Archegos Left a Sparse Paper Trail for a $10 Billion Firm

Lawyers and securities experts said a multibillion-dollar family office like Archegos could avoid making 13F disclosures, but it would require threading a needle: The firm could have managed money for only Mr. Hwang and his spouse — not other family members, fund employees or his charity, which operated on the same floor of a Midtown Manhattan office building. The firm could also have been able to skip filing a 13F if it sold off enough stocks to fall below the $100 million threshold before the end of each quarter. It also could have requested confidential treatment from the S.E.C. to keep such disclosures private, lawyers and experts said.

Archegos was set up to make filings to the S.E.C. — it had its own Central Index Key number — but a search for documents returns no results.

The S.E.C. has opened an informal inquiry into Archegos and the spillover effects of its collapse, which caused billions of dollars in losses at banks around the globe. Regulators have declined to comment on the investigation.

Senator Sherrod Brown, chairman of the Senate Banking Committee, sent letters to the half-dozen banks that did business with Archegos — including Credit Suisse, Goldman Sachs and Morgan Stanley — seeking information about their dealings with Mr. Hwang’s firm. That includes information about any transactions that “would be subject to regulatory reporting with the S.E.C.”

The rules for 13F filings apply to “registered investment advisers and exempt reporting advisers that manage accounts on behalf of others, including advisers to separately managed accounts, private funds, mutual funds, and pension plans.” They must file if they have “discretion” over $100 million or more in securities at the end of a quarter.

Nicolas Morgan, a former S.E.C. lawyer, said a family office could get around the stock reporting requirement in only rare circumstances. It “would be outside the norm” to not file a 13F, said Mr. Morgan, a partner in the white-collar defense practice at Paul Hastings.

After the failure of Archegos, Americans for Financial Reform, an advocacy group, sent a letter to the S.E.C. calling for a review of 13F filings and whether gaps in the disclosure process created the registration exemption for family offices, which control roughly $6 trillion in assets, according to Campden Wealth, which provides research and networking opportunities to wealthy families.

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Jamie Dimon Sees a Boom Coming

The annual letter to shareholders by JPMorgan Chase’s chief Jamie Dimon was just published. The widely read letter is not just an overview of the bank’s business but also covers Mr. Dimon’s thoughts on everything from leadership lessons to public policy prescriptions.

“The U.S. economy will likely boom.” A combination of excess savings, deficit spending, a potential infrastructure bill, vaccinations and “euphoria around the end of the pandemic,” Mr. Dimon wrote, may create a boom that “could easily run into 2023.” That could justify high equity valuations, but not the price of U.S. debt, given the “huge supply” soon to hit the market. There is a chance that a rise in inflation would be “more than temporary,” he wrote, forcing the Fed to raise interest rates aggressively. “Rapidly raising rates to offset an overheating economy is a typical cause of a recession,” he wrote, but he hopes for “the Goldilocks scenario” of fast growth, gently increasing inflation and a measured rise in interest rates.

“Banks are playing an increasingly smaller role in the financial system.” Mr. Dimon cited competition from an already large shadow banking system and fintech companies, as well as “Amazon, Apple, Facebook, Google and now Walmart.” He argued those nonbank competitors should be more strictly regulated; their growth has “partially been made possible” by avoiding banking rules, he wrote. And when it comes to tougher regulation of big banks, he wrote, “the cost to the economy of having fail-safe banks may not be worth it.”

“China’s leaders believe that America is in decline.” While the U.S. has faced tough times before, today “the Chinese see an America that is losing ground in technology, infrastructure and education — a nation torn and crippled by politics, as well as racial and income inequality — and a country unable to coordinate government policies (fiscal, monetary, industrial, regulatory) in any coherent way to accomplish national goals,” he wrote. “Unfortunately, recently, there is a lot of truth to this.”

a leveraged buyout offer from the private equity firm CVC Capital, sending its shares to a four-year high. Toshiba has had a series of scandals, and faces pressure from activist investors.

raising the corporate rate to help pay for President Biden’s infrastructure plans — though he didn’t mention the White House’s proposed rate, 28 percent. Other corporate chiefs are privately criticizing the potential tax rise.

The company behind the Johnson & Johnson vaccine mix-up has a history of errors. Emergent BioSolutions, which the U.S. relied on to produce doses by J.&J. and AstraZeneca, had a made manufacturing errors before. Experts worry this may leave some Americans more wary of getting vaccinated, even as Mr. Biden has moved up the eligibility deadline for U.S. inoculations.

