Hits & Takes
By JLN Staff
We have decided to publish our Special Report on Spoofing on the most appropriate day of the year for such a report, April 1st. The title of the report will be “Spoofing is No Joke.”~JJL
Longtime CBOT member and reader of JLN Harlan Krumpfus has passed away Sunday, it was reported on the “Overheard at the CBOT” Facebook group.~JJL
Marge Livingston has passed away at age 82. She was the widow of Homer Livingston, Jr., a prominent Chicago banker and former CEO of the Chicago Stock Exchange. Homer died in 2015 at the age of 79.~JJL
I know we’re all nervous about the coronavirus, but try not to let it override your better judgment when it comes to avoiding phishing emails. There’s a nasty new phishing scam that involves an email with a Word document, which claims to have advice for avoiding infection from the World Health Organization (WHO). If you try to open the document, you find that it isn’t a Word document at all, but what’s called a “Visual Basic for Applications (VBA) script,” which accesses your computer and steals your data, which can include credit card information. Thankfully I didn’t have to learn this from experience, and now you won’t either!~MR
Pandemic-Related Business Continuity Planning, Guidance and Regulatory Relief
Due to the recent outbreak of coronavirus disease (COVID-19), FINRA reminds member firms to consider pandemic-related business continuity planning, including whether their business continuity plans (BCPs) are sufficiently flexible to address a wide range of possible effects in the event of a pandemic in the United States. Each member firm is also encouraged to review its BCP to consider pandemic preparedness and to review its emergency contacts to ensure that FINRA has a reliable means of contacting the firm. This Notice also provides pandemic-related guidance and regulatory relief to member firms from some requirements. As coronavirus-related risks decrease, member firms should expect to return to meeting any regulatory obligations for which relief has been provided.
*****My worries are more about survival than needing regulatory relief.~JJL
Global Fear of Flying Spawns Crisis for Airlines; As bookings fall sharply, carriers are cutting flights, grounding planes and trimming costs.
Alison Sider, Benjamin Katz and Doug Cameron – WSJ
The coronavirus has suddenly and unexpectedly created the biggest challenge for the global airline industry since 9/11. Bookings around the world are falling sharply. U.S. carriers are following Asian and European airlines in cutting flights, grounding planes and enacting draconian cost reductions, such as hiring freezes and unpaid leave. Foreign airlines are looking for help from governments, banks and investors. Major airlines are trying to reassure passengers with promises of scrubbed cabins, filtered air and free-flowing hand sanitizer.
*****Airlines go bankrupt when there is a little issue. Now this.~JJL
How this market crash is different from 2008, and the same; The global economy’s banking nerve centre is not under threat
Mohamed El-Erian – FT
Unlike the global financial crisis, this is not a crippling crunch in the banking or payments and settlements systems. Instead, the world economy and markets are going through a rough patch that has been years in the making. The tough times are also being amplified because governments have fewer ways to respond to them.
*****Why is this crash different from all other crashes?~JJL
What Are Circuit Breakers and Do They Calm Markets?
Nick Baker and Sam Mamudi – Bloomberg
U.S. stocks were suspended on March 9 after a plunge in the S&P 500 triggered a so-called circuit breaker. Such pauses in trading have spread globally as a tool not just to take the sting out of market meltdowns but to address the risk of erroneous trades in an era of high-frequency trading. Circuit breakers can also backfire, as China and the U.S. have experienced, adding to the volatility they’re intended to curb.
****Circuit breakers are kindergarten timeouts for when the market is being bad.~JJL
R.J. O’Brien Selects Eventus Systems for Global Market Surveillance, Real-Time Risk Monitoring Solution; Cloud Deployment of Validus Platform to Begin April 1
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, and
Austin-based Eventus Systems, Inc., a multi-award winning global trade surveillance and market risk software platform provider, today announced that RJO has selected Eventus to provide its global market surveillance and real-time risk monitoring solution. RJO conducted an extensive international search before choosing Eventus and expects its cloud deployment of the Validus platformhttp://bit.ly/2xj6vbs
*****The big winner here is Ellen Resnick of Crystal Clear Communications, who represents both firms.~JJL
Monday’s Top Three
Our top story Monday was Eurex’s COVID-19: How we handle the situation. Second was The Financial Times’ Citi to cut ties with two-thirds of foreign exchange platforms. Third was Bloomberg News’ Historic Day in Markets Has Traders Rethinking What’s Possible, which contains the quote, “Covid-19, at least for now, is providing the black swan event that the markets never realized could happen.”
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Yes, You Should Work From Home to Help Fight Coronavirus Spread; You’re not only protecting yourself, you’re protecting everyone else.
Justin Fox – Bloomberg
You want to do what you can to protect yourself and others from the spread of the new coronavirus. You’re already washing your hands raw, bumping elbows instead of shaking hands, pressing elevator buttons with your knuckles, and valiantly fighting the urge to touch your face. What else can you do to fight Covid-19? Well, you could just work from home today instead of going to the office.
The Markets Are Awful, But at Least They Work—for Now; Selloff has triggered stress in financial plumbing, but measures of market disruption suggest this hasn’t yet become anything like 2008
James Mackintosh – WSJ
You know things are bad when the good news in markets is that the financial system seems to be working well enough that people can dump their stocks in a reasonably orderly way. With oil prices falling by the most in three decades, circuit-breakers triggered to pause the decline in U.S. stocks, and Italy, one of Europe’s major manufacturing regions, in quarantine, there’s no shortage of disastrous news for investors.
