Why Wall Street Is Afraid of a Digital Dollar

Jul 15, 2021

First Read

$51,456/$300,000 (17.2%)


Hits & Takes
John Lothian & JLN Staff

Traders Magazine has a piece titled “Virtu CEO: Retail Investors Have Never Had It Better.” While I agree with this sentiment, having lived and traded through some horrible market structure, the message coming from Doug Cifu, CEO of Virtu Financial, is funny. Virtu being on the other side of a lot of retail equity trade would know a lot about retail trading, but they make a lot of money from that trading. It is kind of like saying the guy with the other hand at the poker table has a great hand, while you are holding a royal flush. — Traders Magazine

IMC has a post on its website titled “Why our partnership with Team Liquid is important for recruiting talent.” — IMC

Matt Kulkin of Steptoe has a commentary titled “Why the Global Libor Transition Depends on U.S. CFTC Action.” — MorningConsult.com

We had an anonymous donation to the JLN MarketsWiki Education GoFundMe campaign yesterday. We appreciate and thank Anonymous and all who have given. Support our efforts to preserve industry history by giving to our GoFundMe campaign.

This week my take in The Spread will look back at some of the people who have spoken at our MarketsWiki Education World of Opportunity, particularly about options and the lessons they offered. Don’t forget to register your interns and newer employees for the July 21 event starting at 1:30 p.m.

We don’t have any sponsors for the MarketsWiki Education World of Opportunity this year and the event is FREE to anyone to attend. Thank you to all who have supported our GoFundMe campaign, which helps offset the cost of producing the event and videos.

Today we have the video of Tim Brennan, one of the most enthusiastic storytellers we have had for The Path to Electronic Trading Series. Later today we will publish our interview with a trader Tim hired more than once, Senior Director at ICE/NYSE Options – Head of Product & Competitive Strategy Meaghan Dugan.

Over the weekend I attended an Eagle court of honor for a Scout who is the son of the man I passed my Boy Scout troop to. This Scout gave me and another adult a mentor pin for our help during his Scouting career. He told the story of having failed in an election to become senior patrol leader and feeling down, and the advice I gave him. He said I told him, “Tim, you don’t have to have a title to be a leader.” He did not understand it at first, but he did over time as he built a relationship with the Scouts to earn their trust to lead them. He was later elected senior patrol leader. He used this story in his Eagle rank life statement, his essay for college and an application for a national Eagle scholarship. All told I have been gifted with six mentor pins and two dad Eagle scout pins. It has been a very worthwhile use of my time, treasure and talents.

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


In the long and continuing path toward the decriminalization of adult-use cannabis at the federal level, on Wednesday Senate Majority Leader Chuck Schumer, D-N.Y., Senate Finance Committee Chairman Ron Wyden, D-Ore., and Sen. Cory Booker, D-N.J., introduced draft legislation called The Cannabis Administration and Opportunity Act, a bill they plan to formally advance later this year. If passed, it would remove marijuana and THC from the list of controlled substances within 180 days after its enactment. In a press briefing, Schumer said the legislation aims to “right the wrongs of the failed war on drugs,” which has largely affected communities of color. It’s highly unlikely the Act will be passed in its current form, but it nonetheless advances the dialogue about current prohibitions. View a video of the senators’ press conference here. ~SC

Markets Media announced the winners of its inaugural European Markets Choice Awards. Among them are: David Schwimmer, CEO, London Stock Exchange Group, for CEO of the year; Citadel Securities for best liquidity provider (equities); Jane Street for best liquidity provider (fixed income); and MarketAxess for best trading analytics tool. To see the full list, you can go here. ~SR


Tim Brennan Took the Leap to a New Frontier of Trading

Tim Brennan did not know what he wanted to do after graduating from a small liberal arts college with a degree in psychology. As with many other traders from this era, his mom had a friend who could get him a job as a runner at the Chicago Board Options Exchange.

Watch the video »


Statement from CFTC Staff on Transition Away from LIBOR
The Commodity Futures Trading Commission’s Market Participants Division and Division of Market Oversight (Divisions) today are jointly issuing this statement to advise market participants and swap execution facilities (SEFs) of the importance of ensuring a smooth and timely transition away from LIBOR.

*****Please don’t labor over LIBOR.~JJL


NFA warns of fraudulent phishing emails purporting to be from NFA
NFA has learned of a recent phishing campaign that involves fraudulent emails purporting to be from NFA staff. These emails have a source domain name “@basicnet-nfafures.org.” NFA reminds all Members to be vigilant when it comes to email requests. All legitimate emails from NFA will come from an address ending in @nfa.futures.org, nfanotifications@mailer.nfa.org or @nfa-swaps-proficiency-requirements.moonami.com in the case of NFA’s Swaps Proficiency Requirements. Always be sure to scrutinize the sender’s address.

*****My church was also hit with a phishing attack asking about gift cards being bought for the staff. The bad guys are very inventive. Be careful what you click on.~JJL


Can Chicago thrive in a work-from-home world? Rustbelt cities have missed out on an expected boost from urban migration during the pandemic
Patti Waldmeir – FT
The fortunes of cities can go down as well as up. And at this pivotal post-pandemic moment, things could go either way for the Rustbelt cities of my beloved American Midwest. For Chicago, the capital of the American heartland, the pandemic could be a generational turning point. I chose it as my last Financial Times posting — after tiring of global supercities such as Shanghai and Cape Town, Brussels and Washington — because it was small but vibrant, clean but not sterile, urban but in a suburban sort of way (ie parking could still be had for less than $20 a day).

*****Chicagoland will always thrive. The City of Chicago and the downtown district is another question.~JJL


Wednesday’s Top Three
Our top story Wednesday was the same as Tuesday’s top story: Farewell open outcry, a look at the history of the Chicago trading floors, from The Trade. Second was Crypto exchange FTX sets sights on blue-chip acquisitions, from the Financial Times. Third was S.E.C. Says a SPAC Misled Investors About Its Space Deal, from the New York Times, about a civil settlement involving Momentus and Stable Road Acquisition, a SPAC.


