| November 30, 2023 | "Irreverent, but never irrelevant" | | | | John Lothian
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Hits & Takes
John Lothian & JLN Staff
We missed including a story from Bloomberg yesterday about Miami International Holdings Inc.'s plans for a new trading floor in Miami. MIAX is building a 38,400-square-foot options trading pit and offices in Miami's Wynwood neighborhood, according to Chief Communications Officer Andy Nybo, Bloomberg reported. I can't wait to see the new trading floor.
Joshua Brown, who has published a blog under The Reformed Broker name, is hanging up the title. A lot has changed for Brown since 2008, when he was broke and working at a dead-end brokerage firm at the age of 31. He has gone on to much greater things and moving forward he will be publishing on the www.downtownjoshbrown.com site. He announced his move in his last column on The Reformed Broker, which you can find HERE.
The last time we had interest rates this high and markets as robust as they are today, we saw some consolidation in the brokerage space in the futures industry. Part of the driver of the consolidation was the goal to create enough mass to be able to take the combined entity public. Given the current conditions, I would not be surprised to see such consolidation happen. In the history of the futures industry, some FCMs have had a tremendous sense of when the time was right to sell, and have done very well doing so. There must be something in the water in the CBOT Building and others nearby about knowing when to sell high and buy low.
Elon Musk went on a bit of a rant and told advertisers on X, formerly Twitter, who stopped advertising because of his anti-semitic comment to "F-off." That is not good customer relations. In fact, that is the kind of relationship that will ultimately force Mr. Musk to sell X. The bankers backing him will be willing to take only so much heat before they force him to sell. My guess is that X will once again be named Twitter under new ownership once Mr. Musk sells. There is hope for Twitter, especially as Musk continues to swirl down the drain.
The U.S. Presidential election in 2024 is looking like a big problem for Wall Street and others who don't like the choices of President Joe Biden as the Democratic nominee and former President Donald Trump as the Republican nominee. Biden is running practically unopposed and is a sure thing to lock up the nomination, assuming no challenger jumps in at the last minute. Trump is leading his competitors by 50 points in various polls and is the likely Republican nominee. That math has prompted JP Morgan's Jamie Dimon to encourage people, including very liberal Democrats, to vote for former South Carolina Governor Nikki Haley for the Republican nomination. By crossing over, the Democrats won't be influencing Biden's chances and can hurt Trump's and help Haley win the nomination. I am not sure if the goal is to have Haley win the presidency, but it is to stop Trump from winning the Republican nomination. I expect this idea to get lots of support as the primaries and caucuses near.
FIA Asia 2023 wrapped up earlier today in Singapore with the SGX closing reception. The only event left for the conference is the Friday golf outing benefiting Futures for Kids. Speaking of Futures for Kids, Rama Pillai's "Good Karma with Rama" Kilt Challenge fundraising for the charity has raised 12,787 pounds so far. He is off to a great start. Thank you to all who have contributed and all who will contribute to Rama's Kilt Challenge!
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
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The United Nations Framework Convention on Climate Change (UNFCC), COP28, kicks off today, Nov. 30, in Dubai, United Arab Emirates. Finance for climate transition, mitigation and adaptation will be a major point of discussion throughout the conference, which runs through Dec. 12. Learn more about the history of the conference, its process and meetings, follow a live blog, and read documents and decisions at the UNFCC website. View public webcasts here. Follow the news at hashtag #COP28 on social media. ~SAED
Our most read stories from our previous edition of JLN Options were:
- Wall Street's fear gauge drops below 13. What it could mean for stocks over the long run from MarketWatch.
- A Deeper Dive into 0DTE Options trading: Jonathan Zaionz, Senior Derivatives Analyst at Cboe Global Markets and Author of "The Rise of SPX & 0DTE Options," Discusses 0DTE and More in this Options Discovery Full Interview from John Lothian News.
- Amazon Stock Is Approaching a New High. Instead of Buying Shares, Do This from Barron's. ~JB
Subscribe to the JLN Options Newsletter HERE (it's free).
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Webull Completes Purchase of Flink in Mexico
Webull Corporation
Webull Corporation ("Webull"), the owner of the popular Webull trading platform that has been downloaded over 40 million times worldwide, today announced its acquisition of all of the outstanding shares of Miflink S.A.P.I. de C.V. ("Flink"). Flink is an investment platform based in Mexico City that allows Mexican customers the unique opportunity to invest in fractional shares of U.S. listed companies without commissions. As part of the transaction, Webull will also acquire Mexican brokerage Vifaru Casa de Bolsa, which Flink agreed to purchase in May 2022, subject to regulatory approval by Mexico's CNBV.
/jlne.ws/410nhWE
****** "Webull's innovative and intuitive mobile trading app is a great opportunity for the BMV cash equities and MexDer listed derivatives exchanges to gain exposure to Webull's eight million global clients."~Gary Flagler - MexDer
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Elon Musk delivers diatribe against advertisers over X boycott 'blackmail'; Outburst by social media platform's billionaire owner comes during chaotic interview following antisemitism controversy
Hannah Murphy - Financial Times
Elon Musk told advertisers who have halted spending on X due to his endorsement of an antisemitic post to "go f**k" themselves, deepening a rift between the billionaire and the companies that generate most of the social media platform's revenue. In a rollercoaster interview with Andrew Ross Sorkin at The New York Times Dealbook Summit on Wednesday, Musk said that a recent exodus of big brands - which included IBM, Apple, Walt Disney, Comcast and Warner Bros - was "going to kill the company, and the whole world will know the advertisers killed the company".
/jlne.ws/3QZQ4WY
****** The question is where is the stop out level where Musk is forced to sell X? Ironically, X is the sign for a stop. ~JJL
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Henry Kissinger, Who Helped Forge U.S. Foreign Policy During Vietnam and Cold Wars, Dies at 100; German-born academic was a hero to war-weary Americans but many blamed him for brutalities abroad
Alan Cullison - The Wall Street Journal
Former presidential adviser Henry Kissinger has died, according to a statement posted on his website, bringing to a close one of the most polarizing and influential diplomatic lives in U.S. history. He died Wednesday at his home in Connecticut, said a statement by his consulting firm. He was 100 years old.
/jlne.ws/4a0IyUs
****** Here is the Financial Times obituary of Secretary Kissinger.~JJL
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Wednesday's Top Three
Our top story Wednesday was LME wins High Court ruling over cancelled nickel trades, from the Financial Times. Second was Charlie Munger Wrote His Own Best Eulogy, an opinion piece from John Authers in Bloomberg. Third was our MarketsWiki page for Bolsa Mexicana de Valores S.A.B.
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| Lead Stories | How AI will change investment and research; The next ecosystem could be very different for providers and professionals
Juan Luis Perez - Financial Times
Sir Isaac Newton lost a fortune betting on the South Sea Company. Perhaps he did not take into account the "precautionary principle". If you don't understand something, even if others seem excited about it, it's better to do something else or wait until you do get it. This principle should perhaps be borne in mind by investors and investment banks as artificial intelligence is developed for market and financial research. It could create a lot of noise.
/jlne.ws/3GoYoue
US will be forced to curtail crypto if industry fails to act on illicit finance threats- official
Hannah Lang - Reuters
The U.S. government will cut off cryptocurrency companies from the broader U.S. economy if they fail to block and report illicit money flows, Deputy Treasury Secretary Wally Adeyemo warned the industry on Wednesday. Speaking at an event hosted by the Blockchain Association, Adeyemo said that crypto companies need to do more to curtail the flow of illicit finance, and that the lack of action across the sector presents a risk to the U.S.
/jlne.ws/415dq22
Treasury Seeks Expanded Sanctions Powers in Digital Space; Department asks Congress for 'secondary sanctions regime'; Aims to combat use of digital assets in illicit finance
Christopher Condon - Bloomberg
The US Treasury's No. 2 official said the Biden administration is asking Congress to consider the most serious reforms to the department's sanctions powers since the terrorist attacks of 2001 to help combat the use of digital assets in illicit finance. "We are calling on Congress to create a secondary sanction regime," Deputy Treasury Secretary Wally Adeyemo said in prepared remarks on Wednesday. That would go beyond just barring a company from the US financial system, because it "will also expose any firm that continues to do business with the sanctioned entity" to also being cut off, he said.
