First Read
Hits & Takes
John Lothian & JLN Staff
I don’t know if it is the long hours of work, the hurricane, the evacuation, bad search technique, or aging and losing my memory, but I totally screwed up my recollection of the timeline of the DRW/CFTC scuffle. I apologize for the error.
SEC Chairman Gary Gensler was at the helm of the CFTC as chairman in 2013 when it filed its case against DRW and Don Wilson. Timothy G. Massad succeeded Gensler, starting on June 5, 2014 and leaving on inauguration Day in 2017, January 20th. J. Christopher Giancarlo succeeded Chairman Massad and was the one who inherited the case late in the process, as the trial took place in December of 2016 and the decision rendered in 2018.
Here is the original press release from the CFTC from 2013 announcing the charges, “CFTC Charges Donald R. Wilson and his Company, DRW Investments, LLC, with Price Manipulation.” And here is a story from Reuters from 2018 reporting DRW winning the case, “U.S. CFTC loses case against prominent trader Donald Wilson, DRW.”
DRW Cumberland issued a statement via Twitter that I have printed in its entirety below that does embody the spirit I expected from them, that they will fight. They also explained in detail how they engaged with the SEC and have no plans to change their business model. Here is DRW Cumberland’s statement:
Today we became the latest target of the SEC’s enforcement-first approach to stifling innovation and preventing legitimate companies from engaging in digital assets. This comes despite bipartisan pushback on this approach in the most recent House Financial Services Committee hearing, in which the SEC was called a rogue agency, cited for its failure to work with Congress and taken to task for abusing its power.
At issue in our case is the SEC’s view that some of our transactions involving certain cryptoassets were securities transactions. We have engaged in five years of good-faith discussions with the SEC on this point. On our end, we’ve shared dozens of written summaries and statements, produced thousands of pages of material and made our senior management and compliance personnel available for many hours of interviews. Today’s complaint is the first time the SEC has outlined the specific transactions at issue.
The SEC asserts these transactions required us to register as a broker-dealer. While we strongly disagree, we took that step and acquired a registered broker-dealer in 2019. Only then – despite Chairman Gensler’s call to “just come in and register” – were we told we could only use our broker-dealer to trade BTC or ETH (both commodities and not under the jurisdiction of the SEC). This naturally calls into question whether the guidance to come in and register was provided in good faith.
We are not making any changes to our business operations or the assets in which we provide liquidity as a result of this action by the SEC. We are confident in our strong compliance framework and disciplined adherence to all known rules and regulations – even as they have been a moving target (it wasn’t long ago ETH was claimed to be a security).
We have proven before our firm’s willingness to defend ourselves against overzealous regulators wielding their power in ways that harm rather than benefit the market. We did it when Chairman Gensler was Chair of the CFTC, with the court finding its case against DRW “based on little more than an ‘earth is flat’-style conviction.” This time the SEC’s approach seems to be a game of Catch-22 where the ability to “come in and register” is just a mirage.
We’re ready to defend ourselves again.
Lance Glinn, who replaced Josh King as the host of Inside the ICE House, which is now part of NYSE TV, interviewed Synchrony President & CEO Brian Doubles on a “Decade of Success & Strong Culture.”
Bloomberg reports “Wholesaler True Value Co. filed for bankruptcy in Delaware on Monday as it seeks to sell its business to rival Do it Best Corp.”
Upon inspection of the roof of my home in Florida this morning, it was found that half of the roof’s upper layer is missing. I have more work to do here in Florida than I thought.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
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Our most read stories from our previous edition of JLN Options were:
– Cboe Shifts EDGA Equities Exchange to Maker-Taker Model from Cboe via Traders Magazine.
– The Rise of the Quick-Buck ETF from Bloomberg.
– Acuiti and SGX Group launch global derivatives market sentiment index from Acuiti. ~JB
Subscribe to the JLN Options Newsletter HERE (it’s free).
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News avoiders relinquish their democratic privilege; Our fractured, algorithm-driven attention economy is all too easily exploited when people aren’t paying attention
Jemima Kelly – Financial Times
I have something of a confession to make: I really love listening to the kinds of podcasts that, if they were titles in a bookshop, would be found in that most ugly-sounding of sections: “self-help”. I suppose I listen, on and off, to a good half-dozen or so of them – they keep me company when I’m doing chores, they motivate me, and they often give me fresh ways of thinking about my life (and even about some of the subjects I write on).
/jlne.ws/3Ua7CSp
****** Thank you to all of you who stay on top of the news along with me.~JJL
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Nobel economics prize goes to inequality researchers Acemoglu, Johnson and Robinson
Simon Johnson and Mark John – Reuters
Three U.S.-based academics won the 2024 Nobel economics prize on Monday for research that explored the aftermath of colonisation to understand why global inequality persists today, especially in countries dogged by corruption and dictatorship. Simon Johnson and James Robinson, both British-American, and Turkish-American Daron Acemoglu were commended for their work on “how institutions are formed and affect prosperity”, the Royal Swedish Academy of Sciences said.
/jlne.ws/4dGzFQs
****** See my comment about being treated with respect, equality and justice. Those are the ingredients of a strong community, society, economy and civilization.~JJL
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Useful Quarterly Business Reviews
Joe Schroeter
“He wasn’t bad; he got the information out there.”
“Hey, do you have a template I can fill out?”
“I got my deck down to 20 slides!”
“We don’t really do a formal business review. We just add it as an agenda item at the end of each quarter.”
I was speaking with a CEO client this week about the next round of his company’s version of Business Plan Reviews, (BPR’s and QBRs) He was scrambling to give people detail of what to include in their presentations and anticipating what guidance he already knew he wanted to give. He couldn’t remember much about the reviews in late July.
/jlne.ws/4840Hjn
***** Former CQG President Joe Schroeter’s latest post to his blog.~JJL
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Is the Stock Market Open Monday? These Are the Columbus Day Trading Hours.
Emily Dattilo – The Wall Street Journal
Columbus Day falls on Monday, Oct. 14, this year, but only some financial markets will be closed. The U.S. holiday, observed on the second Monday in October, commemorates Christopher Columbus landing in North America in 1492. In some states, however, it has been renamed Indigenous People’s Day to honor the resilience of the group as it dealt with losses from colonization. President Joe Biden was the first to observe this holiday at the White House in 2021.
/jlne.ws/4dNWLEN
***** Even though today is not October 10, Columbus Day for me will always be the day that Refco announced its problems, which started its quick downfall.~JJL
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Friday’s Top Three
Our top story Friday was the SEC press release SEC Charges Cumberland DRW for Operating as an Unregistered Dealer in the Crypto Asset Markets. Second was Hurricane Milton photos: Scenes of damage and rescue efforts across Florida, from the South Florida Sun Sentinel. And third was the LinkedIn post from Gary Siegel, managing editor at The Bond Buyer, sharing the sad news that his friend and colleague Chip Barnett passed away on Monday.
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Lead Stories
‘King of the geeks’: how Alex Gerko built a British trading titan; XTX Markets conquered foreign exchange trading and made its Russian-born founder a multibillion-pound fortune
Nikou Asgari – Financial Times
If Alex Gerko had stuck with his plan A, he might have stayed a Russian academic rather than becoming one of Britain’s wealthiest billionaires with an estimated £12bn fortune. After gaining a maths PhD in Moscow, however, Gerko concluded he could not be world-class as an intellectual. Instead, he moved to London where, with the help of an Icelandic supercomputer and 25,000 AI chips, he built XTX Markets: an algorithmic trading firm and part of a new elite that has rewired financial trading.
/jlne.ws/3zYCRsL
London AIM market should be axed for failing to win tech floats, say think tanks; UK’s exchanges are ‘not fit for purpose’ and require ‘radical’ overhaul, say Tony Blair Institute and Onward
Emma Dunkley – Financial Times
London’s junior stock exchange should be scrapped as part of a radical overhaul needed to attract fast-growing firms and rejuvenate the UK’s capital markets, two influential think tanks have warned.nThe UK’s capital markets are “not fit for purpose” and require “radical surgery”, the report from The Tony Blair Institute and the centre-right think-tank Onward said. London was once the world’s largest stock exchange, but now ranks sixth, while it has failed to win a number of major new listings from tech companies.
/jlne.ws/4eIV9NK
Banks and fund managers call on EU to commit to shorter settlement plan; Industry lobby groups urge Brussels to set timetable for modernisation of securities market
Nikou Asgari – Financial Times
European banks and fund managers have urged Brussels to publicly commit to shortening the window for settling EU stock and bond trades, as the US and UK press on with plans to modernise their own markets. A task force representing 18 market lobby groups on Monday called on EU authorities to “make a formal commitment” to reform settlement times. The task force, led by the Association for Financial Markets in Europe (AFME), also called for the bloc to set a timeframe to guide the industry in its preparations.
