablecoins –
News Nation USA
/bit.ly/35BQhIC

SEC aims to stop insiders dumping stock before the bad news hits; US watchdog plans to close a loophole that has left ‘real cracks’ in the regulatory regime
John Dizard – FT
It seems the great trading edge enjoyed by corporate insiders is knowing when to sell. That makes sense. There are many brokers and business-TV guests with stock buying tips, but few who will urge you to sell now, before the bad news comes out.
/on.ft.com/3zHZ5ud

UK plans rule changes to lure back EU share-trading flows; Consultation on reform could be announced as early as chancellor’s July speech to the City
Philip Stafford – FT
The UK wants to change its rules around share trading to adapt to life after Brexit, in an effort to entice EU share deals back to the City of London. EU share trading quickly fled the UK after the full terms of the country’s departure from the bloc kicked in at the start of this year, with cities like Amsterdam and Paris picking up the slack for the EUR8bn-a-day business. The EU did not recognise UK stock exchanges as having standards equivalent to its own, which meant its institutions were barred from using London-based venues.
/on.ft.com/3zB6DPg

FCA urges thousands to seek compensation over pension transfers; Letters sent to clients of IFAs who have since gone bust
Josephine Cumbo – FT
Thousands of people are receiving letters from the UK’s City regulator urging them to lodge claims for compensation for being wrongly advised to transfer out of their guaranteed “final salary” pensions.
/on.ft.com/3zREofB

ESMA recommends changes to supervisory fees for credit rating agencies
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published today its final report providing technical advice to the European Commission on the supervisory fees charged to credit rating agencies (CRAs).
/bit.ly/3gRvZzQ

AML Compliance Costing UK Financial Institutions A Massive £28.7bn Annually – The Equivalent Of Half Of Last Year’s Defence Budget Says LexisNexis® Risk Solutions
Mondovisione
LexisNexis® Risk Solutions, the global data and analytics provider, today releases its latest report Cutting the Cost of AML Compliance, which reveals a conservative estimate for AML compliance costs across the UK financial services sector reaching almost £29bn per year.
/bit.ly/3xE3756

Dorval Asset Management: BaFin Imposes Administrative Fine
MondoVisione
On 10 June 2021, BaFin imposed an administrative fine amounting to 160,000 euros on Dorval Asset Management. The sanction related to a breach of section 130 (1) of the German Act on Breaches of Administrative Regulations (Ordnungswidrigkeitengesetz – OWiG) in conjunction with section 33 (1) of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG). Dorval Asset Management failed to submit a voting rights notification within the prescribed period.
/bit.ly/3cW8Nza

Businessman Sentenced to 2½ Years in $150 Million Bank Fraud; Ray Akhavan was convicted in a scheme to trick financial institutions into processing online marijuana sales
Rebecca Davis O’Brien – WSJ
A federal judge sentenced a California businessman to 2½ years in federal prison Friday for orchestrating an international scheme that tricked U.S. banks into processing more than $150 million in marijuana-related purchases.
/on.wsj.com/35FPZ3f

SEC Omits Cryptocurrency From 2021 Regulatory Agenda
Matthew De Saro – be[in]crypto
The U.S. Securities and Exchange Commission (SEC) has announced its regulatory agenda for 2021 and cryptocurrencies are not on it. The SEC has curiously left cryptocurrency and blockchain off its list of regulatory priorities for 2021 according to the Office of Information and Regulatory Affairs. The official release is called the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions. The purpose of the document is to provide “important public notice and transparency about proposed regulatory and deregulatory actions within the Executive Branch,” according to the release.
/yhoo.it/3gLt3pP

Investing and Trading

When Lawyers Charge $1,800 an Hour, Who Pays? The cost of directors’ and officers’ liability insurance is rocketing as litigation proliferates. It’s bad news for companies, shareholders and insurers alike.
Chris Bryant – Bloomberg
Elon Musk was on to something when he complained that the cost of insurance to protect company directors and officers from shareholder litigation has gotten out of control. The impulsive Tesla Inc. boss may be an unlikely spokesperson for the unfairness of these spiraling fees, but they reveal something about this age of corporate misadventure and trigger-happy lawyers. It’s bad for shareholders, companies and insurers alike.
/bloom.bg/3iXhM7l