/jlne.ws/3sSKmOz
Robinhood launches fresh UK foray; Meme stock platform opens waiting list for British investors after failed 2020 bid
Arjun Neil Alim and Jennifer Hughes - Financial Times
US share trading app Robinhood is launching in the UK after an abortive attempt three years ago, betting it can win business from incumbents it says charge large fees. The broker, whose commission-free trading offer catapulted it to the forefront of the 2021 meme stock mania, on Thursday opened a waiting list for UK investors, the first step in its expansion in the UK.
/jlne.ws/46xQV6Z
With Meme-Stock Boom Behind It, Robinhood Scours Globe for DIY Investors; Digital brokerages Webull, Public have also launched in the U.K. this year
Hannah Miao and Caitlin McCabe - The Wall Street Journal
Robinhood became synonymous with a new generation of do-it-yourself investors in America. Now it wants to do the same abroad. The digital brokerage on Thursday is opening a wait list for U.K. residents and will grant them early access to its trading app over the next several weeks, with full availability scheduled for early 2024. Robinhood joins other digital brokerages, including Webull and Public, that launched in the U.K. this year. The international expansion follows an industrywide drop in trading activity among individual investors. Robinhood's monthly active users have roughly halved from pandemic-era highs, while revenue from interest has eclipsed that of trading-related activities. The rapid rise in interest rates has made trading stocks less attractive when plenty of high-yielding investments with little risk are available.
/jlne.ws/3uwygeg
IRS Court Win Paves Way for Higher Taxes on Hedge-Fund Managers; Ruling could close off a tax-reduction technique popular among fund managers
Richard Rubin and Peter Rudegeair - The Wall Street Journal
The Internal Revenue Service scored a significant win over the hedge-fund and asset-management industries this week in a case that could bring higher taxes for many fund managers. The U.S. Tax Court's ruling could require managers to pay self-employment taxes of more than 3% on much of their income. If the opinion survives additional legal battles and is applied broadly, it would close off a popular technique that lets them exclude millions of dollars in income from self-employment taxes and related levies that others must pay.
/jlne.ws/3RmlIz9
Citadel and Its Peers Are Piling Into the Same Trades. Regulators Are Taking Notice
Katherine Burton, Hema Parmar, Madeline Campbell and Nishant Kumar- Bloomberg
Even Ken Griffin is a little worried. Multimanager funds like Griffin's Citadel have come to dominate the hedge fund industry, riding a steady run of outperformance to oversee more than $1 trillion, including a healthy dose of leverage. But the explosive growth has led the industry giants to pile into many of the same trades.
/jlne.ws/3Rm9RAZ
Global bank executives hit out at US capital plans; UBS chair and HSBC chief join Wall Street bankers in questioning US proposals to implement Basel III rules
Joshua Franklin, Stephen Morris, Owen Walker and Stephen Gandel and Colby Smith - Financial Times
Global bank executives have rounded on US regulators' plans for new industry capital rules, warning that the Basel III endgame proposals are "fighting yesterday's war" while putting financial market liquidity at risk.
/jlne.ws/3T3XtqQ
Elon Musk, Slinging Expletives, Says Advertiser Boycott on X May Kill It
Aisha Counts and Dana Hull - Bloomberg
Elon Musk, the billionaire owner of X, says the advertisers that have stopped spending on the platform due to his endorsement of an antisemitic post can "f--" themselves. "What it's going to do is it's going to kill the company, and the whole world will know the advertisers killed the company," Musk said at the New York Times DealBook conference on Wednesday. "Go f-- yourself." The post was the "worst and dumbest I've ever done," said Musk, the chief executive officer of Tesla Inc.
/jlne.ws/3N6ngL9
***** Here is the New York Times DealBook story and video. ~SR
Elon Musk Uses 'F' Word for Advertisers Boycotting Platform; Billionaire addresses posts on X he says were misperceived as antisemitic
Alexa Corse - The Wall Street Journal
Elon Musk said advertisers pulling their ads from his social-media platform X can "go f-yourself." Musk's platform in recent weeks has been grappling with the departure of several large advertisers in the wake of a post by the billionaire describing an antisemitic post as "the actual truth," which elicited a new round of criticism that he promotes antisemitic views.
/jlne.ws/413ZHbq
OpenAI's New Board Takes Over and Says Microsoft Will Have Observer Role; Group of directors will expand and strengthen governance structure following CEO Sam Altman's surprise ouster and return
Deepa Seetharaman - The Wall Street Journal
OpenAI's new board formally took over on Wednesday and said it would add an observer role for partner Microsoft, capping a dramatic chapter for the artificial-intelligence startup and launching a new phase of difficult decisions. The new board's initial three members were decided as part of CEO Sam Altman's return last week after the previous board abruptly fired him. The replacement directors' priorities include creating an independent committee to review the events around Altman's ouster, OpenAI's interim chairman, Bret Taylor, said in a note to employees on Wednesday.
/jlne.ws/47z38t7
In the Market: Regulators look to pry open the dark corners of Treasury markets
Paritosh Bansal - Reuters
In recent weeks top U.S. officials have raised concerns over a hedge fund trade that profits from tiny price differences in Treasuries, worried it could present a risk to financial stability. No one knows, though, how big that trade really is. Researchers from the U.S. Federal Reserve and the Office of Financial Research (OFR) in late August wrote there were signs that the so-called basis trade had increased this year amid rising interest rates, approaching levels last seen in 2019.
/jlne.ws/3T46wbl
LME court win affirms the broad powers of exchanges; The court said it would not second-guess the LME's 'specialist decision-maker' role
Jeremy Chan - Financial News
The London Metal Exchange's win in its court battle with Elliott Management and Jane Street has made clear the broad power of exchanges in protecting the markets they oversee.The High Court in its decision on 29 November said the LME didn't act unlawfully when it cancelled trades and upheld margin requirements on 8 March 2022 after a short squeeze sent nickel prices surging to over $100,000 per ton.
/jlne.ws/3uy1j10
We Already Know What Will Happen at COP28; We don't need any more climate change goal-setting or discussions about process. What we need are specific policies and implementation.
Lara Williams - Bloomberg
So it begins. An estimated 70,000 politicians, business leaders, scientists, activists, journalists and others from around the world are pouring into Dubai for two weeks, maybe more, of climate events and deliberations. In a year that saw the average global surface temperature breach 2C (3.6F) of warming on multiple days (that's deeply concerning!), the need for faster progress toward climate targets is more urgent than ever. Many will be waiting with bated breath to see whether this meeting winds up being a success or a failure.
/jlne.ws/3uAeb6V
China Investment Bank Bans Displays of Wealth; CICC asks analysts to avoid negative macro, market commentary; Bankers also discouraged from showing off their wealth: memo
Bloomberg News
One of China's largest investment banks has warned its analysts against making any bearish calls and to avoid showing off their lavish lifestyle, as Beijing continues to clamp down on well-paid bankers. Analysts at China International Capital Corp. are barred from sharing negative comments about the economy or markets in both public and private discussions, according to an internal memo sent to the research department this month and seen by Bloomberg News. Employees should also avoid wearing luxury brands or revealing their compensation to third parties, the memo said.
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Banking Escapees Make Billions From Private Credit Boom; HPS personifies the remarkable ascent of direct lending, and its threat to Wall Street.
Silas Brown and Davide Scigliuzzo - Bloomberg
Dinner with Barack Obama, mansions on both US coasts and dazzling modern art collections - from Frank Stella to Jean-Michel Basquiat. These are all solid bragging points when you're sitting at finance's top table. And yet for the three core founders of HPS Investment Partners, how they spend their fortune is much less striking than how they made it. In 2016 the private credit firm bought itself out of JPMorgan Chase & Co. in a complicated deal valuing it at close to $1 billion. As it wrestles today with the idea of a public listing, it could be worth roughly eight times as much.
/jlne.ws/46GWLmm
SEC Says WeWork Options Plot Failed on Botched Press Release
Patrick Clark - Bloomberg
The US Securities and Exchange Commission accused a strip mall owner of a botched attempt to profit by manipulating the price of WeWork Inc. shares and using client funds to pay for his lavish lifestyle. The real estate investor, Jonathan Larmore, was behind an entity called Cole Capital that made an offer to buy WeWork stock at a large premium earlier this month, in the days before the coworking company filed Chapter 11 bankruptcy. The move briefly sent the shares soaring, according to the SEC complaint filed in Arizona.