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Endowments and foundations race to outsource investment management; Funds turn to external managers after other revenue sources faltered
Sun Yu – Financial Times
Small US endowments and foundations are racing to outsource their investment management in the hopes of getting access to profitable but illiquid alternative markets amid growing funding challenges. The funds collectively control trillions of dollars in assets but have struggled to generate consistent returns. The outsourcing boom has come as endowments and foundations increasingly rely on investment gains to meet funding needs, after other revenue sources became more volatile and operational costs jumped. It has coincided with a push into alternative asset classes such as private equity and venture capital in an effort to improve results.
/jlne.ws/3Nm2pDr
European Regulators Signal Backing for Possible Commerzbank Deal
Mark Schroers, Nicholas Comfort and Kamil Kowalcze – Bloomberg
A potential takeover by UniCredit SpA of rival Commerzbank AG would likely get regulatory approval, several senior central bank and supervision officials indicated, saying there are few reasons why a deal should raise concerns. The European Central Bank would probably give a green light to an offer from UniCredit, the officials from Germany and various other jurisdictions said. Almost all took a positive general view on cross-border consolidation as a way to overcome financial fragmentation and boost bank profitability in Europe.
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Campaigners want UBS barred from US pension market, Sueddeutsche Zeitung says
Reuters
A group of campaigners wants UBS to lose its exemption from U.S. regulations that allows the Swiss bank to operate in the American pension market despite breaking banking rules, Sueddeutsche Zeitung reported on Monday. The U.S. Department of Labor is considering an application from UBS that would extend its exemption to operate in the world’s largest with $30 trillion of assets under management, the newspaper said.
/jlne.ws/4eNrUcY
EU Finance Chiefs Know They’re in Trouble and Are Fighting Over What to Do; The economic challenges that are dragging down the European economy have been building up for years but officials have been slow to catch on.
Kamil Kowalcze, Jorge Valero, and Alessandra Migliaccio – Bloomberg
Finance Minister Christian Lindner was listening to a presentation at the International Monetary Fund meeting in April when he finally realized just how bad things have gotten for Germany. In the middle of a presentation on economic decline, Francois Villeroy de Galhau nudged him to take a closer look at the photo chosen to illustrate the main point: It was Friedrichstrasse in downtown Berlin.
/jlne.ws/404JioJ
Global Executives Seek Protection From Election-Fueled FX Swings; Corporates are looking to extend hedges beyond polling day; Foreign-exchange market volatility gauges start to pick up
Carter Johnson, Michael O’Boyle, and Eddy Duan – Bloomberg
Less than a month from polling day, a toss-up US presidential election that could rattle currency markets is leading finance executives to bolster their companies’ foreign-exchange hedges. In an increasingly close campaign for the presidency and Congress, Kamala Harris and Donald Trump are presenting diverging views on trade, government spending and the economy. Firms that operate across different countries are contending with a wide range of scenarios – including a Republican or a Democratic sweep – that could lead to sharp currency swings like those seen eight years ago when Trump was first elected.
/jlne.ws/3Yoln2D
Social media must do more to tackle payment fraud, says UK regulator; Ministers urged to consider levy on tech groups to compensate victims of online scams
Akila Quinio and Martin Arnold – Financial Times
Social media groups must do more in the “war of attrition” against financial fraud on their sites, the UK payment regulator has said, adding ministers should consider making platforms liable for compensation to victims. David Geale, interim managing director of the Payment Systems Regulator, told the Financial Times that a new “world-first” scheme forcing banks to reimburse victims was only the latest step in a “constant fight” against fraudsters.
/jlne.ws/3BHVP7L
Power and influencers: CEOs on social media; Pressure is growing on C-suite executives to raise their online game – but they must beware of oversharing
Cristina Criddle – Financial Times
Corporate messaging on social media is often left to younger, tech-savvy staff in a business, or communications professionals, who understand how it might be received. But chief executives and other C-suite staff are increasingly expected to post regularly on platforms such as LinkedIn to improve their public profile. And, as with all influencers online, authenticity is critical.
/jlne.ws/4eZazNJ
$10mn? $30mn? $100mn? The redefinition of the super-rich; The rapid rise in billionaires has disrupted what it means to be part of the moneyed elite
Chris Newlands – Financial Times
Talk to 10 different wealth industry professionals about when you become super-rich (an ultra-high-net worth individual, or UHNW, in industry parlance) and you will get 10 different answers. For a law firm, it can mean having investable assets – spare cash not tied up in property – of $10mn; for a wealth manager, it can mean having at least $30mn; for an exclusive private members’ club, the hurdle can be as high as $100mn.
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Why have Americans been moving closer to climate risk? Pandemic-era migration has doubled the number of people in areas most vulnerable to extreme weather events
Rana Foroohar – Financial Times
Last week, as Hurricane Milton was barrelling towards the west coast of Florida, one well-known television meteorologist covering the storm was brought to tears during a broadcast. “I apologise – this is just horrific,” he said, choking up. It was made more so by the fact that Hurricane Helene had only just ripped through Florida and the Carolinas, killing at least 225 people and destroying not just coastal areas, but mountain towns like Asheville, a community some 500 miles from where the storm made landfall. YouTube videos of the floods in that city showed buildings floating down raging rivers.
/jlne.ws/3Y5EzAP
The Harsh Reality of ‘Hurricane Insurance’; Catastrophe bonds sound like a clever climate solution, but they can leave vulnerable nations out of luck when disaster strikes.
Gautam Naik, Jim Wyss and Greg Ritchie – Bloomberg
In the hours before Hurricane Milton reached land in Florida last week, a saildrone dispatched into the maelstrom by US government researchers sent back heart-stopping data. Ocean waves driven by supercharged winds had surged to more than 28 feet tall. It was a specter that sent millions of people fleeing for safety. By this time, as early winds lashed the Gulf Coast, one investor in the $46 billion market for specialized financial instruments designed to pay out in the event of storms like Milton had already ditched a Florida bond for 67 cents on the dollar. It was a clear sign that investors anticipated heavy losses.
/jlne.ws/484YioE
Hurricane Damage and Your Taxes. Here’s What to Know; Losses from hurricanes, wildfires and other disasters may be tax deductible, and even those spared from catastrophe in 33 states could get extended tax deadlines
Laura Saunders – The Wall Street Journal
So far this year, part or all of 33 states have been declared federal disaster areas, and some areas have qualified more than once. Losses, especially in the wake of Hurricanes Milton and Helene, are expected to be in the tens of billions of dollars. Making matters worse, many disaster victims don’t have sufficient insurance, or the right kind of insurance, to cover these losses. Part of the losses could be deductible for tax purposes for some victims, cushioning the blow. But there are strict and complex limits on disaster deductions that will severely limit the amounts many can recover unless Congress changes the rules. Lawmakers enacted such changes for Hurricanes Harvey and Irma after they hit in 2017. Efforts are afoot to make changes for recent disasters, perhaps in the postelection, lame-duck session.
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Ukraine Invasion
Mystery of Russia’s secret weapon downed in Ukraine
Abdujalil Abdurasulov – BBC News
When two white vapour trails cross the sky near the front line in eastern Ukraine, it tends to mean one thing. Russian jets are about to attack. But what happened near the city of Kostyantynivka was unprecedented. The lower trail split in two and a new object quickly accelerated towards the other vapour trail until they crossed and a bright orange flash lit up the sky. Was it, as many believed, a Russian war plane shooting down another in so-called friendly fire 20km (12 miles) from the front line, or a Ukrainian jet shooting down a Russian plane?
/jlne.ws/4eF2lKJ
Russia’s illicit Starlink terminals help power its advance in Ukraine; Ukraine’s outgunned and outmanned army had one major advantage over its enemy: internet through Starlink terminals. Now the Russians have it, too.
Alex Horton, Serhii Korolchuk and Eva Dou – The Washington Post
Russian forces have become deadlier and more agile with the help of illicit Starlink terminals, allowing them to use satellite internet to enhance coordination during assaults, fly more drone sorties and batter Ukrainian troops with accurate artillery fire despite U.S. efforts to stop the flow of technology. The terminals, which give commanders live battlefield views with drones and secure communication between soldiers, are subject to prohibitions that outlaw many U.S. electronics from reaching Moscow. Yet there is a burgeoning black market of Starlinks bringing the terminals to Russians on the front, and their proliferation has been an important factor in Russia’s recent gains during its offensive, Ukrainian soldiers said.