MarketsWiki Stats
26,462 pages; 234,474 edits
MarketsWiki Statistics


Lead Stories

Why Wall Street Is Afraid of a Digital Dollar; The idea of a government-backed virtual currency has support in policy circles, but Wall Street sees a threat to its consumer-finance dominion.
Christopher Condon – Bloomberg
Imagine logging on to your own account with the U.S. Federal Reserve. With your laptop or phone, you could zap cash anywhere instantly. There’d be no middlemen, no fees, no waiting for deposits or payments to clear. That vision sums up the appeal of the digital dollar, the dream of futurists and the bane of bankers. It’s not the Bitcoin bros and other cryptocurrency fans pushing the disruptive idea but America’s financial and political elite. Fed Chair Jerome Powell promises fresh research and a set of policy questions for Congress to ponder this summer. J. Christopher Giancarlo, a former chairman of the Commodity Futures Trading Commission, is rallying support through the nonprofit Digital Dollar Project, a partnership with consulting giant Accenture Plc. To perpetuate American values such as free enterprise and the rule of law, “we should modernize the dollar,” he recently told a U.S. Senate banking subcommittee.

BlackRock Closes In on the Once Unthinkable, $10 Trillion in Assets; Chief Executive Larry Fink says inflation is here to stay
Dawn Lim – WSJ
BlackRock Inc.’s BLK -3.06% second-quarter profit rose 14% on new money coming into the giant asset manager, a sign that investors are becoming more confident about an economic recovery.

Powell Says Stable Coins Need Regulation to Protect U.S. Public
Steve Matthews – Bloomberg
Federal Reserve Chair Jerome Powell said there are potential risks from stable coins and that they require regulation to ensure their safety. Powell told the House Financial Services Committee on Wednesday that stable coins are a lot like money market funds or bank deposits “but without the regulation.”

US outpaces Europe in electronic bond trading growth, report finds; Research has found from 2017 to 2020 investment grade and high yield bond e-trading in the US grew by 111% and 145% respectively compared to 61% growth in Europe.
Annabel Smith – The Trade
The US has seen double the amount of growth in electronic bond trading compared to Europe in the last three years, according to a report by Coalition Greenwich. The report surveyed 157 corporate bond investors across Europe, the Middle East and Africa, and US asset managers, hedge funds, regional banks and others.

US regulator under fire for delays to delisting Chinese stocks; Companies that do not comply with US audit rules could keep New York listing as late as 2025
Patrick Temple-West and Demetri Sevastopulo – FT
Pressure is building on the US Securities and Exchange Commission to finalise regulations to de-list Chinese companies that fail to comply with American auditing rules, after lawmakers discovered the agency might not begin enforcement until 2025 at the earliest.

UK regulators are wading into the US’s Libor transition; Top officials, including the Bank of England governor, are pushing firms here to adopt a specific benchmark for dollar borrowing.
Claire Jones – FT
The world of financial regulation is, unlike global capital, respectful of national boundaries. That’s especially true when those boundaries belong to the biggest of all financial players — the US.

Tradeweb appoints former BrokerTec Americas chief to lead Dealerweb platform; New Dealerweb managing director will be responsible for driving the development of the fixed income central limit order book following the Nasdaq acquisition.
Wesley Bray – The Trade
Fixed income platform provider Tradeweb has appointed the former chief of BrokerTec Americas as a managing director in its Dealerweb wholesale unit. In his new role, Dan Cleaves will be responsible for leading the strategy and development of the Dealerweb central limit order book (CLOB) which was acquired from Nasdaq last month.

Wall Street Has Surrendered to the $500 Billion ETF Rush; Vanguard leads the way as industry prepares to shatter annual record with months to go
Claire Ballentine and Francesca Maglione – Bloomberg
U.S. money managers couldn’t stop the march toward exchange-traded funds, so they decided to join it instead. Now it’s more like a stampede. ETFs are on the brink of luring more money in seven months than in any calendar year on record. At $488.5 billion and counting, they’ll likely break the $497 billion full-year record set in 2020 in weeks, possibly days.

Private Equity’s Male Bias Proves Hard to Fix, Even in Sweden
Anton Wilen – Bloomberg
In one of the world’s most gender-equal societies, private equity has once again been outed as a surprisingly stubborn bastion of male dominance. Just 19% of board seats at portfolio companies owned by PE firms are held by women, according to a study by HUI Research commissioned by the Swedish Private Equity & Venture Capital Association published on Thursday. That compares with roughly a third of seats at companies traded on the Nasdaq OMX Stockholm index. The report also cited a “major gender imbalance” when it comes to PE firms’ own investment committees, where only 16% are women.

Bankers Win the SPAC-Fee Grand Slam; It’s been very lucrative for Wall Street to advise blank-check companies. Disclosing potential conflicts is good, avoiding them would be better.
Chris Bryant – Bloomberg
Gary Gensler, the U.S. Securities and Exchange Commission’s new chair, meant what he said. After months of warning investors not to dive into special purpose acquisition companies just because they’re backed by a celebrity and promising more scrutiny, the regulator on Tuesday took the rare step of sanctioning a SPAC and its merger target — a space-cargo firm — for misleading investors.

Morgan Stanley’s CFO Nears Her Debut in Wall Street’s Glare
Sridhar Natarajan – Bloomberg
In an interview, Sharon Yeshaya recounts her journey at firm; Gorman’s offer in May came as a complete surprise to her
When Morgan Stanley unveils what’s expected to be one of its best quarters ever, a new voice will lead Wall Street through the numbers and the strategy. Sharon Yeshaya has been known to Morgan Stanley’s top brass ever since Chief Executive Officer James Gorman plucked the former trader out of the firm’s then-struggling fixed-income division and made her his chief of staff. Soon, the finance world will become familiar with Yeshaya, after her recent ascent to chief financial officer.