/jlne.ws/46HVStH
SEC Case Threatens Widespread Disruption; The commission may have gone too far in relying on in-house judges. But a radical Supreme Court ruling could cause chaos.
The Editorial Board - Bloomberg
On Wednesday, the Supreme Court will consider a case of potential overreach by the Securities and Exchange Commission that could have far-reaching consequences - both for the commission and for every other government agency. One of the questions before the court is whether the SEC violated hedge fund manager George Jarkesy's right to a jury trial by assigning his case to an in-house judge, who imposed financial penalties and barred him from the industry. The justices have previously ruled that there are limited situations, such as the protection of public rights, when a government agency can bypass a trial.
/jlne.ws/3T3bpRW
'Zombie' CLOs Are New Hurdle in European Debt Restructurings
Giulia Morpurgo, Lisa Lee and Eleanor Duncan - Bloomberg
The red tape of the CLO industry is threatening to push some struggling companies in Europe into expensive and lengthy legal processes in order to restructure their debt. These European collateralized loan obligation lenders have become "zombies" - unable to act in deals to allow companies to extend repayment deadlines because of their own investment deadlines. As a result, companies in stressed situations like data-storage business PlusServer GmbH and fellow German firm Tele Columbus AG are being forced to pay up to go to court.
/jlne.ws/40Y8N9X
Deutsche Bank was keen to land a 'whale' of a client in Trump, documents at his fraud trial show
Jennifer Peltz - Associated Press
Deutsche Bank viewed Donald Trump as a "whale" of a client, was eager to land him and eagerly cultivated a relationship that grew from $13,000 worth of revenue to $6 million in two years, according to documents presented Wednesday at the former president's civil fraud trial. The bank's dealings with Trump are a key issue in New York Attorney General Letitia James' lawsuit, which accuses Trump, his company and some executives of hoodwinking lenders and insurers by presenting them with grossly inflated statements of his asset values.
/jlne.ws/3T5sWZF
Viewpoint - Trends to watch in APAC derivatives markets
FIA
China's dominant commodity exchanges, India's exponential growth, and the rise of global benchmarks in the east all are signs of Asia-Pacific's growing global influence in cleared derivatives markets. "Headlines from Europe and the US sometimes squeeze APAC issues out of the spotlight, but it's increasingly clear that this region is where the action is," writes FIA President & CEO Walt Lukken in his latest Viewpoint column.
/jlne.ws/47EwSoO
Saudi wins provisional backing for Opec+ oil production cuts; Expectations of production deal boost volatile prices but traders warn of quick reverse if talks collapse
David Sheppard and Ian Johnston - Financial Times
Saudi Arabia has won provisional backing for further oil production cuts by the Opec+ group, boosting oil prices to the highest in three weeks ahead of a crucial meeting of the cartel. The meeting, which is being held online rather than in person after being delayed from Sunday, comes as oil producers attempt to support a price that has slipped in recent months and as tensions in the Middle East are heightened by the Israel-Gaza war.
/jlne.ws/3QUdiNS
COP28 Scores Early Win With Landmark Deal on Climate Damages
Jennifer A. Dlouhy and John Ainger - Bloomberg
Nearly 200 nations agreed on details for running a fund designed to help vulnerable countries deal with more extreme weather stoked by global warming, marking a major breakthrough as international climate negotiations opened in Dubai.
/jlne.ws/41hUkWB
***** Here is this story from Reuters, The Wall Street Journal, and The Guardian. ~SAED
COP28 opens with plea to work together on fossil fuels; COP28 president says engaging on fossil fuels 'essential'; Countries and oil companies urged to work together; Summit delegates hope for early approval of disaster fund deal
Kate Abnett, Maha El Dahan and Valerie Volcovici - Reuters
The incoming COP28 president, Sultan al-Jaber, opened this year's U.N. climate summit on Thursday by urging countries and fossil fuel companies to work together to meet global climate goals. Governments are preparing for marathon negotiations on whether to agree, for the first time, to phase out the world's use of CO2-emitting coal, oil and gas, the main source of warming emissions. Jaber, who is also the CEO of the United Arab Emirates' national oil company ADNOC, aimed to strike a conciliatory tone following months of criticism over his appointment at the head of COP28.
/jlne.ws/3uGh2LK
At COP28, the United States Will Stress an End to Fossil Emissions, Not Fuels; The Biden administration faces increasing international and domestic political pressure to endorse near-term cuts in coal, oil and natural gas.
Marianne Lavelle - Inside Climate News
President Joe Biden will not attend the climate talks that commence this week in Dubai, but the conflict that has come to define his policy on the planetary crisis will be front and center. The president who has catalyzed the nation's greatest investment ever in a clean energy transition also has presided as U.S. oil and natural gas production reached record heights. And as delegates from nearly 200 nations convene Thursday for two weeks of negotiations on what more needs to be done to stave off catastrophic warming, pressure is building for the annual conference to address specifically-for the first time- the future of fossil fuels.
/jlne.ws/3RnOGyP
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| Ukraine Invasion | | News about the invasion of Ukraine by Russia and its military, economic, political and humanitarian impact | Ukraine Poll Shows 40% Back NATO Bid Without Occupied Regions
Kateryna Chursina - Bloomberg
A new poll in Ukraine showed that two fifths of respondents back joining NATO even if it means territories outside Kyiv's control remain outside the alliance. A total of 40% of those asked said they fully or rather supported the idea of Ukraine joining the bloc with only those territories currently under government control, according to the telephone survey of 1,000 people conducted by the Rating pollster on Nov. 22-23. Support for NATO accession slipped to 77% from 83% in July and is now at the same level as it was in March 2022, shortly after Russia started its invasion.
/jlne.ws/3uAB6Pr
Zelenskiy Faces Manpower Dilemma in Ukraine's Stalled Offensive
Volodymyr Verbianyi and Daryna Krasnolutska - Bloomberg
A plan to draft more Ukrainian men into the army has been sitting on President Volodymyr Zelenskiy's desk since June. The wartime leader so far has defied pressure from the military to sign it. Instead, Zelenskiy last week asked his government and top brass for a more comprehensive package, one better tailored to a nation exhausted by a war and preparing for another winter of fighting. It again put off the blueprint, approved by Ukraine's parliament, to lower the draft age during war for men with no military experience to 25 from 27.
/jlne.ws/3sP2qsX
Russian missile strikes in eastern Ukraine tear through buildings and bury families in rubble
Hanna Arhrova - Associated Press
Russian missiles tore through apartment buildings in eastern Ukraine's Donetsk region, local officials said Thursday, killing at least one person and burying families under rubble as the Kremlin's forces continued to pound the fiercely contested area with long-range weapons. Russian military units simultaneously launched six S-300 missiles toward the Donetsk region during the night, according to Ukrainian Internal Affairs Minister Ihor Klymenko. Another two were fired separately in the same area, the Ukrainian air force said.
/jlne.ws/3T4JEIB
War has spread to a sixth domain: the private sector; The conflict in Ukraine highlights the need for governments and private companies to collaborate on national security
John Thornhill - Financial Times
Ever since the first recorded battle in the 15th century BC at Megiddo, where Pharaoh Thutmose III's forces crushed the rebellious Canaanites (and gave rise to the term Armageddon), our species has been steadily, and depressingly, expanding the domains in which we kill each other.
/jlne.ws/3sPpgAG
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| Israel/Palestine Conflict | | News about the recent (October, 2023) conflict between Israel and Palestine | Switzerland Joins US-Led Group Seeking to Stop Hamas Funding
Paula Doenecke - Bloomberg
Switzerland is taking part in a multi-country group that includes the US and Germany that aims to disrupt funding for Hamas. The country is already distributing material to banks on how to discover terrorist financing and its top prosecutor has started an investigation into alleged payments made to Hamas a few weeks before the Oct. 7 attacks on Israel.