/jlne.ws/3YmeoHh
Ukraine Faces Bleak Winter as Russia Ramps Up Assaults, U.S. Support Trickles In; President Zelensky pleads for more arms and other assistance to help end the war on favorable terms, but Biden administration is skeptical
James Marson – The Wall Street Journal
The war in Ukraine is barreling toward the end of its third year, with Russia pursuing relentless offensives despite heavy losses and Western leaders groping for a strategy to end the conflict. With Western weapons deliveries limited and slow, Ukraine is facing a bleak winter. Its outnumbered and outgunned military is slowly but steadily losing ground on the main eastern front, trying to exact a heavy toll on Russia while minimizing its own losses.
/jlne.ws/4f5byf9
Israel/Palestine Conflict
U.S. Is Sending Antimissile System to Israel to Bolster Defenses Against Iran; The move comes as U.S. and Israel hold talks on a possible Israeli attack on Iran
Michael R. Gordon, Lara Seligman and Nancy A. Youssef – The Wall Street Journal
The Biden administration is sending an advanced antimissile system to Israel along with American troops to operate it, moving to bolster its top Middle East ally’s defenses against an Iranian attack, the Pentagon said Sunday. The deployment of the Thaad system, a ground-based interceptor designed to shoot down ballistic missiles, marks a significant step in American efforts to directly protect Israel against an enemy attack by putting U.S. soldiers on the ground.
/jlne.ws/3Yq82FR
Hezbollah Tunnel Entrances Abut U.N. Peacekeeping Position, Israel Alleges; Allegation comes amid a fight between Israel and the U.N. after peacekeepers were injured by Israel, according to the U.N.
Dov Lieber – The Wall Street Journal
On a forested mountainside near the border between Israel and Lebanon, two tunnel shafts descend dozens of feet into the rocky earth. Around 300 feet away, the blue United Nations flag waved atop a peacekeeping observation post. The Israeli military took a group of reporters into Lebanon on Sunday to see the shafts, which it said were among hundreds of tunnel entrances and underground bunkers used by Hezbollah militants to store weapons and hide fighters west of the Lebanese village of Labbouneh.
/jlne.ws/3XXfMi0
Hezbollah says targeted Israeli naval base after deadly drone strike
Jay Deshmukh with Jonathan Sawaya in Beirut – AFP
Hezbollah said it targeted an Israeli naval base on Monday, a day after a drone strike killed four soldiers in the deadliest attack on Israel since the war in Lebanon began. The group said its fighters launched rockets at a naval base near Haifa in northern Israel, calling it a tribute to its leader, Hassan Nasrallah. The Israeli military said on Monday it had intercepted another launch aimed at a training camp at Binyamina, also near Haifa, a day after four soldiers were killed and dozens more wounded in a Hezbollah drone strike.
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Israel Says Documents Found in Gaza Show Hamas’s Attack Planning, Iran Ties; Letters and meeting minutes appear to show Hamas seeking funding from Tehran, trying to win support from Hezbollah
Rory Jones – The Wall Street Journal
Israel’s military shared with journalists documents that it said its soldiers found in Gaza and that appear to show financial and military support provided by Iran to Palestinian Islamist militant group Hamas before the Oct. 7 attacks. The Israeli armed forces gave The Wall Street Journal a series of what it described as letters and notes from meetings of the Hamas leadership as Israel weighs a retaliatory strike against Iran after Tehran fired a large salvo of missiles at Israel this month.
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Four Israeli soldiers killed in Hizbollah drone strike; Attack is one of deadliest by Iran-backed militant group since Israel stepped up its Lebanese offensive
Neri Zilber and Raya Jalabi – Financial Times
A Hizbollah drone attack on a military base in the centre of Israel has killed four soldiers and injured about 60, in one of the deadliest strikes by the Iran-backed militant group since Israel escalated its air and ground offensive in Lebanon three weeks ago. Seven soldiers were seriously injured in the attack by the Lebanese militants on Sunday evening, according to the Israel Defense Forces.
/jlne.ws/405B1RK
Israel accused of targeting medics in Lebanon after 150 killed; Dozens of clinics and hospitals, some linked with Hizbollah, hit by air strikes in escalating campaign
Raya Jalabi and Malaika Kanaaneh Tapper – Financial Times
Israeli strikes have killed more than 150 medical and rescue workers in Lebanon and hit dozens of health facilities, a pattern one Lebanese minister alleged to be “systematic targeting” of healthcare. Direct Israeli strikes, mainly over the past three weeks, have incinerated ambulances, destroyed civil defence centres and battered wings of hospitals as Israel’s military has intensified its campaign against Hizbollah.
/jlne.ws/4h1yHBb
Exchanges, OTC and Clearing
Asia’s Oldest Exchange’s Shares in Demand as Rival NSE Volume Spillover Eyed
Ashutosh Joshi – Bloomberg
Shares of BSE, Asia’s oldest exchange, have jumped more than 50% since mid-September. Driving the optimism are hopes that its rival, the rival National Stock Exchange, could go public shortly after clearing some long-standing cases related to unfair practices. On top of that, many in the market believe that some of the trading volumes from the NSE’s discontinued weekly contracts might shift to BSE, providing a potential upside.
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NSW Treasurer Daniel Mookhey joins ASX to celebrate World Investor Week and announce winners of the ASX sharemarket game
ASX
ASX today joined over 60 other exchanges globally in ringing the bell for financial literacy in support of World Investor Week. This annual event, led by the International Organization of Securities Commissions (IOSCO), aims to promote investor education and protection by empowering investors with the tools and knowledge they need to make informed financial decisions. NSW Treasurer, the Hon Daniel Mookhey MLC joined ASX Managing Director and CEO Helen Lofthouse and schools from across NSW to ring the bell for financial literacy at ASX headquarters in Sydney.
/jlne.ws/3NpscKP
Boerse Stuttgart Digital partners with AWS to boost its crypto infrastructure solutions for financial institutions across Europe
Boerse Stuttgart Digital
Boerse Stuttgart Digital, Europe’s leading regulated crypto infrastructure provider partners with Amazon Web Services (AWS) to boost its product offerings for European financial institutions, enabling more efficient scalability and facilitating expansion. This will simplify the deployment of Boerse Stuttgart Digital’s solutions tailored to traditional banks, brokers, and asset managers. Across Europe, retail customers and corporates are increasingly seeking reliable avenues to venture into the crypto market. Traditional financial institutions are facing a pivotal choice: to miss out on this structural trend or partner with established infrastructure providers which stand for trust, security, and reliability.
/jlne.ws/4h79i92
CME Group International Average Daily Volume Reached New Record of 8.4 Million Contracts in Q3 2024
CME Group
CME Group, the world’s leading derivatives marketplace, today announced that its international average daily volume (ADV) reached a record 8.4 million contracts in Q3 2024, up 29% year on year. Reflecting all trading reported outside the United States, the record volume was driven by growth across all asset classes, with the highest trading volumes coming from interest rate and equity products, which accounted for three-quarters of the growth in volume. Interest rate products saw record growth of 32% in quarterly volumes year on year, driven by an increase of 38% growth in SOFR futures and 25% growth in Treasury contracts. In addition, Energy products saw 30% growth, Equities products were up 25%, and record FX volumes increased by 14% in the third quarter.
/jlne.ws/4dJybVx
Reminder: Initial Listing of the Chicago Wheat – European Milling Wheat Spread Futures and KC HRW Wheat – European Milling Wheat Spread Futures Contracts
CME Group
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ELITE hosts the 5th edition of ELITE Day “Purpose-driven companies: lead the future with impact” and launches the first ELITE Impact Observatory showcasing a strong average turnover growth of +52% for ELITE companies
Euronext
ELITE, the Euronext ecosystem supporting privately-owned small and medium-sized enterprises (SMEs) in their sustainable long-term growth, today launches the ELITE Impact Observatory on the occasion of ELITE Day 2024. The analysis measures the impact of ELITE in terms of financial performance and employment for the companies within the network. The research is based on a sample of 500 ELITE companies, representative of the main sectors in ELITE and selected based on their specific ATECO code. The selected companies have a turnover of between EUR10 million and EUR300 million. The ELITE sample was then compared with a benchmark sample of around 1,200 companies. The benchmark sample was defined using a statistical approach based on the following criteria:
/jlne.ws/482WRal
Altvest Lists on the JSE’s AltX Board, Reaching for Greater Capital
JSE
“At the heart of Altvest Capital’s mission is the goal of bridging the financial accessibility gap by funding South African Small and Medium Enterprises (SMEs) through debt and equity instruments. We seek to raise this debt and equity by designing investment instruments that are accessible to retail and institutional investors on the same terms, conditions and price. Listing on the JSE is a strategic move that will help us reach more investors and enhance these investment and funding opportunities for all,” said Warren Wheatley, CEO of Altvest Capital.