Get Ready for Years of Chaos in Container Shipping; Backed up ports and the Suez Canal fiasco are just surface problems. When things go wrong in this business, they go seriously wrong.
David Fickling – Bloomberg
The world’s cargo ships just can’t seem to get their act together. First there were the queues at the twin ports of Los Angeles and Long Beach, which left as many as 40 container vessels awaiting a berth in early February amid a flood of traffic. Combined volumes at the terminals hit a record of 1.9 million containers in May, nearly double the Covid-19 low in March 2020.
/bloom.bg/3zLWDD8

World’s Biggest Stock Owner Grapples With a Child Labor Dilemma
Lars Erik Taraldsen and Leanne de Bassompierre – Bloomberg
Children working on cocoa farms keep chocolate giants supplied; World’s biggest sovereign fund demands action at chocolatiers
In Oslo, where the world’s biggest sovereign wealth fund decides how to allocate $1.4 trillion, a huge contradiction lurks. The fund is trying to reconcile a sustainable-investing mantra with the billions it owns in companies that source cocoa from regions where children pick beans that feed the world’s craving for chocolate. So far, it has chosen to stay involved rather than sell so it can push for positive change.
/bloom.bg/3d0aPyn

Influencers Are Luring Investors Flummoxed by Meme Stonks and Options; With the rise of free, fast trading from your phone, demand has surged for information about creating wealth, not just managing it.
Misyrlena Egkolfopoulou and Donald Moore – Bloomberg
The U.S. was already doing a poor job of teaching people how to manage their money. Then meme stonks came along. Now with everyone desperate for financial advice, a deluge of new companies and their influencer leaders are all at your service, fighting to be the first place you turn to chat about stocks, budgets or finances — at times, for a fee.
/bloom.bg/2SHqdcf

As Lumber Prices Fall, the Threat of Inflation Loses Its Bite; Costs soared partly because of do-it-yourselfers’ spending stimulus checks, but a month of declines show that consumers aren’t about to trigger runaway increases.
Matt Phillips – WSJ
From sawmills to store shelves to your own hammer swings, lumber can tell you a lot about what’s going on in the economy right now. Lumber prices soared over the past year, frustrating would-be pandemic do-it-yourselfers, jacking up the costs of new homes and serving as a compelling talking point in the debate over whether government stimulus efforts risked the return of 1970s-style inflation.
/nyti.ms/3zKnYpd

Avalanche of Options Trades Fuels Market Pullback; One measure of trading activity has reached its second-highest level on record
Gunjan Banerji and Anna Hirtenstein – WSJ
Heavy options activity is amplifying this week’s frantic investor retreat from bets on stronger economic growth. The Dow Jones Industrial Average lost 3.4% for the week, its biggest decline in more than seven months. The S&P 500 dropped 1.3% Friday and finished its worst week since February. Lumber prices tumbled 15% this week and have nearly halved from their high in May. Gold and copper both posted their largest one-week percentage declines since March 2020.
/on.wsj.com/3d0DvHI

Smithfield Foods is sued by an advocacy group claiming it stoked fears of meat shortages; The group claims there were ample supplies of meat in cold storage even as Smithfield warned that the country was in danger of running out of meat.
NY Times
Smithfield Foods was one of the first companies to warn that the country was in danger of running out of meat as coronavirus infections ripped through processing plants in April 2020 and health officials pressured the industry to halt some production to protect workers.
/nyti.ms/2Unl4Xb

The Natural-Gas Glut Has Evaporated, Driving Prices Higher; The power-plant fuel costs twice what it did at the start of last summer, portending higher utility bills and manufacturing costs
Ryan Dezember – NY Times
Natural-gas prices are starting the summer air-conditioning season nearly twice as high as they were a year ago. Demand for the fuel is picking up as the world’s economies reopen and as Americans dial down their thermostats for what is expected to be a hot summer. Meanwhile, U.S. producers have stuck to the skimpy drilling plans they sketched out when prices were lower, eliminating the glut that was keeping them depressed.
/on.wsj.com/3cY4nbe

Big Oil Takes a Beating, but Its Investors Are Riding High; While major oil companies have been losing public battles over climate change, energy stocks and oil prices are soaring.
Jeff Sommer – NY Times
It has been a terrible several weeks for big oil companies like Exxon Mobil, Chevron and Royal Dutch Shell, which have been rebuked in proxy fights, the courts and a landmark public report, all pressuring them to do much more to stop climate change.
/nyti.ms/2UiPmdv