Many Jobs Lost During the Coronavirus Pandemic Just Aren’t Coming Back; Companies see automation and other labor-saving steps as a way to emerge from the health crisis with a permanently smaller workforce
Lauren Weber – WSJ
Job openings are at a record high, leaving the impression that employers are hiring like never before. But many businesses that laid off workers during the pandemic are already predicting they will need fewer employees in the future.

Wall Street Opens Back Up to Oil and Gas—But Not for Drilling; Oil-and-gas companies are using cash from debt offerings to shore up balance sheets rather than to boost production
Joe Wallace and Collin Eaton – WSJ
Energy companies are raising money again from Wall Street at superlow borrowing costs, thanks in part to higher oil prices. The one thing most investors don’t want them to do with it is pump more crude.

How Is the Economy Doing? Here’s What Banks Say; Quarterly earnings from JPMorgan, Goldman and other big banks show an economy going strong. The question is, for how long?
David Benoit and Ben Eisen – WSJ
Here’s what the biggest U.S. banks are telling us about the state of the economy. Consumer spending is returning to pre-pandemic levels, and borrowing appears poised to rise. Markets are cooling, but deal making is as hot as ever. Still, the recovery remains vulnerable, bank executives said. Covid-19 variants are driving up case counts, raising the specter of new lockdowns. Government-aid programs that kept many Americans afloat are about to expire.

Co-Working Spaces Are Back. And There Are Many, Many Options; As the office world adjusts to a new normal and workers grow tired of their homes, WeWork and its competitors reap the benefits.
Melissa Kravitz Hoeffner – NY Times
Though Kia Roberts, who runs her own private investigation firm, originally felt hesitant about joining The Wing, the feminist-aligned co-working space and social club, she fell in love with it after a visit to its Dumbo location in early 2019.

Citigroup Is Closing in on Peers in One Key Way; Solid growth in checking accounts is a hopeful sign as it tries to refocus on the U.S. consumer market
Telis Demos – WSJ
Some key metrics at Citigroup C -0.29% are keeping pace with peers right now, a hopeful indicator of better days ahead. The news coming out of banks’ second-quarter reports this week hasn’t pleased investors so far, as they didn’t give very buoyant updates on their interest income. Citigroup said it didn’t expect a significant further decline in net interest revenue for the rest of this year. The KBW Nasdaq Bank index is down more than 2% since reporting began on Tuesday.

Tradeweb Appoints Dan Cleaves to Lead Dealerweb CLOB
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced the appointment of Dan Cleaves as a Managing Director in its Dealerweb wholesale unit. Based in New York, Mr. Cleaves will lead the strategy and development of the Dealerweb Central Limit Order Book (CLOB) recently acquired from Nasdaq. Mr. Cleaves will draw on his extensive experience running electronic markets for the most liquid Treasury instruments, interfacing with clients, technologists and regulators to ensure the successful integration and growth of Dealerweb CLOB. He will report to Chris Amen, Managing Director and Head of On-the-Run Treasury Trading at Dealerweb.

Digital Markets Propagate in the New Economy
Ivy Schmerken – Flextrade
New online marketplaces have emerged to trade traditional assets such as real estate, art works, and private securities on digital platforms, seeking to cut out intermediaries and reduce frictions by using the blockchain to democratize access to finance. In the 1990s, consumers cleaned out their attics and put their collectibles up for sale on eBay, where they could hold their own private lawn sale. Now many are turning physical assets and collectibles into digital assets that can be securitized and traded on two-sided markets.


U.S. Overdose Deaths Hit Record 93,000 During Pandemic Last Year; A government report found overdose deaths soared to a record 93,000 last year in the midst of the coronavirus pandemic.
Overdose deaths soared to a record 93,000 last year in the midst of the COVID-19 pandemic, the U.S. government reported Wednesday. That estimate far eclipses the high of about 72,000 drug overdose deaths reached the previous year and amounts to a 29% increase.

Tokyo Cases at Six-Month High; Melbourne Lockdown: Virus Update
Bloomberg News
New cases in Tokyo reached the highest in six months, about a week before the Olympics are scheduled to start. The head of the International Olympic Committee said measures against the virus are in place and working.

Virus Trio Could Push U.K. Hospitals to Brink, Scientists Warn
Damian Shepherd – Bloomberg
Flu deaths could hit 60,000 this year in a worst-case scenario; Staff shortage of 84,000 will heap further pressure on the NHS
A mix of Covid-19, influenza and a respiratory virus common among children could push the U.K.’s National Health Service to the breaking point this winter, according to a new report. The Academy of Medical Sciences warned that hospital admissions and deaths from flu and respiratory syncytial virus could double from normal levels alongside a third Covid-19 wave. New modeling showed that flu deaths in Britain could hit 60,000 in the worst-case scenario.

Australia’s Squandered Pandemic Luck Bodes Ill for Its Future; The failure to heed clear warnings sends a discouraging signal about the government’s ability to handle other complex global crises in the coming years.
David Fickling – Bloomberg
For much of the past 18 months, living in Sydney while a pandemic has raged around the rest of the world has been such an undeserved blessing that I’ve felt almost embarrassed in conversation with overseas friends.

The Next Pandemic Could Be Averted With AI, Apps, and Big Data; Covid-19 has accelerated research efforts on stopping infectious diseases from jumping to humans, and on better vaccines to combat them.
James Paton and Randy Thanthong-Knight – Bloomberg
When a woman riding on her motorcycle in rural northern Thailand spotted a cow frothing at the mouth, she pulled over, snapped a few photos, and reported it on a mobile app. Local health authorities stepped in to limit the spread of foot-and-mouth disease to three cows, and farmers averted millions of dollars of potential losses, which would have been catastrophic for the village.

Thai Hospital Tycoon to Import Pfizer Shots as Covid Worsens
Randy Thanthong-Knight – Bloomberg
Thonburi Healthcare set to sign deal with BioNTech in 2-3 days; Boon expects first vaccine shipment to arrive before July end
Thonburi Healthcare Group Pcl, one of Thailand’s largest private hospitals, is in talks with BioNTech SE to import 20 million doses of Pfizer Inc. shots to meet a rush for vaccines as the country reported the highest single-day Covid fatalities from a raging coronavirus outbreak.