/jlne.ws/418giLy
Israel and Hamas extend ceasefire to keep trading hostages for prisoners; Decision to continue uneasy truce comes minutes before it was set to expire
Mehul Srivastava and Neri Zilber and Andrew England - Financial Times
Israel and Hamas agreed to continue a fragile truce for at least another day to keep trading hostages in Gaza for Palestinian prisoners, as US secretary of state Antony Blinken landed in the region to try to facilitate the release of more captives. Qatar, which is mediating the pause in hostilities, said the two sides had "reached an agreement to extend the humanitarian pause in the Gaza Strip for an additional day under the existing conditions".
/jlne.ws/3sVZzye
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| Exchanges, OTC & Clearing | | Top news from exchanges, clearing, settlement and trade execution facilities | Miami Exchange Preps Trading Floor in Wynwood During Options Boom; MIAX is building both a physical and electronic trading venue; Options volume has soared since the pandemic lockdowns
Katherine Doherty - Bloomberg
Miami International Holdings Inc. plans to operate a trading floor in its namesake city for the first time. The company, also known as MIAX, is building a 38,400-square-foot (3,500-square-meter) options trading pit and offices in Miami's Wynwood neighborhood, according to Chief Communications Officer Andy Nybo. Its new options exchange will be part electronic, set to open in the second quarter of 2024, and part a physical trading floor, which will go live later in the year. The combination gives MIAX the ability to offer trading in either an old-school open-outcry or modern, electronic format.
/jlne.ws/47BME3z
Cboe Global Markets to Present at the Goldman Sachs 2023 U.S. Financial Services Conference Wednesday, December 6
Cboe press release
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, announced today that Fredric Tomczyk, Chief Executive Officer, David Howson, Executive Vice President and Global President, and Jill Griebenow, Executive Vice President, Chief Financial Officer and Chief Accounting Officer, will present at the Goldman Sachs 2023 U.S. Financial Services Conference in New York City on Wednesday, December 6 at 3:40 p.m. ET. The live webcast and replay of the presentation will be accessible at www.cboe.com in the Investor Relations section, under Events and Presentations. The archived webcast is expected to be available within an hour of the presentation.
/jlne.ws/413HISs
Numoro's Machine Learning Powered AMETF Lists on JSE
Johannesburg Stock Exchange
The Johannesburg Stock Exchange (JSE) is pleased to announce the listing of a groundbreaking machine learning Actively Managed Exchange Traded Fund, the Numoro Multi-Asset AMETF (AQUA). This new fund which is supported by robust algorithms is born from a partnership between financial solutions provider, Numoro and the Prescient financial management platform. The portfolio invests in a flexible combination of investments in international equity, bonds, money, and property markets - with further increased adaptability through asset allocation between asset classes, countries, and regions.
/jlne.ws/3RodmH6
SPAN Margin Parameters
London Metal Exchange
LME Clear Members are advised that new SPAN1 margin parameters have been set, as marked in the SPAN Margin Parameter spreadsheet located here https://www.lme.com/en/Clearing/Risk-management/Margin-parameter-files The changes will be made effective at close of business 4 December 2023 and will be reflected in SPS margin calls on the morning of 5 December 2023. Members are advised that Secondary SPAN margin parameters will be updated from the morning of 1 December 2023 with the new parameters as detailed in this circular.
/jlne.ws/3vimcfa
After court victory, LME bids to reboot confidence
Eric Onstad and Pratima Desai - Reuters
As the London Metal Exchange (LME) savours its court victory over cancelled nickel trades, it still faces a host of challenges including ongoing repair of its damaged nickel contract and reputation after being rocked by crisis last year. The LME on Wednesday won a legal battle with U.S. financial firms which demanded $472 million in compensation after the exchange cancelled billions of dollars in nickel trades when prices shot to records above $100,000 a metric ton in a few hours of chaotic trade.
/jlne.ws/413w3mH
Straits Times Index (STI) Quarterly Review
London Stock Exchange Group
December 2023. No changes to the constituents of the STI FTSE Russell, a leading global index provider, announces that there will be no changes to the constituents of the Straits Times Index (STI), following the December 2023 quarterly review. A full list of STI constituents can be found on the FTSE Strait Times (ST) Index Series website.
/jlne.ws/414BtxK
Straits Times Index (STI) quarterly review - December 2023 30 Nov 2023
SGX
No changes to the constituents of the STI FTSE Russell, a leading global index provider, announces that there will be no changes to the constituents of the Straits Times Index (STI), following the December 2023 quarterly review. A full list of STI constituents can be found on the website. The STI reserve list will see the following changes (in alphabetical order):
/jlne.ws/3sW1WB6
The first major auction for the sale of carbon units took place at the National Commodity Exchange
MOEX
On November 30, 2023, an auction for the sale of carbon units was successfully held at the National Commodity Exchange (NTB, part of the Moscow Exchange Group). This is the first major exchange auction for the sale of carbon units since September 2022, when regulation of this market came into force and the infrastructure for the production and circulation of carbon units was launched. The seller and customer of the auction was SIBUR. As a result of the auction, two purchase and sale transactions were concluded with a total volume of 2,735 carbon units. The buyers were Gazprombank (represented by a subsidiary) and the Carbon Zero company. The weighted average selling price was 700 Russian rubles per carbon unit.
/jlne.ws/47Ygnn2
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| Fintech | | A roundup of today's market tech news and a look at tomorrow's disruptors | Trading Technologies' TT platform captures Derivatives Trading System of the Year at 2023 FOW International Awards
Trading Technologies
For the second consecutive year, global markets technology platform provider Trading Technologies International, Inc. (TT) captured the award for Derivatives Trading System of the Year for its TT platform at the 2023 FOW International Awards. The awards were presented at a dinner ceremony last night, following the Trading London Conference. The recognition follows the platform's win of the same category at the FOW Asia Capital Markets Awards in September. The TT platform was also named Best Solution for Futures Trading at the TradingTech Insight USA Awards in June.
/jlne.ws/3Gp8DPa
Eventus wins Market Surveillance Solution of the Year at FOW International Awards 2023
Eventus
Eventus, a leading global provider of state-of-the-art, at-scale trade surveillance software across all lines of defense, announced that the firm's Validus platform has been named Market Surveillance Solution of the Year at the 2023 FOW International Awards.
Bestowed in London last night following the publication's Trading London conference, the award was the second Eventus has earned in the category at the FOW International Awards, following its second win in September in the same category at the FOW Asia Capital Markets Awards. Earlier this month, Eventus also won the award for Best Market & Trade Surveillance Solution in the Digital Assets category in the Regulation Asia Awards for Excellence 2023.
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Nvidia CEO Says US Will Take Years to Achieve Chip Independence
Ian King - Bloomberg
Nvidia Corp. Chief Executive Officer Jensen Huang, who runs the semiconductor industry's most valuable company, said the US is as much as 20 years away from breaking its dependence on overseas chipmaking. Huang, speaking at the New York Times's DealBook conference in New York, explained how his company's products rely on myriad components that come from different parts of the world - not just Taiwan, where the most important elements are manufactured.
/jlne.ws/3GGR65v
Microsoft will have observer role on OpenAI's new board; Key investor in generative AI start-up seeks to strengthen corporate governance after week of tumult
George Hammond - Financial Times
Microsoft will have a role on OpenAI's new board as the artificial intelligence start-up aims to strengthen its corporate governance following a week of chaos in which five out of six of its directors, including chief executive Sam Altman, were ousted or quit. The new board will include Microsoft as a non-voting observer, alongside "individuals whose collective experience represents the breadth of OpenAI's mission - from technology to safety to policy," the start-up said on Wednesday.
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Artificial Intelligence Needs Open-Source Models to Reach Its Potential; Without a commitment to openness, a privileged elite will enjoy the lion's share of the benefits.
Kai-Fu Lee - The Wall Street Journal
Johannes Gutenberg's printing press revolutionized life in the 15th century, making it possible for ideas to travel around the world at previously unimaginable speeds and creating huge gains for mankind. Gutenberg tried to keep his technique a secret, but a disgruntled former investor, Johann Fust, soon replicated his device. Fust launched his own press and poached Gutenberg's top techie, Peter Schoeffer. It was lucky for the rest of us that he did. Imagine if the printing press had been kept secret and controlled by one company, or confined within one nation. Centuries of human progress might never have happened. It's an imperfect analogy, but it offers a useful way to frame the current debate around artificial intelligence.
