DIRS.INFO The most relevant business & tech news

☆ German financial system under strain but property correction not seen: Bundesbank
▼ + stars: | 2022-11-24 | by ( Cynthia Kim | Jihoon Lee | ) www.reuters.com time to read: +2 min

FRANKFURT, Nov 24 (Reuters) - Risks in the German financial system are building as the economy heads for a recession and struggles with rising interest rates and sky-high energy prices, but a correction in the housing market is not imminent, the Bundesbank said on Thursday. "The macro-financial environment has deteriorated substantially," the Bundesbank said in a Financial Stability Review. Still, the Bundesbank did not expect a significant correction in house prices, which were in the past seen 15% to 40% overvalued. "A worsening energy crisis, a sharp economic slump and abruptly rising market interest rates could put the German financial system under considerable pressure," the bank added. Extreme volatility in energy prices sharply increased the collateral requirements of central counterparties in derivatives trading but government measures cushioned the liquidity shortage and the overall supply of credit "has worked well", it said.

☆ Germany is not blocking EU energy solution but is 'sceptical', minister says
▼ + stars: | 2022-11-24 | by ( ) www.reuters.com time to read: +1 min

BERLIN, Nov 24 (Reuters) - Germany is not standing in the way of the European Union's solution to the energy crisis, Economy Minister Robert Habeck told the Handelsblatt daily on Thursday in response to criticism about his country's stance towards plans for a gas price cap. "We're not blocking anything," he said in an interview with the daily and three European newspapers. "But I am sceptical when it comes to a fixed price cap in the market, because it would be either too high or too low," he said. On Tuesday, the European Union executive proposed a gas price cap for the bloc at 275 euros ($286.91) per megawatt hour for month-ahead derivatives on the Dutch exchange that serves as Europe's benchmark. Diplomats have said the proposed level was unlikely to be popular when energy ministers of the bloc's 27 members debate it on Thursday.

☆ FTX Hires Ex-Regulators to Investigate Firm’s Collapse
▼ + stars: | 2022-11-23 | by ( Mengqi Sun | ) www.wsj.com time to read: +5 min

Cryptocurrency exchange FTX, whose recent collapse has led to questions about lacking regulatory oversight, has hired a fitting team to help untangle the mess: former senior U.S. regulators. FTX said this week it has been in contact with investigators, The Wall Street Journal previously reported. FTX, which is based in the Bahamas, also has hired Nardello & Co., an investigations firm that specializes in anti-corruption and fraud cases, Mr. Bromley said in court Tuesday. The name of the cybersecurity company wasn’t disclosed because of concerns over continuing cyberattacks on FTX, he said. The collapse of FTX has set off the largest crypto-related bankruptcy ever, and court filings are already shedding light on what went wrong and how complicated things could get.

☆ Billionaire bitcoin bull Mike Novogratz says crypto should and will be regulated and the FTX disaster has created a 'deficit of trust' in the whole industry
▼ + stars: | 2022-11-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The FTX disaster has created a "deficit of trust" in crypto, according to bitcoin bull Mike Novogratz. The industry should and will get regulated he said, pointing to the fallout of Sam Bankman-Fried's crypto exchange. But while investors are being rocked by this bout of volatility, crypto isn't going anywhere, he told CNBC. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. And so in no world is bitcoin is going away, or quite frankly, the blockchain and Ethereum and everything else," he said.

Barry Silbert, the founder of crypto conglomerate Digital Currency Group, has joined a growing list of industry leaders in trying to settle investors' nerves after the sudden collapse of FTX. Since FTX's rapid winddown two weeks ago, investors have worried about a crypto contagion affecting every corner of the industry. "We have weathered previous crypto winters," Silbert wrote, adding that "while this one may feel more severe, collectively we will come out of it stronger." They've each expressed shock at FTX's apparent deceit of investors and customers and emphasized that client assets are secure. It also absorbed the $1.1 billion debt that the bankrupt crypto hedge fund Three Arrows Capital owed Genesis.

☆ Carl Icahn has reportedly made a boatload betting against GameStop and is still short
▼ + stars: | 2022-11-22 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Activist investor Carl Icahn has reportedly made a successful short bet against meme stock GameStop , and still owns a large bearish position in the struggling retailer. Icahn began building the short position at the height of the meme stock mania in 2021 when GameStop hit a peak of $483 a share, Bloomberg News reported, citing sources familiar with the matter. The investor has increased his bet from time to time and is still short the stock, Bloomberg reported. Icahn said he holds the belief that inflation is here to stay for the long term, pressured by structural wage increases. Sophisticated investors like Icahn can buy and short derivatives tied to the index.