Covid Vaccine Makers Take Aim at Bottlenecks to Speed Production
James Paton – Bloomberg
New marketplace links buyers and sellers of vital materials; Shortages have hindered manufacturing and access to shots
A new initiative aims to overcome bottlenecks that have hampered the production and global rollout of Covid-19 shots, linking manufacturers with suppliers of vital materials.

Covid pandemic triggers drop in routine childhood vaccinations; At least 23m children worldwide have missed jabs against other diseases, say WHO and Unicef
Hannah Kuchler – FT
The Covid-19 pandemic has led to huge drops in childhood vaccinations, leaving countries more vulnerable to disease outbreaks, the World Health Organization has warned.

Delta Variant? The Airline Prefers Plain Old B.1.617.2; For Delta Airlines, the fast-spreading Covid-19 variant’s WHO-chosen name draws jibes from a rival, but doesn’t slow bookings
Alison Sider – WSJ
Airlines are trying to put the Covid-19 pandemic behind them. For Delta Air Lines Inc., by virtue of its name, it may be a bit harder. Airlines are coming off what executives have said was the most difficult year in their history. The coronavirus decimated travel demand: People canceled trips in droves and planes took off nearly empty for months. Major airlines lost some $35 billion last year.

Melbourne Locked Down Again as Australia’s Delta Outbreak Grows
Georgina McKay – Bloomberg
Second-largest city joins Sydney with new stay-at-home orders; Prime Minister Morrison racing to boost tardy vaccination rate
Melbourne will enter a snap five-day lockdown from midnight, joining Sydney in imposing stay-at-home restrictions as the delta strain of the coronavirus spreads around Southeast Australia, the nation’s most populated region.

Delta variant gains ground in US as outbreaks highlight vaccine divide; Infection rates in Kansas, Oklahoma, Missouri, Arkansas, Louisiana and Mississippi are among the highest in the US – and their vaccination rates are among the lowest
Jessica Glenza – The Guardian
A cluster of midwestern and southern states have emerged as a new center of Covid-19 outbreaks, as the highly transmissible Delta variant sweeps across poorly vaccinated populations in the US.

Indonesia’s Virus Surge Has Nervy Traders Recalling India Rebound
Marcus Wong – Bloomberg
Light positioning in rupiah, stocks is positive for Indonesia; ‘Authorities continue to offer market confidence,’ OCBC says
Indonesian investors are understandably worried about the potential impact of the spreading pandemic on their holdings. If the experience of India is any guide, they have some reason for confidence.

Exchanges, OTC and Clearing

GreenVolt lists on Euronext Lisbon
EUR150 million raised; Market capitalisation of over EUR500 million; 35th listing of a cleantech company on Euronext in 2021; 118th listing on Euronext in 2021
Euronext welcomes GreenVolt – Energias Renováveis, SA (“GreenVolt”), the leading biomass energy operator in Portugal, to its regulated market in Lisbon (ticker code: GVOLT; ISIN code PTGNV0AM0001).

Eurex expands buy-side access to cleared repo business; Expansion of the ISA Direct clearing model for repo at Eurex will give hedge funds and other firms access to the scheme.
Hayley McDowell – The Trade
Eurex has expanded the scope of buy-side clients that can use its European direct access repo clearing model to hedge funds and other investors. The expansion means more firms and their counterparty dealer banks will be able to use the direct access model for repo clearing, which provides market participants with direct clearing connections to CCPs for reduced costs and risk.

How time flies when you are successful – Eurex Repo turns 20
Being successful in the financial markets for 20 years is a very good reason to pause for a moment and look back on how it all started. Today, Eurex Repo is a well-established and leading provider, operating several markets with a multitude of products in secured funding and financing. But how was it twenty years ago; how did it all begin? How has it developed and what will the challenges be in the coming years?

Pioneering CCP transparency to maintain safer markets (part 7);CCP transparency series
The Public Quantitative Disclosure (PQD) is an internationally agreed format defined by CPMI-IOSCO with the intention of enhancing CCP market transparency. Eurex Clearing has been publishing its PQD since 2015 and continues to strongly support CCP transparency and market stability. With the disclosure for Q4/2016, Eurex Clearing began a series of commentary to highlight key trends, discuss current topics and shed some light on selected data points.

Equity Index Derivatives: Tradability of EURO STOXX® Banks Index Futures and EURO STOXX® Banks Dividend Index Futures for Participants in the U.S.
With effect from 19 July 2021, the following additional products will be activated for tradability in the U.S.:
EURO STOXX® Banks Index Futures
EURO STOXX® Banks Dividend Index Futures

Honeywell International Inc. to Join the NASDAQ-100 Index Beginning July 21, 2021
Nasdaq (Nasdaq: NDAQ) today announced that Honeywell International Inc. (Nasdaq: HON), will become a component of the NASDAQ-100 Index® (Nasdaq: NDX), the NASDAQ-100 Equal Weighted Index (Nasdaq: NDXE) and the NASDAQ-100 Ex-Technology Index (Nasdaq: NDXX) prior to market open on Wednesday, July 21, 2021. Honeywell International Inc. will replace Alexion Pharmaceuticals, Inc. (Nasdaq: ALXN) in the NASDAQ-100 Index®, the NASDAQ-100 Equal Weighted Index and the NASDAQ-100 Ex-Technology Index.

EBS Market Integration Notice: New/Update Content
CME Group
Subject to applicable regulatory approvals, EBS Market’s Central Limit Order Book and eFix Matching Service will launch on CME Globex. You will receive subsequent notices with additional details and actions required to support the EBS Market integration onto CME Globex.

Adoption of CME, CBOT, NYMEX/COMEX Rule 258. (“Exchange Personal Trading Policy”)
CME Group
Effective July 29, 2021, and pending all relevant Commodity Futures Trading Commission (“CFTC”) regulatory review periods, Chicago Mercantile Exchange Inc. (“CME”), The Board of Trade of the City of Chicago, Inc. (“CBOT”), New York Mercantile Exchange Inc. (“NYMEX”) and Commodity Exchange, Inc, (“COMEX”) (collectively, the “Exchanges”) will adopt CME, CBOT, NYMEX/COMEX Rule 258. (“Exchange Personal Trading Policy”).