/jlne.ws/3YjiCiR
Fintech
Bank of America Folds Fintech Investment Banking Team Into Tech
Ryan Gould and Matthew Monks – Bloomberg
Bank of America Corp. has folded its fintech investment banking team into its technology practice, reflecting the industrywide shift in financial services toward software. The lender is moving about 50 bankers into its roughly 200-strong tech group, according to Kevin Brunner, the bank’s chairman of global M&A and global head of technology, media and telecom investment banking.
/jlne.ws/3BGXg6e
European T+1 Task Force acknowledges benefits of aligning with UK for transition in H2 2027; A new report emphasises the need for the EU to coordinate closely with the UK in H2 2027 for a switch to a T+1 settlement cycle, while also detailing the need for a maximum possible notice period for transition and a temporary suspension of cash penalties over the implementation period.
Wesley Bray – The Trade
The European T+1 Industry Task Force has voiced support for a co-ordinated move to T+1 in the EU, acknowledging the benefits of an aligned approach across the entire European region, including the EEA, the UK and Switzerland. In a new report, the task force stated that this followed a range of views being expressed as to whether the date identified for the UK transition, H2 2027, could also be a feasible implementation date for the EU.
/jlne.ws/4eFT6KA
AI is coming for wealth management; If Silicon Valley is right and the technology progresses, we may witness a new wave of industry disruption
Juan Luis Perez – Financial Times
It is difficult to find a wealth management operation at a bank or a broker not trying to figure out how to incorporate artificial intelligence in their offering. It is an opportunity and competitive threat. Active wealth management tries to understand how to fit a vast array of products to changing life needs and circumstances. Providing tailored advice is expensive though. One of the biggest opportunities from AI in this area is to provide offerings to those previously excluded on cost grounds as their wealth was just not enough to justify services.
/jlne.ws/3Y2dCxH
This AI Pioneer Thinks AI Is Dumber Than a Cat; Yann LeCun, an NYU professor and senior researcher at Meta Platforms, says warnings about the technology’s existential peril are ‘complete B.S.’
Christopher Mims – The Wall Street Journal
Yann LeCun helped give birth to today’s artificial-intelligence boom. But he thinks many experts are exaggerating its power and peril, and he wants people to know it. While a chorus of prominent technologists tell us that we are close to having computers that surpass human intelligence-and may even supplant it-LeCun has aggressively carved out a place as the AI boom’s best-credentialed skeptic.
/jlne.ws/3Y7UkHv
OpenAI Could Be a Force for Good if It Can Answer These Questions First
Andrew Kassoy – The New York Times
Mr. Kassoy is a co-founder and co-chair of B Lab, the nonprofit that oversees B Corp certification and helped write and advocate benefit corporation legislation. OpenAI is now worth as much as Goldman Sachs or AT&T. The artificial intelligence start-up behind ChatGPT has also said it intends to shed its status as a nonprofit to become a for-profit business within two years. Outside experts and OpenAI employees have expressed concern that as a result, the company will shy away from its founding purpose – to build safe A.I. to “benefit all of humanity” – in favor of earning profits for investors.
/jlne.ws/3U6c9Fm
Opinion: Sam Altman’s imperial reach; The tech leader’s boundless ambition is putting AI, and the world, on a dangerous path.
Robert Wright – The Washington Post
Robert Wright, whose books include “Nonzero” and “The Evolution of God,” is publisher of the Nonzero Newsletter and host of the “Nonzero” podcast. This essay first appeared in the Nonzero Newsletter. In 2008, Paul Graham, a co-founder of the Silicon Valley firm Y Combinator, described Sam Altman, who was then 23 years old, like this: “You could parachute him into an island full of cannibals and come back in five years and he’d be the king.” In 2011, Graham made Altman a partner at Y Combinator. Three years later, Graham stepped down as president of the company and crowned Altman as his successor.
/jlne.ws/483J1EL
Asia to remain center of chip industry despite West’s push: ASML CEO; Europe and U.S. must address ‘costs and flexibility’ to have global impact
Cheng Ting-Fang – Nikkei Asia
The buildup of chip production in Western countries is unlikely to shift the industry’s balance of power away from Asia, according to Christophe Fouquet, president and CEO of ASML, the Dutch maker of highly prized semiconductor making machinery. Fouquet spoke to Nikkei Asia in an exclusive interview at ASML’s headquarters a few weeks after traveling to Dresden, Germany, for the groundbreaking ceremony for Taiwan Semiconductor Manufacturing Co.’s first European plant, seen as crucial to the bloc’s effort to restore its chip production prowess.
/jlne.ws/3U64ze4
Cybersecurity
Watch Out for This Gmail Account Takeover Scam; Be on the lookout for unexpected Gmail account recovery attempts and subsequent customer service calls that sound a little too perfect, warns IT consultant Sam Mitrovic.
Will McCurdy – PC Mag
Sam Mitrovic, an IT consultant and tech blogger, received a notification to approve a Gmail account recovery attempt, which he denied. According to his blog, Mitrovic then received a call roughly 40 minutes later, showing the caller ID as Google Sydney, which he also declined. Using phony account-recovery notifications is a classic trick used by cybercriminals carrying out phishing attacks, Forbes points out. These types of ploys will generally lead customers to a fake login portal, which will capture their login details.
/jlne.ws/488WlHJ
Reddit is Down: ‘Request Has Been Blocked’ Error Explained
Disheeta Maheshwari – COMINGSOON.net
Reddit users are encountering widespread access issues, with many reporting a “Request has been blocked due to network policy error” message when trying to log in or navigate the site. While some users can still access certain parts of Reddit, others are completely blocked from signing in or using the platform. Now, many people are wondering whether Reddit is down and what is “blocked due to network policy.” So, here’s all you need to know.
/jlne.ws/3Y7wcok
Cryptocurrencies
Bitcoin Hits Unusually Calm ‘Uptober’ as Traders Await Election; Bitcoin has moved less than 5% for 34 straight sessions; October historically is more bullish for the crypto market
Muyao Shen and Lu Wang – Bloomberg
Bitcoin has settled into an unusually calm period, as traders remain on the sidelines awaiting the outcome of the upcoming US election. The original cryptocurrency moved less than 5% for 34 straight sessions through yesterday, on par with the longest such streak of calm in a year, according to data compiled by Bloomberg. The doldrums in price movement has disappointed many in the crypto community since the asset class has historically performed well in October, earning the nickname “Uptober.”
/jlne.ws/3BK5Ukn
The Endless Downfall of a Crypto Power Couple; Ryan Salame, an FTX executive, and Michelle Bond, a crypto policy advocate, were once a Washington power couple. Now they both face prison time.
David Yaffe-Bellany – The New York TImes
He was a wealthy cryptocurrency executive with a shiny white Porsche and a luxury condo in the Bahamas. She was a crypto policy expert with political ambitions, advocating for the industry in Washington. A romance blossomed after they were brought together by an unlikely matchmaker: Sam Bankman-Fried, the founder of the collapsed FTX crypto exchange. Two years ago, the FTX executive Ryan Salame and the crypto advocate Michelle Bond were an industry power couple. Mr. Salame gave tens of millions of dollars to conservative politicians, who celebrated him as a “budding Republican megadonor,” while Ms. Bond ran for Congress, drawing support from Donald Trump Jr.
/jlne.ws/4h7zjp4
69,000 Bitcoins Are Headed for the US Treasury-While the Agent Who Seized Them Is in Jail; The $4.4 billion in crypto is set to be the largest pile of criminal proceeds ever sold off by the US. The former IRS agent who seized the record-breaking sum, meanwhile, languishes in a Nigerian jail cell.
Andy Greenberg – Wired
In November of 2020, a person identified by the US Department of Justice only as “Individual X” sat down with an IRS agent named Tigran Gambaryan and prosecutors at the US Attorney’s office in San Francisco. That unnamed individual typed out the long string of characters of a Bitcoin private key on Gambaryan’s laptop, allowing Gambaryan to move 69,370 bitcoins from Individual X’s bitcoin address to one controlled by the US government.
/jlne.ws/3YliGie
Stripe Says Stablecoins Payments Made in More Than 70 Countries After Relaunch
Emily Mason – Bloomberg
Stripe Inc. said individuals from more than 70 countries have used stablecoins for online transactions during the first 24 hours after allowing merchants using its platform to accept crypto payments again. Stripe merchants in the US were authorized as of Oct. 9 to receive the Circle-issued stablecoin USDC through their online checkout pages. The payments firm was among the first to enable Bitcoin payments in 2014, but disabled the feature four years later, explaining that slow processing times were leading to failed transactions.
/jlne.ws/4f6z7EJ
Politics
Nobel Peace Prize winners warn of rising risk of nuclear war
Reuters
Leaders of the group of atomic bomb survivors awarded the Nobel Peace Prize warned on Saturday that the risk of nuclear war was rising, renewing their call to abolish nuclear weapons. “The international situation is getting progressively worse, and now wars are being waged as countries threaten the use of nuclear weapons,” said Shigemitsu Tanaka, a survivor of the 1945 U.S. bombing of Nagasaki and co-head of the Nihon Hidankyo group. “I fear that we as humankind are on the path to self-destruction. The only way to stop that is to abolish nuclear,” he said.