Not Even Bond Traders Can Predict the Future; Falling yields should be a source of concern, not a sign that inflation is being held at bay.
Allison Schrager – Bloomberg
Consumer prices paid by city dwellers in the U.S. rose more than 7% last month and more than 9% in April on an annualized basis. If this keeps up the rest of the year, it will be the highest inflation rate the U.S. has experienced since the 1980s. But fear not, say some investors and the Federal Reserve, the bond market isn’t worried. Yields fell over the last week and remain low by historical levels, even after rising on the back of Jay Powell’s speech Wednesday. And if markets aren’t worried, maybe we shouldn’t be either.
/bloom.bg/35KtSbO

Bond Sales to Dwindle as U.S. Summer Lull Begins
Jack Pitcher – Bloomberg
High-grade supply expected to total $15 billion to $20 billion; Companies may sell long-dated debt with yield curve flattening
New high-grade bond sales are expected to slow next week as the U.S. summer lull starts to kick in, with syndicate desks calling for just $15 billion to $20 billion of fresh supply.
/bloom.bg/3gJUosl

Wishful Thinking in a World Without Yield; The need for higher returns can breed desperation for anyone with a portfolio—large or small
Jason Zweig – WSJ
At first glance, the Pennsylvania Public School Employees’ Retirement System, one of the largest pension plans in the U.S., doesn’t sound anything like you or me. It commands $66 billion in net assets, spent $515 million last year on management fees, and has more than 40% of its net assets in exclusive investments like buyout, venture-capital and hedge funds.
/on.wsj.com/3wLAKlm

Environmental, Social and Corporate Governance

Your Face Is the Next Frontier in ESG Investing; Asset managers are putting pressure on tech firms over their implementation of facial recognition software.
Mark Gilbert – Bloomberg
After successfully persuading the energy industry to curb its climate impact, the fund management world is turning its attention to reining in tech. But there’s a danger that by trying to cover too many non-financial bases, investors will end up weakening their clout.
/bloom.bg/3j151Zg

How the Clean-Energy Revolution Is Sweeping Through Markets
Claire Ballentine – Bloomberg
The market froth propelling clean-energy technology stocks has delivered billions of dollars of trading profits to investors across the globe and led to the creation of dozens of funds designed to prosper from the surge in prices. Whether it’s electric-vehicle makers like Tesla Inc. and its lesser-known rivals, or companies such as QuantumScape Corp. that are developing next-generation lithium-ion batteries, or solar companies like Enphase Energy Inc., these stocks have mostly all gone in one direction, and that’s higher.
/bloom.bg/3iWXFWJ

Coal-Loving Australia Rejects Green Hub on Environment Risks
Heesu Lee – Bloomberg
Plan has “unacceptable” impacts, Environment Ministry says; Proposal would have used wind, solar power to produce hydrogen
One of the world’s biggest fossil fuels exporters rejected a proposal to build a massive renewable energy hub over concern about its environmental impact.
/bloom.bg/3xEavx4

Solar power investors burnt by rise in raw materials costs; Shares fall as supply chain pressures limit scope for installation price cuts
Henry Sanderson – FT
The rapid rise in prices for raw materials has reversed a decades-long decline in the cost of solar energy, denting investor interest in the sector following a record rally in 2020.
/on.ft.com/3j17dzY

Timber prices fall as US consumers swap DIY for going out; Easing of Covid restrictions leads to downturn of more than 40% from early May peak
Harry Dempsey – FT
As US consumers venture out again, lumber prices are heading back to earth. Prices for the wood have pulled back sharply from astronomical heights in recent weeks as homeowners have redirected their spending from building decks and replacing flooring to going out to eat, drink and shop after Covid-19 rules were eased in the US.
/on.ft.com/2UccWZl

Heavyweight investors demand more disclosure of environmental risks; Institutional shareholders join campaign for better reporting on climate and green issues
Chris Flood – FT
Amazon, Facebook, Tesla and Berkshire Hathaway are failing to report data on climate change to their shareholders, according to a coalition of heavyweight investors, which is demanding that 1,320 companies should make clearer disclosures about environmental risks.
/on.ft.com/2SHyNaZ

