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(Bloomberg) —

Four people found guilty of cooperating with Israel’s Mossad intelligence service were executed in Iran early Sunday, according to state-run IRNA news agency.

The people were accused of “stealing and damaging public and private property, abduction and making forced confessions” with Mossad’s assistance, according to the report.

Three others were given prison sentences of up to 10 years for their complicity. The report also said they used firearms for abduction and were paid by the Mossad in cryptocurrencies.

Tasnim didn’t specify whether the people were arrested in connection with anti-government unrest that’s gripped Iran since mid-September.

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(Bloomberg) —

Reports of the death of globalization are looking greatly exaggerated.

Yes, a US-China trade war, a global pandemic, Brexit and Russia’s war in Ukraine have rattled the once-entrenched ways that the world’s largest economies trade with each other. Such events are beginning to transform supply chains in important ways.

But trade experts also warn that it’s premature to declare the end of a world economy stitched together by cross-border commerce.

The shifting contours of the global trading system mark a kind of “reglobalization” where multinational companies are adapting their trade networks to accommodate the new economic and geopolitical challenges.

Why it matters: Supply chains could become more robust, and possibly more costly due to fewer efficiencies and geographic proximity, but more reliable under less economic pressure from strategic foes.

Here are seven ways the world’s largest trading powers are rewiring their traditional relationships — from some marginal, perhaps temporary shifts taking place to what might be the beginnings of longer-term structural realignments:

Following Brexit, exporters in the UK experienced significant changes to their ability to trade with European Union member states. The UK Trade Policy Observatory estimates that UK exports to the EU decreased by 14% after the UK-EU Trade and Cooperation Agreement went into effect on Jan. 1, 2021. Certain sectors — like the UK fashion industry — were particularly hard hit by the reintroduction of tariffs, cross-border regulations and other customs formalities. 

As the pandemic snarled global supply chains, US policymakers urged companies to look at ways to reinforce their supply chains and reduce American economic dependence on China and other authoritarian regimes. The Biden administration’s push toward “friend-shoring” production and manufacturing has steadily resulted in increased US trade between the US and its traditional allies in Europe. 

The US remains China’s single most important export market. However, US sanctions, tariffs and export restrictions are encouraging Chinese companies to diversify their export destinations and expand access to non-US markets, particularly in the Asia-Pacific region. The creation of the 15-nation Regional Comprehensive Economic Partnership will further accelerate China’s regionalization trend in the years to come. 

US sanctions and the Biden administration’s decision to revoke Russia’s most basic World Trade Organization rights have effectively severed American economic ties with Russia. As a result, Russia now trades fewer goods with the US than former American strategic foes like Iraq.

China’s goal of “reunifying” the democratically governed island of Taiwan is causing frictions with its trading partners. Lithuania became a key example in 2021 when it opened a de facto Taiwan mission in Vilnius. That provoked a backlash from Beijing and resulted in a 75% drop in Lithuanian exports to China. In recent years, the US, EU, Canada and Australia have begun to push back against China. 

Following Russia’s invasion of Ukraine, Germany actually increased its imports from Russia in order to secure access to critical goods before EU export restrictions entered into force. German imports of Russian goods have now fallen by nearly 40% compared with the same period a year ago. 

Washington’s concerns about China’s manufacturing capacity for semiconductors is propelling a massive shift in the way companies produce the chips needed for products ranging from cars and refrigerators to military aircraft and missiles. Over the next five years semiconductor companies will collectively spend more than $110 billion building new semiconductor fabrication plants outside of China, according to Cowen Inc.  

–With assistance from Zoe Schneeweiss.

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(Bloomberg) — LedgerX, one of the few solvent pieces of Sam Bankman-Fried’s crumbled FTX empire, is for sale and attracting interest from would-be buyers including crypto giants Blockchain.com and Gemini, according to people familiar with the matter.

The unit, which is registered with the US Commodity Futures Trading Commission as a derivatives exchange, was a cornerstone of Bankman-Fried’s efforts in Washington. It’s also considered one of the most valuable assets associated with FTX after more than 100 other entities filed for bankruptcy.  

New FTX Chief Executive Officer John J. Ray III and restructuring advisers have been poring over the company’s books in search of cash, cryptocurrency and assets that could be sold to help repay creditors. It’s unclear how much LedgerX, which had about $303 million in cash as of a Nov. 17 filing, may fetch in a sale.

In addition to Blockchain.com and Gemini, crypto exchange Bitpanda and event contracts trading platform Kalshi, which is also registered with the CFTC and uses LedgerX to clear trades, have expressed interest, the people said. There are about half a dozen other potential buyers and more could be added, said one of the people. 