An electric aircraft maker sues a rival for intellectual property theft. Wisk, which is backed by Boeing and the Google founder Larry Page, said that former employees downloaded confidential information before joining Archer, a competitor. Archer, which is going public by merging with a SPAC run by Moelis & Company and which counts United Airlines as an investor, denied wrongdoing and said it was cooperating with a government investigation.

A blistering start for venture capital in 2021. Start-ups set a fund-raising quarterly record in the first three months of the year, raising more than $62 billion, according to the MoneyTree report from PwC and CB Insights. That’s more than twice the total a year earlier and represents nearly half of what start-ups raised in all of 2020.

Voting in the union election at an Amazon warehouse in Bessemer, Ala., ended on March 29, and counting began the next day, but the outcome is still unknown. What’s going on? It’s less about the number of ballots than how they’re counted.

The stakes are high, for both Amazon and the labor movement. Progressive leaders like Bernie Sanders have argued a victory for the union, the first at an Amazon facility in the U.S., could inspire workers elsewhere to unionize. And Amazon is facing increased scrutiny for its market power and labor practices.

a painstaking process:

  • Once Amazon and the union have gone back and forth over disputed voters, the N.L.R.B. counts the uncontested ballots anonymously and by hand, on a video conference open to reporters. This could start today.


— Kristalina Georgieva, the managing director of the I.M.F., on how the uneven rollout of vaccines poses a threat to the global economic recovery.


After the 2008 financial crisis, Credit Suisse emerged battered by high-risk bets and promised to do better. A series of recent scandals suggests it hasn’t, The Times’s Jack Ewing writes.

A recap of the Swiss bank’s troubles over the past year or so:

  • A spying scandal that led to the ouster of Tidjane Thiam as C.E.O.

  • Ties to Greensill Capital, the SoftBank-backed lender that has filed for insolvency and will lead to losses at the Swiss bank.

  • Its involvement with Archegos, whose hugely leveraged stock bets went south, saddling the bank with a big hit.

30-day comment period on to-be-drafted regulations that would make it harder to obscure who controls a company. Among the details to be worked out are what entities should report and when; how to collect, protect and update information for a database; and the criteria for sharing with law enforcement.

“We could not be more excited,” Kenneth Blanco, the director of the Treasury’s Financial Criminal Enforcement Network (FinCEN), told bankers recently. The U.S. has been under pressure to address its vulnerability to money laundering and financial crimes:

New rules could make forming small businesses, special purpose vehicles and other closely held entities “significantly” more burdensome, said Steve Ganis of Mintz, an expert in anti-money laundering regulation. “FinCEN’s new regime will make things much more complicated for start-ups, where control and ownership are highly fluid,” he said. Public companies and many larger businesses would be exempt because they already face stricter scrutiny.

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With a Big Tax Break, Hong Kong Tries to Soothe the Rich

HONG KONG — Political opposition has been quashed. Free speech has been stifled. The independent court system may be next.

But while Hong Kong’s top leaders take a tougher line on the city of more than seven million people, they are courting a crucial constituency: the rich. Top officials are preparing a new tax break and other sweeteners to portray Hong Kong as the premier place in Asia to make money, despite the Chinese Communist Party’s increasingly autocratic rule.

So far, the pitch is working. Cambridge Associates, a $30 billion investment fund, said in March it planned to open an office in the city. Investment managers have set up more than a hundred new companies in recent months. The Wall Street banks Goldman Sachs, Citigroup, Bank of America and Morgan Stanley are increasing their Hong Kong staffing.

“Hong Kong is second only to New York as the world’s billionaire city,” said Paul Chan, Hong Kong’s financial secretary, at an online gathering of finance executives this year.

erupted two years ago. At the same time, it is trying to charm the city’s financial class to keep it from moving to another business-friendly place like Singapore.

“It is a one-party state, but they are pragmatic and they don’t want to hurt business,” Fred Hu, a former chairman of Goldman’s Greater China business, said of Chinese officials.

For apolitical financial types, the changes will have little impact, said Mr. Hu, who is also the founder of the private equity firm Primavera Capital Group. “If you’re a banker or a trader, you may have political views, but you’re not a political activist,” he said.

flowed out of local Hong Kong bank accounts and into jurisdictions like Singapore.

Tensions run taut inside Hong Kong’s gleaming office towers. Even executives who are sympathetic to the government have declined to speak publicly for fear of getting caught in the political crossfire between Beijing and world capitals like Washington and London. Hong Kong’s tough rules on movement in the pandemic may also spark some expatriates to leave in the summer once school ends.