/jlne.ws/4h6OMpl
Jamie Dimon for Treasury Secretary: The Idea That Never Fades; The JPMorgan boss’s name has been floated for 25 years. This presidential race, the chatter is as loud as ever-even as Dimon himself downplays the chances.
Hannah Levitt – Bloomberg
Blockbuster videos were flying off the shelves, Walmart was about to launch a website, and Wall Street was buzzing over what would become of the dark-haired banking whiz recently fired from Citigroup. It was 1999, and rumors were percolating for the first time that Jamie Dimon was gliding toward a cabinet post in the next presidential administration.
/jlne.ws/4f0uN9Y
Trump calls for death penalty against migrants who kill U.S. citizens
Zoe Richards and Jake Traylor – NBC news
Former President Donald Trump on Friday repeatedly called for using the death penalty against migrants who kill U.S. citizens and law enforcement officers. “I’m hereby calling for the death penalty for any migrant who kills an American citizen or a law enforcement officer,” Trump said at a campaign rally in Reno, Nevada. The former president made the same remark during his rally in Aurora, Colorado, earlier in the day. Trump has also previously called for using the death penalty against human and drug traffickers.
/jlne.ws/4h01E0n
Markets Return to a Trump Tipping Point; The narrative has shifted to where a Republican sweep must be considered. If inflation reignites, it won’t go smoothly for stocks.
John Authers – Bloomberg
Malcolm Gladwell is out with a sequel to his bestseller The Tipping Point, called The Revenge of the Tipping Point. In the New York Times, Anand Giridaradhas subjected it to one of the most brutal reviews I have ever read. The whole concept that there’s a point in society where opinion or consumer behavior just “tips” is questionable, and possibly exaggerated. With this huge caveat in mind, the US political narrative has changed in the last week, in what looks like a Gladwellian tipping point. That shows up in prediction markets, in any amount of hair-pulling Democratic commentary, and more significantly in polling data. This narrative may or may not be correct – at this point eight years ago, the Donald Trump campaign was reeling from the Access Hollywood tape and the story was that Hillary Clinton had the presidency wrapped up – but it doesn’t need to be right to move markets. After two months of gauging whether Kamala Harris could win, and might even have a Senate majority behind her, the question is back to whether Republicans can pull off a landslide and clean sweep.
/jlne.ws/486zuwu
Barry Diller: ‘I want Donald Trump pushed into the dustheap of history’; IAC chair warns of power shift to Big Tech in film and TV
Matthew Garrahan – Financial Times
Barry Diller’s career has been characterised by big jobs, big bets and big bucks. During more than 50 years in the media and entertainment industry, he has risen from the mailroom of the William Morris talent agency to Hollywood’s top table. He ran Paramount Pictures as it released hits such as Saturday Night Fever, Raiders of the Lost Ark and Cheers. He gatecrashed the cosy club of US broadcasting when he launched the fourth national network (Fox) for Rupert Murdoch. He bought (and sold) the QVC shopping channel, ran the Universal movie studio and surfed the dotcom wave with IAC, where he assembled a portfolio of online brands, which has at various times included Expedia, Tinder and Match.com.
/jlne.ws/3A6ptCT
How Wall St. Is Subtly Shaping the Harris Economic Agenda; The vice president has repeatedly incorporated suggestions from business executives into her economic agenda.
Andrew Duehren and Lauren Hirsch – The New York Times
When two of Vice President Kamala Harris’s closest advisers arrived in New York last month, they were seeking advice. The Democratic nominee was preparing to give her most far-reaching economic speech, and Tony West, Ms. Harris’s brother-in-law, and Brian Nelson, a longtime confidant, wanted to know how the city’s powerful financiers thought she should approach it.
/jlne.ws/485qM1y
Want a Crypto-Friendly Congress? Run Ads That Don’t Mention Crypto; A trio of crypto-funded super political-action committees spent $62 million on video ads last month that never mentioned digital currencies
Caitlin Ostroff and Vicky Ge Huang – The Wall Street Journal
/jlne.ws/3BIctE1
Trump Wants the Military to Target Americans Who Oppose Him; The former president said he thinks U.S. troops should be deployed “if necessary” against “radical left lunatics” on election day
Peter Wade – Rolling Stone
/jlne.ws/3YxZ8HD
Alex Salmond, Champion of Scottish Independence, Dies at 69; Former first minister led SNP into 2014 referendum that failed; Salmond was leading new pro-independence party at his death
Alastair Reed and Shiyin Chen – Bloomberg
/jlne.ws/4eI5TvO
Britain hosts an international investment summit and denies snubbing Elon Musk
Jill Lawless – Associated Press
/jlne.ws/486yrN4
Keir Starmer vows to rip up bureaucracy to unleash ‘shock and awe’ of investment; Prime minister targets competition authority and other regulators he believes are stifling global appeal
George Parker, Michael O’Dwyer, Anna Gross and Sylvia Pfeifer – Financial Times
/jlne.ws/404RG82
The EU Is Losing the Fight for Global Influence
Ben Sills – Bloomberg
/jlne.ws/3NpZSIc
China to Sell Special Sovereign Bonds to Boost Bank Capital
Bloomberg News
/jlne.ws/3ZXMimZ
HK’s Lee to Unveil Steps to Boost Financial Hub Role, SCMP Says
Sangmi Cha – Bloomberg
/jlne.ws/3YiUL2N
As Dubai Becomes the New Chelsea, Brace for Exit Taxes; Pressure will grow for millionaires fleeing chilly fiscal climes to pay a departure levy.
Lionel Laurent – Bloomberg
/jlne.ws/3Y3W3xl
Regulation
Cumberland DRW charged for operating as unregistered crypto dealer by SEC; The US Securities and Exchange Commission (SEC) concluded that Cumberland DRW had operated as an unregistered dealer in more than $2 billion of crypto assets offered and sold as securities.
Claudia Preece – The Trade
The US Securities and Exchange Commission (SEC) has charged Chicago-based firm Cumberland DRW with operating as an unregistered crypto asset dealer. Specifically, the watchdog concluded that Cumberland DRW had operated as an unregistered dealer since “at least March 2018 through to present” in more than $2 billion of crypto assets offered and sold as securities.
/jlne.ws/4eGccAh
SEC Charges U.S.-Based Moog Inc. with FCPA Violations for Subsidiary’s Role in Indian Bribery Scheme
SEC
The Securities and Exchange Commission today announced that Moog Inc., a New York-based global manufacturer of motion controls systems for aerospace, defense, industrial and medical markets, agreed to pay a civil penalty of $1.1 million to resolve the SEC’s charges that it violated the Foreign Corrupt Practices Act (FCPA) arising out of bribes paid by its wholly owned Indian subsidiary, Moog Motion Controls Private Limited (Moog Motion Controls).
/jlne.ws/3ZZ8WeL
SEC Charges Massachusetts Resident with Multi-Million Dollar Stock Securities Fraud
SEC
Today the Securities and Exchange Commission filed charges against Wakefield, Massachusetts resident Norman V. Meier, for allegedly conducting a multi-million dollar securities fraud involving the offer and sale of several stocks to unsuspecting investors in both Europe and the United States.
/jlne.ws/3NnqgSW
FMA publishes research on commercial real estate and the KiwiSaver industry
FMA
Research from the Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko – has found most KiwiSaver providers are well placed to manage their exposure to the commercial real estate market but more work can be done to mitigate and communicate the risks. Commercial real estate has become an important alternative asset class for fund managers, and was previously seen as a relatively low-risk investment option within a diversified portfolio.
/jlne.ws/4hiUSTJ
Commercial Real Estate and the Managed Funds Industry Research
FMA
New research from the FMA has found most KiwiSaver providers are well placed to manage their exposure to the commercial real estate market but more work can be done to mitigate and communicate the risks. Overall, based on our conversations with fund managers, we have not seen anything which makes us particularly concerned that Commercial Real Estate (CRE) markets are causing any major issues here.
/jlne.ws/3zZ1iq4
MAS Monetary Policy Statement – October 2024
MAS
1. In the July 2024 Monetary Policy Statement, MAS maintained the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, with no change to the width of the band or the level at which it was centred. Since then, the S$NEER has been appreciating gradually in line with the policy band.
/jlne.ws/3U8Q6Oi
SFC welcomes appointment of Chairman
SFC
The Securities and Futures Commission (SFC) welcomes the appointment by the Chief Executive of Dr Kelvin Wong Tin-yau as the Chairman of the SFC for a term of three years from 20 October 2024 (Note 1). Dr Wong will succeed Mr Tim Lui who will step down on 19 October 2024 having chaired the SFC for six years (Note 2).