Top tech groups try to dilute ESG disclosure rules; Microsoft and Alphabet set for clash with asset managers over mandatory statements
Patrick Temple-West and Billy Nauman – FT
Microsoft and Alphabet have pushed back against calls to include disclosures on environmental, social and governance issues in key US regulatory filings, setting them on course for a tussle with major asset managers.
/on.ft.com/3d0vgLM

The Record Temperatures Enveloping The West Are Not Your Average Heat Wave
Eric Westervelt – NPR
It might be tempting to shrug at the scorching weather across large swaths of the West. This just in: It gets hot in the summer. But this record-setting heat wave’s remarkable power, size and unusually early appearance is giving meteorologists and climate experts yet more cause for concern about the routinization of extreme weather in an era of climate change.
/n.pr/3cYj4uM

Why Hydrogen Is the Hottest Thing in Green Energy
Vanessa Dezem – Bloomberg
Solar panels and wind turbines can’t clean up everything. Making steel, for instance, calls for higher temperatures than traditional electric furnaces can deliver. That’s why plans for blunting climate change now envision a big role for hydrogen in curbing industrial emissions and for powering cars, trucks and ships. So-called green hydrogen is essentially emissions free. But meeting the ambitious plans being made for it means building a giant industry almost from scratch.
/bloom.bg/3qqIhUt

Institutions

US banks set to return money to shareholders after stress tests; Wall Street to use passing grades as chance to reduce cash piles through stock buybacks and dividends
Joshua Franklin – FT
America’s biggest banks will learn the results of their latest stress tests from the US Federal Reserve this week, with a passing grade expected to be a catalyst for billions of dollars in stock buybacks and dividends.
/on.ft.com/3cYb9h8

Petty protectionism will not help European bank prospects; Freezing big groups out of EU Recovery Fund syndication will do nothing to narrow transatlantic investment banking gulf
Patrick Jenkins – FT
Among the clutch of achievements racked up by Joe Biden in his whistle-stop tour of Europe last week, the detente in EU-US trade relations, symbolised by the end of a punitive tariff regime on Boeing and Airbus, was one of the more striking.
/on.ft.com/3gQPNU8

Gates’s Divorce Casts Harsh Glare on $170 Billion Money Manager
Sophie Alexander, Anders Melin and Tom Maloney – Bloomberg
For almost three decades, Michael Larson has quietly shuffled around one of the world’s biggest fortunes with a chief priority: Keep his fabulously wealthy bosses out of the headlines.
/yhoo.it/3cXaEnI

Cathie Wood Inspires Boom in New Funds That Upend ETF Order
Claire Ballentine – Bloomberg
Not so long ago, actively managed ETFs were rare. Now they’re being created at twice the rate of their passive rivals. Inspired by the success of Cathie Wood’s ARK Innovation ETF (ticker ARKK), exchange-traded fund issuers have this year launched 115 active products versus just 51 passive funds, according to data compiled by Bloomberg.
/yhoo.it/3gI9kG0

EU clears banks barred from bond deals after ‘declaration on honour’; Eight lenders can handle transactions again after providing evidence they have taken remedial measures
Tommy Stubbington – FT
Eight banks previously barred from taking part in bond sales for the EU’s EUR800bn recovery fund have been cleared to handle future transactions after promising “integrity” and providing evidence of “remedial measures” following historical breaches of antitrust rules.
/on.ft.com/3xIoWAx

Net flows into inflation-linked ETPs surge to a record $4.4bn in May; Dash for inflation protection was in progress before the announcement US consumer price inflation hit 29-year-high
Steve Johnson – FT
Net flows into inflation-linked exchange traded products, which aim to protect investors from the ravages of monetary debasement, hit a record $4.4bn in May — even before it emerged that core US consumer price inflation hit a 29-year high that month.
/on.ft.com/3iYseew

JPMorgan Chase to invest $150M in Chicago’s South and West sides as part of effort to close ‘racial wealth divide’
Lauren Zumback – Chicago Tribune
JPMorgan Chase plans to invest $150 million in grants and low-cost loans in Chicago’s South and West sides. The funds, part of an earlier $30 billion pledge to provide economic opportunity in underserved communities across the U.S., are intended to support an inclusive recovery from the COVID-19 pandemic. They will build on a $40 million investment in Chicago’s neighborhoods announced in 2017, said Charlie Corrigan, head of Midwest philanthropy at JPMorgan. Those funds — later increased to $50 million — have since been distributed.
/bit.ly/3xDttnD