Coronavirus Exposes the Danger of Corporate America’s Debt Binge; A slowdown in consumer and business spending could send heavily leveraged companies into default.
Rich Miller, Claire Boston – Bloomberg
The coronavirus is threatening to expose the Achilles heel of the U.S. economy: heavily leveraged companies. As the economic expansion stretched into a record 11th year, and interest rates stayed at ultralow levels, business debt ballooned and now exceeds that of households for the first time since 1991.
Here’s How the Virus Is Impacting Traders and Bankers at Work
Deutsche Bank AG and Point72 Asset Management were among firms to report coronavirus infections as the financial industry takes steps to ensure business carries on during the escalating health crisis. Japanese brokerages are among those introducing split operations, while the U.S. Securities and Exchange Commission is encouraging D.C. employees to stay at home following a possible infection there. Banks in the Asia-Pacific region can expect $100 billion in credit losses stemming from the outbreak, S&P Global Ratings said.
FCA to review pricing of market data; Regulator will examine information sold by groups including the LSE and Bloomberg
Philip Stafford – FT
UK markets regulators are to review whether stock exchanges and trading venues are charging their customers a fair price for market data, as those who control the valuable information come under greater scrutiny.
Markets Walked Off the Cliff. Will They Look Down? Stocks still haven’t had their Wile E. Coyote moment, despite Monday’s plunge.
John Authers – Bloomberg
Some mighty moves in the tectonic plates of the global economy are afoot. You can read my latest take on the deep significance of what is happening in this column, which expands on yesterday’s newsletter. For now, I will try to explain what has just happened, which is hard enough.
Circuit Breaker Halts Stock Trading for First Time Since 1997 Stock trading halted for 15 minutes after S&P 500 falls 7%
Akane Otani – WSJ
Stock trading was briefly halted Monday for the first time since 1997 after a tumultuous selloff triggered an automatic curb on trading. Just minutes after the stock market opened, the S&P 500 fell 7% from its previous close—triggering a circuit breaker that halted trading across the entire stock market for 15 minutes. When trading resumed at 9:49 a.m. ET, major indexes managed to come off their lows and hold above them for the rest of the morning.
Investors Rush Into Bonds to Shelter From Market Storm
Yields on government bonds tumble to record lows while corporate debt suffers its worst selloff in years
Anna Hirtenstein, Joe Wallace and Paul J. Davies – The Wall Street Journal
The historic plunge in government bond yields reflects a harsh new reality: Investors think the economy is slipping into a big hole that will be tough to escape. Turmoil in financial markets triggered by an oil price war and the outbreak of the coronavirus sent government bond yields to historic lows Monday, as investors sought safety in the least risky assets they could find.
Critics take aim at ‘failure’ of bond designed to fight disease; Instruments issued by World Bank have yet to pay out to combat the coronavirus
Anna Gross – FT
Pandemic bonds issued by the World Bank are under fire, accused of having structural flaws that prevent them from supporting poor countries hit hard by coronavirus.
Volatility Is Up. Here’s How It Works and Why It Matters
Joanna Ossinger and Cecile Vannucci – Bloomberg
Mom and pop investors fear it. Traders by and large love it, and normally miss it when it’s gone. Volatility was absent from the financial markets for an unusually long time before rushing back. It’s now on everyone’s radar screen, and likely to stay that way in the months ahead. Volatility not only affects investments; investing in volatility has become something of a cottage industry.
Why Rational People Are Panic Buying as Coronavirus Spreads
Ari Altstedter and Jinshan Hong – Bloomberg
Psychologists view this as a form of control amid uncertainty; Store shelves around the world bare of toilet paper, staples
The worldwide spread of the novel coronavirus is leading to some curious side effects: Store shelves are being stripped bare from Singapore to Seattle. Supermarkets in the U.K. have started rationing items. In Hong Kong a delivery man was reportedly robbed at knife-point of hundreds of toilet-paper rolls. Australia has seen brawls break out at supermarkets prompting police to taser one man. And France effectively nationalized all production of face masks after people began depleting the supply.
The Big Interview: Ralston Roberts; Following the recent 50th anniversary of Instinet, Ralston Roberts speaks to Hayley McDowell about his first year as chief executive of the agency broker, and the impact the firm has had on the rise of electronic trading.
Hayley McDowell – The Trade
Hayley McDowell: How was your first year as CEO of Instinet, and what were your priorities for the business upon taking up the role?
Investment Week launches Women in Investment Awards 2020
Investment Week launches Women in Investment Awards 2020
Investment Week is delighted to open nominations for our Women in Investment Awards 2020, in partnership with HSBC Global Asset Management.
Don’t Jump to Conclusions When America’s Coronavirus Iceberg Emerges; As testing expands, the number of confirmed coronavirus cases will head higher, but care needs to be taken in analyzing any trends in the data
Justin Lahart – WSJ
Nobody should be surprised if there is a surge in the number of confirmed cases of the novel coronavirus within the U.S. in the weeks ahead. And nobody should confuse that surge with how rapidly the virus is spreading.
Bank of Japan credibility at risk as its stock portfolio on verge of losses
Hideyuki Sano, Tomo Uetake – Reuters
The Bank of Japan may be close to losses on its 29 trillion yen ($279 billion) stock portfolio, analysts say, raising concerns about its credibility and the sustainability of its hyper-easy monetary policy.
It’s a ‘Swimming Naked’ Moment: The Financial System Has a Real Test; The coronavirus spread and its economic effects are stressing the U.S. system for the first time since the 2008 financial crisis.