SGX first Asian exchange to commit to 1.5°C-aligned science-based emission reduction targets
With this commitment, SGX joins the Race to Zero and Business Ambition for 1.5°C campaigns; Initiatives to address emissions include improving energy efficiency of data processing requirements
Singapore Exchange (SGX) is committing to a 42% reduction in Scope 2[1] emissions by FY2031 from the base as at FY2021 (July 2020 to June 2021), pledging to set science-based emissions reduction targets that are consistent with keeping global warming to 1.5°C above pre-industrial levels. For Scope 3 emissions, we plan to engage our co-location data centre supplier for them to set science-based targets within five years.

LCH Achieves Strong Clearing Volumes In H1 2021
Daniel Maguire, Group Head, Post Trade, LSEG and CEO of LCH Group, said:
“LCH has continued to perform well in the first half 2021, with robust volumes and growth across many of our services. We take our commitment to ensuring financial stability seriously and we are pleased to have continued to offer unparalleled efficiencies to the market over the year.”

MOEX To Launch Quarterly Options On US Stock Index Futures
The underlying asset is a futures contract on shares of the SPDR S&P 500 ETF Trust, the world’s largest ETF, which tracks the benchmark S&P 500 Index. The ETF has a net asset value (NAV) of USD 358 billion and includes shares of the 505 largest US companies by market capitalization.

NGX, BPE, NIPC Collaborate To Host Investors’ Webinar
Nigerian Exchange (NGX) Limited was pleased to collaborate with the Bureau of Public Enterprises and the Nigerian Investment Promotion Commission to host an investors’ webinar on Tuesday, 13 July 2021. The event was headlined by the Vice President, Federal Republic of Nigeria, and Chairman of the National Council on Privatization Professor Yemi Osinbajo, GCON.


Digital-finance app M1 raises $150M; It becomes the latest Chicago company valued at more than $1 billion.
John Pletz – Crain’s Chicago Business
M1 Finance, which helps customers invest and borrow money, hasn’t had to look far for cash. The company is swimming in capital. It’s raised $150 million from investors led by SoftBank’s Vision Fund 2. The company, which started six years ago as a no-fee online brokerage, raised $75 million in March and $50 million in October.

Vlad Zamfir on the Dangers of Unstoppable Software and What People Get Wrong About Blockchains; Immutable databases aren’t as great as many in the industry want you to believe
Tracy Alloway and Joe Weisenthal – Bloomberg
Vlad Zamfir is something of a crypto legend. The researcher was early into Bitcoin, and he was part of the Ethereum Foundation before it launched. He’s still an active researcher in the space, but he believes the people operating in it get some basic premises wrong. One of the basic premises that people preach is the idea of database immutability. He argues that, in order for crypto to become more influential, it needs to take governance seriously and find ways to be in compliance with generally accepted ideas about the law.

French tech bet pays off with rise in ‘unicorns’; Paris on the march as a European hub for sector start-ups
Peggy Hollinger – FT
France may have been ejected from the Euro 2020 football championships unexpectedly early last month, but “les Bleus” are still in the game — at least the fantasy version.

Revolut valued at $33bn after $800m fundraising; Digital bank becomes the biggest ever private tech company in the UK
Nicholas Megaw – FT
Revolut, the London-based digital banking start-up, has raised $800m in a funding round that makes it the UK’s most valuable private tech company of all time.

JP Morgan to provide clients with end-to-end TCA solution through Abel Noser collaboration;l Third partnership in as many months for JP Morgan’s asset management-focused data and analytics offering.
Jonathan Watkins – The Trade
JP Morgan has partnered with Abel Noser Solutions to provide an end-to-end solution transaction cost analysis (TCA) solution to its securities services clients. Abel Noser’s analytics will be integrated into JP Morgan’s open platform, providing asset owner and asset manager clients with the multi-asset post-trade TCA solution.


U.S. Plans to Counter Ransomware Attacks With Crypto Tracing
Jennifer Jacobs and Billy House – Bloomberg
Tipsters could receive rewards of as much as $10 million; Some lawmakers not impressed with Biden approach so far
The Biden administration intends to crack down on the use of cryptocurrencies in ransomware attacks through more rigorous tracing of proceeds paid to hackers behind the disabling of companies, government agencies and organizations, according to people familiar with the matter.

Getting started in cybersecurity – 6 essential skills to consider
Dmitry Dontov – Security Magazine
Capable cybersecurity professionals can expect to be spoiled for choice in the job market today and well compensated for their in-demand skillsets. For those considering entering the field, I’d like to lay out the state of security today, explore potential career paths, and provide some guidance on the steps you can take, including skills you can develop to make it happen.

Online fraud up by a third in the UK during the pandemic
Patricia Nilsson – Financial Times
The prevalence of online fraud has spiked during the pandemic as people have relied more on the internet for everyday tasks, with £2.3bn lost by consumers last year. Cases of fraud reported to the UK police unit Action Fraud rose by a third in 2020, reaching more than 410,000, according to analysis by consumer rights group Which?

$10 million rewards bolster White House anti-ransomware bid
Frank Bajak – The Washington Post
The State Department will offer rewards up to $10 million for information leading to the identification of anyone engaged in foreign state-sanctioned malicious cyber activity against critical U.S. infrastructure — including ransomware attacks — and the White House has launched a task force to coordinate efforts to stem the ransomware scourge. The Biden administration is also launching the website stopransomware.gov to offer the public resources for countering the threat and building more resilience into networks, a senior administration official told reporters.