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Denver Ranks No. 1 in Business Use of AI, Topping San Francisco
Alexandre Tanzi - Bloomberg
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JPMorgan Says AI Technology Is Starting to Generate Revenue; Bank has hundreds of projects 'close to coming to fruition'; Headcount won't necessarily be cut by AI, Heitsenrether says
Katherine Doherty - Bloomberg
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Amazon Has Developed Its Own Version of an AI Image Generator; Company also unveiled chips, chatbot for businesses this week; Amazon has been playing catchup in market for generative AI
Matt Day - Bloomberg
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| Cybersecurity | | Top stories for cybersecurity | Ransomware group 'Black Basta' has raked in more than $100 million -researchers
Raphael Satter - Reuters
A cyber extortion gang suspected of being an offshoot of the notorious Russian Conti group of hackers has raked in more than $100 million since it emerged last year, researchers said in a report published on Wednesday. Digital currency tracking service Elliptic and Corvus Insurance in a joint report said the ransom-seeking cybercrime group known as "Black Basta" has extorted at least $107 million in bitcoin, with much of the laundered ransom payments making their way to the sanctioned Russian cryptocurrency exchange Garantex.
/jlne.ws/3RpLqTC
Chatbot Boom Has Cyber Experts Racing to Counter AI Hacking
Katrina Manson - Bloomberg
The Cyber Angle
Three years ago, an engineer named Christina Liaghati reached out to Microsoft Corp. because she was increasingly worried that artificial intelligence was susceptible to hacking. Now she's spearheading an effort with the tech giant's help to map out the problem.
/jlne.ws/3RmiRpS
Survey shows AI-powered cybersecurity tools adoption uncertainty
Security Magazine
A new survey reveals that although security leaders see AI as superior at identifying threats, the widespread adoption of large language models is not likely on the horizon. Arctic Wolf recently published findings from an artificial intelligence (AI) survey conducted by CyberRisk Alliance of more than 800 senior IT and cybersecurity decision-makers at enterprise organizations across North America and the United Kingdom. The survey data sheds light on executive attitudes towards the current use of AI within cybersecurity, and the role AI will play going forward.
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| Cryptocurrencies | | Top stories for cryptocurrencies | Grayscale Trust Becomes 'Live Betting Line' for Spot Bitcoin ETF
Katie Greifeld - Bloomberg
Traders betting that regulators will approve a US spot Bitcoin exchange-traded fund sooner rather than later have all but evaporated a once-gargantuan discount on the world's biggest crypto fund. The $24 billion Grayscale Bitcoin Trust (ticker GBTC) is currently trading at a roughly 8% discount to its underlying Bitcoin holdings, the narrowest dislocation in over two years, Bloomberg data show. GBTC entered 2023 with a record discount of nearly 50%.
/jlne.ws/3t3ms2H
SoFi to End Crypto Services; Jack Dorsey's Latest Crypto Moves
CoinDesk
"CoinDesk Daily" host Jennifer Sanasie breaks down the biggest crypto stories of the day, including the latest developments for Binance as founder and former CEO Changpeng "CZ" Zhao steps down as chairman of the global exchange's U.S. affiliate's board. SoFi tells its crypto customers it is ending crypto services next month. Plus, Jack Dorsey leads a $6M seed funding round for a decentralized bitcoin mining pool.
/jlne.ws/3GlW3jJ
Cristiano Ronaldo faces $1bn lawsuit over Binance ads
Tom Gerken - BBC
Footballer Cristiano Ronaldo is facing a class action lawsuit in the US over his promotion of Binance, the largest cryptocurrency exchange in the world. The plaintiffs claim his endorsement led them to make loss-making investments. They are seeking damages of "a sum exceeding" $1bn (£790m).
/jlne.ws/3GlbbxS
Jump-Incubated Crypto Project Wormhole Raises $225 Million
Yueqi Yang - Bloomberg News
Wormhole, a crypto project recently spun off by Jump Trading Group, said it raised $225 million from a group of investors at a $2.5 billion valuation, making it one of the largest funding rounds in the digital assets industry this year. Wormhole, which provides a so-called bridge between blockchains, was part of Jump Crypto, the digital-asset unit of the Chicago-based high frequency trading firm. The project links different blockchains like Solana and Ethereum to make transactions easier across networks. Investors in the current round included Jump, Brevan Howard, Coinbase Ventures, Multicoin Capital, Arrington Capital, according to a statement Wednesday.
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| Politics | | An overview of politics as it relates to the financial markets | The Nikki Haley wild card for 2024; Trump is favourite to win the Republican nomination but many US voters don't want a rerun of the 2020 election
Edward Luce - Financial Times
Is America doomed to a rerun of the last election? Whichever of the two parties dumped its frontrunner would probably have next year's vote sewn up. Though Joe Biden and Donald Trump are both unpopular, America seems resigned to a stale but terrifying repeat of 2020. The likeliest - or least implausible - disrupter at this point is Republican outlier Nikki Haley.
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Bill Ackman Says Biden Is Past His 'Peak' and Should Drop His 2024 Campaign
Laura Davison - Bloomberg
Billionaire investor Bill Ackman said President Joe Biden risks tarnishing his political reputation by seeking a second term and that he's intrigued by Representative Dean Phillips's primary challenge for the Democratic nomination. "I think Biden's done a lot of good things. But I think his legacy will not be a good one if he is the nominee," Ackman said in an interview with Bloomberg Television. "I do think the right thing for Biden to do is to step aside, and to say he's not going to run, and create the opportunity for some competition."
/jlne.ws/3RwkFgl
Deutsche Bank Gained Lucrative Business From Trump, Former Executive Testifies; The ex-banker, in a 2011 email read during civil fraud trial, described the billionaire as a 'whale' to be reeled in
Jacob Gershman - The Wall Street Journal
The former Deutsche Bank executive who recruited Donald Trump as a client testified Wednesday that the bank's dealings with the former president were lucrative and her superiors were eager to expand them. Rosemary Vrablic, a former relationship manager with the bank's private-wealth-management division, is one of several witnesses from Deutsche Bank being called to the stand this week by Trump's lawyers as they seek to rebut allegations by the New York attorney general that Trump committed civil fraud by overstating his wealth for financial gain.
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Members of Congress Plan to Grill OCC Over Fintech Regulator Who Faked His Resume
Michael Roddan - The Information
A congressional committee is preparing to question officials from the federal banking regulator, the Office of the Comptroller of the Currency, over the appointment of its first chief financial technology officer, who The Information reported fabricated his work history to get the $300,000-a-year job.
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Jamie Dimon Urges Donors, Even Democrats, to 'Help Nikki Haley'; The JPMorgan Chase C.E.O.'s show of support for Ms. Haley came on the same day that a new super PAC set out to try to draw independent voters to her candidacy.
Maggie Astor - The New York Times
The chief executive of Wall Street's largest bank threw his support behind Nikki Haley on Wednesday, just as a group of entrepreneurs confirmed that they were forming a super PAC to try to draw independent voters to her. The two developments provided new signs that opponents of former President Donald J. Trump in the business world are coalescing around Ms. Haley as their favored alternative.
/jlne.ws/46FN0EW
Calls grow for gambling ad ban on London transport network; Mayor Sadiq Khan urged to honour manifesto pledge
Martha Muir - Financial Times
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ECB's Guindos Says Using Frozen Assets Could Damage Euro's Reputation
Zoe Schneeweiss - Bloomberg
/jlne.ws/3GmQnWJ
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| Regulation & Enforcement | | Stories about regulation and the law. | US slaps sanctions on crypto mixer used by N.Koreans for laundering
AFP
The United States on Wednesday slapped sanctions on a crypto mixer that it said was serving as a money laundering tool for hackers affiliated with the North Korean government. Crypto mixers are software allowing users to obfuscate transactions, and have been used by hackers in attempts to convert crypto into traditional currency.
/jlne.ws/3GoFYty
SEC Charges Phoenix Real Estate Investor With Stock Manipulation Over Fake WeWork Offer; The SEC claims the investor used an entity he created and controlled to make a false tender offer for WeWork
Ben Glickman - The Wall Street Journal
The Securities and Exchange Commission on Wednesday charged Jonathan Larmore, a Phoenix-based real-estate investor, with stock manipulation tied to a false tender offer for now-bankrupt WeWork. The SEC charges also allege that ArciTerra Companies, a real-estate investment company, and Larmore, who is the company's chief executive, misappropriated more than $35 million in managed funds over a number of years. The SEC alleges that Larmore had, since at least January 2017, used a "substantial portion" of misappropriated funds from ArciTerra for family members' expenses and to fund a lifestyle which included private jets, yachts and expensive residences.
