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☆ Fed hikes rates by 50 bp, as expected, keeps hawkish tone
▼ + stars: | 2022-12-14 | by ( Reuters Staff | ) www.reuters.com time to read: +8 min

STORY: STATEMENT TEXT:MARKET REACTION:STOCKS: The S&P 500 turned sharply lower then steadied down 0.11%BONDS: Benchmark 10-year note yields rose then backed off to 3.4847%. CHRIS ZACCARELLI, CHIEF INVESTMENT OFFICER, INDEPENDENT ADVISOR ALLIANCE, CHARLOTTE“The Fed is taking away the punchbowl just as the party was getting started. They’re reiterating their forecasts but the whisper number was that the Fed was going to stop at a 4.5%-4.75% terminal rate. You know, the biggest thing that is holding the Fed back right now are the jobs numbers. The most dovish participants is looking for an extra 50 bps of hikes.

John J. Ray, chief executive officer of FTX Cryptocurrency Derivatives Exchange, arrives to a House Financial Services Committee hearing investigating the collapse of FTX in Washington, DC, on Tuesday, Dec. 13, 2022. Instead, like bankers and lawyers who are working on the bankruptcy proceedings, the new leadership team is professional independent contractors. That means, among other things, that they get paid immediately, before any FTX investors receive recompense for their losses. According to court filings, the new FTX CEO will collect $1,300 hourly plus "reasonable expenses" for his work untangling what U.S. Attorney Damian Williams called "one of the biggest frauds in American history" in a news conference Tuesday. In one bankruptcy case Ray worked on, he billed around 156 hours in a two-month period, netting him $120,582, so his billings for FTX may run higher or lower.

☆ Parents of Sam Bankman-Fried face scrutiny over their roles in FTX
▼ + stars: | 2022-12-14 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

Now, Joseph Bankman and Barbara Fried, the FTX founder’s parents, may face legal troubles of their own. Bankman-Fried’s lawyer declined to comment when asked about scrutiny of his parents. The new CEO of FTX is John Ray III, a restructuring expert tasked with shepherding the company through its complex bankruptcy. They have told friends that their son’s legal bills will likely wipe them out financially, according to the paper. A judge ordered that Bankman-Fried must remain in custody after denying a request for bail, calling him a flight risk.

☆ Instant view: Fed hikes rates by 50 bp, as expected, keeps hawkish tone
▼ + stars: | 2022-12-14 | by ( ) www.reuters.com time to read: +8 min

CHRIS ZACCARELLI, CHIEF INVESTMENT OFFICER, INDEPENDENT ADVISOR ALLIANCE, CHARLOTTE“The Fed is taking away the punchbowl just as the party was getting started. They're reiterating their forecasts but the whisper number was that the Fed was going to stop at a 4.5%-4.75% terminal rate. "But the Fed is out there saying that 5.1% is still on the cards … and that rate hikes will continue." BRIAN JACOBSEN, SENIOR INVESTMENT STRATEGIST, ALLSPRING GLOBAL INVESTMENTS, MENOMONEE FALLS, WISCONSIN“The most interesting part of the releases were in the Summary of Economic Projections. And they’re holding it there longer than markets expected.”“In addition, they’re downgrading GDP estimates for this year, and in particular, for next year.

☆ A 10% pop in the S&P 500 Tuesday? What JPMorgan's trading desk note on CPI really says
▼ + stars: | 2022-12-13 | by ( John Melloy | ) www.cnbc.com time to read: +2 min

The note gave out market-reaction scenarios based on what Tuesday's all-important consumer price index shows and suggested investors were betting on a lighter-than-expected reading. The note then gave the following scenarios: 5% probability — CPI 7.8% or higher — S & P 500 down 4% to 5% 25% probability — CPI 7.5% - 7.7% — S & P 500 down 2.5% to 3.5% 50% probability — CPI 7.2% - 7.4%. — S & P 500 up 2% to 3% 15% probability — CPI 7.0% - 7.2% — "A bullish outcome that could pull terminal rate lower." — S & P 500 up 4% to 5% 5% probability — CPI 6.9% or lower — "A print here could be the technical end of the bear market...This would give increasing confidence in projections of headline inflation falling [to] 3% in 2023. — S & P 500 up 8% to 10% It's that last scenario that turned heads, even with just a 5% probability assigned.

Federal authorities on Tuesday charged FTX co-founder Sam Bankman-Fried with using what they said was tens of millions of dollars of misappropriated customer funds to make illegal political donations to both Democratic and Republican candidates. He then used those funds to make "large political donations," to make investments and buy "lavish real estate," the SEC complaint alleged. The campaign finance allegations come days after a private watchdog group asked the Federal Election Commission to investigate Bankman-Fried's political contributions. Most of Bankman-Fried's publicly disclosed campaign contributions, which totaled nearly $40 million in the 20222 election cycle, went toward Democrats, FEC records show. "The question is whether regulators, including the SEC, backed off from aggressive investigation of FTX because of this political influence," Painter said.