James B. Stewart – NY Times
The investor Warren Buffett once gave a famous warning: “It’s only when the tide goes out that you learn who’s been swimming naked.” The tide has just gone out again, and clues to who’s been swimming naked have begun to emerge.
Coronavirus Is a Risk to the Olympics, in 2020 and Beyond; Reforms meant to shrink the ever-expanding games haven’t had much success. Maybe a pandemic could spark action.
Adam Minter – Bloomberg
In 1906, preparations for the 1908 Olympics were underway in Rome when Mount Vesuvius erupted and devastated Naples. The Italians, already strapped for funds to build Olympic venues, used the disaster as an excuse to back out of their commitment. The International Olympic Committee didn’t miss a beat: In November 1906 — a mere 15 months before the opening ceremonies — London was selected as a replacement and held the games on time. Among other feats, the city built the first dedicated Olympic Stadium.
Wealth Wipeout Reshapes Ranks of World’s Richest People
Tom Metcalf, Venus Feng, and Devon Pendleton – Bloomberg
The 500 richest people lost combined $239 billion on Monday; Major U.S. stock market indexes fell more than 7.5% on the day The wealth destruction caused by Monday’s market collapse is reshaping the ranks of the world’s richest people. Wildcatter Harold Hamm’s fortune plunged by almost half to $2.4 billion by the end of the day, a drop that bumped him from the 500-member Bloomberg Billionaires Index. Fellow oil magnate Jeff Hildebrand also fell off the ranking while Lukoil PJSC executives Leonid Fedun and Vagit Alekperov lost a combined $5 billion.
Investors Dodging Market Meltdown Say They Can’t Find Liquidity
John Ainger and Anooja Debnath – Bloomberg
Key gauge of banking sector risks rises to highest since 2011; Move Index of Treasury vol spikes to highest level in decade
Fund managers are being faced with a collapse of liquidity as they try to handle record market moves. Investors say it is becoming increasingly difficult to trade due to the extent of swings on a day that saw 30-year Treasury yields drop the most since the 1980s and a fall in U.S. stocks so sharp that trading was halted minutes from the open. Even before today financial conditions were tightening at the fastest pace since the 2008 crisis.
Traders Are Wagering the VIX Hits Triple Digits on Tuesday
Luke Kawa – Bloomberg
The Cboe Volatility Index hit highest since financial crisis; A call option with a strike price of 100 traded Monday
Tail risk is catching a bid during this market meltdown, with the potential for volatility to ascend to heights never seen before.
Exchanges, OTC and Clearing
OCC Names Two New Members to Board of Directors
OCC, the world’s largest equity derivatives clearing organization, today announced two new members to its Board of Directors. Kevin KennedyKevin Kennedy, Senior Vice President and Head of Product Management for North American Market Services at Nasdaq, has joined OCC’s board of directors. He replaces Tom Wittman, Executive Vice President, Head of Global Trading and Market Services for Nasdaq, who resigned from OCC’s board of directors on December 30, 2019.
Nasdaq acquires buy-side portfolio management FinTech Solovis; Solovis will be integrated with Nasdaq’s eVestment business for expanded multi-asset portfolio management and reporting tools.
Kiays Khalil – The Trade
Nasdaq has confirmed its acquisition of institutional investment FinTech firm Solovis to complement its takeover of buy-side analytics provider eVestment in 2017.
Nasdaq Acquires Institutional Investment Fintech Firm Solovis; Solovis will pair with eVestment to deliver investment data, portfolio analytics and monitoring across public and private markets
Nasdaq, Inc. (Nasdaq: NDAQ) announced today the acquisition of Solovis, a privately-held financial technology company offering multi-asset class portfolio management, analytics and reporting tools across public and private markets. Solovis solutions will be available through Nasdaq’s eVestment group and broaden eVestment’s capabilities with portfolio analysis and monitoring for institutional investors and consultants.
JPX launches pilot for DLT post-trade information platform; Trust banks, asset managers, and other securities services providers have been invited by JPX to participate in the test.
Joe Parsons – The Trade
The Japan Exchange Group (JPX) will launch testing of a distributed ledger technology (DLT) pilot platform for sharing post-trade securities information.
Toronto Stock Exchange Celebrates 30 Years of ETFs; Home to the world’s first exchange traded fund marks occasion with market open ceremony
Toronto Stock Exchange (TSX) today celebrated the 30th anniversary of the launch of the world’s first exchange traded fund (ETF) with a market opening event featuring guests from across Canada’s ETF industry.
TP ICAP launches innovative FX options platform
TP ICAP, the world’s largest interdealer broker, has launched an innovative foreign exchange options platform, FXOhub. FXOhub represents a step-change in intuitive liquidity sourcing and trade execution on an industry leading FX Options platform.
SGX appoints Ng Yao Loong as Deputy CFO
Singapore Exchange (SGX) today announced the appointment of Mr Ng Yao Loong as Deputy Chief Financial Officer (CFO) with effect from 1 April 2020. Mr Ng will succeed Mr Chng Lay Chew as CFO from 1 October 2020 onwards, upon Mr Chng’s retirement.
SGX reports market statistics for February 2020
Supply-chain uncertainties drive heightened demand for risk-management solutions; Investors continue to seek access to Emerging Asia, in particular China
Singapore Exchange (SGX) today released its market statistics for February 2020. Rising concern over the impact of the COVID-19 outbreak on the global economy and on supply chains drove heightened demand for risk management solutions across financial and commodity markets, lifting derivatives trading volume to a record.