The Ransomware Point of Attack is Sharper
Axio – Security Boulevard
Ransomware has been an ongoing cyber risk over the past years. Instead of becoming less prevalent and replaced with different attack vectors, it has evolved, adapted, and become more sophisticated and frequent. Since the start of 2021, the point of attack has sharpened its focus. Ransomware is now about creating a compromise and subsequent operational disruption. The more hackers can interfere with day-to-day business operations, the more likely they will collect ransom. Attacks can now generally be broken down into three subcategories: Phishing attacks, Network Edge Vulnerability, and Remote Desktop Protocol. As of today, these are the three most dangerous threats to your infrastructure.


BlackRock CEO Larry Fink Says There’s ‘Very Little’ Demand for Crypto
Tanzeel Akhtar – CNBC
Blackrock CEO Larry Fink said in a CNBC interview Tuesday that he is not seeing much demand for digital assets.

The Creator of Dogecoin Made a Brief Statement In Order to Blast All of Crypto
Joe Weisenthal – Bloomberg
Jackson Palmer is one of the creators of the most valuable jokes of all time. Back in January 2018, he wrote an article for Vice about his creation of Dogecoin, noting that it had a $2 billion valuation, which represented something “very wrong.”

Hong Kong Arrests Four in Alleged $155 Million Crypto Scheme
Kiuyan Wong – Bloomberg
Suspicious funds processed via remittances, stablecoin Tether; Operation, named ‘Coin Breaker,’ was launched a week ago
Hong Kong authorities arrested four men for a suspected money-laundering syndicate involving HK$1.2 billion ($155 million) with virtual currency. Operation “Coin Breaker” was launched on July 8, and the men aged between 24 and 33 have been arrested, according to a statement from Hong Kong Customs. The men opened various local bank accounts and made transactions through a virtual currency exchange trading platform, the statement said. The suspicious funds were processed via bank remittances and virtual currency from February 2020 through this May, according to officials.

Tether: the former plastic surgeon behind the crypto reserve currency; Giancarlo Devasini’s status at the centre of the cryptocurrency world is a remarkable transformation from his previous careers
Kadhim Shubber and Siddharth Venkataramakrishnan – FT
When Giancarlo Devasini first got into cryptocurrencies in 2012, his interests were distinctly small-time. He piped up on a popular Bitcoin forum to ask if anyone wanted to buy DVDs or CDs for 0.01 bitcoin each, then roughly 11 cents, promising free shipping for bulk orders.

China’s share of bitcoin power usage drops as Kazakhstan surges; Central Asian state catapulted to third place as its share of crypto mining increases sixfold
Siddharth Venkataramakrishnan – FT
China’s share of global electricity usage for bitcoin mining fell to under half for the first time this April, while Kazakhstan has catapulted to third place as its share of mining increased sixfold.

JC Flowers stake in LMAX values currency platform at $1bn; Transaction reflects hefty price tags in the booming cryptocurrency space
Eva Szalay – FT
The eye-popping valuations attracted by cryptocurrency companies are seeping into traditional foreign exchange markets, after a minority investment in currency trading platform LMAX Group has valued the company at $1bn.

Visa and Mastercard stick with Binance as regulatory scrutiny rises; Some banks and smaller payments groups have severed ties with the big crypto exchange
Adam Samson – FT
Visa and Mastercard have left open key gateways between Binance and the financial system despite rising regulatory scrutiny on the cryptocurrency exchange that has prompted some banks and smaller payments companies to cut ties.

Cathie Wood Says Environmental Concerns Over Bitcoin Are Temporary
Claire Ballentine – Bloomberg
Head of Ark Investment defends position on cryptocurrency; Still maintains conviction in companies like Tesla, Roku
Concerns about Bitcoin’s environmental impact are unlikely to derail its long-term path higher, Ark Investment Management’s Cathie Wood says.

Bitcoin Miners Seek to Go Nuclear to Address Environmental Woes
Vildana Hajric and Will Wade – Bloomberg
Partnership aims to use fission reactors to supply energy; Nuclear-powered Bitcoin mining is still likely years away
Amid a heated debate over Bitcoin’s environmental toll, two companies say they have an answer on mitigating some of the negative effects: Nuclear energy.


Biden Keeps Travel Ban on Europeans Despite Pleas to Ease It
Nick Wadhams – Bloomberg
Europeans chafe that travel limits remain despite vaccinations; Delta CEO says he’s been pushing U.S. for months to ease rules
European governments are growing increasingly frustrated with the Biden administration for refusing to lift travel rules that prevent most of their citizens from traveling to the U.S., citing inconsistent rules, economic costs and an outdated strategy for halting the coronavirus.

Why Republicans Are Turning Against Vaccines; It seems irrational for elected officials to put their own constituents at risk. But there is a political logic to it.
Jonathan Bernstein – Bloomberg
Why are some Republican politicians suddenly turning against the coronavirus vaccines — and in at least one case, seemingly turning against vaccination in general? It seems to make no sense; it’s their own constituents who will suffer if their vaccination rates stay low. Indeed, that’s exactly what’s happening now, with more Republican states having the lowest vaccination rates and experiencing new surges of Covid-19. How can that work out for them?

Democrats eye carbon border tax to help fund $3.5tn spending package; Proposal comes as part of sweeping aid plan and follows EU bid to move towards zero emissions
Lauren Fedor and Aime Williams – FT
Democratic lawmakers are drawing up plans for a tax on imports from carbon-polluting countries to help pay for a $3.5tn package in new government spending on everything from universal childcare to an expansion of public healthcare benefits.

Republicans Highlight Inflation in Effort to Thwart Biden’s Midterm Economic Case; Administration officials point to data showing that the labor market is recovering and consumer confidence is rising
Catherine Lucey – WSJ
President Biden is touting an economic boom he says will boost Americans as the nation exits the Covid-19 pandemic. But Republicans have pointed to the accompanying surge in inflation to hammer the president’s party over higher prices for used cars, apparel and more.

Joint Chiefs chairman feared potential ‘Reichstag moment’ aimed at keeping Trump in power
Reis Thebault – Washington Post
In the waning weeks of Donald Trump’s term, the country’s top military leader repeatedly worried about what the president might do to maintain power after losing reelection, comparing his rhetoric to Adolf Hitler’s during the rise of Nazi Germany and asking confidants whether a coup was forthcoming, according to a new book by two Washington Post reporters.