/jlne.ws/3sVkvWe
Italian watchdog orders Intesa to halt customers' transfer to digital-only bank; Rome-based regulator says clients should be able to choose whether their accounts are moved
Silvia Sciorilli Borrelli - Financial Times
Italy's competition watchdog has ordered Intesa Sanpaolo, the country's largest lender, to stop migrating customers to its new online service Isybank after receiving more than 5,000 complaints this month from account holders that were shifted without their consent. The Rome-based regulator said on Thursday that it wanted customers to "be put in the condition of choosing whether to keep an account in Intesa Sanpaolo at previous conditions or shift to Isybank".
/jlne.ws/3RmdtmH
Longevity killed the R-star; The Bank of England takes a stab at a global estimate
Robin Wigglesworth - Financial Times
R* star is a fun concept (and a fun but now sadly limited-edition T-shirt as well). It is the theoretically "neutral" level of interest rates that doesn't stimulate or contract the economy, so it's both a silly construct of economists with physics envy and an influential framework to understand where rates are heading. The Bank of England's Ambrogio Cesa-Bianchi, Richard Harrison and Rana Sajedi have therefore tried to come up with an estimate for the global economy's R*, and decompose it into its various components.
/jlne.ws/3Nboi8D
Global tangle of climate disclosure rules risks causing 'reporting fatigue'; Companies urge flexibility to ease the compliance burden of new but differing requirements
Patrick Temple-West - Financial Times
Next year is poised to be a seminal one for companies' climate disclosures. Thousands of multinationals with businesses in Europe will be required to start reporting their climate impact under the Corporate Sustainability Reporting Directive (CSRD). Their reports are expected to include more information about pollution, water use, and impact on communities.
/jlne.ws/47TkkJM
SEC Charges Phoenix-Area Real Estate Fund Adviser Jonathan Larmore with $35 Million Fraud
SEC
The Securities and Exchange Commission today announced fraud charges against Phoenix-based real estate investment company ArciTerra Companies LLC and its CEO, Jonathan M. Larmore, for engaging in a multi-year scheme to misappropriate millions of dollars of investor funds from investment vehicles that ArciTerra managed. The SEC also charged several entities controlled by Larmore for their roles in the scheme.
/jlne.ws/3GnrYjT
SEC Names Kate E. Zoladz as Regional Director of Los Angeles Office
SEC
The Securities and Exchange Commission today announced that Kate E. Zoladz has been named Regional Director of the Los Angeles Office, effective Dec. 3, 2023. Ms. Zoladz has served as Acting Co-Director since June 2023 and as the Associate Regional Director for Enforcement since October 2019. She joined the agency in 2010.
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Prepared Remarks before the Small Business Capital Formation Advisory Committee
Chair Gary Gensler - SEC
Since the 1930s, investors and issuers have benefitted from the basic bargain that Congress embedded in the securities laws. Congress required that public offerings of securities be registered with the SEC and include specified disclosures to investors. Congress also recognized that there were certain transactions or issuers that would be exempt from such disclosure requirements, in essence, forming part of the private markets. Over the decades, we've seen continued development of robust public and private markets, and our economy has benefited from both.
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Remarks to Small Business Capital Formation Advisory Committee
Commissioner Caroline A. Crenshaw - SEC
First, wage increases. It has been hard to open a newspaper over the past several years without reading a story about how the COVID-19 pandemic continues to affect the economy. Thanks to the robust government response, average hourly wages have increased greatly since the end of the pandemic. And that is something to be thankful for - unemployment is near historic lows, families are more economically secure, and costs (though rising) are now being outstripped by average wage gains.[1]
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Freedom: Remarks at Meeting of the Small Business Capital Formation Advisory Committee
Commissioner Hester M. Peirce - SEC
The accredited investor definition is always a source of lively discussion. I hope that one aspect of today's discussion will be how we can bring to life an idea the Commission posited several years ago. Specifically, in conjunction with revising the definition of accredited investor in 2020, the Commission raised the possibility of "designat[ing] qualifying professional certifications, designations, and other credentials by order" as a means of reaching accredited investor status.[1] What other measures of sophistication should the Commission designate? Successful completion of certain well-established privately administered investor education certification programs? A set of college courses on investment? Degrees in certain fields?
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SEC Obtains Final Judgments Against Former Public Company Officers and Directors, Concluding the Litigation in Fraudulent Filings and Pump-And-Dump Scheme
SEC
On November 21, 2023, the U.S. District Court for the Southern District of New York entered final consent judgments against Marlio Mauricio Diaz Cardona and Carlos Felipe Rezk, former officers and directors of Cool Holdings, Inc. ("Cool Holdings"), for their roles in a scheme involving false statements and omissions of material information in filings with the Commission, as well as a fraudulent pump-and-dump of Cool Holdings' stock. Entry of the final judgments against Diaz and Rezk concludes this litigation.
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Agreement signed by New Zealand regulator and global standards body to uphold and promote financial market integrity
Financial Markets Authority
The Financial Markets Authority (FMA) - Te Mana TÄtai Hokohoko - has signed a Consultation Agreement with The Financial Markets Standards Board (FMSB). The Agreement formalises cooperation between the FMA and FMSB. The FMA supports the primary objectives of FMSB to promote fair and effective global wholesale financial markets; to produce clear guidance on how business should be conducted to eliminate or mitigate vulnerabilities; and to promulgate such guidance as widely as possible globally and obtain commitments for its use.
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Investment firms must improve market stress assessments when it comes to liquidity adequacy, says FCA; Currently "most" firms have not gotten into the habit of regular reviews and subsequent adjustments to their liquid asset levels in line with external market changes, said the regulator.
Claudia Preece - The Trade
Amongst the final observations from the UK Financial Conduct Authority's (FCA) in its Investment Firm Prudential Regime (IFPR) review was the need for investment firms to better assess their liquid asset threshold requirements during periods of financial stress. The thematic review specifically focused on the progress made by firms in implementing the internal capital adequacy and risk assessment (ICARA) process and reporting requirements under IFPR - which applies to the investment firms engaged under Mifid.
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EU committee gives green light for Euro derivatives clearing active accounts; Proposal to draw Euro clearing back to the Bloc via active clearing accounts with European CCPs has proved divisive with participants who claim the move could be anti-competitive.
Annabel Smith - The Trade
A committee of European policymakers has, on Tuesday 28 November, voted in favour of the draft EU rules around active clearing accounts, aimed at encouraging more Euro clearing volumes away from the City of London and back to the Bloc. Euro-denominated derivatives clearing is a market that has historically been dominated by the London Stock Exchange Group's clearing house LCH in the City and has proved to be one of the key battle lines drawn since Brexit.
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| Investing & Trading | | Today's top stories from equities, indices and FICC (fixed income, currencies and commodities) | Munis Haven't Rallied So Much in a Month Since Paul Volcker Ran the Fed; Bloomberg index heads for its best monthly gain since 1986; Falling Treasury yields and lower muni bonds sales fuel rally
Shruti Singh - Bloomberg
The last time the municipal bond market rallied so much, it was Paul Volcker - and not Jerome Powell - who was winning a war on inflation. Fueled by growing speculation that the Federal Reserve has tamed inflation enough to start cutting interest rates next year, everything from Bitcoin to tech stocks to Treasuries have rallied sharply this month. For state and local government debt, it has been a particularly heady run: They've delivered a return of more than 5% in November, the best month since January 1986.
/jlne.ws/46BDWkK
JPMorgan's S&P 500 Outlook for 2024 Is Grimmest on Wall Street; Firm calls for 8% drop in index but predicts earnings growth; Waning consumer trends, geopolitical risks to weigh on stocks
Alexandra Semenova - Bloomberg
As a rush of Wall Street strategists call for all-time highs in US stocks in the year ahead, JPMorgan Chase & Co. stands apart, releasing the gloomiest forecast so far among its peers. The S&P 500 Index is set to drop to 4,200 by the end of 2024 - roughly 8% from its current level - as global growth decelerates, household savings shrink and geopolitical risks remain high with national elections including those in the US that could add to policy volatility, according to Dubravko Lakos-Bujas, the bank's chief global equity strategist. The call reiterates the bank's outlook heading into this year that has fallen short, with US stocks headed toward a double-digit annual gain amid economic resilience.