Extraordinary Revision of the Price Limit
Considering recent market conditions, the price limit range for TSE Mothers Index Futures and TOPIX Banks Index Futures shall be revised from the trade date ending on March 13, 2020 to the trade date ending on May 29, 2020.
The details are as below.
SIX Swiss Exchange: To Contain The Spread Of The Coronavirus The Exchange Wil No Longer Be Organizing Events Nor Sending Delegations To Attend Events.
To protect the health and well-being of clients and employees, the Swiss Stock Exchange will, till further notice, no longer be organizing events nor sending delegations to attend events.
Nadex Temporarily Widens Spread And Halts Contracts
On trade date March 9, 2020, North American Derivatives Exchange, Inc. (“Nadex”, the “Exchange”) temporarily refrained from listing its GBP/JPY Intraday 5-Minute Currency Binary contracts which would have expired at 6:10pm- 6:20pm ET, and its GBP/USD Intraday 5-Minute Currency Binary contracts which would have expired at 6:10pm and 6:15pm ET. The GBP/JPY Intraday 5-Minute Currency Binary contract was listed at 6:20pm ET for a 6:25pm ET expiration, and the GBP/USD Intraday 5-Minute Currency Binary contract was listed at 6:15pm for a 6:20pm ET expiration. This action was taken pursuant to Nadex Rules 12.31(f)(iv)(5) and 12.41(f)(iv)(5).
U.S. stock market circuit breakers working as expected: NYSE president
Safeguards in the U.S. stock market are functioning as planned, the president of the New York Stock Exchange said on Monday, after a 7% decline in the S&P 500 triggered a 15 minute trading pause shortly after the market opened.
AST Launches ProxyIQ to Provide Unmatched Speed, Accuracy and Cost-Effectiveness in Mutual Fund Proxy Campaign Analytics and Management
AST today announces the launch of ProxyIQ, its transformative blockchain-based proxy campaign management platform. ProxyIQ provides mutual fund issuers with the best proxy campaign tabulation, reporting and predictive analytics available in the industry, allowing for smarter, more cost-effective campaign execution.
AST Private Company Solutions Launches Astrella™, Harnessing Technology to Transform Private Company Equity Ownership Ecosystem;
Ownership data management leader introduces new cloud-based platform that integrates blockchain, AI and predictive analytics.
AST Private Company Solutions (AST PCS) introduces its innovative software-as-a-service (SaaS) based solution for privately-held companies at a launch party today. The platform, called Astrella, provides solutions for managing capitalization (cap) tables and other equity ownership data
Robinhood Brokerage App Goes Down for Second Time in a Week
Nikitha Sattiraju – Bloomberg
Online brokerage Robinhood Markets Inc. went down for the second time in a week on Monday. The company was having problems with equities, options and cryptocurrency trading after markets opened.
Robinhood Draws User Ire for Repeated Outages in Volatile Market; Some customers of e-brokerage couldn’t trade during Dow’s worst day since 2008
Dawn Lim – WSJ
Robinhood Financial LLC suffered its third outage in eight days, angering investors who couldn’t trade during a wild day in markets. The market gyrations sent investors scrambling to hedge positions, cash out or buy stocks at discounted prices while oil prices collapsed and U.S. stocks neared bear market territory. Some Robinhood customers took to social media to vent that they missed out on a historic trading day.
FIX EMEA Trading Conference postponed; Conference organisers have decided that going ahead with the event would put delegates and speakers at risk.
Hayley McDowell – The Trade
The FIX Trading Community has confirmed that its EMEA conference set to take place this Thursday in London has been postponed to protect the wellbeing of its delegates and speakers in light of coronavirus.
Citi reduces FX platforms and demands vendors adhere to FX Global Code; Following a scorecard assessment of its FX trading platforms 12 have been cut, as Citi says it expects vendors to adhere to the FX Global Code of Conduct.
Hayley McDowell – The Trade
US investment bank Citi has confirmed that it has cut the number of FX trading platforms it uses, and now requires vendors adhere to the FX Global Code of Conduct before entering partnerships.
Over $26 billion wiped off cryptocurrency market in 24 hours after massive oil price plunge
Arjun Kharpal – CNBC
Cryptocurrency markets plunged following a plummet in oil prices and further sell-off in stocks.
The market capitalization or entire value of cryptocurrencies was down $26.43 billion from a day earlier at around 1:17 p.m. Singapore time, according to data from Coinmarketcap.com. The sell-off worsened as the day went on.
What the Oil Market Says About Bitcoin’s ‘Safe Haven’ Status
Leigh Cuen – Coindesk
Monday’s historic financial tumult reached beyond stocks, sinking commodities and even bitcoin markets. “I don’t think any asset is safe right now – except cash, U.S. dollars,” said Ali Khedery, formerly Exxon’s senior Middle East advisor and now CEO of U.S.-based strategy firm Dragoman Ventures. While bitcoin prices dropped nearly 10 percent over the weekend, Saudi Arabia slashed its export oil prices when Russia refused to support an Organization of the Petroleum Exporting Countries (OPEC) effort to reduce oil production. Coronavirus quarantines mean fewer cars on the road, economic slowdown and less demand for oil, experts warn.
Crypto Traders Stung by Liquidations on Leveraged Exchanges
Olga Kharif – Bloomberg
Liquidations on BitMex exchange spike as Bitcoin price plunges; The higher the leverage used, the closer the liquidation point
Cryptocurrency investors are learning a hard lesson about the downside of leverage during the global rout across asset classes. With prices down more than 15% since March 6, thousands of traders have been facing liquidations on BitMex, the world’s largest Bitcoin derivatives exchange. On Sunday, the Seychelles-registered trading platform had the most Bitcoin-related liquidations in three months, according to crypto derivatives tracker Skew.