For now, however, financial firms are doubling down on Hong Kong. Neal Horwitz, an executive recruiter in Singapore, said finance was likely to remain in Hong Kong “until the ship goes down.”

carried interest, which is typically earned by private equity investors and hedge funds. Officials had discussed the plan for years but didn’t introduce a bill until February, and it could pass in the coming months through the city’s Beijing-dominated legislature.

sparked criticism elsewhere, including in the United States. But Hong Kong fears a financial exodus without such benefits, said Maurice Tse, a finance professor at Hong Kong University’s business school.

“To keep these people around we have to give a tax benefit,” he said.

Hong Kong has also proposed a program, Wealth Management Connect, that would give mainland residents in the southern region known as the Greater Bay Area the ability to invest in Hong Kong-based hedge funds and investment firms. Officials have boasted that it would give foreign firms access to 72 million people. Hong Kong and mainland Chinese officials signed an agreement in February to start a pilot program at an unspecified time.

Pandemic travel restrictions have slowed the proposal’s momentum, said King Au, the executive director of Hong Kong’s Financial Services Development Council, but it remains a top priority.

“I want to highlight how important the China market is to global investors,” Mr. Au said.

Mainland money has already helped Hong Kong look more attractive. Chinese firms largely fueled a record $52 billion haul for companies that sold new shares on the Hong Kong Stock Exchange last year, according to Dealogic, a data provider. New offerings this year have already raised $16 billion, including $5.4 billion for Kuaishou, which operates a Chinese video app. The record start has been helped in part by Chinese companies that have been pressured by Washington to avoid raising money in the United States.

triple its hires across China, and a spokeswoman said a Hong Kong staff increase was part of that. Bank of America is adding more people in Hong Kong, while Citi has said it will hire as many as 1,700 people in Hong Kong this year alone.

hew to the party line. Still, it is considering moving some of its top executives to Hong Kong, because it will be “important to be closer to growth opportunities,” Noel Quinn, HSBC’s chief executive, said in February.

Investment funds are flocking to Hong Kong, too, after officials in August lowered regulatory barriers to setting up legal structures similar to those used in low-tax, opaque jurisdictions like the Cayman Islands and Bermuda. Government data shows that 154 funds have been registered since then.

Xi Jinping, China’s top leader, and Li Zhanshu, the Communist Party’s No. 3 official, at one point owned Hong Kong property, according to a trail that can be traced partly through public records.

While officials have welcomed business, they have made clear to the financial and business worlds that they will brook no dissent. In March, Han Zheng, a Chinese vice premier, praised the stock market’s performance and the finance sector in a meeting with a political advisory group but made its limits clear.

“The signal to the business community is very simple,” said Michael Tien, a former Hong Kong lawmaker and businessman who attended the closed-door session. “Stay out of politics.”

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Global Economy Expected to Grow 6% This Year, I.M.F. Says: Live Updates

World Economic Outlook report.

The emergence from the crisis is being led by the wealthiest countries, particularly the United States, where the economy is now projected to expand by 6.4 percent this year. The euro area is expected to expand by 4.4 percent and Japan is forecast to expand by 3.3 percent, according to the I.M.F.

Among the emerging market and developing economies, China and India are expected to lead the way. China’s economy is projected to expand by 8.4 percent and India’s is expected to expand by 12.5 percent.

Ms. Gopinath credited the robust fiscal support that the largest economies have provided for the improved outlook and pointed to the relief effort enacted by the United States. The I.M.F. estimates that the economic fallout from the pandemic could have been three times worse if not for the $16 trillion of worldwide fiscal support.

Despite the rosier outlook, Ms. Gopinath said that the global economy still faced “daunting” challenges.

Low-income countries are facing bigger losses in economic output than advanced economies, reversing gains in poverty reduction. And within advanced economies, low-skilled workers have been hit the hardest and those who lost jobs could find it difficult to replace them.

“Because the crisis has accelerated the transformative forces of digitalization and automation, many of the jobs lost are unlikely to return, requiring worker reallocation across sectors — which often comes with severe earnings penalties,” Ms. Gopinath said.

The I.M.F. cautioned that its projections hinged on the deployment of vaccines and the spread of variants of the virus, which could pose both a public health and economic threat. The fund is also keeping a close eye on interest rates in the United States, which remain at rock-bottom levels but could pose financial risks if the Federal Reserve raises them unexpectedly.

The global economy is on firmer ground one year into the pandemic thanks to the rollout of vaccines, the International Monetary Fund said on Tuesday. But the recovery will be uneven around the world because of persistent inequality and income gaps.