EU States Now Have to Split the Bill for Their Climate Moonshot
Birgit Jennen and Chiara Albanese – Bloomberg
Unveiling of plan to cut carbon use sets off years-long fight; ‘It creates frustration,’ warns one European lawmaker
The European Union’s ambitious plan to slash carbon usage over the next decade kicks off years of wrangling as members figure out if and how they can afford a program that would transform every corner of the bloc’s economy.

Starbucks, Coke Join Call for Congress to Protect Voting Rights
Rick Clough – Bloomberg
Coffee chain’s CEO says the right is ‘core to our democracy’; Republican-led laws are restricting access in some states
Starbucks Corp. and Coca-Cola Co. called on Congress to revisit the Voting Rights Act as major corporations push back against Republican efforts in many U.S. states to restrict ballot access.


Daniel S. Kahl Appointed Acting Director of the Division of Examinations; Peter B. Driscoll to Depart Agency
The Securities and Exchange Commission today announced that Peter B. Driscoll, the Director of the Division of Examinations, will depart the agency effective Aug. 14. Daniel Kahl, the Division’s Deputy Director, will be named Acting Director upon Mr. Driscoll’s departure.

ICO “Listing” Website Charged With Unlawfully Touting Digital Asset Securities
The Securities and Exchange Commission today announced settled charges against the operator of Coinschedule.com, a once-popular website that profiled offerings of digital asset securities. The SEC’s order finds that United Kingdom-based Blotics Ltd. violated the anti-touting provisions of the federal securities laws by failing to disclose the compensation it received from issuers of the digital asset securities it profiled.

ESMA consults on amendments to MAR Guidelines on delayed disclosure of inside information
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today launched a Consultation Paper on the review of its Guidelines on delayed disclosure of inside information under the Market Abuse Regulation (MAR) in relation to its interaction with prudential supervision.

ESMA Publishes Disclosure And Investor Protection Guidance On Spacs

FCA publishes Annual Report and Accounts 2020/21
We have published our Annual Report and Accounts, which looks back on our key pieces of work throughout 2020/21.

Transforming to a forward-looking, proactive regulator
Speech by our CEO, Nikhil Rathi, delivered at the FCA’s Our Role and Business Plan webinar.

Investing and Trading

‘You could lose everything’ on meme stocks: Franklin Templeton CEO
Max Zahn with Andy Serwer – Yahoo Finance
The meme stock craze has cooled off — at least temporarily. Over the past week, favored equities GameStop (GME) and AMC (AMC) have plummeted, dropping about 10% and 21% respectively.

Reddit Traders Are Upending the World of Credit Investing, Too
Eliza Ronalds-Hannon – Bloomberg
Distressed funds need predictable equity markets to hedge bets; Risk of getting caught in meme-stock run up keeps firms at bay
It was the type of master stroke that could make a Wall Street career. Jason Mudrick’s financing of AMC Entertainment Holdings Inc. at the height of the pandemic netted his hedge fund hundreds of millions of dollars in just a few months.

Meet the teen investors of the future; Winners of the FT’s personal finance competition see beyond meme stocks
Claer Barrett – FT
Is it possible to become a millionaire by the time you are 30? Could learning about investment help to boost your financial resilience, and how might consumers be affected by a cashless society?

Bonds Are Predicting Another Hawkish Fed Mistake; The conundrum of falling longer-term yields implies traders think policy makers will tighten too early, whatever Jerome Powell says.
John Authers – Bloomberg
Return of the Conundrum
The bond market has another conundrum. Almost 20 years ago, Alan Greenspan admitted that it was a “conundrum” that longer bond yields barely rose as he steadily raised short-term rates in his latter years at the Federal Reserve. Now, inflation may or may not prove to be transitory, but it is the highest in decades. Month after month, the official numbers have turned out higher than expected. With higher inflation, investors should in theory demand a higher yield from bonds to compensate for the erosion of buying power. And any suggestion that interest rates are going to go up should, as Greenspan implied, lead to higher long-term yields. Yet they are falling.

The Fed Has a Real Estate Fight on Its Hands; Jerome Powell faces a dilemma: Pull back on mortgage-bond purchases and threaten market stability or watch home prices continue to surge.
Lisa Abramowicz – Bloomberg
A fight is brewing at the Federal Reserve about housing prices, and there’s no easy way to resolve it without either spurring record home costs to rise even more or disrupting increasingly complacent asset markets.

Global Hunger Is Back With a Vengeance; The surge in prices of major agricultural commodities is hitting the world’s poor especially hard.
Bobby Ghosh
Even a short spasm of food inflation can be damaging for the world’s poorest, who are rarely more than a few meals away from hunger. So the current spike in food prices, examined in detail by several of my colleagues, should be setting off klaxons everywhere.

Environmental, Social and Corporate Governance

ESG stocks are not in a bubble; Despite rush by investors, valuations are not overextended
Karen Karniol-Tambour – FT
The rush by investors of all stripes to prioritise environmental, social and governance goals has raised speculation of an emerging bubble in favoured stocks. But the shift to ESG appears to be still in its early innings. Investor positioning in sustainable equities is not yet overextended.

How the EU plans to reshape its economy to limit climate change; Bloc of 27 countries to negotiate over three-pronged approach to reduce greenhouse gas emissions
Mehreen Khan – FT
Brussels has laid out the path to the EU becoming the world’s first economic bloc to hit net zero greenhouse gas emissions by 2050 in an attempt to limit global warming.

How the pandemic foretells the climate crisis; ‘The destruction of the Amazon is climate’s Delta variant. When Brazilian rainforests shrink, rich countries heat up too’
Simon Kuper – FT
When England drops nearly all its Covid-19 restrictions on July 19, it won’t be the end of the pandemic. It may not even be the beginning of the end. But it is a foreshadowing of an ending of sorts. One day, rich countries will emerge from Covid-19 while poor countries remain stuck in it. And this isn’t just the scenario for the pandemic. It is probably also a preview of the climate crisis.