The Commodity Futures Trading Commission announced new charges against Bankman-Fried, FTX and Alameda Research, alleging that FTX commingled customer funds and that the onetime crypto billionaire violated the Commodities Exchange Act. From the founding of FTX in 2019, the CFTC alleged, Alameda "accessed and used FTX customer funds for Alameda's own operations and activities, including to fund its trading, investment, and borrowing/lending activities." The CFTC filing echoed charges that the SEC unveiled earlier Tuesday, which said Bankman-Fried operated his empire as a fraud "from the start." FTX allowed Alameda access to massive amounts of liquidity, backstopping risky bets on crypto assets and derivatives, the CFTC alleged. "At Bankman-Fried's direction, FTX executives created features in the underlying code for FTX that allowed Alameda to maintain an essentially unlimited line of credit on FTX," the CFTC alleged.

[1/2] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. Wall Street's main indexes have slumped this year on fears of aggressive rate hikes triggering a U.S. recession. The Nasdaq and the S&P 500 (.SPX) have fallen 29.5% and 17.2%, respectively, so far in 2022 and are on track for their worst yearly performance since 2008. Seven out of the 11 major S&P 500 sector indexes were in the green, led by energy (.SPNY) and technology stocks (.SPLRCT). The S&P index recorded no new 52-week highs and two new lows, while the Nasdaq recorded 29 new highs and 136 new lows.

Wall Street's main indexes have slumped this year on fears of aggressive rate hikes triggering a U.S. recession. ET, Dow e-minis were up 81 points, or 0.24%, S&P 500 e-minis were up 12.75 points, or 0.32%, and Nasdaq 100 e-minis were up 34.25 points, or 0.3%. Qualcomm Inc (QCOM.O) lost 2.7% after Wells Fargo downgraded its rating on the smartphone chipmaker's stock to "underweight" from "equal weight". Rivian Automotive Inc (RIVN.O) lost 1.2% after the company paused its partnership discussions with Mercedes-Benz Vans on electric van production in Europe. Reporting by Shubham Batra, Ankika Biswas and Johann M Cherian in Bengaluru Editing by Vinay DwivediOur Standards: The Thomson Reuters Trust Principles.

☆ Former FTX CEO Sam Bankman-Fried refuses to testify before Senate, committee says
▼ + stars: | 2022-12-12 | by ( Brian Schwartz | ) www.cnbc.com time to read: +1 min

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during a Senate Agriculture, Nutrition and Forestry Committee hearing in Washington, D.C., on Wednesday, Feb. 9, 2022. Former FTX CEO Sam Bankman-Fried is refusing to testify at a hearing this week about his company's implosion, the Senate Banking Committee said Monday. Attorneys for the crypto platform's founder have also said Bankman-Fried, who is based in the Bahamas, will not accept service of a subpoena to compel his testimony before the panel, senators said. Bankman-Fried is scheduled to appear at a House Financial Services Committee hearing on Tuesday that will focus on his company's collapse. In a joint statement, Senate Banking Chair Sen. Sherrod Brown, D-Ohio and ranking member Pat Toomey, R-Pa., said they have "offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony."

CNBC's Andrew Ross Sorkin reported that the charges against Bankman-Fried include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. Neither the Attorney General of the Bahamas nor the Royal Bahamas Police Force would confirm the nature of the charges against Bankman-Fried. "I didn't ever try to commit fraud," Bankman-Fried said. The CFTC and lawmakers have begun their probes into FTX and Bankman-Fried, who told Sorkin he was down to his last $100,000. Failed lender BlockFi sued Bankman-Fried in November, seeking unnamed collateral that the FTX founder provided for the crypto lending firm.

☆ This new ETF combines international and income investing, and both themes are hot
▼ + stars: | 2022-12-11 | by ( Jesse Pound | ) www.cnbc.com time to read: +3 min

The three-month-old fund is an actively managed strategy that combines dividend-paying international equity holdings with covered call writing, an income strategy used frequently by fund sub-advisor Capital Wealth Planning. And international funds are also gaining traction. He added that the fund managers may actually be a bit more aggressive in writing calls in the international fund than in the U.S. version. "It's not unusual for international stocks to suspend or reduce their dividends more frequently than U.S. stocks do," Magoon said. Since its launch in September, the Amplify International Enhanced Dividend Income ETF has a total return of about 7%.