“Emerging market and developing economies are expected to suffer more scarring than advanced economies,” the I.M.F. said in its World Economic Outlook report, which projected 6 percent global growth in 2021. Here are projections for the growth of some individual countries:

Mickey Mantle’s 1952 Topps rookie card is one of the most sought-after cards. While a Mantle with a rating of SGC 7 like this one is valuable, a version of the same card rated PSA Mint 9 recently sold for $5.2 million.
Credit…Jeenah Moon for The New York Times

Topps, known for its trading cards and Bazooka gum, is going public by merging with a blank-check firm in a deal that values the company at $1.3 billion, the DealBook newsletter was the first to report.

The transaction includes an investment of $250 million led by Mudrick Capital, the sponsor of the special purpose acquisition company, or SPAC, along with investors including Gamco and Wells Capital. Michael Eisner, the chairman of Topps and former chief executive of the Walt Disney Company, will roll his entire stake into the new company and stay on.

“Everybody has a story about Topps,” Mr. Eisner said. That’s what initially attracted him to the trading card company, which he acquired in 2007 via his investment firm, Tornante, and Madison Dearborn for $385 million. Buying Topps was a bet on a brand that elicits an “emotional connection” as strong as Disney, the company Mr. Eisner ran for 21 years.

In the years since Mr. Eisner’s initial purchase, Topps has focused on a shift to digital, starting online apps for users to trade collectibles and play games. It also created “Topps Now,” which makes of-the-moment cards to capture a defining play or a pop culture meme. (It sold nearly 100,000 cards featuring Bernie Sanders at the presidential inauguration in his mittens.) And it has moved into blockchain, too, via the craze for nonfungible tokens, or NFTs.

The pandemic has driven new interest in memorabilia, especially trading cards. Topps generated record sales of $567 million in 2020, a 23 percent jump over the previous year.

The secondhand market is particularly hot, with a Mickey Mantle card recently selling for more than $5 million. “Topps probably made something like a nickel on it, 70 years ago,” said Jason Mudrick, the founder of Mudrick Capital. NFT mania will allow Topps to take advantage of the secondhand market by linking collectibles to digital tokens. Topps is also growing beyond sports, like its partnerships with Marvel and “Star Wars.”

It continues to see value in its core baseball-card business, as athletes come up from the minor leagues more quickly. “The trading card business has been growing for the last several years,” Michael Brandstaedter, the chief executive of Topps, said. “While it definitely grew through the pandemic — and perhaps accelerated — it did not arrive with the pandemic.”

That resilience is part of the bet that Mudrick Capital is making on the 80-year old Topps. It’s a surer gamble, Mr. Mudrick said, than buying one of the many unprofitable start-ups currently courting SPAC deals. “Our core business is value investing,” he said.

United Airlines is the first major U.S. carrier to run its own pilot academy.
Credit…Chris Helgren/Reuters

United Airlines said on Tuesday that it had started accepting applications to its new pilot school, promising to use scholarships, loans and partnerships to help diversify a profession that is overwhelmingly white and male.

The airline said it planned to train 5,000 pilots at the school by 2030, with a goal of half of those students being women or people of color. The school, United Aviate Academy in Phoenix, expects to enroll 100 students this year, and United and its credit card partner, JPMorgan Chase, are each committing $1.2 million in scholarships.

About 94 percent of aircraft pilots and flight engineers are white and about as many are male, according to federal data. United said 7 percent of its pilots were women and 13 percent were not white.

Airlines have had more employees than they needed during the pandemic, when demand for tickets fell sharply, and they have encouraged thousands, including many pilots, to retire early or take voluntary leaves. Since September, nearly 1,000 United pilots had retired or taken leave. Last week, the airline said it would start hiring pilots again after stopping last year.

But the industry is facing a long-term shortage of pilots because many are nearing retirement age and many potential candidates are daunted by the cost of training, which can reach almost $100,000 after accounting for the cost of flight lessons.

United is the first major U.S. carrier to run its own pilot academy, although many foreign airlines have run such programs for years. The company said it hoped the guarantee of a job after graduation would be a draw. In addition to the 5,000 pilots it plans to train, United said it would hire just as many who learned to fly elsewhere.

United Aviate is meant for people with a wide range of experience, from novices who have never flown to pilots who are already flying for one of United’s regional partners. A student with no flying experience could become a licensed pilot within two months and be flying planes for a living after receiving a commercial pilot license within a year, the airline said. Within five years, that person could fly for United after a stint at a smaller airline affiliate to gain experience.