JPMorgan Banker Fired for Expense Errors Sues for Discrimination
Jonathan Browning – Bloomberg
Analyst says she faced bullying and abuse over her dyslexia; Bank fired Master for “really stupid errors” over expenses
Zainab Master, a junior banker at JPMorgan Chase & Co. in London, worked 785 hours of weekday overtime in a year before she was fired. The bank’s policies allowed for overtime meals and taxis. But it was the expenses that the young analyst in the asset management unit was to fall foul of.
/bloom.bg/3qgm6zS

HSBC to Take $3 Billion in Losses on Sale of Troubled French Bank; Lender controlled by private-equity firm Cerberus will buy HSBC’s French retail operations for a symbolic one euro
Simon Clark – WSJ
HSBC Holdings PLC HSBC -0.07% expects to take $3 billion in losses as part of an agreement to sell its unprofitable French retail bank, in a sign of the souring fortunes of European banking. London-based HSBC, one of the world’s largest lenders, said Friday that it had agreed to sell the bank to a company owned by Cerberus Capital Management LP, a New York-based private-equity firm.
/on.wsj.com/3qgo17y

The Clubby World of Venture Capital Finds a New Bet: Black Entrepreneurs; Funds increasingly seek out diversity among company founders
Te-Ping Chen – WSJ
Austin Clements was ready to give up. He’d quit his job in venture capital in 2019 to try to launch his own fund giving early-stage money to tech startups founded by entrepreneurs of color, but investor interest was slim. Last June, he and his co-founder figured that before throwing in the towel, they’d write one final mass email to anyone they’d ever pitched or spoken to about their fund—a group of around 300 people—asking for support.
/on.wsj.com/3gFAOgN

Credit Suisse Slashes Business With SoftBank and Its Founder, Masayoshi Son; Swiss bank was one of the Japanese businessman’s biggest personal lenders, but stock-based loans were liquidated in the recent months, according to filings
Margot Patrick and Phred Dvorak – WSJ
Credit Suisse CS 0.34% Group AG and SoftBank 9984 -3.51% Group Corp. Chief Executive Masayoshi Son recently dissolved a longstanding personal lending relationship and the bank clamped down on transactions with his company, according to regulatory filings and people familiar with the matter.
/on.wsj.com/2SgX1Zl

Renaissance Suffers $11 Billion Exodus With Meager Quant Returns
Miles Weiss and Hema Parmar – Bloomberg
Hedge fund firm now mostly managing its own internal capital; Redemptions rose from $5 billion between December and February
Investors are still headed for the exits at Renaissance Technologies, pulling $11 billion from the quant giant in seven months. Disgruntled by subpar returns, clients have now redeemed — or asked to redeem — more than a quarter of the capital that Renaissance manages in hedge funds with outside money, according to investor documents seen by Bloomberg. The firm now is mostly managing its own internal capital, a person with knowledge of the matter said.
/bloom.bg/3wJxAyo

Regions

Wall Street Banks Struggle to Cash In on China Hiring Binge
Bloomberg News
Morgan Stanley, Credit Suisse reverse losses, JPMorgan in red; High costs, entrenched competition weigh on bank earnings
Wall Street still hasn’t figured out how to make much money in China. Despite the broad market opening, the hundreds of new hires and the billions invested, JPMorgan Chase & Co. and other global investment banks posted a combined loss of about 308 million yuan ($48 million) last year. Three firms eked out tiny profits from their onshore joint ventures and three had losses. By contrast, China’s investment banks rode a wave of deal making to earn $24.4 billion, according to filings.
/bloom.bg/2SOrMFb

Covid gives Japan ‘last chance’ to reverse digital defeat; Suga pins hope on new agency to reduce bureaucracy after pandemic blunders
Wataru Suzuki – FT
Each day, dozens of residents in Tokyo’s Setagaya district visit an office to sign up for a My Number identification card. Officials take each visitor’s photo, make copies of their existing ID documents and ask them to write down four passwords. The information is sent back to the local government and it can take months before the card is issued.
/on.ft.com/3vLa8iQ