☆ UK announces major overhaul of its financial sector in attempt to spur growth
▼ + stars: | 2022-12-09 | by ( Jenni Reid | ) www.cnbc.com time to read: +3 min

The U.K. government on Friday announced extensive reforms to financial regulation that it says will overhaul EU laws that "choke off growth." Finance Minister Jeremy Hunt said he wanted to ensure the U.K.'s status as "one of the most open, dynamic and competitive financial services hubs in the world." "And we will go further – delivering reform of burdensome EU laws that choke off growth in other industries such as digital technology and life sciences." Researchers at the London School of Economics said earlier this year that financial services will be among the sectors worst hit by Brexit. Another proposed reform would see regulators' remit increased to include facilitating the competitiveness of the U.K. economy, particularly the financial services sector.

☆ UK’s Big Bang barely mitigates City’s Brexit pain
▼ + stars: | 2022-12-09 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

Hence Friday’s package, long trailed as a “Big Bang”, supposed to turbocharge the City. Eventually, he could end the regime if banks prove they can safely be wound down. Hunt’s broader push is to enlist the Financial Conduct Authority and Prudential Regulation Authority supervisors in his Big Bang, giving them a statutory responsibility for boosting the economy’s competitiveness. The only way to undo the damage would be to align with European rules indefinitely or to re-join the bloc, both of which are political no-gos. The government will also introduce new statutory objectives for the Financial Conduct Authority watchdog and the Prudential Regulation Authority, which supervises banks and insurers.

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, during a Senate Agriculture, Nutrition and Forestry Committee hearing in Washington, D.C., on Wednesday, Feb. 9, 2022. FTX founder Sam Bankman-Fried has agreed to testify before the House Financial Services Committee at a hearing about the crypto exchange's collapse on Tuesday, he said in a series of tweets Friday morning. There's been a lot of back and forth in Washington over whether lawmakers would have to subpoena Bankman-Fried, who said he would voluntarily testify since the committee "still thinks it would be useful." In his tweet thread, the disgraced former "darling" of crypto appeared to lay blame on Binance founder Changpeng "CZ" Zhao. Before Bankman-Fried agreed to testify, CNBC reported that Waters was not planning to subpoena the ex-billionaire.

☆ EU gets another reason for a gas cap U-turn
▼ + stars: | 2022-12-09 | by ( ) www.reuters.com time to read: +2 min

BRUSSELS, Dec 9 (Reuters Breakingviews) - The European Commission’s gas cap has taken some withering friendly fire. The European Central Bank has slammed the proposal for threatening financial stability and putting the central bank in an untenable position, in an opinion published on Thursday. The gas cap, put forward under intense political pressure, has exposed divisions among European Union member states. Instead of crafting a workable compromise, the Commission plan seems to have achieved the impressive feat of being both unusable and a danger to financial stability. Ahead of next week’s European leaders’ summit, the smart move is to scrap it.

☆ High energy prices will be a tailwind for aluminum, says BoA's Francisco Branch
▼ + stars: | 2022-12-09 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailHigh energy prices will be a tailwind for aluminum, says BoA's Francisco BranchFrancisco Branch, Bank of America head of global commodity and derivatives research, joins 'Closing Bell: Overtime' to discuss the collapse of crude oil and why he thinks that could reverse.

☆ EU's gas price cap scheme could backfire, raise volatility -ECB
▼ + stars: | 2022-12-08 | by ( ) www.reuters.com time to read: +1 min

FRANKFURT, Dec 8 (Reuters) - Proposed European Union rules aimed at tempering natural gas price spikes may actually jeopardize financial stability and need to be redesigned, the European Central Bank said on Thursday in a formal opinion. The EU proposed a "market correction mechanism" last month aimed at tempering natural gas prices and market volatility after a spike in energy costs pushed inflation to record highs and raised financial market stress in energy derivatives trading. The ECB, a guardian of the bloc's financial stability, acknowledged that the goal was to moderate extreme price levels and volatility, but warned that the rules could achieve the exact opposite. "The ECB considers that the current design of the proposed market correction mechanism may, in some circumstances, jeopardise financial stability in the euro area," the ECB said an opinion signed by President Christine Lagarde. Instead, the EU should merely have the "possibility" to seek the ECB's advice, the ECB added.

☆ Former FTX CEO Sam Bankman-Fried hit with campaign finance complaint over GOP 'dark' money
▼ + stars: | 2022-12-08 | by ( Dan Mangan | ) www.cnbc.com time to read: +4 min

An ethics watchdog group has asked the Federal Election Commission to investigate former FTX CEO Sam Bankman-Fried for alleged "serious violations" of election law, citing his admitted contributions of "dark" money to Republican-aligned groups during the 2022 primary season. Anyone can file a complaint with the FEC if they suspect a violation of federal election campaign laws. The complaint contains a link to the Nov. 16 interview Bankman-Fried gave to Tiffany Fong, who posted the discussion on her YouTube channel. "All my Republican donations were dark," Bankman-Fried went on to say, the complaint noted. In the interview, Bankman-Fried said that those contributions were "all for the primary."