☆ A European Union may cap natural gas prices at 275 euros to blunt the energy crisis caused by Russia's war on Ukraine
▼ + stars: | 2022-11-22 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The European Union's executive arm said Tuesday it's aiming to limit European natural gas prices at €275 per megawatt hour. If approved, the cap would be automatically triggered if two conditions related to benchmark prices are met. EU members have been debating over proposed measures aimed at shielding customers and businesses from energy price spikes. "Gas prices in the EU have fallen since August thanks to demand reduction, mandatory storage filling, diversification of supplies and other measures proposed by the Commission in recent months. But we have been missing in our toolkit a way to prevent and address episodes of excessively high prices," EU Energy Commissioner Kadri Simson said in the statement.

Lawyers for collapsed crypto exchange FTX said in the company's first bankruptcy hearing on Tuesday that regulators from the Bahamas, where FTX was headquartered, have agreed to consolidate proceedings in Delaware. "What we are dealing with is a different sort of animal," said FTX counsel James Bromley. FTX lawyers confirmed earlier reports that the Southern District of New York's Cyber Crimes unit has begun an investigation into the matter. FTX lawyers have also made reference to cyberattacks, suggesting there were multiple attacks beyond the $477 million hack that occurred shortly after the company entered bankruptcy on Nov. 11. FTX customers had a global presence, but many were based in tax havens.

☆ Equinor sees no substantial impact from EU gas price cap
▼ + stars: | 2022-11-22 | by ( ) www.reuters.com time to read: 1 min

OSLO, Nov 22 (Reuters) - Norwegian oil company Equinor (EQNR.OL) said on Tuesday it believed the European Commission's proposed gas price cap would have no substantial impact on the company's exports to Europe. The EU executive on Tuesday proposed a cap of 275 euros ($282) per megawatt hour from next year for month-ahead derivatives on the Dutch exchange that serve as Europe's benchmark. "Our immediate assessment is that this will not give substantial consequences on our exports," Equinor said in a statement to Reuters. Norway has overtaken Russia as Europe's biggest gas supplier. State-controlled Equinor's is the Nordic country's largest producer of oil and gas.

☆ European Union executive proposes gas price cap at 275 euros/MWh
▼ + stars: | 2022-11-22 | by ( ) www.cnbc.com time to read: 1 min

European gas prices are expected to drop in the coming months. The European Union executive on Tuesday proposed a gas price cap for the bloc at 275 euros ($282) per megawatt hour for month-ahead derivatives on the Dutch exchange that serve as Europe's benchmark. The cap would be available for one year from Jan. 1, 2023, said EU energy commissioner, Kadri Simson. "We propose to put a ceiling on the TTF (Title Transfer Facility) gas price to protect our people and businesses from extreme price hikes," she said. The idea to cap prices has divided EU countries for many months.

☆ SocGen’s BNP envy carries a cost
▼ + stars: | 2022-11-22 | by ( Liam Proud | ) www.reuters.com time to read: +3 min

It mimics BNP Paribas’s (BNPP.PA) deal with European peer Exane, which the French group took over last year. SocGen research analysts cover around 500 mostly European stocks, according to JPMorgan, compared with AllianceBernstein’s more international coverage of roughly 800 companies. Second, the venture makes the French bank’s equities business less reliant on derivatives and structured products, which led to heavy losses in 2020. Trading cash equities and selling research typically chews up much less capital and leads to fewer blow-ups. And the wider equities trading business is increasingly dominated by larger players, especially U.S. banks.

The price cap idea has led to persistent disagreements between the EU's 27 member states. Belgium, Greece, Italy and Poland are among the countries most vocal in calling for a gas price cap to be implemented, while the bloc's largest economy Germany has led the opposition. Historically, the gas price at the TTF hub has been used as a benchmark for LNG deliveries into Europe. PRICE CAP ON RUSSIAN GASThe Commission suggested a Russian gas price cap in September, but dropped the idea after resistance from central and eastern European countries worried Moscow would retaliate by cutting off the gas it still sends to them. Given that fall, some EU diplomats said a price cap would do little to reduce European gas prices, and would function as more of a geopolitical move to cut revenues to Moscow.