The airline said it was also working with three historically Black colleges and universities — Delaware State University, Elizabeth City State University and Hampton University — for recruitment. The first class of 20 students is expected to start this summer.

Air France is considered too big to fail in its home country, but the company’s debt has ballooned during the pandemic.
Credit…Christian Hartmann/Reuters

Air France on Tuesday said it would receive a new bailout from the French government worth 4 billion euros ($4.7 billion) to help the beleaguered airline cope with mounting debts as a third wave of pandemic lockdowns around Europe prolong a slump in continental air travel.

The support comes on top of €10.4 billion ($12.3 billion) in loans and guarantees that Air France and its partner, the Netherlands-based KLM, received from the French and Dutch governments last year.

Air France-KLM chief executive, Benjamin Smith, citing an “exceptionally challenging period,” said the funds would “provide Air France-KLM with greater stability to move forward when recovery starts, as large-scale vaccination progresses around the world and borders reopen.”

Bruno Le Maire, France’s finance minister, said Tuesday that the new aid is taking the form of a state-backed recapitalization, which involves converting €3 billion in loans the government granted the airline last year into bonds with no maturity, as well as €1 billion in fresh capital through the issuance of new shares.

The French government is the airline’s largest shareholder, at 14.3 percent. The agreement could allow the government to raise its stake as high as 30 percent, Mr. Le Maire and Air France said, by buying some of the new shares. China Eastern Airlines, also a large shareholder, will also participate, Air France said.

Air France-KLM lost two-thirds of its customers last year, and its debt has nearly doubled to €11 billion. It expects an operating loss of €1.3 billion in the first quarter.

As vaccinations speed ahead in the United States, air travel has started to recover, fueling a return of ticket sales. Delta Air Lines announced it would add more passengers and start selling middle seats for flights starting May 1.

By contrast, Europe’s vaccine rollout has faltered and variants of the virus have gained ground, prompting renewed travel restrictions. That has left major flagship air carriers, including Air France-KLM, Lufthansa of Germany, and Alitalia of Italy, struggling.

The French government recently cut its economic growth forecast for 2021 to 5 percent, down from 6 percent.

Air France’s board approved the deal on Tuesday after the French government and European regulators agreed on the terms.

The Dutch government is holding separate talks with European regulators over converting a €1 billion loan to KLM into hybrid debt in return for slot concessions at the Schiphol Airport in Amsterdam.

Air France employs tens of thousands of workers in France and is considered too big to fail. Still, Mr. Le Maire said the aid was not a “blank check,” adding that the company would have to “make efforts on competitiveness” in exchange for the support and must continue to reduce its carbon emissions.

To conform to European competition rules, Air France was forced to relinquish 18 slots per day, representing nine round-trips, to competing airlines at Orly, Paris’ second-largest airport after Charles de Gaulle.

Credit Suisse’s offices in Zurich. The bank said it would hire outside experts to investigate what led to losses tied to its involvement with Archegos Capital Management and Greensill Capital.
Credit…Arnd Wiegmann/Reuters

Credit Suisse said Tuesday it would replace the head of its investment bank and the chief of risk and compliance after losses from its involvement with Archegos Capital Management, the collapsed hedge fund, totaled nearly $5 billion.

The bank, which is based in Zurich, is in turmoil after a series of disasters that have battered its reputation and are likely to diminish its global clout. Credit Suisse also serves as a warning of the risks that may lurk in the financial system, as bankers and investors try to earn returns when interest rates are at rock bottom and stock values are already frothy.

Credit Suisse detailed the financial impact of its dealings with Archegos for the first time on Tuesday, saying it would report a loss for the first quarter of 900 million Swiss francs after booking a charge of 4.4 billion francs, or $4.7 billion, related to the hedge fund. The losses were higher than some estimates.

Brian Chin, the chief executive of Credit Suisse’s investment bank, will leave on April 30. Lara Warner, the chief risk and compliance officer, will step down immediately, the bank said.

Members of Credit Suisse’s executive board will forgo their bonuses for 2020 and 2021, the bank said. Credit Suisse will also cancel plans to buy back its own shares, a way of pushing up the stock price. But the bank, seeking to dispel any questions about its overall health, said its capital was still at levels considered acceptable.

Credit Suisse shares were down more than 2 percent in Zurich trading early Tuesday. They have lost one-quarter of their value since the beginning of March.

Thomas Gottstein, the chief executive of Credit Suisse since last year, said the bank would hire outside experts to investigate what led to the “unacceptable” loss from Archegos as well as the bank’s involvement with Greensill Capital, which collapsed last month.