☆ It turns out Taylor Swift has better due diligence than half of Silicon Valley
▼ + stars: | 2022-12-08 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

Taylor Swift in the "Bejeweled" music video. Taylor Swift has better due diligence than half of Silicon ValleyIt's SBF. Just when you thought the FTX debacle couldn't get any weirder, let's add Taylor Swift into the mix. What Taylor Swift album does Sam Bankman-Fried most identify with? Perhaps the most pressing question, however, as pointed out by senior finance editor Michelle Abrego, is this: How does Taylor Swift have better due diligence practices than half of Silicon Valley?

☆ Europe's BNP Paribas appoints senior executives to Global Markets Americas division
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +1 min

Dec 7 (Reuters) - BNP Paribas SA (BNPP.PA) has appointed several senior executives to its Global Markets Americas division, the European bank said on Wednesday, in a move to further consolidate its presence in the United States. The French bank appointed former Morgan Stanley executive Kunal Maini as the co-head of Global Macro - Americas and he will be responsible for globalizing the US Rates franchise. In addition, BNP also hired a string of executives to strengthen its credit portfolio at a time when global fixed income markets have come under immense pressure from soaring inflation and outsized interest rate hikes. John Hanisch was appointed the co-head of Secondary Credit Americas and Global Head of Securitized Products Trading; Charlie Shah the Head of IG & CDS Trading Americas and Bo Bazylevsky the Head of LatAm Flow Credit Trading. BNP's move to hire across divisions sharply contrasts global banks including HSBC Holdings PLC (HSBA.L) and Goldman Sachs (GS.N), which axed jobs to rein in costs.

☆ Analysis: EU avoids sledgehammer to crack euro clearing nut - for now
▼ + stars: | 2022-12-07 | by ( Huw Jones | ) www.reuters.com time to read: +6 min

EU financial services chief Mairead McGuinness has likened ending the bloc's heavy reliance on London for clearing euro contracts to weaning the EU off Russian gas so that Brussels builds "open strategic autonomy" in capital markets to safeguard financial stability. This will help build a more efficient market that makes relocation of clearing from London attractive, McGuinness said. Industry officials note EU based clearing liquidity in this contract would effectively need to be built up from scratch, which could take time. These conditions would mean that in practice EU banks will still be clearing some derivatives in London after June 2025. Nevertheless, EU banks still face systems changes to report and track how much is being cleared, a cost that UK and U.S. banks won't face.

☆ Here are Goldman's best stock option trades for 2023
▼ + stars: | 2022-12-07 | by ( Jesse Pound | ) www.cnbc.com time to read: +3 min

The firm calculated the single stock options with the most upside by comparing the price of an at-the-money call that expires in Jan. 2024 with the hypothetical return if the stock reaches the price target of Goldman's analyst. Call options serve as bets that a stock price will rise above a set strike price during the life of the contract. One benefit of using options is that, if the stock falls, the investors lose only the premium paid for the option. If it continues to climb to Goldman's price target, the call option could deliver a return of nearly 300%, the firm said. A put option is effectively the inverse of a call option and serves as a bet that a stock will fall below a set strike price.

☆ EU ramps up moves to limit financial link with post-Brexit London
▼ + stars: | 2022-12-07 | by ( Huw Jones | ) www.reuters.com time to read: +3 min

Britain's departure from the EU has forced the bloc to review its reliance on London for clearing trillions of euros in derivatives, EU financial services commissioner Mairead McGuinness said. The draft laws form the latest package in the bloc's efforts to build a capital markets union. The portion that must shift would be decided by EU regulators, but the relocation would be "gradual" and "with the grain" of the market to cut excessive rather than all reliance on London, an EU official said. Banks pushed back against voluntary attempts to relocate euro clearing from London to Frankfurt, leaving the EU with little choice but to mandate the shift. The third draft law seeks to simplify how companies list to save about 100 million euros annually in compliance fees.

FTX's implosion has heightened the need for more trustworthy, regulated cryptocurrency players, and big banks see an opportunity to pick up business, Mathew McDermott, Goldman's head of digital assets, told Reuters. Goldman is doing due diligence on a number of different crypto firms, he added, without giving details. HSBC (HSBA.L) CEO Noel Quinn, meanwhile, told a banking conference in London last week he has no plans to expand into crypto trading or investing for retail customers. Goldman Sachs has also together with MSCI and Coin Metrics launched data service datonomy, aimed at classifying digital assets based on how they are used. The firm is also building its own private distributed ledger technology, McDermott said.

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