Surging Electricity Demand to Boost Emissions as Coal Use Climbs
Samuel Etienne – Bloomberg
CO2 to increase in 2021 after two years of declines, IEA says; Increase threatens efforts to reach net-zero targets by 2050
Global electricity consumption will surge this year as the world emerges from the coronavirus pandemic, with fossil fuels supplying almost half the increase in a shift that threatens ambitious net-zero carbon emission targets.

Ex-BNP Paribas Banker Targets $1 Billion for Japanese ESG Fund
Chika Mizuta and Takahiko Hyuga – Bloomberg
Okazawa sees fund assets rising to as much as $3 billion; Fund aims to back green startups in tech, agriculture
Kyoya Okazawa, a former Asia executive at BNP Paribas SA, aims to raise $1 billion for a new ESG fund backing Japanese startups in sectors ranging from paint to grass-fed beef.


Vanguard Targets Direct Indexing With Just Invest Acquisition
Lewis Braham – Barron’s
In a sign that direct indexing has officially arrived as an important investment alternative to traditional mutual and exchange traded funds, Vanguard announced Tuesday that it is acquiring direct indexing upstart Just Invest.

US banks close more than 250 branches in bet on digital future; Customers flocked to apps during pandemic and lenders hope they will stay there
Imani Moise – FT
US retail banks slashed their branch networks and trimmed headcount in the first half of the year in a bet that much of the foot traffic that went digital during pandemic lockdowns will never return.

ETF industry on track for record year as investor inflows reach $659bn; Increased use of exchange-traded products by active managers has given the sector a boost
Michael Mackenzie and Chris Flood – FT
Investors are pouring money into exchange traded funds at a historic pace as equity and corporate bond markets rally to new peaks and asset managers increasingly turn to the vehicles to build portfolios.

Morgan Stanley Profit Rises; Boost in fees from deal making and advising wealthy clients helps Wall Street firm
Peter Rudegeair – WSJ
Morgan Stanley MS -0.80% said Thursday that second-quarter profit rose 10% from a year earlier, thanks to a boost in fees from deal making and advising wealthy clients. The New York-based bank reported profit of $3.51 billion, or $1.85 a share, on revenue of $14.76 billion. That exceeded the consensus estimates of analysts polled by FactSet of per-share earnings of $1.66 on revenue of $13.97 billion.

Robinhood, Others Upend Rules for Early IPO Trading; Traditional six-month lockup is eased for insiders wanting to sell stock after a company goes public
Corrie Driebusch – WSJ
Robinhood Markets Inc. revolutionized online trading. Now, as it prepares to list its own shares, the upstart broker is taking aim at a pillar of the traditional IPO process: lockups. When Robinhood shares start trading at the end of this month, employees will be able to sell 15% of their holdings immediately, rather than after the traditional six-month lockup period, according to a regulatory filing. Three months later, they can sell another 15%.

Morgan Stanley wealth units help pick up trading slack in second quarter; Wall Street bank benefited from higher fees amid dealmaking boom
Joshua Franklin – FT
Morgan Stanley revenues rose in the second quarter as its investment banking and wealth management divisions picked up some of the slack from a slowdown in trading.

BIS: Stress-Testing Banks For Climate Change – A Comparison Of Practices
Global and national financial authorities are increasingly taking action to require the financial industry to assess and manage climate risks. To this end, they have launched stress tests for banks and more exercises are planned for the near future. The use of stress tests is an important step forward in dealing with climate risks as these tests are useful for sizing, even if only approximately, potential impacts of climate risks.

Goldman Sells $5.5 Billion of Bonds in Echo of April Bank Sales
David Caleb Mutua – Bloomberg
Lender raised $6 billion after first-quarter results in April; JPMorgan, BofA, Citi may bring new sales, says BI’s Kakuda
Goldman Sachs Group Inc. raised $5.5 billion in new bonds after reporting earnings Tuesday, reminiscent of an issuance onslaught from the biggest U.S. banks after they posted results three months ago.

Bank of America CEO Isn’t Worried About Losing Junior Talent
Katherine Doherty and David Westin – Bloomberg
Turnover rate is where it’s been ‘traditionally,’ CEO says; Firms have been hiking pay as young bankers talk of burnout
Bank of America Corp. is confident in its ability to retain young talent as Wall Street firms bid up salaries for junior bankers burned out by the pandemic, Chief Executive Officer Brian Moynihan said.

Charles Schwab seeking 1,000 new employees in DFW area
Looking for a job? There are at least 1,000 available in the financial services area. The Charles Schwab Corporation on June 17 announced it is hiring for over 1,000 new positions in the Dallas-Fort Worth Metroplex in an expansion of the company’s nationwide recruitment efforts.


Hot Pot Scandal Fuels Anger Over Hong Kong ‘Double Standards’
Iain Marlow, Chloe Lo, and Kari Soo Lindberg – Bloomberg
Three top officials fined for dinner breaching virus measures; Government pressed over light penalty amid protest crackdown
Over the past year, Hong Kong has threatened protesters with jail for holding demonstrations banned to due virus-control measures. Now, a decision to forgive three senior officials for attending a dinner in violation of Covid rules has provided a new rallying cry for pro-democracy activists.

UK businesses warn of confusion and chaos over Covid workplace guidance; Executives describe the advice as a series of ‘mixed messages and patchwork requirements’
Daniel Thomas – FT
Business and trade union leaders have strongly criticised the government’s latest workplace guidance in England for Covid-safe offices, factories, shops and restaurants, describing it as confused and chaotic.

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Crypto Nomads: Surfing the World for Risk and Profit

Crypto Nomads: Surfing the World for Risk and Profit

First Read $51,906/$300,000 (17.3%) ++++ Hits & Takes John Lothian & JLN Staff The STA is holding the 88th Annual Market Structure Conference in person on October 6-8 at the JW Marriott in Washington, DC with the title "The Great Return." That is a very good...

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