Credit Suisse’s asset management unit oversaw $10 billion in funds that Greensill packaged based on financing it provided to companies, many of which had low credit ratings.

“Serious lessons will be learned,” Mr. Gottstein said.

Tucson is building on a five-year growth plan that predated the pandemic. “We’re working together as a region,” Mayor Regina Romero said.
Credit…Rebecca Noble for The New York Times

Some midsize cities — like Austin, Texas; Boise, Idaho; and Portland, Ore. — may be poised to rebound faster than others because they have developed strong relationships with their local economic development groups.

These partnerships have established comeback plans that incorporate a number of common goals, like access to affordable loans, relief for small businesses and a focus on downtown areas, Keith Schneider reports for The New York Times.

In Tucson, the revitalization plan, which goes into effect this month, calls for assessing the effect of the pandemic on important business sectors, including biotech and logistics. Other provisions advocate recruiting talented workers and preparing so-called shovel-ready building sites of 50 acres or more.

City leaders are building on a five-year, $23 billion growth plan in industrial and logistics development in the Tucson region that resulted in 16,000 new jobs before the pandemic, according to Sun Corridor, the regional economic development agency that sponsored the recovery plan. Caterpillar and Amazon moved into the region, while Raytheon, Bombardier and GEICO were among the many prominent companies that expanded operations there.

Other cities are struggling to recover after pandemic restrictions emptied their central business districts. The question is how much these downtowns will bounce back when the pandemic ends.

“The number of square feet per worker has declined really dramatically since 1990,” said Tracy Hadden Loh, a fellow at the Brookings Institution. Couple that with recent announcements from companies like Google, Microsoft, Target and Twitter about remote work, and some cities could see less office construction activity.

A Starbucks cafe in Seoul.
Credit…Ed Jones/Agence France-Presse — Getty Images

Starbucks says it plans to eliminate all single-use cups from its South Korean stores by 2025, the chain’s first move of this sort as it seeks to reduce its carbon footprint.

The coffeehouse chain plans to introduce a “cup circularity program” in some stores beginning this summer, in which customers would pay a deposit for reusable cups that would be refunded when the containers are returned and scanned at contactless kiosks, the company said in a statement on Monday. The arrangement will be expanded to cafes across the country over the next four years.

“Starbucks Coffee Korea is a leader in sustainability for the company globally, and we are excited to leverage the learnings from this initiative to drive meaningful change in our stores and inform future innovation on a regional and global scale,” Sara Trilling, the president of Starbucks Asia Pacific, said in the statement.

South Korea has in recent years tried to cut back on disposable waste in cafes, banning the use of plastic cups for dine-in customers in 2018. Legislation introduced last year would require fast food and coffee chains to charge refundable deposits for disposable cups to encourage returns and recycling. Last year, the environmental ministry said it planned to reduce the country’s plastic waste by one-fifth by 2025.

The increased use of plastic packaging and containers amid the coronavirus pandemic has been a setback for initiatives aimed at reducing single-use plastic waste. In March 2020, Starbucks and other chains said they would no longer offer drinks in washable mugs or customer-owned cups to help prevent the spread of the virus.

Investors have been focused on the Biden administration’s infrastructure spending plan, which includes money to encourage investment in renewable energy, including wind turbines.
Credit…Mike Blake/Reuters

U.S. stocks dipped on Tuesday, a day after Wall Street’s major benchmarks climbed to records.

The S&P 500 climbed above 4,000 points last week for the first time amid signs that the economic recovery was strengthening, with manufacturing activity quickening and the biggest jump in jobs since the summer. The United States is administering three million vaccines per day on average, but the number of coronavirus cases has started to tick up again because of the spread of new variants.

That said, many investors have focused on the vaccine rollout and the potential impact of the Biden administration’s large spending plans, including the $2 trillion American Jobs Plan, intended to upgrade the nation’s infrastructure and speed up the shift to a green economy.

“Investors should not fear entering the market at all-time highs,” strategists at UBS Global Wealth Management said in a note on Tuesday, recommending stocks in the financial, industrial and energy sectors. The reopening of economies because of the vaccine rollout also favored small and medium-size companies, they wrote.

The Stoxx Europe 600 index rose 0.7 percent to a record in its first day of trading since Thursday because of the long Easter weekend. In Britain, mining companies led the FTSE 100 higher, which was up 1.2 percent. The DAX in Germany rose 0.9 percent

Asian stock indexes were mixed. The Hang Seng in Hong Kong rose 2 percent and the Nikkei 225 fell 1.3 percent.

The yield on 10-year Treasury notes slipped to about 1.69 percent.