Belarus bonds tumble as EU considers ‘Venezuela-style’ sanctions; Provisional rules banning trading of Belarusian securities could leave bondholders stuck
Tommy Stubbington – FT
Belarus’s government bond prices tumbled on Monday as the EU prepared to tighten sanctions against President Alexander Lukashenko’s regime for its interception of a Ryanair flight to arrest a dissident.
/on.ft.com/3iYsA5a

Top Cocoa Grower Accuses Mondelez of Backtracking on Farmer Pay
Leanne de Bassompierre – Bloomberg
U.S. chocolate maker says it pays the full premium for farmers; Ivory Coast and Ghana produce nearly 70% of the world’s cocoa
The cocoa regulator in the world’s top grower of the crop, Ivory Coast, has accused Mondelez International Inc. of undermining a premium meant to boost West African farmers’ pay, a claim the company said is incorrect.
/bloom.bg/3qdxyMR

Miscellaneous

French schools dominate FT ranking of masters in finance degrees; HEC Paris takes top position with other grandes écoles retaining high positions in annual assessment of courses
Andrew Jack – FT
French business schools led by HEC Paris are the best places to study a masters in finance degree around the world, with strong continued demand despite the disruption of coronavirus, according to the FT’s latest annual assessment.
/on.ft.com/3d0eeNP

First day back at work; Americans are shedding their sweatpants and venturing back to the workplace as more states reopen. Workers in California, Illinois, Kentucky, New York and Washington, D.C., describe their first day back at the office after 15 months at home.
Patrice Peck, Erin Chan Ding, Josh Wood, Kevin Armstrong and Sherri Williams – The Washington Post
With the covid death rate collapsing and the number of vaccinations rising, New York and California, two states hit early and hard by the virus, ended nearly all of their pandemic-era restrictions on Tuesday.
/wapo.st/2SO70Fy

Tight Labor Market Returns the Upper Hand to American Workers; Employers competing for low-wage workers are offering signing bonuses and other perks
Eric Morath and Greg Ip – NY Times
Low-wage workers found something unexpected in the economy’s recovery from the pandemic: leverage. Ballooning job openings in fields requiring minimal education—including in restaurants, transportation, warehousing and manufacturing—combined with a shrinking labor force are giving low-wage workers perks previously reserved for white-collar employees. That often means bonuses, bigger raises and competing offers.
/on.wsj.com/2STJ8Am

The Return to the Office Is Pushing Even More Women Out of Work; Companies are asking people back, but there’s less child care than ever. Moms are paying the price.
Jeff Green, Carolina Gonzalez, and Julia Fanzeres – Bloomberg
The pandemic took a toll on the careers of many working mothers. A rush back to the office is shaping up to be just as damaging. The lack of child care and in-person schooling that has pushed millions of women out of the workforce in the U.S. since March 2020 has only gotten worse. Though businesses including Microsoft Corp., Amazon.com Inc. and Netflix Inc. responded with backup day care and emergency leave, much of that was temporary and is coming to an end. The $53 billion in federal rescue funds to keep day-care centers running and to reopen shuttered care was a stopgap.
/bloom.bg/2TQWYDQ

Deloitte tells staff they can work from home forever
Simon Foy – The Telegraph
Deloitte has told its 20,000 UK staff that they can work wherever they want when Covid restrictions are lifted as the accountancy firm adopts a fully flexible approach.
/yhoo.it/3wN2UfA

John Lothian Newsletter

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Past JLN Newsletters

The Spread – July 30, 2021

The Spread – July 30, 2021

Earnings season in full bloom; Options lead year-to-date derivatives volume; Robinhood’s IPO; John gets real with Get Real VR: Conflicting factors underpin volatility; Cboe cleared for fall European competition; and the Cboe Options Institute’s Kevin Davitt talks about vega in this week’s “Term of the Week.”

The Four Biggest Ways That Robinhood Changed Investing

The Four Biggest Ways That Robinhood Changed Investing

First Read $51,906/$300,000 (17.3%) ++++ Options Continue to Lead Derivatives Volume Uptrend, but Q2 Lags, FIA Data Show Suzanne Cosgrove - John Lothian News Global futures and options volumes continued to trend higher in the first half of 2021 compared to both 2020...

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