WHO Encourages Use Of Contactless Payments Due To COVID-19
Roger Huang – Forbes
As part of the COVID-19 outbreak, central banks have resorted to quarantining physical bills and some are even going so far as to burn banknotes. South Korea’s central bank, the Bank of Korea, has implemented a quarantine policy for physical notes that come in from local banks. They’ll keep banknotes in a safe for up to two weeks, given “that the [SARS-CoV-2, which causes the COVID-19 disease] virus usually dies in nine days.”
After institutional launch, Blockchain.com now jumps into retail lending business
Yogita Khatri – The Block
Crypto wallet provider Blockchain.com, which boasts of having over 46 million users, has rolled out the retail lending desk. Dubbed “Borrow,” the desk allows users to borrow USD-pegged stablecoin, USD Digital, against bitcoin held in their Blockchain.com wallets. USD Digital is Blockchain.com’s in-wallet stablecoin, a spokesperson of the firm told The Block, adding that it is powered by Paxos and functions “just like” Paxos Standard (PAX) stablecoin. “Given the state of the global markets, people are looking outside of the traditional finance system for new ways to borrow money against what they’ve previously saved,” Xen Baynham-Herd, executive vice president at Blockchain.com, told The Block.
DeFi lending protocol Compound sees its biggest day of liquidations since v2 protocol launch
Celia Wan – The Block
Compound saw $2,534,760 worth of collateral liquidated on March 8 – a record high since the launch of its v2 lending protocol in May of last year. The price of ether (ETH) plunged over the weekend, dropping from above $250 to around $200. Since borrowers tend to use ETH as collateral, the price dip rendered many loans under-collateralized, triggering their liquidation. MakerDAO, another lending protocol, as well as exchange dYdX also saw liquidation spike over the same period, although those occurrences were not as substantial as those seen on Compound.
Bitcoin’s implied volatility is surging, and it’s a cash grab for big traders
Frank Chaparro – The Block
Implied volatility for bitcoin has been soaring – and it’s a boon for some of the market’s biggest traders. One-month implied volatility for the digital asset has increased from 55% to 65% since Sunday at midnight, according to data provided by Skew. Implied volatility gauges a market’s expectation for volatility in a given asset over the next month.
You Call That Volatility? Bitcoin Traders Scoff at Wall Street’s Gyrations
Bradley Keoun – Coindesk
It was just another Monday in the notoriously volatile cryptocurrency markets, which stay open 24 hours a day, seven days a week. Traders in the 11-year-old digital-asset industry described few changes in business activity or sentiment as coronavirus-related fears gripped Wall Street and sent stock markets reeling. “We’re not the ones uncomfortable with the volatility today,” said Ricky Li, co-founder and head of Americas at Altonomy, a cryptocurrency-focused proprietary trading firm. Prices for bitcoin (BTC) slid by 2.9 percent to about $7,800 as of 16:48 UTC (12:48 p.m. Eastern Time) Monday.
Securitize Launches Tokenized Platform to Revitalize Japan’s Rural Property Market
Paddy Baker – Coindesk
Digital asset issuer Securitize has launched a tokenized platform aimed to encourage funding in under-invested real estate in rural Japan. Built in collaboration with Tokyo-based fintech firm LIFULL Social Funding, the crowdfunding platform has just finished undergoing joint tests, according to a Securitize blog post on Tuesday. Calling the project “very exciting”, Securitize CEO and co-founder Carlos Domingo said this was the beginning for both Securitize and LIFULL to “modernize the Japanese real estate market together.”
Kraken Plans to Expand Indian Services Amid Banking Ban Lift
Arnab Shome – Finance Magnates
Kraken, a United States-based crypto exchange, is planning to expand its operations in the Indian market with its digital asset trading services. Announced on Monday, this decision came after the recent verdict of India’s highest court against the harsh decision of the country’s central bank to ban banking services for crypto businesses. “This is an incredibly emotional moment for India,” Sunny Ray, Kraken head of global business development, said. “Satoshi created Bitcoin because he felt that central banks were inefficient. The fact that the crypto industry just battled, and won, against the central bank located in the second-most populous country in the world is a massive achievement. We fought for 1.5 billion people to have the right to access crypto.”
Non-custodial crypto exchange Synthetix is preparing to offer derivatives trading on Ethereum
Yogita Khatri – The Block
Non-custodial crypto exchange Synthetix, which is built on the Ethereum blockchain, is planning to add several new features to its platform, including derivatives trading. Announcing the news on Tuesday, Synthetix said it is planning to launch trading in binary options, as well as futures in Q3 of this year. Binary options are a type of derivative product in which a trader either receives a payout or loses their investment.
Donald Trump floats tax cuts as response to coronavirus impact; US president to talk to Congressional leaders about ‘very dramatic’ economic measures
Demetri Sevastopulo and James Politi – FT
President Donald Trump on Monday said he would propose a “major” economic relief package, including a possible payroll tax cut and measures to help hourly-wage workers, in an effort to reduce the negative impact of the coronavirus outbreak.
In coronavirus crisis, Trump’s stock market advice keeps looking worse
David Knowles – Yahoo News
Almost forgotten in the rush of doom-and-gloom headlines about the spread of coronavirus and Monday’s record-breaking stock market sell-off is President Trump’s two-week-old advice to would-be investors to buy stocks.