Representatives for LedgerX, FTX, Blockchain.com, Gemini and Kalshi didn’t respond to requests for comment. Bitpanda Chief Executive Officer Eric Demuth said in an email that the firm wasn’t interested or considering the purchase. 

In a sign that talks are becoming more serious, at least some of the parties have signed non-disclosure agreements, some of the people said.

After FTX US purchased it last year, LedgerX sought approval for a controversial plan to clear crypto derivatives trades without intermediaries. The firm withdrew its application with the CFTC as the corporate group of companies filed for bankruptcy. 

As early as Wednesday, LedgerX planned to make $175 million available for use in FTX’s bankruptcy proceedings from a $250 million fund the company set aside as part of that application.

CFTC chairman Rostin Behnam previously told lawmakers his agency is in daily communication with LedgerX amid the FTX turmoil. The potential sale wasn’t discussed.  

–With assistance from Hannah Miller.

(Updates with Bitpanda CEO comment in fifth paragraph.)

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(Bloomberg) — Bill Ackman said Saturday that his recent comments on Sam Bankman-Fried were misinterpreted. 

Ackman, founder and chief executive officer of Pershing Square Capital Management LP, faced criticism after he tweeted on Nov. 30 that he believed SBF, as the founder of crypto exchange FTX is known, was telling the truth at the New York Times Dealbook Summit. Bankman-Fried denied trying to perpetrate a fraud, while acknowledging many errors at the helm of the company. 

FTX imploded last month after the exchange revealed an $8 billion hole in its balance sheet, fueling questions about whether it mishandled customer funds. Since then Bankman-Fried has embarked on an apology tour, accepting that his company broke its own rules but denying fraud. 

Read more: Inside Sam Bankman-Fried’s Bahamian Penthouse After FTX’s Fall

Ackman said Saturday that the collapse of FTX is “at a minimum, the most egregious, large-scale case of business gross negligence that I have observed in my career.” Still, the hedge fund manager said Bankman-Fried could have “civil rather than criminal liability” if he has told the truth.  

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(Bloomberg) —

Nissan Motor Co. Chief Executive Officer Makoto Uchida is heading to France for more talks with French partner Renault SA aimed at resetting a two-decade-old alliance, said people familiar with the situation.

Uchida will attend a board meeting of the operating alliance on Tuesday at Renault headquarters in Boulogne-Billancourt, outside Paris, said the people, who asked not to be identified discussing private matters. Nissan Chief Operating Officer Ashwani Gupta is also expected to attend, one person said. 

Nissan, Renault and junior alliance member Mitsubishi Motors Corp. are trying to reboot a partnership that’s become problematic over the years. Tentative plans for a meeting in London on Dec. 7 to discuss the alliance’s future were scrapped, the people said. 

Renault CEO Gets Union Support at Home as Nissan Talks Continue

Media representatives for Nissan and Renault declined to comment when contacted by Bloomberg News outside of normal office hours.

Discussions with Nissan started earlier this year as Renault began work to carve out its electric-vehicle business, known as Ampere. Nissan may invest $500 million to $750 million for a stake of about 15% in Ampere, but the agreement hinges on a wider deal that would see Renault trim its own 43% stake in Nissan to about 15% over time, Bloomberg has reported.

Power Imbalance

The shift would alleviate a power imbalance that’s been a source of friction between the companies for years. 

The three-way alliance holds meetings every month. Renault Chairman Jean-Dominique Senard and Chief Executive Officer Luca de Meo, along with Francois Provost, senior vice president of international development and partnerships, and Renault’s entire board of directors flew to Tokyo in November for in-person meetings, the people said. 

Nissan is in talks “every day” with Renault to bring the alliance “to the next step” and “become stronger together,” Uchida said in an interview with Bloomberg in New York on Thursday. 

Complex Talks

De Meo and Uchida still aim to sign a non-binding agreement before year-end, but the talks could also either drag on or collapse, with differences over shared technology and IP among the sticking points, the people said.

The alliance was struggling even before the 2018 toppling of Carlos Ghosn, who was then its chairman and widely seen as the glue holding the group together. The reset is all the more urgent as automakers globally grapple with a costly and difficult transition to electrification.

Senard and de Meo expressed optimism about the ongoing Nissan talks in recent weeks, but called the negotiations complex and cautioned about setting any deadlines. 

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(Bloomberg) — Moscow will intensify its cyber efforts to pressure the sources of Ukraine’s military and political support both domestic and foreign, according to Microsoft Corp.  

In a post on the company’s “On the Issues” blog, Clint Watts, general manager of Microsoft’s digital threat analysis center, urged customers to prepare for more Russian cyber attacks over the winter. 