/jlne.ws/3N8vKBA
Treasury 'Melt Up' Grows as Bond Traders Price Fed Cut by May
Elizabeth Stanton and Liz Capo McCormick - Bloomberg
Bond traders ramped up their bets on an abrupt end to the Federal Reserve's tightening cycle, pricing in the first interest-rate cut by May as a so-called "melt up" in bond prices continues. Yields on two-year Treasuries fell as much as 10 basis points on the day. Swap contracts referencing Fed meeting dates repriced to levels consistent with the policy rate declining by a quarter percentage point from its current range of 5.25%-5.5%; a reduction was previously seen happening a month later in June.
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A New Lawsuit Might Change the Real Estate Industry Forever; Understanding the Sitzer/Burnett decision.
Tracy Alloway, Joe Weisenthal, and Aashna Shah - Bloomberg
Last month, a Missouri jury found that real estate brokers colluded to artificially inflate and fix their own commissions, and as a result, ordered the National Association of Realtors to pay $1.8 billion in damages. While the ruling will be appealed, with highly uncertain damages and remedies, the case is shining a light on how participants in the real estate industry get paid, and raising the question of whether homebuyers are paying too much to their brokers. So how do brokers get paid? What are their incentives? And why haven't fees for brokers gone down, even as online platforms that compete with them have proliferated. On this episode of the podcast, we speak with Andra Ghent, a finance professor at the University of Utah and a specialist in real estate who explains how the structure works currently, and how the lawsuit could ultimately change the entire business model of buying and selling homes. This transcript has been lightly edited for clarity.
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The Robots Will Insider Trade; Also OpenAI's board, kangaroo grazing and bank box-checking.
Matt Levine - Bloomberg
Here you go, insider trading robot:We demonstrate a situation in which Large Language Models, trained to be helpful, harmless, and honest, can display misaligned behavior and strategically deceive their users about this behavior without being instructed to do so. Concretely, we deploy GPT-4 as an agent in a realistic, simulated environment, where it assumes the role of an autonomous stock trading agent. Within this environment, the model obtains an insider tip about a lucrative stock trade and acts upon it despite knowing that insider trading is disapproved of by company management. When reporting to its manager, the model consistently hides the genuine reasons behind its trading decision. We perform a brief investigation of how this behavior varies under changes to the setting, such as removing model access to a reasoning scratchpad, attempting to prevent the misaligned behavior by changing system instructions, changing the amount of pressure the model is under, varying the perceived risk of getting caught, and making other simple changes to the environment. To our knowledge, this is the first demonstration of Large Language Models trained to be helpful, harmless, and honest, strategically deceiving their users in a realistic situation without direct instructions or training for deception.
/jlne.ws/3Go03k0
Market review: The algorithmic acquisition flurry among fixed income trading venues; Following two major announcements this year, The TRADE speaks to the trading venues hoping to dominate the evolving fixed income algo trading sphere.
Wesley Bray - The Trade
Over the last few months, the market has seen two of the most prominent fixed income trading venues expand their service offerings through acquisitions of algorithmic trading providers. In recent years, algorithmic trading has become key to firms' fixed income execution strategies, becoming central to how liquidity providers are adapting to support buy-side clients and making the topic a central theme to several panels at the Fixed Income Leaders Summit this year and last year.
/jlne.ws/3sWsFNU
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| Environmental, Social and Corporate Governance | | Stories about environmental, social and governance investing | COP28 Is Bigger Than Ever, But Still Can't Achieve One Thing; "Implementation doesn't happen as the result of negotiation in negotiation halls," says former COP organizer Christiana Figueres on the latest Zero.
Akshat Rathi, Oscar Boyd, and Christine Driscoll - Bloomberg Zero (podcast)
Christiana Figueres was named head of the United Nations Framework Convention on Climate Change, the body tasked with running COP meetings, six months after a disastrous one. Hosted by Copenhagen in 2009, the summit finished without any meaningful agreements and soon earned the nickname "Brokenhagen." "The global mood on climate was so despondent and everyone was so angry with each other," Figueres recalls on this week's episode of the Zero podcast. "No one even wanted to talk to each other anymore, let alone trust in the system and in the process."
/jlne.ws/3uEiQ7R
Too little. Too late. Too slow. But could COP yet turn the tide on climate change? As delegates assemble in Dubai, Pilita Clark reflects on an unwieldy, polarising, occasionally 'unhinged' process - and why we need it to succeed more than ever
Pilita Clark - Financial Times
"Years from now, our grandchildren will reflect on humanity's moral courage to solve the climate crisis and they will look to December 12, 2015, as the day when the community of nations finally made the decision to act." That's what Al Gore said in a statement that dropped into my inbox at 6.46pm on the wintry Saturday in December when the Paris Agreement was finally adopted.
/jlne.ws/49WC34X
Wind and solar power face an end-of-life sustainability challenge; As the world switches to renewables, difficulties in dealing with spent panels and turbines are coming into focus
Philippa Nuttall - Financial Times
Cars were a novelty once; so were oil wells, plastic bottles and coal-fired power stations. Novelty wears off, though - and, as the industries concerned acquired global heft, the environmental downsides became ever clearer. But it is not only the giants of the fossil fuel era that must confront the loss of innocence that comes with scale. The huge increase in renewable energy in recent years - a doubling of capacity since 2013, with COP28 expected to produce a push for a tripling by 2030 - means that the solar and wind power sectors will soon face their own sustainability challenges.
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Moody's Says $4 Trillion of Debt Exposed to Environmental Risks
Caleb Mutua - Bloomberg
The amount of debt facing heightened exposure to environmental risks has more than doubled to over $4 trillion in less than a decade, according to Moody's Investors Service. Sixteen sectors currently face "high or very high environmental credit risk," compared to just nine sectors in 2015, Moody's said in a report Tuesday. Among the most exposed include oil and gas, mining and chemicals, according to the report. The ratings provider explored the potential credit impact from environmental pressures - including climate change, waste and pollution - on 90 sectors accounting for $82 trillion of debt.
/jlne.ws/3uHF4pK
BP pays £254mn to take full control of solar joint venture Lightsource; Deal signals that UK energy group is pressing ahead with a strategy drawn up by former chief executive Bernard Looney
Rachel Millard and Tom Wilson - Financial Times
/jlne.ws/47HDO4A
Oil and gas companies stall on net zero plans; Producers argue they have to meet high demand for fossil fuels alongside green investment goals
Tom Wilson - Financial Times
/jlne.ws/47VrDAJ
Carbon capture faces high cost hurdles; Mixed political messages and a lack of business incentives are holding back greater uptake of the technology
Ian Johnston - Financial Times
/jlne.ws/47VrNYR
Litigation proves limited in forcing rapid cuts to Big Oil carbon emissions; Campaigners fear effect on climate of cases dragging on for years, though energy groups risk complacency, analysts warn
Henry Mance - Financial Times
/jlne.ws/47CCMXd
China may be close to a climate tipping point; With incentives from the rest of the world to slash its emissions, the country could be the leading force in the green transition
Pilita Clark - Financial Times
/jlne.ws/47DRbm8
Pressure grows for tighter scrutiny of funds' green claims; As regulators focus on sustainable investments, campaigners are calling for greater disclosure and even political action
Alice Ross - Financial Times
/jlne.ws/46Fcjar
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| Banks, Brokers & Managed Funds | | The latest from banks, brokers, hedge funds and managed futures | Dutch Government Kicks Off EUR1 Billion ABN Amro Stake Sale
Sarah Jacob - Bloomberg
The Dutch government plans to sell shares worth about EUR1 billion ($1.1 billion) in ABN Amro Bank NV as it continues to retreat from a holding acquired during the financial crisis over a decade ago. The state will lower its stake to about 40% from the current 49.5% in the coming days, its investment vehicle NLFI said in a statement on Thursday. The minimum price for the share sale is still being considered and the plan will be managed by BofA Securities, while Rothschild & Co is acting as financial adviser to NLFI, according to the statement.