While the world deals with the coronavirus, Trump glorifies himself on Twitter
Eugene Robinson – Washington Post
A dangerous pathogen is spreading across the globe. Financial markets are having a nervous breakdown. Oil prices have collapsed. Americans are hoarding hand sanitizer and surgical masks. Air travel is down. Conferences are being canceled. Merely shaking a stranger’s hand suddenly seems like a risk. And the president of the United States, in response, is spending hours a day glorifying himself on Twitter.
Biden Says Trump Should ‘Be Quiet’ on Coronavirus
Ryan Teague Beckwith and Jennifer Epstein – Bloomberg
Joe Biden said President Donald Trump is spooking the stock market with inaccurate statements about the coronavirus. In an interview with MSNBC set to air at 10 p.m. Monday, the former vice president said the market’s dramatic drop, which led trading to be halted briefly Monday morning, may be caused by traders realizing Trump’s generally rosy picture of the virus’ spread in the U.S. is inaccurate.
“He’s Definitely Melting Down Over This”: Trump, Germaphobe in Chief, Struggles to Control the Covid-19 Story ; Publicly, he sees it as yet another (“Fake News”) media war; privately, he worries about virus-carrying journalists on Air Force One. But cancel his rallies? “I’m not going to do it,” he says.
Gabriel Sherman – Vanity Fair
Ever since the coronavirus exploded outside of China at the end of January, Donald Trump has treated the public health crisis as a media war that he could win with the right messaging. But with cases now documented in 34 states and markets plunging, Republicans close to Trump fear his rosy assessments are fundamentally detached from reality in ways that will make the epidemic worse. “He is trying to control the narrative and he can’t,” a former West Wing official told me.
Trump’s ‘Business as Usual’ Virus Strategy Fails to Calm Markets
By Justin Sink – Bloomberg
President says flu kills more and ‘life & the economy go on’; Trump to meet economic team after holding Florida fundraiser
It was business as usual for President Donald Trump on Monday as the stock market crumbled under the twin strains of collapsing oil prices and the spreading coronavirus.
US bank regulators urge relief for borrowers over coronavirus; Fed and other agencies say they will refrain from criticising ‘prudent efforts’ to aid customers
Brendan Greeley – FT
Federal bank regulators urged US banks on Monday to work “constructively” with borrowers affected by the coronavirus outbreak, in a joint announcement similar to ones issued after 9/11 and Hurricane Katrina.
Following consultation, ASIC releases new regulatory framework for foreign financial services providers
ASIC has released its new regulatory framework for foreign financial services providers (FFSPs) providing financial services to Australian wholesale clients.
‘Our new regulatory framework facilitates Australian wholesale access to foreign investment opportunities, preserves market integrity against misconduct in wholesale markets, and strengthens ASIC’s ability to take effective regulatory and supervisory action,’ said ASIC Commissioner Cathie Armour.
ASIC consults on proposals about advice fee consents and independence disclosure
ASIC has today issued Consultation Paper 329 Implementing the Royal Commission recommendations: Advice fee consents and independence disclosure (CP 329). CP 329 seeks feedback on:
Firm Gateway is becoming FINRA Gateway in 2020!
We are delighted to introduce FINRA Gateway, the new FINRA reporting and compliance user experience, which we will begin to roll-out in the coming months. The new system is designed to focus on compliance functions, such as research, reporting and responding to requests, rather than focusing on the specific system you would access to fulfill your requirements.
FINRA Termination of CTCI Protocol for Reporting Trades to TRACE AND ORF
This is the final reminder that beginning Monday, March 16, 2020, FINRA will no longer support the reporting of transactions to its TRACE and OTC Reporting Facility (ORF) products via the CTCI protocol.
Pandemic/Business Continuity Planning for FINRA Reporting Facilities
In light of the recent outbreak of coronavirus disease (COVID-19), FINRA continues to review its pandemic and business continuity plans to ensure continuous operation of FINRA’s facilities for the reporting of OTC transactions in equity and fixed income securities (i.e., the Alternative Display Facility (ADF), the OTC Reporting Facility (ORF), the Trade Reporting and Compliance Engine (TRACE) and the FINRA Trade Reporting Facilities (TRFs), operated on FINRA’s behalf by the TRF Business Members1) (collectively, the “FINRA Facilities”). FINRA anticipates that the FINRA Facilities will remain fully operational in the event of a pandemic.
EVENT POSTPONED: SEC Announces Conference on Municipal Securities Disclosure
The Securities and Exchange Commission today announced that it will host a March 10 conference to focus on municipal securities, which are predominantly owned by Main Street investors and help finance important public projects like schools, roads and utilities.
Trump Hasn’t Been Tested for Virus But Top Aide Is Quarantined
Billy House – Bloomberg
Trump named Meadows as his new chief of staff last week; Several lawmakers had contact with infected person at event
President Donald Trump has yet to be tested for the coronavirus, even as his incoming chief of staff and at least four other GOP lawmakers put themselves in quarantine after coming into contact with an infected person at a political event.
Investing and Trading
FTSE Russell Announces 2020 Russell US Indexes Reconstitution Schedule
John D’Antona Jr. – Traders Magazine
FTSE Russell, the global index, data and analytics provider, today announced the 2020 schedule for the annual reconstitution of its Russell US Indexes. The Russell annual index rebalance process is designed to capture and reflect market shifts from the past year to ensure the Russell US indexes continue to accurately reflect the US equity market.
Mnuchin, Treasury Cancel 50 Year Bond Sales
John D’Antona Jr. – Traders Magazine
Forget about investing in the United States if you have a super-long duration.