/jlne.ws/3BMtzkf
Investing and Trading
Documents show OpenAI’s long journey from nonprofit to $157B valued company
Thalia Beaty – Associated Press Finance
Back in 2016, a scientific research organization incorporated in Delaware and based in Mountain View, California, applied to be recognized as a tax-exempt charitable organization by the Internal Revenue Services. Called OpenAI, the nonprofit told the IRS its goal was to “advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”
/jlne.ws/483Kdb2
Changing OpenAI’s nonprofit structure would raise questions about its future
Thalia Beaty – Associated Press Finance
The artificial intelligence maker OpenAI may face a costly and inconvenient reckoning with its nonprofit origins even as its valuation recently exploded to $157 billion. Nonprofit tax experts have been closely watching OpenAI, the maker of ChatGPT, since last November when its board ousted and rehired CEO Sam Altman. Now, some believe the company may have reached – or exceeded – the limits of its corporate structure, under which it is organized as a nonprofit whose mission is to develop artificial intelligence to benefit “all of humanity” but with for-profit subsidiaries under its control.
/jlne.ws/3BImzEX
Golden times for gold fans; Prices for the metal have shot up this year even as inflation risks have receded, prompting calls to give it more respect
Katie Martin – Financial Times
This year for gold bugs has gone something like this: Heads, I win. Tails, I also win. The yellow metal, as hackneyed journalese demands we call it on second mention, has had quite a run. The price is up by more than a quarter over the course of 2024, hovering now at a little above $2,600 a troy ounce.
/jlne.ws/3YkWapI
Apollo Explains How Big Tech Is Disrupting Credit Markets; Rob Bittencourt on why tech stories aren’t just for stock investors.
Tracy Alloway and Joe Weisenthal – Bloomberg
Big tech stocks have had an enormous impact on the stock market, with Magnificent 7 companies like Apple, Microsoft and Nvidia now dominating equity indices and basically dictating the path of benchmark returns. And of course, there’s been loads of discussion about the real transformational value of AI and whether it’s all going to end up being one big bubble. But tech investing and big disruptive trends like AI aren’t just for equity investors. They’re playing out in the credit market, too. And of course, building the data centers and producing the chips that power AI requires huge amounts of capital – much of which is sourced via bonds and loans. Increasingly, a lot of that capital is coming from private credit players, one of the biggest of which is Apollo Global Management. In this episode, we speak with Rob Bittencourt, a partner at Apollo and co-head of opportunistic credit, about how the tech story is playing out and what Apollo is doing in the space.
/jlne.ws/4eyUwX7
S&P Sees More Sovereign Foreign Debt Defaults Over Next Decade; Higher debt, borrowing costs lead to higher risks of defaults; Sovereigns with rising net external liabilities more at risk
Harry Suhartono – Bloomberg
S&P Global Ratings predicts an increase in foreign-currency debt defaults among sovereign issuers over the next decade, driven by significantly higher debt levels and increased borrowing costs on hard currency obligations. The ratings agency said the sovereigns under review on average spent almost 20% of general government revenues on interest payments in the year leading up to defaulting on foreign-currency debt. These high borrowing costs were a result of factors such as rising inflation, currency devaluation, terms-of-trade shocks, and a large portion of government debt being in foreign currency.
/jlne.ws/4f3wu6l
Two decades of EM bond history; Keeping it local
Robin Wigglesworth – Financial Times
/jlne.ws/4h0yyOh
CNX Shares Soar to Decade High While Traders Pile Into Options; Derivative contracts volume in the shale driller surges; Trades bet on stock climbing some 20% over next six months
David Marino – Bloomberg
At least one investor is making a big bet that CNX Resources Corp. will keep climbing even as the natural gas producer’s stock reached a 10-year high this week. Options trading in CNX surged as one or more investors bought over 34,000 call options on Thursday and Friday. The derivatives give holders the right to buy more than 3 million shares at $40 by mid-April. The wager was made while the stock was still trading around $35, shares advanced 5.1% Friday to $36.52, the highest since July 2014.
/jlne.ws/4h7gYIs
Private Equity Investors Account for 40% of US Deals; Funds, private equity firms becoming more involved in mergers; Antitrust agencies released figures in merger rule revamp
Leah Nylen – Bloomberg
Two out of every five major US mergers and acquisitions in 2022 involved private equity investors, a percentage that has steadily grown over the past two decades. At least 40% of deals reported to the federal government for antitrust review that year involved a fund or limited partnership, according to the Federal Trade Commission and the Justice Department. That’s a marked increase from 2001, when private investors were only involved in about 10% of deals, the agencies said.
/jlne.ws/3BK5hY3
Would a Time Machine Make You a Great Investor? Traders who got a peek at dozens of real Wall Street Journal front pages mostly couldn’t make money. Here’s why.
Spencer Jakab – The Wall Street Journal
It sounds like an investor’s wildest dream. A surprising experiment shows that it shouldn’t be. Huge sums are lavished each year on Wall Street economists and strategists asked to gaze into their crystal balls ahead of market-moving economic numbers. When they mostly get it wrong and there is a surprise, the news is big enough to make front-page news in the next day’s print edition of The Wall Street Journal. But what if a trader had an actual crystal ball and could read a copy of the world’s leading business newspaper a day early?
/jlne.ws/3Np3REV
Environmental, Social and Corporate Governance
Why have Americans been moving closer to climate risk?; Pandemic-era migration has doubled the number of people in areas most vulnerable to extreme weather events
Rana Foroohar – Financial Times
Last week, as Hurricane Milton was barrelling towards the west coast of Florida, one well-known television meteorologist covering the storm was brought to tears during a broadcast. “I apologise – this is just horrific,” he said, choking up. It was made more so by the fact that Hurricane Helene had only just ripped through Florida and the Carolinas, killing at least 225 people and destroying not just coastal areas, but mountain towns like Asheville, a community some 500 miles from where the storm made landfall. YouTube videos of the floods in that city showed buildings floating down raging rivers.
/jlne.ws/3Y5EzAP
Rapid rise of LNG trucking pushes China to peak diesel; Pace of adoption leaves Germany’s Daimler Truck dealing with ‘catastrophic’ sales drop
Ryan McMorrow and Tina Hu and Edward White – Financial Times
Cheap natural gas is spurring Chinese truckers to switch to rigs powered by the fuel, damping the country’s appetite for oil and contributing to a “catastrophic” sales drop for the China unit of one of the world’s largest truckmakers. While the country’s rapid adoption of electric cars has been in the spotlight, significant change has also been taking place in China’s freight industry.
/jlne.ws/40a9sX8
COP29 and the greenwashing of Azerbaijan; The UN climate conference is again being hosted by an authoritarian petrostate
The editorial board – Financial Times
Azerbaijan’s hosting of COP29 next month means the climate conference is being held for the third year running in an authoritarian state with a dubious human rights record, and for the second year in a petrostate. To ensure developing countries, and indeed fossil fuel producers, are part of a global solution to climate change, it is important they can take charge of COPs. But after Egypt and the United Arab Emirates, Azerbaijan – where the autocratic Ilham Aliyev succeeded his father as president in 2003 – also seems to hope hosting the event can greenwash its reputation.
/jlne.ws/3A5zyQw
When the Arctic Melts; What the fate of Greenland means for the rest of the Earth.
Elizabeth Kolbert – The New Yorker
In the middle of the night in the middle of the summer in the middle of the Greenland ice sheet, I woke to find myself with a blinding headache. An anxious person living in anxious times, I’ve had plenty of headaches, but this one felt different, as if someone had taken a mallet to my sinuses. I’d flown up to the ice the previous afternoon, to a research station owned and operated by the National Science Foundation. The station, called Summit, sits ten thousand five hundred and thirty feet above sea level. The first person I’d met upon arriving was the resident doctor, who warned me and a few other newcomers to expect to experience altitude sickness. In most cases, he said, this would produce only passing, hangover-like symptoms; on occasion, though, it could result in brain swelling and death. Belatedly, I realized that I’d neglected to ask how to tell the difference.
/jlne.ws/4eZ5yVp
China Carbon Prices Hit Record High Ahead of Compliance Deadline
Heesu Lee – Bloomberg
China’s carbon prices rose to a record high as a looming compliance deadline for industries increased the prospect of a supply shortfall. Emissions permits jumped 2.5% to 103.49 yuan ($14.62) a ton on Monday, the highest on record since the market launched in mid-2021, according to the National Carbon Trading Agency. They are up about 35% so far this year, following government announcements of more stringent regulations to stimulate the market.
/jlne.ws/488EYqt
California Tries ‘Trump-Proofing’ Its Climate Policies; A second Trump administration would be expected to shred climate polices. California officials are devising ways to insulate its environmental regulations.