Oil prices rose. West Texas Intermediate, the U.S. crude benchmark, rose 2 percent to just below $60 a barrel.

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He Built a $10 Billion Investment Firm. It Fell Apart in Days.

Until recently, Bill Hwang sat atop one of the biggest — and perhaps least known — fortunes on Wall Street. Then his luck ran out.

Mr. Hwang, a 57-year-old veteran investor, managed $10 billion through his private investment firm, Archegos Capital Management. He borrowed billions of dollars from Wall Street banks to build enormous positions in a few American and Chinese stocks. By mid-March, Mr. Hwang was the financial force behind $20 billion in shares of ViacomCBS, effectively making him the media company’s single largest institutional shareholder. But few knew about his total exposure, since the shares were mostly held through complex financial instruments, called derivatives, created by the banks.

That changed in late March, after shares of ViacomCBS fell precipitously and the lenders demanded their money. When Archegos couldn’t pay, they seized its assets and sold them off, leading to one of the biggest implosions of an investment firm since the 2008 financial crisis.

Almost overnight, Mr. Hwang’s personal wealth shriveled. It’s a tale as old as Wall Street itself, where the right combination of ambition, savvy and timing can generate fantastic profits — only to crumble in an instant when conditions change.

in a 2019 speech. “I couldn’t go to school that much, to be honest.”

Grace and Mercy Foundation, a New York-based nonprofit that sponsors Bible readings and religious book clubs, growing it to $500 million in assets from $70 million in under a decade. The foundation has donated tens of millions of dollars to Christian organizations.

“He’s giving ridiculous amounts,” said John Bai, a co-founder and managing partner of the equity research firm Fundstrat Global Advisors, who has known Mr. Hwang for roughly three decades. “But he’s doing it in a very unassuming, humble, non-boastful way.”

But in his investing approach, he embraced risk and his firm ran afoul of regulators. In 2008, Tiger Asia lost money when the investment bank Lehman Brothers filed for bankruptcy at the peak of the financial crisis. The next year, Hong Kong regulators accused the fund of using confidential information it had received to trade some Chinese stocks.

In 2012, Mr. Hwang reached a civil settlement with U.S. securities regulators in a separate insider trading investigation and was fined $44 million. That same year, Tiger Asia pleaded guilty to federal insider-trading charges in the same investigation and returned money to its investors. Mr. Hwang was barred from managing public money for at least five years. Regulators formally lifted the ban last year.

ViacomCBS announced plans to sell new shares to the public, a deal it hoped would generate $3 billion in new cash to fund its strategic plans. Morgan Stanley was running the deal. As bankers canvassed the investor community, they were counting on Mr. Hwang to be the anchor investor who would buy at least $300 million of the shares, four people involved with the offering said.

But sometime between the deal’s announcement and its completion that Wednesday morning, Mr. Hwang changed plans. The reasons aren’t entirely clear, but RLX, the Chinese e-cigarette company, and GSX, the education company, had both spiraled in Asian markets around the same time. His decision caused the ViacomCBS fund-raising effort to end with $2.65 billion in new capital, significantly short of the original target.

ViacomCBS executives hadn’t known of Mr. Hwang’s enormous influence on the company’s share price, nor that he had canceled plans to invest in the share offering, until after it was completed, two people close to ViacomCBS said. They were frustrated to hear of it, the people said. At the same time, investors who had received larger-than-expected stakes in the new share offering and had seen it fall short, were selling the stock, driving its price down even further. (Morgan Stanley declined to comment.)

By Thursday, March 25, Archegos was in critical condition. ViacomCBS’s plummeting stock price was setting off “margin calls,” or demands for additional cash or assets, from its prime brokers that the firm couldn’t fully meet. Hoping to buy time, Archegos called a meeting with its lenders, asking for patience as it unloaded assets quietly, a person close to the firm said.

Those hopes were dashed. Sensing imminent failure, Goldman began selling Archegos’s assets the next morning, followed by Morgan Stanley, to recoup their money. Other banks soon followed.

As ViacomCBS shares flooded onto the market that Friday because of the banks’ enormous sales, Mr. Hwang’s wealth plummeted. Credit Suisse, which had acted too slowly to stanch the damage, announced the possibility of significant losses; Nomura announced as much as $2 billion in losses. Goldman finished unwinding its position but did not record a loss, a person familiar with the matter said. ViacomCBS shares are down more than 50 percent since hitting their peak on March 22.

Mr. Hwang has laid low, issuing only a short statement calling this a “challenging time” for Archegos.

Kitty Bennett contributed research.