Given the recent Covid-19 volatility sparked bond market rally, interest rates have fallen across the yield curve making long- and ultra-long maturity bond yields unattractive to investors. For example, the Treasury 10-year note yield fell to 0.706% on Friday while the 30-year bond yield closed at 1.25%.
Switching out of shares in a battered market; The virus is not the only problem facing investors
John Redwood – FT
Two weeks ago I thought the growing gap between the optimism of the share markets and the likely run of news from a world economy damaged by an epidemic was too great. I wrote about the likely impending fall in share prices and sold shares in the FT fund.
Why there are no winners from the oil price plunge this time; Coronavirus hit to demand will prevent any boost to growth, economists say
Delphine Strauss – FT
The last sustained fall in global oil prices from 2014 to 2015 was greeted as a shot in the arm for the world economy. This week’s crash, if it lasts, could be very different.
Market stability begins to fray as oil slump piles on the pain; Price plunge compounds worries for traders already reeling from coronavirus crisis
Robin Wigglesworth, Philip Stafford and Eva Szalay – FT
The biggest oil price crash in almost three decades has deepened the market stress caused by the coronavirus outbreak, leaving traders reeling and leading to mounting signs of strain and dislocation in financial markets.
Triple-Leveraged Oil Fund Among Niche ETFs That Are Plunging
Claire Ballentine and Katherine Greifeld – Bloomberg
ETN that provides magnified exposure to oil swings sinks 71%; Cboe delists bearish Treasury ETN amid haven demand explosion
Distress reigns in corners of the market for exchange-traded products as the spreading coronavirus and all-out oil price war upend assets around the world. U.S. stocks plunged, crude slid the most since 1991 and Treasury yields plumbed record lows. Credit markets torpedoed and the dollar slumped. And now, the pithy slogan “there’s an ETF for that” means there’s a product getting hammered in areas of the markets most under duress.
Global Bond Markets Unwind Aggressively on Fiscal Promises
Masaki Kondo, John Ainger, and Chikafumi Hodo – Bloomberg
Treasury yields jump the most since 2016 on Trump tax relief; Moves spread into Europe, with disaster hedges coming off
Global bond markets snapped back aggressively from their phenomenal rally over the past week on bets that governments will introduce fiscal measures to deal with the economic fallout from the coronavirus.
What Benjamin Graham Would Tell You to Do Now: Look in the Mirror; The great investment analyst and Buffett mentor often counseled that investors must first know their own risk tolerance
Jason Zweig – WSJ
Forget about what the stock market is going to do. Instead, focus on what you, as an investor, ought to do. That advice from Benjamin Graham, the great investment analyst and Warren Buffett’s mentor, can help you navigate the market’s latest storm. Should you jettison some stock or stay the course? How should you act now to reduce the odds that you will kick yourself later for taking too much risk or too little? A few of Graham’s guidelines can help you know yourself and act accordingly.
Bank investors confront a new fear: oil company defaults; ‘Unmitigated selling’ of small lenders with energy exposure and double-digit falls for big groups
Stephen Morris and Robert Smith and Robert Armstrong – FT
After weeks of worrying that lower interest rates will squeeze bank profits, investors confronted a still more alarming possibility on Monday: that a collapse in oil prices could trigger a wave of defaults by borrowers.
Deutsche Bank cleared Cyprus funds for businessman Jho Low; Lender acted as correspondent bank for Malaysian facing allegations over 1MDB scandal
Michael Peel and Olaf Storbeck – FT
Deutsche Bank cleared funds for Jho Low, the Malaysian businessman fighting multibillion-dollar corruption allegations, ahead of his purchase of a house and nationality in Cyprus under the Mediterranean state’s “golden passport” scheme.
Bogleheads Keep Calm and Carry On With Global Stocks Pummeled
Suzanne Woolley and Edward Robinson – Bloomberg
‘People are scared,’ says adviser to many middle-class clients; Some savvy investors are converting traditional IRAs to Roths
Anxiety? Yes. Panic? No. As the S&P 500 plunged Monday, calm reigned on the online forum of the Bogleheads, an investing group inspired by the late Vanguard Group founder Jack Bogle and famed for its cool-headed, long-term attitude toward passive index investing.
CFPB Says Fifth Third Employees Opened Accounts Without Customer Consent; Lawsuit alleges bank didn’t do enough to monitor or adjust sales goals
Orla McCaffrey – WSJ
The Consumer Financial Protection Bureau said Monday that Fifth Third Bancorp FITB -17.57% employees opened deposit and credit-card accounts without customer approval in a bid to meet ambitious sales goals.
Mexico boosts size of currency hedging programme; Central bank and finance ministry response follows peso’s fall to record low
Jude Webber – FT
Mexico responded to the global markets sell-off by ramping up the size of a currency hedging programme launched three years ago, designed to prop up the flagging peso after it hit a new historic low above 22 to the dollar in overnight trading after oil prices slumped.
Standard Life Aberdeen suffers nearly £60bn of withdrawals
Owen Walker – FT
Standard Life Aberdeen suffered heavy outflows, mainly tied to its lost business with Lloyds Banking Group, as well as a 10 per cent profit fall in its full-year profit, yet beat analysts’ expectations.
JPMorgan Says Fed Won’t ‘Keep its Powder Dry,’ Sees Zero Rate
Simon Kennedy – Bloomberg
JPMorgan sees Fed cut of 100 basis points by end of next week; Economists say Fed could act before March 17-18 meeting
JPMorgan Chase & Co. economists predicted the U.S. Federal Reserve will cut interest rates to the lowest level since 2015 by the end of next week, a more aggressive move than anticipated by other Wall Street banks.