Coral Davenport – The New York Times
California officials have been working for months on a plan to “Trump proof” the state’s leading edge environmental and climate policies, in the event that former President Donald J. Trump returns to White House and follows through on his promise to gut them. Whether California succeeds could affect more than a dozen other states that follow its emissions rules, and could have global impact because the state’s market muscle compels auto makers and other companies to conform to California standards.
/jlne.ws/402GdFK
The Scion of the Ziploc Empire Is on a Crusade to Rein In Plastic Waste; SC Johnson chief confronts a ‘versatile’ material that propelled the family business and is also a ‘profound global pollutant’
Natasha Khan – The Wall Street Journal
Billionaire Fisk Johnson has been on a crusade to contain the plastic waste crisis. He has gone scuba diving among plumes of plastic sludge. He has funded research on how microplastics are damaging for human health. And he has made trips to Congress to ask for regulations placing responsibility on consumer-goods companies to recycle the plastic waste their products generate. Companies like his.
/jlne.ws/404NLrQ
‘Vengeful’ Trump withheld disaster aid and will do so again, ex-officials warn; Former administration officials say Trump deliberately denied funds to states he deemed politically hostile
Oliver Milman – The Guardian
Donald Trump deliberately withheld disaster aid to states he deemed politically hostile to him as US president and will do so again unimpeded if he returns to the White House, several former Trump administration officials have warned. As Hurricane Helene and then Hurricane Milton have ravaged much of the south-eastern US in the past two weeks, Trump has sought to pin blame upon Joe Biden’s administration for a ponderous response to the disasters, even suggesting that this was deliberate due to the number of Republican voters affected by the storms.
/jlne.ws/4eNsEig
ACX to Close Abu Dhabi Carbon Exchange After One Year; UAE wealth fund Mubadala invested in ACX Abu Dhabi in 2022; Global carbon offset markets buffeted by greenwashing claims
Verity Ratcliffe – Bloomberg
/jlne.ws/48e9j7d
Orange Growers Were Looking for a Turnaround. Then Milton Came; Hurricane knocked fruit off Florida trees just before harvest; State’s orange output was just recovering from Ian and disease
Ilena Peng – Bloomberg
/jlne.ws/4eSFH1o
Institutions
Global Banks Embark on a New Wave of Product Innovation Targeting Nature; The UN biodiversity summit begins next week in Colombia; Bank of America, HSBC also among lenders planning to attend
Natasha White – Bloomberg
Some of the world’s biggest banks are about to gather for talks, with the goal of monetizing a theme that until now has left much of Wall Street drawing blanks: nature and biodiversity. JPMorgan Chase & Co. and Standard Chartered Plc are among lenders sending representatives for the first time to the United Nations’ COP16 biodiversity summit, which starts next week in the Colombian city of Cali. Other banks that plan to send staff include Citigroup Inc., Bank of America Corp., HSBC Holdings Plc and Deutsche Bank AG.
/jlne.ws/3YqttXl
Verdi union against Commerzbank cross-border merger regardless of bidder nationality
Reuters
German trade union Verdi would oppose a cross-border merger for Commerzbank even if the bidder was not an Italian bank like UniCredit, an official said on Saturday. Berlin was taken aback by UniCredit’s swoop to build a large stake in state-backed Commerzbank, a move the Italian bank says could lead to a merger.
/jlne.ws/400AiB0
Australian Hedge Fund Star Liu Departs Tribeca to Start New Firm
Harry Brumpton and Georgina McKay – Bloomberg
The manager of Australia’s second-best performing hedge fund, Jun Bei Liu, plans to open her own firm, ending nearly two decades with Tribeca Investment Partners. Sydney-based Liu is set to launch the A$1.5 billion ($1 billion) long-short strategy she currently manages under a new yet-to-be-named company by the start of 2025, with backing from Tribeca, which will provide administrative support.
/jlne.ws/4h5OwHa
Hurricane-themed ETF to be liquidated; ProcureAM’s $3mn FIXT fund, which invests in natural disaster recovery, has been unable to attract investors
Daniel Gil – Financial Times
An ETF that invests in companies involved in natural disaster recovery and prevention will be shuttered, its sponsor disclosed last week, just days after Hurricane Helene made landfall in Florida. ProcureAM, which manages the roughly $3mn Procure Disaster Recovery Strategy ETF (FIXT), filed to dissolve the fund last week following approval from its board of trustees. The fund’s last day of trading on the Nasdaq exchange will be October 17, according to a regulatory filing.
/jlne.ws/402UqT2
Ex-Jefferies Fund Manager Hits Back at ‘Despicable’ Fraud Suit; Jordan Chirico said Jefferies’ Leucadia approved investments; 352 Capital sued Chirico, others alleging $100 million fraud
Carmen Arroyo and Jonathan Randles – Bloomberg
A former Jefferies Financial Group hedge fund manager pushed back on a fraud lawsuit accusing him of knowingly investing more than $100 million of the fund’s money in a Ponzi-like scheme involving water machines. Jordan Chirico, former portfolio manager of 352 Capital, part of Jefferies’ Leucadia Asset Management, on Monday asked a judge to dismiss the suit 352 filed against him in July. He said the fund failed to allege that he knew of any wrongdoing during initial purchases of bonds issued by WaterStation Management, and that Leucadia authorized all of the investments in any case.
/jlne.ws/3YkrDZ4
Work & Management
It’s a tough time to be a tech graduate – AI and layoffs have made it a competitive job market
Beatrice Nolan – Business Insider
When Alex Diaz decided to major in computer science, he was looking for job security. “I chose computer science for insurance,” Diaz, a recent University of Maryland graduate, told BI. “I thought if I graduate, I’m sure to find a job because every industry needs a computer scientist nowadays.” Four years down the line, Diaz isn’t feeling so confident. “I’ve been applying for hundreds of positions – positions I believe I’m qualified for – but I’m just not getting a response,” he said. “I think this parallels with a lot of people’s experiences.”
/jlne.ws/3BHSdmd
The difficult work conversation AI helped me with; Turning to ChatGPT stopped weeks of procrastination over an email
Emma Jacobs – Financial Times
A tricky work conversation loomed, so I did what any normal person would do: I put it off. I picked up the phone. I put it down. I gave myself a deadline: after my holiday, then after the weekend. I’m hardly alone. One survey found half of respondents spent seven days or more avoiding thorny conversations. Instead, they complained and ruminated – all wasteful activities preventing them from getting on with their jobs.
/jlne.ws/3U7mS2o
America’s offices are about to see a wave of distress that could result in a billion square feet of fresh housing supply
Jennifer Sor – Business Insider
A seismic event is brewing in a corner of the commercial real estate market, with many office buildings facing distress as they approach a wall of maturing debt and struggle against enduring work-from-home trends. Those factors – which have left some of the worst office buildings nearly deserted – are about to spark a handful of fire sales, potentially kicking off a wave of office-to-apartment conversions that will add more housing supply to the pipeline, real estate pros said.
/jlne.ws/4dKxknp
Are directors of founder-led companies being set up to fail? It can be hard to rein in one dominant individual unless boundaries are set
Anjli Raval – Financial Times
The story is familiar – the visionary founder builds a successful company from scratch but as the business matures, they obstruct effective oversight. Time and again, as another boardroom drama breaks out, independent directors wonder: can a founder-led company ever truly be governed? The drive and boldness of these leaders is essential in the early stages of growing a business. But without proper checks and balances, an over-reliance on one individual can lead to more risk taking and poor decisions. Failure is often praised as a lesson for success but there can be huge costs. Recent turmoil at OpenAI, Tesla and WeWork highlights the complexities of balancing founder influence with the structures needed to safeguard a company’s future.
/jlne.ws/3BKZCkD
How culpable are external lawyers in corporate wrongdoing? New paper by former Big Law associate flags concerns over role in episodes such as the opioid crisis
Sujeet Indap – Financial Times
In the midst of the US opioid epidemic, junior attorney Elise Maizel experienced a sudden crisis of conscience. “I was sitting on the 42nd floor of an office tower and feeling intensely guilty about whether corporate lawyers had played a role in the crisis taking place where I grew up.” Maizel came from south-west Virginia, a rural area that had been ravaged by addiction. As a corporate lawyer, she wondered what accountability her profession owed when the likes of McKinsey, drug manufacturers, distributors and pharmacies eventually paid billions in settlements over business practices that had contributed to tens of thousands of deaths and even more shattered lives.