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China’s New Rules Worry Foreign Banks and Companies

SHANGHAI — To defend against accusations by Washington and others that it doesn’t play fair on trade, Beijing could point to the banks. Chinese leaders have been steadily lowering the barriers they had erected around the country’s vast financial system, giving Wall Street and European lenders a greater shot at winning business in the world’s second-largest economy.

Now the walls are going up again.

New Chinese rules have sharply limited the ability of foreign banks to do business there, making them less competitive against local rivals, according to three people with knowledge of the directives. One set of rules enacted in December and January restricts how much money foreign banks can transfer into China from overseas. Another that took effect on Wednesday required many foreign banks to make fewer loans and sell off bonds and other investments, two of the people said.

The new rules have caused a stir among the global bank executives and foreign companies in China that depend on those lenders for money, the people said. Among other concerns, they worry that the rules could make foreign-owned businesses more dependent on China’s state-run banking system for the money they need to grow. That dependence could give Beijing another potential pressure point to use as it squares off against Washington and others over trade, human rights, geopolitics and other sticky issues.

Banks and trade groups have been reluctant to speak publicly for fear of triggering further regulatory measures. But in a January letter to China’s central bank that was reviewed by The New York Times, the European Union Chamber of Commerce in China raised concerns about the money transfer limits.

encouraged boycotts of foreign businesses like H&M, the Swedish retailer, and Nike, the American athletic brand, after they vowed not to use cotton made by forced labor in Xinjiang.

The reasons behind China’s new banking rules aren’t clear, though they appear to have little to do with the tense political environment. They seem to be aimed instead at stemming big, potentially disruptive flows of money into the country.

surpassed the United States last year by taking in $163 billion worth of direct investments in factories, office buildings, companies and other assets.

Big money flows into a country can also make its currency rise in value — and China appears to working hard to counter that.

China’s currency, the renminbi, rose sharply in value against the U.S. dollar in the second half of last year. In May, $1 was worth about 7.15 renminbi. By year’s end, $1 bought about 6.5 renminbi. That rise was bad news for China’s exporters because it made their goods less competitive overseas.

But since the Chinese government enacted its new banking rules, the currency has begun to weaken. It now stands at about 6.6 renminbi to the dollar.

The new rules alone aren’t likely significant enough to account for the sudden halt to the renminbi’s rise. But they join other moves made by the Chinese government in recent months that have made moving money into China slightly harder and moving it out slightly easier. Combined, they could put pressure on the renminbi to weaken.

“This has started since last October, and they are all on the same side,” said Michael Pettis, a finance professor at Peking University.

Outside factors have likely contributed to the renminbi’s shift, including the resurgence of the U.S. economy, which could lead investors to steer their money there instead.

Chinese officials have stressed in recent months that their country is open to foreign investment, particularly banking.

“The inflow of foreign capital is inevitable, but so far, the scale and speed are still within our control,” Guo Shuqing, the chairman of the China Banking and Insurance Regulatory Commission, which has worked closely with the central bank on the new policies, said during a news conference on March 2. “We continue to encourage foreign financial institutions to enter China for shared development.”

In an unsuccessful attempt to head off a trade war with the Trump administration, China gradually relaxed or removed limits on foreign banks, insurers and money management firms. Big banks responded by expanding their mainland operations, including Citigroup, Credit Suisse, Goldman Sachs, HSBC, J.P. Morgan Chase, Morgan Stanley and UBS.

The global financial environment has encouraged money flows into China. With near zero interest rates elsewhere, international banks borrowed cheaply abroad. Until the new rules kicked in, they could send that money to China and lend or invest it there, reaping higher returns.

The first of the new rules, issued in a memo to banks in December, appeared to be aimed at that trend. That rule limited the ability of global banks to raise money overseas and move it into China. The rule is being phased in through November but was written in a way that has already had a big effect on financial contracts involving bets on the renminbi’s direction, said the people familiar with the notice.

Another measure communicated directly by Chinese regulators to foreign banks three weeks ago concerned the size of bank balance sheets, two of the people said.

Concerned about the rapid growth of credit in the Chinese economy, regulators ordered domestic and foreign banks to limit their balance sheets by Wednesday night to show only slight growth from last year. Because China has recently loosened limits on foreign purchases of bonds, many foreign banks had been buying more bonds for sale to foreign customers, expanding their balance sheets.

The full impact of the new rules will depend on how long they stay in place. Eswar Prasad, a Cornell University economist, predicted that China would eventually resume opening up to foreign financial institutions.

“They don’t want to scare off foreign investors in the medium to long term,” he said.

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