ECB Anti-Virus Measures May Be Mixed Bag for Banks, Goldman Says
Alexander Weber – Bloomberg
The European Central Bank is expected to take steps this week that may hit bank profitability but bolster the system in the longer run as it seeks to contain the economic fallout of the coronavirus, according to Goldman Sachs Group Inc.
Britain Seen Announcing Biggest Bond Deluge in Nearly a Decade
John Ainger and Greg Ritchie – Bloomberg
Gilt issuance set to rise to highest since 2011-2012: dealers; Bond rally means investors may end up paying U.K. to borrow
U.K. bond issuance is set to surge to the highest level in nine years with Prime Minister Boris Johnson’s government expected to unveil a significant increase in budget spending. Sales of gilts will rise to 166 billion pounds ($218 billion) in the 2020-2021 financial year, according to the median forecast of 13 bond dealers surveyed by Bloomberg.
Coronavirus Ravages Iran All the Way to the Top; Hospitals run short of beds, and four government officials are among the dead.
Arsalan Shahla, Gülnar Motevalli, Marc Champion – Bloomberg
Iran is dealing with one of the world’s worst outbreaks of the new coronavirus, and the disease was quick to reach the top ranks of the government. Four current and former Iranian officials have died so far from coronavirus: a member of the Expediency Council that advises 80-year-old Supreme Leader Ayatollah Ali Khamenei; an aide and mentor to Foreign Minister Mohammad Javad Zarif; a former ambassador to the Vatican; and a newly elected member of parliament. Iraj Harirchi, the deputy health minister in charge of the country’s coronavirus task force, has it himself, as does the head of Iran’s medical services. Vice President Masoumeh Ebtekar—once spokeswoman for the revolutionaries who took 52 Americans hostage at the U.S. Embassy in Tehran in 1979—says she’s sick with the virus, too.
Italy Negotiating With Banks for Mortgage Relief in Virus Crisis
Sonia Sirletti – Bloomberg
Government looks at tax payments, temporary layoff relief; Italy extended restrictions on movement to entire country
The Italian government is negotiating with banks to provide breaks from debt payments including mortgages, as individuals and businesses are hit by a nationwide lockdown to contain the coronavirus.
Saudi Arabia Escalates Price War With Huge Oil Output Hike
Javier Blas, Matthew Martin, and Grant Smith – Bloomberg
Riyadh prepares to flood the market with record crude supply; Russia responds with signal it can boost output to new high
Saudi Arabia escalated its oil price war with Russia on Tuesday, with its state-owned company pledging to supply a record 12.3 million barrels a day next month, a massive production hike to flood the market.
Coronavirus to drive European airline industry shakeout
Laurence Frost – Reuters
The coronavirus will accelerate a Darwinian shakeout in Europe’s overcrowded airline industry that ultimately benefits Ryanair and British Airways owner IAG, industry experts predict.
Coronavirus triggers collapse in UK business confidence
Daniel Thomas – Financial Times
Business confidence in the UK has plummeted since the start of the global coronavirus crisis, wiping out the post-election “Boris bounce” and raising new questions for the chancellor in this week’s Budget. One in five directors said the outbreak posed a severe threat to their businesses, according to a survey by the Institute of Directors, a lobby group, in one of the first indicators of how companies are coping with the disruption caused by the coronavirus. A further 40 per cent of business leaders saw the virus posing a moderate threat.
Brexit: UK ‘must consider deal trade-offs’, says von der Leyen
The UK should consider the trade-offs it is willing to make in a post-Brexit deal, European Commission president Ursula von der Leyen says. She said the closer the UK’s access to the single market – which it is leaving – the more it must adhere to EU rules. But cabinet minister Michael Gove said the UK “would regain its economic and political independence” and any deal “would need to reflect that reality”. Both sides agreed that differences remained after last week’s trade talks.
With coronavirus, the government must extend the Brexit transition period
Lisa Nandy – The Guardian
Coronavirus is a threat to the global economy as well as to public health. Every family will be affected and those who have less will feel it the most. In a globally connected world, we are only as strong as the most vulnerable. The government must take a long-term approach to this crisis and run the country like the future matters. In a crisis, uncertainty must be minimised. That is the lesson from the financial crisis in 2008 and every global crisis before it.
The UK Budget can slay the pessimism that fed populism
Sebastian Mallaby – Financial Times
In the wake of the second world war, Britain created the welfare state, including its beloved National Health Service. Following the stagflationary 1970s, Britain pioneered privatisation, a model that soon spread to other countries. Today, even in the face of coronavirus, Britain has a chance to lead the way on a third policy adventure. With the Budget that will be unveiled on Wednesday, the government could begin to transform a cause of populism into a tool for fighting it.
Coachella Organizers Aim to Delay Music Festival to October
Nick Turner and Lucas Shaw – Bloomberg
The massive music festival was scheduled for next month; Live events have been thrown into disarray by coronavirus
The Coachella Valley Music and Arts Festival organizers are aiming to delay the event in California after the confirmation of a coronavirus case prompted local health officials to declare a state of emergency, according to a person familiar with the matter.
Coronavirus School Closures Expose Digital Haves and Have-Nots; As schools from Seattle to New York start closing, educators face challenges of remote learning
Julie Jargon – WSJ
The ability of schools across the country to hold classes remotely is being tested as more close in an effort to contain the spread of the novel coronavirus. Also being tested: the ability of families to get their homes tech-ready so children can log in to virtual classrooms.