As questions swirl about how much cryptocurrencies will be worth in the wake of the spectacular collapse of the crypto exchange FTX and other major platforms, a key question has emerged: Who will keep your crypto safe? Prior to its collapse, FTX was the world's fifth-largest cryptocurrency exchange, according to data from the crypto group CoinGecko cited by Reuters, processing $627 billion in trading volume year-to-date. But as cryptocurrencies broadly became more mainstream, companies and exchanges sprang up that allowed people to buy crypto without those steps. Today, platforms seemingly untouched by the FTX collapse, like Coinbase, have sought to reassure their users that their assets remain safe and, in some cases, are not subject to lending. Instead, there are growing calls for increased regulation that would force crypto exchanges to keep customers' money firewalled so that it cannot be repurposed for other uses.

☆ The CEO of a company that's purchased $7 billion in real estate expects competitors who've relied on cheap debt will get washed out
▼ + stars: | 2022-11-21 | by ( Alex Nicoll | ) www.businessinsider.com time to read: +4 min

As borrowers' debt comes due, rising interest rates will cause defaults and sales. Defaults could cascade through the financial system, putting "trillions" of dollars at risk. After nearly 15 years of rock-bottom interest rates, financial markets — including real estate — are being weaned from easy money by Federal Reserve rate hikes, Benjamin Miller, the CEO, said. Suddenly, landlords might be on the hook for 20% or more of the total value of the property, and their interest rates will be at least double what they were. An even bigger risk to the financial system lies with interest-rate derivatives, or financial contracts used to mimic or bet against rate moves.

☆ These controversial ETFs take big risks for massive returns
▼ + stars: | 2022-11-20 | by ( Noah Sheidlower | ) www.cnbc.com time to read: +2 min

Known as leveraged ETFs, ProShares Advisors' Simeon Hyman embraces them — running his firm's UltraPro QQQ and UltraPro Short QQQ funds. Its UltraPro Short QQQ ETF is up over 54% so far this year. But its UltraPro QQQ ETF is off almost 74% in the same period. Hyman believes leveraged ETFs are valuable to the marketplace despite the potential for vastly different performance outcomes. Deborah Fuhr, founder of independent research firm ETFGI, suggests FINRA should take a closer look at leveraged ETFs.

Ray's statement came with a flurry of Saturday morning filings in Delaware bankruptcy court. In those filings, FTX asked for permission to pay outside vendors, consolidate bank accounts, and establish new ones. The new FTX CEO asked that employees, vendors, customers, regulators and government stakeholders "be patient" with them. FTX said in a filing that there could be more than one million creditors in these Chapter 11 cases. FTX's bank accounts reflect the global influence of the crypto-asset empire.

The licenses gave FTX access to U.S. commodities derivatives markets as a regulated exchange. FTX also saw its regulatory status as a way of luring new capital from major investors, the documents show. “FTX has the cleanest brand in crypto,” the exchange proclaimed in a June document presented to investors. According to the document, FTX told the regulator it did not have the same issues as products from other providers that the agency had investigated. "We confirmed these were solely rewards based and do not involve lending (or other use) of the deposited crypto," FTX wrote.

☆ As the FTX fallout spreads, smaller cryptocurrencies may have to stop be taken off exchanges to protect consumers, Crypto.com CEO says
▼ + stars: | 2022-11-18 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

The CEO of Crypto.com said exchanges may have to delist smaller cryptocurrencies to protect users as FTX-related volatility spreads. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. One consequence of the fallout has been reducing the liquidity in the broader market, and various exchanges are going to have adjust accordingly. "The business generated over a billion dollars last year, and almost generated a billion dollars in revenue this year. Marszalek cautioned that the broader sector could face trouble as confidence erodes in the wake of the lastest crypto chaos.

☆ From Apollo to DZ Bank, funds snap up bargains in UK pension scramble
▼ + stars: | 2022-11-18 | by ( Nell Mackenzie | ) www.reuters.com time to read: +4 min

REUTERS/Hannah McKay/File PhotoSummarySummary Companies Pension funds still need to raise cashCredit funds pick up bargains from pension fund salesSome credit funds already sitting on profitsLONDON, Nov 18 (Reuters) - Credit funds at Blackstone, Apollo, DZ Bank and Astra Asset Management picked up bargains from UK pension funds during their scramble for cash, and some say pension schemes are still offloading assets as pressures persist. Hedge funds and private equity firms have taken advantage of the forced sales to snap up deals - including certain portions of collateralised loan obligations (CLOs), securities that pension funds invest in. The credit funds are already sitting on juicy profits on some of these trades. This is because these pension funds must match their portfolios to what they will owe retired members. Even though the markets have calmed, some pension funds are still dealing with the implications," said Mody.

