The World
Thousands of documents detailing $2 trillion of potentially corrupt transactions that were washed through the U.S. financial system have been leaked. The leak focuses on more than 2,000 suspicious activity reports (SARs) filed with the U.S. government’s Financial Crimes Enforcement Network (FinCEN). The huge trove reveals how Western banking giants move trillions of dollars in suspicious transactions, enriching themselves and shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins. The documents expose banking safeguards, and the ease with which criminals have exploited them — despite warnings from the banks’ own employees. Five banks in particular — JPMorgan Chase, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon — “kept profiting” from powerful and dangerous players even after U.S. authorities fined these financial institutions for earlier failures to stem flows of dirty money. (BuzzFeedNews, The Guardian, ICJI)
Wall Street is hitting a near seven-week low on virus fears and stimulus fog, while global trade is rebounding much more quickly than it did after the 2008 financial crisis. Meanwhile, U.S. government debt rose at a 59% pace in 2Q20. In China, its global export dominance has surpassed levels seen in any other year, as the same coronavirus that hammered global trade has increased the appetite for Chinese goods — supporting the country’s early recovery as other big economies flounder. Separately, Russia will cut its defense spending in a bid to prop up its ailing economy. (Reuters, Wall Street Journal, CNBC, Financial Times-1, Financial Times-2)
Russia struck preliminary agreements to sell its Covid-19 vaccine to more than 10 countries in Asia, South America and the Middle East — including Brazil, Mexico, Saudi Arabia and India — which could give Moscow valuable economic and political leverage internationally. Elsewhere, demonstrators took to the streets of London, Tel Aviv and other cities over the weekend to protest restrictions, even with infection rates rising in many places and the global death toll approaching 1 million. (Wall Street Journal, Los Angeles Times)
China’s Ministry of Commerce released long-awaited provisions on its so-called “unreliable entity list.” The vaguely worded “blacklist” mirrors the U.S. Commerce Department’s entity list that restricts named companies from accessing items originating in the U.S. Meanwhile, China’s former securities chief said the country should save its overseas investments at risk from foreign protectionism and global recession. (CNBC, South China Morning Post)
California has regained just a third of the jobs it lost since the pandemic hit. Meanwhile, meat prices are falling at grocery stores as shortages fade and livestock clog farms, benefiting consumers but hurting meatpackers and farmers already hit by disruptions. (Los Angeles Times, Wall Street Journal)
Profiles of potential Trump Supreme Court picks. Amy Coney Barrett: a federal appellate judge known for conservative religious views who liberals worry could become instrumental in rolling back abortion rights; and Barbara Lagoa: the Cuban-American federal appellate judge is a conservative jurist whose resume includes a role in a heated international custody battle and the distinction of being the first Hispanic woman to serve on Florida’s top court. Meanwhile, Justice Ruth Bader Ginsburg will lie in repose at the Supreme Court on Wednesday and Thursday and lie in state Friday at the Capitol, while her death puts the ACA focus on Justices Kavanaugh and Roberts. (Reuters-1, Reuters-2, Washington Post, HealthcareDive)
Mastercard is pledging $500 million over the next five years to expand financial inclusion for Black individuals and businesses. Through three interconnected initiatives, and with the help of various partners, the financial services company aims to deliver tools and resources to allow many long-excluded African Americans to access affordable financial services and build prosperity. (Fast Company)
19,000 California firefighters are battling 27 major wildfires across the state. (NPR)
Economy
Home equity for homeowners with a mortgage rose 6.6% annually in 2Q20, while home values are now up 5.1% annually, with price gains having accelerated in 48 of the 50 largest U.S. metropolitan housing markets. (CNBC)
Boomerang CEOs: Many companies have turned to their former CEOs in times of need, but little was known until now about the implications of this practice. A look at what happens when they come back. (MIT Sloan Management Review)
Private equity industry doubles down on reducing carbon footprint: 81% of private equity managers already integrate ESG into their investment process, and a large part of the focus is shifting toward climate awareness. (Private Equity Wire)
Covid is upending middle-class family finances, as the pandemic wreaks havoc with loan-laden white-collar workers. Meanwhile, surging deposits and declining lending are driving banks to dramatically increase their holdings of U.S. Treasurys, offering significant support to the bond market at a time of unprecedented government borrowing. In Europe, banks are loading up on government bonds, raising concerns over ‘doom loop.’ (Wall Street Journal-1, Wall Street Journal-2, Financial Times)
Technology
Many countries and regions are learning new lessons following the TikTok deal: The EU is considering giving itself the ability to make tech companies sell or break off their European operations. China is preparing "a blacklist of foreign companies" that threaten China. And the U.S. is now looking at Tencent's U.S. holdings, which includes everything from Snapchat to Epic to Riot Games. Meanwhile, U.S. regulators don’t have enough money to properly check the tech giants. (Protocol, Financial Times, New York Times, Bloomberg, Big Technology)
The Cloud 100 recognizes standouts in tech’s hottest category from small startups to private-equity-backed giants, from Silicon Valley to Australia and Hong Kong. The companies on the list are selected for their growth, sales, valuation and culture, as well as a reputation score. Covid-19 hasn’t slowed this group down, with a record combined value of about $270 billion and at least 87 companies valued at $1 billion or more—up from 65 a year ago. (Forbes)
Walmart and Oracle are valuing the soon-to-be formed TikTok Global at between $50-$60 billion, as key aspects of one of the most convoluted global tech deals in history take shape. Zhang Yiming, the CEO of ByteDance, parent company of the China-based viral video app TikTok, could become the new entity's largest shareholder. But if all this was really about national security, was anything accomplished? there still seem to be plenty of remaining concerns, and likely even more being discussed inside CFIUS that we have no knowledge of. One key point: TikTok's core algorithms and tech will still be in China, and the Chinese government appears to like the deal. (The Information, Protocol)
Microsoft agreed to buy ZeniMax Media, the studio behind titles such as Fallout and the Doom reboot, for $7.5 billion in cash, reflecting how seriously Microsoft takes gaming as a core part of its business, and should help propel the launch of its new cloud gaming suite. (Axios, Reuters)
Smart Links
Eight companies plan to price U.S. IPOs this week. (Renaissance Capital)
MBA hiring demand recovers to pre-pandemic levels. (Financial Times)
European banks consider mergers for survival. (Wall Street Journal)
Alameda County allocates up to $110 million to private markets. (Pensions & Investments)
The music group The Chainsmokers closed their debut venture fund, Mantis, with $35 million. (TechCrunch)