#51 Daily Financial News Round Up - Dec 21,2021
Market Snapshot
Dow Jones is up by 1.60%, S&P500 is up by 1.78%, and Nasdaq Composite is up by 2.40%.
How’s crypto-market?
Bitcoin is up by 1.05% in the last 24 hours to the price $49,202.97. XRP, Terra and Polygon are the top three traded cryptocurrencies in the last 24 hours. The top 3 gainers are Ren, Aragon and IOTA. The top 3 losers are Monero, Decred and Yearn Finance.
What news caught my attention?
Biden’s administration announced plans to distribute 500 million free-at-home covid-19 testing kits. Stock markets finished higher after this announcement after losing ground due to omicron variant concerns.
NatWest Markets PLC, an investment bank that is a subsidiary of NatWest Group, formerly known as Royal Bank of Scotland, pleaded guilty to fraud and admitted that its traders manipulated the U.S. Treasury markets between 2008 and 2018. The bank engaged in a manipulative trading strategy known as spoofing. Spoofing tactics resemble bluffing, where a trader places big orders for stocks, bonds, or futures to bring the price up or down. Once there is price movement in the intended direction, the spoofer cancels the earlier orders and puts them in the opposite order to take advantage of the price movement. The bank will pay $35 million in fines and penalties.
SoftBank Group Corp plans to borrow a $4 billion loan from Apollo Global Management using SoftBank’s start-up stakes as collateral. This deal reflects SoftBank’s need for cash and highlights how nonbank firms are venturing into lending territories, further pushing banks away.
My Questions/Take-aways:
Since the 2010s, banks have paid more than a billion dollars in fines, which is very prevalent. It should be of grave concern to regulators that banks choose to pay penalties over sticking to the law. Clearly, the cost of fines is not putting a dent in revenues that banks gain from skirting the law.
Traditionally, banks dominated the lending space. In recent times, this might not hold anymore. There are many nonbank lenders who the firms seem to prefer.