☆ EU readies next steps to boost its capital market
▼ + stars: | 2022-11-17 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

Mairead McGuinness said there had been good progress in building the EU's capital markets union (CMU) but more needed to be done to ease reliance on banks for funding companies and the economy, and on London post-Brexit for clearing euro denominated swaps. "We are still over-reliant on central counterparties outside the European Union and this is also a matter of financial stability," McGuinness told an event held by the Association for Financial Markets in Europe (AFME). "In the unlikely case of something going wrong, we would not be in the driving seat for decisions, so we want to increase the attractiveness of clearing in the EU," she said. The EU is watching closely steps being taken by Britain to bolster the competitiveness of its financial sector, now largely cut off from the bloc. "We realise that for the size of our economy the capital markets don't reflect that, as we rely very heavily on bank finance and that is not appropriate."

☆ Top Employee of Crypto Exchange BitMEX Sentenced Over U.S. Charge
▼ + stars: | 2022-11-17 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

A top employee at cryptocurrency derivatives trading exchange BitMEX was sentenced to 12 months probation Wednesday in federal court in Manhattan after pleading guilty to violating U.S. anti-money-laundering rules. U.S. prosecutors alleged Mr. Dwyer and the exchange’s founders failed to implement anti-money-laundering and know-your-customer programs, as required by U.S. law. Under the plea agreement, Mr. Dwyer also agreed to pay $150,000 in fines. “The government’s heavy-handed approach with respect to the prosecution of Mr. Dwyer is regrettable, and Mr. Dwyer is relieved to have this matter behind him and looks forward to getting on with his life, both personally and professionally,” a spokesperson for Mr. Dwyer said in an email Thursday. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance.

☆ Chile's SQM profits jump more than ten-fold on lithium price surge
▼ + stars: | 2022-11-17 | by ( ) www.reuters.com time to read: +2 min

Sales volumes for lithium and derivatives totaled 41,000 tonnes, the highest quarterly volume ever reported by the company, SQM said in its earnings report. "Our positive results in the lithium market were due to sales volumes and prices significantly above average," the company said. Average lithium prices rose to record levels during the quarter at more than $56,000 per tonne, the company said. Revenues for iodine and its derivatives nearly doubled to reach $215 million, the company said, as sales rose 9%. Albemarle (ALB.N), the world's top lithium producer, also reported a surge in sales earlier this month.

☆ Profits for Chile's SQM surge more than ten fold in third quarter
▼ + stars: | 2022-11-17 | by ( Kevin Buckland | ) www.reuters.com time to read: +1 min

Nov 16 (Reuters) - Chilean miner SQM, the world's No. 2 lithium producer, posted on Wednesday a ten-fold jump in third-quarter net profit compared to the year-ago period, landing at $1.1 billion and boosted by sky-rocketing lithium prices and record sales volumes. Sales volumes for lithium, a key rechargeable battery metal, and derivatives totaled 41,000 metric tonnes, the highest quarterly volume ever reported by the company, SQM said in its earnings report. "Our positive results in the lithium market were due to sales volumes and prices significantly above average," the company said. Reporting by Carolina Pulice; Editing by David Alire GarciaOur Standards: The Thomson Reuters Trust Principles.

☆ Never seen 'such a complete failure' of corporate controls, says new FTX CEO who also oversaw Enron bankruptcy
▼ + stars: | 2022-11-17 | by ( Rohan Goswami | ) www.cnbc.com time to read: +3 min

Ray formerly served as the CEO of Enron after the implosion of the energy titan. He promised to work with regulators to investigate FTX founder Sam Bankman-Fried. Bankman-Fried." Ray excoriated Bankman-Fried and his management team for what were described as lackadaisical controls on systems and regulatory compliance. Coordinating with regulators, Ray wrote, the chapter 11 bankruptcy process would examine the actions of Bankman-Fried in connection with FTX's collapse.

Search resuls for: "Derivatives"

25 mentions found