/jlne.ws/3sP4ocP
Robinhood Wants to Shake Up the UK Market in International Debut
Anna Irrera and Aisha S Gani - Bloomberg
Robinhood Markets Inc is launching commission-free stock trading in the UK, marking the international debut of the company that benefitted from the "meme-stock" frenzy of the Covid pandemic.
/jlne.ws/413qhS9
Morgan Stanley, Rothschild Join Finance Elite in Abu Dhabi Push; Banks are opening up in ADGM, the city's main business hub; UAE capital faces competition from neighboring Riyadh, Dubai
Nicolas Parasie and Julia Fioretti - Bloomberg
Rothschild & Co. and Morgan Stanley are among global investment banks opening up in Abu Dhabi as the deep-pocketed United Arab Emirates' capital continues to attract more international money and financial firms. The Paris-based boutique bank secured a license to operate in the Abu Dhabi Global Market, the emirate's main business zone, according to a statement on Thursday.
/jlne.ws/3N38p4b
Deutsche Bank Scores Another Big Win on Lehman Brothers' Debts; Obscure notes considered worthless could pay out £390 million; Deutsche's statutory interest ranks above other claims: judge
Lucca De Paoli - Bloomberg
Deutsche Bank AG and other creditors holding obscure notes issued by Lehman Brothers before its collapse have been handed a big win by a London court, with a first payout set for next month after years of wrangling.
/jlne.ws/47QQC84
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| Work & Management | | Stories impacting work and more about management ideas, practices and trends. | Next generation of billionaires collect more wealth from inheritance than work, says UBS; Swiss bank favoured by super-rich says 1,000 billionaires are likely to pass on $5.2tn to their children over next 20 years
Rupert Neate - The Guardian
Newly minted billionaires have collected more of their wealth from the deaths of relatives than through their own work and entrepreneurship, according to a Swiss bank favoured by the super-rich. Of the 137 people who became billionaires in the 12 months to this April, 53 inherited a combined $150.8bn (£119bn) from their family, the report by UBS found. This exceeds the combined $140.7bn created by "84 new self-made" billionaires over the same period.
/jlne.ws/3N65VSp
Four new work benefits that may help you save more in 2024
Jeanne Sahadi - CNN
Saving enough money for retirement is always a challenge. But for anyone who doesn't have emergency savings, or who has student loans to pay or who is a long-term part-time worker, that challenge is especially hard. Starting next year, however, the two most recent retirement laws - Secure Act and the Secure Act 2.0 - contain four provisions that may make it easier for some to bolster their retirement savings while also meeting more immediate financial obligations. A lot will be up to your employer, however, for two reasons. First, of the four provisions they are only required to implement one of them. The others are optional, said Brian Graff, CEO of the American Retirement Association.
/jlne.ws/46FNHOy
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| Wellness Exchange | | An Exchange of Health and Wellness Information | China Outbreak Shows Need for Pandemic Warning System; We're flying blind without clear, agreed-upon procedures for collecting data on disease outbreaks.
F.D. Flam - Bloomberg
When the news broke last week that thousands of children in Northern China had crowded into hospitals with pneumonia, it was hard not to worry that this might represent the early stages of some new, more virulent Covid variant or even a new pandemic entirely. This episode and all the worry it's generated illustrate how much the world needs an organized early warning system for infectious illnesses. Such a system would be able to flag trouble early without getting triggered by every surge in ordinary respiratory diseases.
/jlne.ws/3GjuCY1
Biden Administration to Require Replacing of Lead Pipes Within 10 Years; The proposal to rip out nine million pipes across the country could cost as much as $30 billion but would nearly eliminate the neurotoxin from drinking water.
Coral Davenport - The New York Times
The Biden administration is proposing new restrictions that would require the removal of virtually all lead water pipes across the country in an effort to prevent another public health catastrophe like the one that came to define Flint, Mich. The proposal on Thursday from the Environmental Protection Agency would impose the strictest limits on lead in drinking water since federal standards were first set 30 years ago. It would affect about nine million pipes that snake throughout communities across the country.
/jlne.ws/3N35gkT
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| Regions | | Stories of local interest from the Americas, EMEA and Asia-Pacific regions | Gambling Stocks Up 300% Pose Dilemma for Australia Pension Funds; CIOs expect investments to shift with societal attitudes; Aristocrat to hold first ESG event as funds engage more
Amy Bainbridge - Bloomberg
Slot machine giant Aristocrat Leisure Ltd. has invited its biggest investors, including some of the country's top pension funds, to Sydney next week for an unprecedented event at the gaming firm: a day devoted to ESG. The guardians of the country's retirement savings, among the top backers of the industry, will likely be watching keenly. Some funds concede that gambling, with its proven links to social harms, may become a tougher investment to justify to the millions of Australian workers that put their money in the country's A$3.5 trillion ($2.3 trillion) pensions system.
/jlne.ws/47y2JXX
Korea Touts Rice Prowess to Africa Amid Market Squeeze
Sam Kim - Bloomberg
South Korea could be viewed as a favorable ally in Africa as the nation touts its rice growing expertise across a continent dominated by China's influence, according to the nation's agriculture and food minister. Seoul is pledging financial support to African nations that agree to cultivate 150 hectares of rice paddies with South Korean varieties, and 10 countries including Senegal and Kenya have committed to the offer so far, said Agriculture, Food and Rural Affairs Minister Chung Hwang-keun. He plans to showcase the plan to more leaders from the continent at a summit in South Korea in May.
/jlne.ws/3N1MkmE
China's Farmers Forced to Let Vegetables Rot as Demand Wanes
Hallie Gu - Bloomberg
Chinese farmers in some provinces are being forced to let fresh vegetables rot in their fields due to weak demand and ample supply, according to a local news report and videos posted on social media.
/jlne.ws/3T2F8Ky
Platinum Mine Disaster Kills 11 Workers in South Africa
Paul Burkhardt and Mpho Hlakudi - Bloomberg
At least 11 people died at a mine owned by Impala Platinum Holdings Ltd. when an elevator transporting workers to the surface failed, the worst accident in the South African company's history.
/jlne.ws/46Eyv4u
Panama Canal Drought Is Making It More Expensive to Ship Fuel Across the Atlantic; Water levels on the vital canal have fallen due to drought; That's causing disruption and adding to shipping costs
Jack Wittels - Bloomberg
The cost of shipping fuels such as diesel across the Atlantic has soared to an almost 16-month high amid ongoing disruption at the Panama Canal. Shipping through the vital waterway - a shortcut between the Atlantic and Pacific oceans - has suffered as an El Nino-fueled drought reduced water levels to an unprecedented low. That's prompting shipping companies to pay large sums to jump ahead in queues or sail thousands of extra miles around South America.
/jlne.ws/47zKBNC
Mexico's Biggest IPO Since 2018 Hits Last Minute Tax Hurdle
Michael O'Boyle - Bloomberg
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| Miscellaneous | | Stories that don't quite fit under the other sections | Billionaire Byron Trott Is in Talks for Minority Stake in Miami Dolphins; Potential deal includes team, stadium and Miami Grand Prix; Billionaire Ken Griffin has also expressed interest in a stake
Kamaron Leach - Bloombereg
Billionaire Byron Trott is in talks to purchase a minority stake in the NFL's Miami Dolphins from team owner Stephen Ross, according to people with knowledge of the matter. The talks involve a small stake in the National Football League franchise, said the people, who asked not to be identified discussing private negotiations. Potential terms couldn't be determined.
/jlne.ws/3sVlq96
All Americans Want for Christmas Is Piles of Chinese Junk; Shein, Temu and Miniso are taking advantage of American consumers' fears of inflation and love of a bargain.
Jessica Karl - Bloomberg
America's economy has gift-wrapped a perfect holiday season for Chinese companies. It begins with the American consumer, who Conor Sen says is deeply unhappy. Squeezed shoppers, fed up with reading headlines about Inflation This, Inflation That, are embracing what Shuli Ren says is a "consumption downgrade" where they "happily trade away premium products for value-oriented ones to conserve cash." Nearly all these "downgraded" products carry a little sticker or apparel tag that says MADE IN CHINA. Three retailers in particular - Shein, Temu and Miniso - are cashing in.
/jlne.ws/3Radwkq
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