“Russian military intelligence actors’ recent execution of a ransomware-style attack — known as Prestige — in Poland may be a harbinger of Russia further extending cyberattacks beyond the borders of Ukraine,” Watts said.  

Alongside almost two months of missile and drone strikes on Ukraine’s civilian infrastructure, there have been “complementary” cyber attacks on Ukrainian and foreign-based supply chains as well as “cyber-enabled influence operations,” he added. 

Read more: Pro-Russia Group Claims Cyberattack on European Parliament

In sum, those efforts are intended to “undermine US, EU, and NATO political support for Ukraine, and to shake the confidence and determination of Ukrainian citizens.”

Watts’ blog said that so far, Russian efforts to amplify popular dissent — for example, over high energy prices and inflation across Europe — have had limited impact, but they “foreshadow what may become broadening tactics during the winter ahead.”

Russian operatives are attempting to boost certain narratives online through state-affiliated media outlets and social media accounts, Watts said, including efforts to undermine elected officials and democratic institutions.  

–With assistance from Susanne Barton.

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(Bloomberg) — Elon Musk wrote Saturday that he’s seen “a lot of concerning tweets” about the recent Brazil election. 

“If those tweets are accurate, it’s possible that Twitter personnel gave preference to left wing candidates,” he said on Twitter.

Luiz Inácio Lula da Silva narrowly defeated President Jair Bolsonaro in Brazil’s presidential election, winning 50.9% of the votes in the Oct. 30 runoff. 

Musk visited Brazil earlier this year to discuss investment plans, implementation of new technology to monitor Amazon deforestation and a project to expand broadband internet to remote regions. 

Musk’s plans to purchase Twitter were praised then by Bolsonaro, who is under investigation in Brazil for allegedly spreading fake news. The president has had several of his own social media posts taken down by Twitter and Facebook after the companies determined he was spreading falsehoods, including about the safety of Brazil’s electronic voting system.

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(Bloomberg) — AT&T Inc. agreed to pay a $6.25 million penalty to settle an unusual lawsuit by federal regulators claiming its executives selectively disclosed nonpublic information about the company’s finances to Wall Street analysts.

The telecommunications giant won’t admit or deny the US Securities and Exchange Commission allegations under a settlement proposal filed Friday by government lawyers with a federal judge in Manhattan. Three AT&T executives who were also named in the agency’s March 2021 suit each agreed to pay a $25,000 penalty, also without admitting wrongdoing.

The SEC alleged that the three executives made private calls to analysts at about 20 firms, disclosing information that included its internal sales data and the impact on revenue. The analysts then reduced their revenue forecasts, the agency said. It said the point of the calls was to avoid a revenue miss for the company.

“We are committed to following all applicable laws and pleased to have resolution with the SEC,” Jim Greer, a company spokesman, said in an email.

Read More: AT&T Is Sued by SEC Over Information Disclosed to Analysts

The agency said the calls violated Regulation FD — or fair disclosure — which requires that material information be broadly disclosed by companies to the investing public.

“We applaud the SEC for penalizing the company and three executives for this flagrant illegal conduct,” Dennis Kelleher, president and chief executive officer of Better Markets, a nonprofit watchdog group, said in a statement. “But mere money penalties are too light to stop this widespread corporate practice of market manipulation by selectively disclosing material nonpublic information to handpicked firms, giving them a unique trading advantage to rip off unsuspecting investors.”

 

(Updates with comment by Better Markets CEO)

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(Bloomberg) — Analysts and investors are struggling to call a bottom in crypto stocks in the wake of a brutal month that ended with the head of BlackRock Inc. saying most digital-asset firms won’t survive. 

Cryptocurrency firms including Coinbase Global Inc., Galaxy Digital Holdings Ltd. and MicroStrategy Inc. all plunged more than 25% last month. The declines added to the pain of a dismal year amid a deep and extended plunge in Bitcoin and other digital tokens. While that trio of firms rallied this week, they’ve still wiped out roughly $52 billion of shareholder value in 2022.

Already reeling from the so-called crypto winter, investors were dealt a major blow with the high-profile collapse of Sam Bankman-Fried’s FTX exchange in early November, which sent Bitcoin tumbling. To top it off, BlackRock Chief Executive Larry Fink said this week that he expects most crypto companies will fold after FTX’s demise. A Schwab index tracking crypto-linked stocks is coming off its worst month since June, and is down 63% this year.

“Questions about whether crypto has a future have become prevalent after a year during which many tokens lost more than 70% of their value and the collapse of FTX has exacerbated a crisis of confidence that had started in the spring,” said Mark Palmer, an analyst at BTIG LLC.