/jlne.ws/4hfSUDw
Attacking corporate art sponsorship is pointless; It damages our cultural life without helping the cause
Thangam Debbonaire – Financial Times
There was a clattering of dominoes across UK literature festivals this year when Baillie Gifford was dropped from the commercial sponsorship which supports this world. The asset manager’s exit came after sustained pressure from activists, authors, politicians and others who opposed its funding of the Hay Festival because a small percentage of its investments were in Israel and in oil companies. Elsewhere, the Turner contemporary art gallery in Kent was subjected to protests for not visibly campaigning on Palestine and there were a series of angry protests against oil company sponsorship of museums including the British Museum and the National Portrait Gallery.
/jlne.ws/3Nq59zr
Corporate Retreats Are Back. Hotels Are Banking on It; Desire for more face-to-face meetings is spurring companies to book group events
Kate King – The Wall Street Journal
Group travel is buoying the hotel business, offering property owners a welcome respite as other types of travel slow. Conferences and other group business are usually the last part of lodging to recover from a downturn. This type of travel has large upfront costs, making it an obvious area where companies can cut during tough times.
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Wellness Exchange
India’s copycat drugmakers gear up to offer cheaper weight-loss drugs; Expiry of Novo Nordisk’s UK patent for Saxenda seen as offering a ‘dry run’ for future generic versions of Ozempic
Chris Kay and Ian Johnston – Financial Times
India’s powerful copycat pharmaceutical industry is set to roll out generic weight-loss drugs in the UK within weeks, with one leading producer forecasting a “huge price war” that could widen access to the popular medicines. Bengaluru-based Biocon is the first company to win UK authorisation to offer a generic version of Novo Nordisk’s Saxenda weight treatment and is ready to launch sales by November. Saxenda is an older drug of the same GLP-1 drug class as the Danish company’s popular Ozempic diabetes treatment and Wegovy weight-loss medication.
/jlne.ws/4eHHJll
Lilly to Invest $364 Million in UK Biotech, Obesity Research; Drugmaker will also study obesity medication rollout in UK; Labour government has tried to attract foreign investment
Ashleigh Furlong – Bloomberg
Eli Lilly & Co plans to invest £279 million ($364 million) in a new initiative to support UK biotechs along with a study of the impact of its blockbuster drugs for diabetes and obesity on the use of health-care resources. The Indianapolis-based drugmaker’s investment includes as much as £204 million to establish a Lilly Gateway Labs location in the UK, according to an emailed statement Monday, giving early-stage biotechs access to Lilly’s expertise, lab space and potential financial investment. Other UK investments include a 5-year real-world study of tirzepatide, the drug known as Mounjaro in the US when used for diabetes and Zepbound for weight loss.
/jlne.ws/3NqJkzM
With new COVID strain XEC spreading, Chicago health experts urge up-to-date vaccination
Angie Leventis Lourgos – The Chicago Tribune
A new COVID variant called XEC has been spreading around the globe as respiratory virus season begins – and many public health experts are concerned about a pattern of troublingly low COVID and flu vaccination rates in recent years. The XEC strain, a highly contagious omicron subvariant, was first detected in Germany in June and has since proliferated across Europe. While the XEC variant appears to be highly contagious, public health officials say its symptoms and severity seem to be similar to other COVID subvariants that are in circulation.
/jlne.ws/3zUc2pN
Why are a rising number of young Britons out of work? A record 35% of people aged 18-24 were classed as ‘inactive’ this year, driven by a mental health crisis
Amy Borrett – Financial Times
The UK is grappling with a concerning rise in youth inactivity, with the number of people aged 16 to 24 not in education, employment or training rising almost a quarter since 2022 to more than 870,000. The surge in worklessness has been partly driven by a post-pandemic mental health crisis, which has affected young people in the UK at much higher rates than their peers in other developed economies.
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Regions
Tokyo Metro’s IPO Set to Raise $2.3 Billion in Japan’s Biggest Listing in Six Years; mSubway operator priced shares at ¥1,200 apiece, top of range; Shares to list Oct. 23 in biggest IPO since 2018 SoftBank deal
Julia Fioretti and Dave Sebastian – Bloomberg
Tokyo Metro Co.’s initial public offering has raised ¥348.6 billion ($2.3 billion) after the company priced shares at the top of the marketed range, people familiar with the matter said, in a show of hot demand for Japan’s biggest listing in six years. The subway operator priced the shares at ¥1,200 apiece, the people said, asking not to be identified to discuss private information. The shares were marketed at a range of ¥1,100 to ¥1,200 each. The company expects to list shares in Tokyo on Oct. 23.
/jlne.ws/4093YfD
Singapore Blocks $1.7 Billion Allianz-Income Insurance Deal; Minister says deal in current form not in public interest; Government open to any new arrangement if concerns addressed
Philip Heijmans and Elffie Chew – Bloomberg
The Singapore government will block a proposed S$2.2 billion ($1.7 billion) deal by Allianz SE to buy a majority stake in a homegrown insurance firm, three months after the transaction sparked a public backlash. The government decided it wouldn’t be “in the public interest” for the Income Insurance Ltd. deal to proceed in its current form, Minister of Culture, Community and Youth Edwin Tong told parliament on Monday. The city-state isn’t satisfied that Income can fulfill its social mission as a co-operative after the acquisition, he added.
/jlne.ws/4f13cW7
China to Offer More Scholarship Slots, Financial Aid to Students
Bloomberg News
China will hand out twice the number of scholarships and step up financial aid to students as part of a series of policy measures announced by the Ministry of Finance on Saturday. The country will double the annual scholarship quota for undergraduate students to 120,000, that of postgraduates to 70,000, and doctoral students to 20,000, Vice Finance Minister Guo Tingting said at a briefing. The limit on student loans will also be raised.
/jlne.ws/4h15PsL
New Abu Dhabi asset manager Lunate reveals deals streak; The firm, which officially launched in January, has already taken stakes worth $5bn this year
Chloe Cornish, Harriet Agnew – Financial Times
New Abu Dhabi asset manager Lunate has invested in 25 deals so far this year, buying stakes in companies from private equity firm CVC to India’s National Stock Exchange. Managing partner Khalifa al-Suwaidi told the Financial Times that the firm, which officially launched in January, had already invested $5bn this year and hopes to deploy $8-10bn a year, making it an attractive potential client for money managers looking to raise funds.
/jlne.ws/3Nn5OSa
A Gilt Buyer Strike Is Not In the UK’s Future; Chancellor Rachel Reeves deserves the benefit of the doubt from skeptical markets.
Marcus Ashworth – Bloomberg
I can’t be alone in wishing for the Oct. 30 budget statement from UK Chancellor of the Exchequer Rachel Reeves to be over and done with. The interminable lead-up has been a succession of rumors, hints and fantasy scenarios. Most likely, it won’t be that exciting. Which would be a blessed relief for the UK government bond market, as chatter abounds of a gilt buyer strike if Reeves leans too heavily on borrowing. I flagged this risk in early September but some perspective is needed. With reports of the more ambitious tax-raising plans being reined in, so will caution most likely be applied to debt raising.
/jlne.ws/4dNQgSu
UK Fintech Firms Push Government to Back Growth, IPO Dreams
Aisha S Gani – Bloomberg
Executives of some of Britain’s most valuable and fast-growing financial technology firms warned the Labour government that London could fall behind in the fintech world if the UK fails to address some of the industry’s key concerns, including the challenges they see with share listings and regulators’ speed in decision-making.
/jlne.ws/3U7Vl0Y
Dubai’s Allure to Expats Is Weighing on City’s Infrastructure; Emirate has attracted about 400,000 people since the pandemic; That’s boosted rents and home values, put pressure on schools
Abeer Abu Omar and Zainab Fattah – Bloomberg
/jlne.ws/3A6ouCH
France Rating Outlook Cut to Negative by Fitch on Wider Deficits; Government debt seen rising towards 118.5% of GDP by 2028; French government presented EUR60 billion savings in new budget
William Horobin – Bloomberg
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Miscellaneous
Inside the Companies That Set Sports Gambling Odds; Big-money data deals and advanced statistical models are helping to predict match outcomes and keep people betting.
Samanth Subramanian – Bloomberg
Along with the pub and the kebabery, one fixture of nearly every British high street is the betting shop. Even unconsciously, the eye registers the distinct colors of their signboards: the forest-green frontage of Paddy Power, the navy of William Hill, the red-bleeding-into-blue of Betfred, the angry red of Ladbrokes. Since betting became legal in the UK in 1961, these bookmakers have taken hundreds of billions of pounds in bets-not just on World Cups, tennis tournaments and elections but also on when humans would walk on the moon, whether the yeti really exists and how long it would take to recapture an African golden eagle that had fled the London Zoo. Their integration into English life has been so thorough that, during the anti-immigrant riots in the summer of 2024, a man with a sticker reading “British and Proud” on his chest lamented the loss of a country that once had “pubs everywhere, betting shops everywhere.” He said this standing in front of a pub, with two betting shops a 10-minute walk away.
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