Few, if any, companies connected to the sector have been spared during the selloff, with even banks like Silvergate Capital Corp. and Signature Bank taking hits. Mining stocks have been among the worst performers, with Marathon Digital Holdings Inc. and Hut 8 Mining Corp. both seeing their share prices cut roughly in half in November. 

FTX’s sudden downfall sparked fears of contagion across the industry, which ultimately became a reality this week when crypto lender BlockFi Inc. also filed for bankruptcy.

“We expect the crypto space to continue to be toxic for investors in the near-term and expect overall chain activity to be relatively quiet among users as we continue to wait out potential contagion effects as a result of the bankruptcy of FTX,” Chase White, an analyst at Compass Point, wrote in a note to clients.

Silvergate now finds itself playing damage control. The company, whose shares tumbled by a record 52% in November, said several weeks ago that its exposure to FTX represented less than 10% of its digital-asset deposits. This week, it said exposure to BlockFi was less than $20 million.

It’s been a similar situation for Coinbase. Chief Executive Officer Brian Armstrong took to Twitter multiple times in recent weeks in an attempt to reassure investors that the cryptocurrency exchange remains on solid footing. So far, it seems to have done little to sway traders and analysts.

Coinbase closed at a record low on Nov. 21 and has been downgraded by analysts at firms including Bank of America Corp. and Daiwa Securities, leaving it with its lowest number of buy ratings since August 2021, data compiled by Bloomberg show. Coinbase shares just snapped a four-week slide, but they’re still down about 80% this year, erasing about $44 billion in value.

Cryptocurrency mining stocks have fared even worse as soaring energy costs add to the challenge of sinking cryptocurrency values. Core Scientific Inc. has seen its share price crumble nearly 99% this year. In its third-quarter earnings release, the company said losses for the nine months through September had reached $1.7 billion and it’s also said it might have to file for bankruptcy if it can’t find additional funding.

The slump in crypto-mining stocks is problematic for a group that was already struggling to pay back $4 billion in loans tied to mining-equipment.

Read more: Fink Says Most Crypto Firms Will Die Off Following FTX Implosion

To be sure, Fink, whose firm had invested roughly $24 million in FTX, said he still sees potential in the technology underlying crypto, including instant settlement of securities.

And some money managers see an opportunity in the beaten-down stocks. Cathie Wood’s Ark Investment Management added crypto investments in the weeks following FTX’s bankruptcy, including in Coinbase, Silvergate and the Grayscale Bitcoin Trust. Wood also told Bloomberg TV that she stands by her forecast that Bitcoin — which traded at roughly $17,000 on Friday afternoon in New York — will hit $1 million by 2030.

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(Bloomberg) — Hello and welcome to the weekend.Thanksgiving holiday madness is over and there’s still time before the Christmas rush overtakes your life. Why not treat yourself to a spontaneous road trip this weekend? Gas prices have fallen to their lowest level since February, and the auto club AAA says the national average now sets you back around $3.55 per gallon. Hurricane season officially ended Wednesday so feel free to drive South.

You can also stay home and watch what the rest of the world calls football. The US takes on the Netherlands this morning, while Argentina battles Australia later in the day.  Toast America’s soccer victory or mourn its loss with a shot of bourbon made by veterans —  some of the proceeds go to charities that support our men and women in uniform. If lounging on the couch suits your mood today (with or without bourbon), check out our guide to the best 151 movies and shows to stream. 

How are you feeling about crypto these days? Sam Bankman-Fried opens up about what really went wrong at his collapsed cryptocurrency exchange FTX (“a few, very large, boneheaded decisions”), how much he reckons he used to be worth ($100 billion) and what he thinks happened to the $8 billion that went missing from the accounts. Diehard Bitcoin fans may want to prepare for more pain after last month’s 16% rout. Over the past decade, the largest token went on to have a weak December following declines in November, according to data compiled by Bloomberg.Your trusty savings account will get a boost if the Fed, pushed by the red hot labor market, raises interest rates further at its Dec 13-14 meeting. On the flipside though is higher mortgage rates. Home prices in 75 cities that used to rank better than the national average for affordability are now worse than average. A median-income household would have to spend its entire paycheck to purchase a median-priced home in Key West, Florida, leaving no money for anything else. Did you know Kim Kardashian has a private equity firm?  Well, she does and it’s expanding. Skky Partners just hired David Brisske from  investment firm Permira as a managing director. Co-founder Jay Sammons says they intend to hire more investment professionals “soon.’’  

If you’re wondering what to do with your own money next year, Bloomberg Intelligence analysts discuss their 2023 investment outlook for stocks in this podcast. Spoiler alert: Small caps look cheap.  

Enjoy the rest of your Saturday. We’ll be back tomorrow with a look-ahead to the coming week.

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