Exchange Invest Weekend: 12th March

In BigWorld

From Exchange Invest 2297: 11th, March 2022: Friday

A fascinating side issue arising from the Russian invasion of Ukraine: leased aircraft and a big lump of risk. Wizzair — a CEE discounter has 4 planes stuck in Ukraine. That’s the tip of the iceberg.

War and western sanctions means cancelled aircraft leases. Russian airlines have around 780 planes leased, of which 515 are foreign leases, mostly from Irish financing companies.

The process is that if a lease is cancelled, then the plane is uninsurable at which point it can’t fly. Thus one Aeroflot flight from Moscow to Tel Aviv last week apparently had to land in Sochi when its lease was terminated in mid air. Lease terminations have been at record levels since Russian tanks rumbled across the Ukrainian border. Leasing market leader AerCap alone has 152 planes ‘trapped’ in Russia according to aviation data provider IBA (5% of their portfolio).

Ukraine and Russia are now, for different reasons, no fly zones for commercial airliners (war / sanctions) so hardware is unlikely to exit soon.

Putin’s United Russia party is pushing legislation which confiscates all the aircraft. Here the acute financial pressure (ever tried processing a lost aircraft claim?) switches from the leasing companies to the insurers. Lessors tend to have 2 policies, for non-payment of the lease itself and being unable to repossess the plane.

Expect much talk of ‘Hull War and Allied Perils’ clauses and ultimately I worry how the insurance business will emerge from the other side. We’re talking multi-billions of dollars of dollars. A simple A320 entry model lists at $101 million. So, (yes, please stop drooling litigators, it’s unseemly) 515 leased aircraft at even a low figure of 100 million bucks a fuselage… Google calculates that as 51,500,000,000.

Now for those of you finding that number somewhat abstract, the record total gross annual premium written at Lloyds in a year (across ALL business lines) was 2019 which amounted to GBP 35,905,000,000, in USD a smidgeon shy of $49,000,000,000.

Collateral? Waterfalls? Certainly, I would be concerned the concerns over Nickel trading on LME this week are utterly minuscule compared to the crunch ahead for insurers in the aviation sector.

IPO-VID LIVESTREAM

NEW WEEK TUESDAY

Season 10: Episode 4 — IPO-VID Livestream 058

IPO-VID Guest: Trabue Bland

Tuesday, March 15th: 1800 UK, 1900 CET, 1300 EST

“Master Of ICE Futures”

In December 2021, it was announced that Trabue Bland will oversee all of ICE’s Exchanges. Formerly VP of Regulation for Intercontinental Exchange Inc he has most recently been President of ICE Futures U.S., & also serves on the Commodity Futures Trading Commission Energy and Environmental Markets Advisory Committee.

Prior to joining ICE in 2007, Bland was Legal Counsel to Acting Chairman Walter Lukken at the CFTC. He was also a trial attorney in the Division of Enforcement and an attorney in the Division of Clearing and Intermediary Oversight having previously served in private practice

Watch the stream on:

Facebook

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YouTube

NOW ONLINE!

Season 10: Episode 3

IPO-VID Livestream 057

IPO-VID Guest: Nigel Feetham

“Nigel Feetham -FinTech Renaissance Man”

Nigel Feetham QC is a barrister, the Head of Financial Services and a senior partner of the leading Gibraltar law firm Hassans. He has served on the Decision Making Committee (an independent statutory committee of the Gibraltar Financial Services Commission) as well as having been a non-executive member of the Board of the GFSC.

He has been actively involved in various strands of fintech and is a leading expert on protected cell company structures and more broadly the insurance sector. Nigel has also published several law books and was formerly a visiting professor of law at a U.K. university.

Watch the Stream on:

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YouTube

IPO-VID LIVESTREAM PODCAST

Episode 38: “Victory or Death? — AMA (Ask Me Anything)”

In IPO-VID Episode 38: In an Ask Me Anything format was presented by yours truly, as I discussed my latest book “Victory or Death?: Blockchain, Cryptocurrency & the FinTech World.” — enjoy!

Available via all the usual podcast sources:

Anchor

Spotify

Google Podcasts

Apple Podcast

EI Weekly Podcast 135

LSEG post hyper-average numbers with a hail Mary dividend rise to boot, while the National Stock Exchange of India seeks a new CEO, and the former CEO Chitra is Cuffed.

And is this a sign of the brave new Asia-centric world as the west declines? Nickel trading halted at LME due to a position taken by a man we’ve never heard of from a company that was unknown to this particular podcast presenter (despite it having 56,000 employees — okay, okay, I must be slacking) based in the city I struggled to find on a map.

The Exchange Invest Weekly Podcast 135

Victory Or Death

20 years on from the first fintech bestseller “Capital Market Revolution!”… “Victory Or Death” is a must read book for anyone interested in the intersection of Blockchain, Cryptocurrency and FinTech as part of the whole future of finance.

Available worldwide.

Podcasts This Week

Episode 286: NYSE President Lynn Martin Is Bullish On Using Data To Move Markets

Inside The ICE House

Waters Wavelength Podcast: Tradeweb’s Bruni On Electronification Of Repo Markets

WatersTechnology

Parish Notes

It’s almost time to pack, only Covid tests to go & concomitant form filling — in previous times most folks probably thought “PLF” was the acronym for a Middle Eastern terrorist entity. Yip, for the first time in years, it’s Rat’s Mouth-wards ho for PLY (an acronym hopefully not considered in the same vein as “PLF”).

My Boca focus is Valereum, representing our purchase of Gibraltar Stock Exchange (regulatory permission pending) and thus my day job of building markets which is why I invested in the delegate fee.

Thus alas Exchange Invest will not be covering the FIA Boca Raton conference.

For the record, we had asked for my wife to be accredited for the media side. While this has in the past proven fine with sundry organisations like the EU… Alas an FIA apparatchik refused the request.

Make of that what you will, it’s certainly a pity to see an industry organisation actively eschewing an offer of publicity from Exchange Invest. FIA goodwill? Clearly not happening in some offices and not the first time either, alas. Parishioners may think it reflects the view of the futures brokers concerning exchanges but I suspect that is an unreasonable assertion. Who knows, perhaps the FIA are cooperating on media censorship with Mad Vlad of Moscow?

So in response to various PR enquiries and as a pre-apology to any readers who spent sponsorship dollars in the hope of some good publicity, EI will not be formally covering Boca events.*

*That said our best Boca moments usually happened when we didn’t turn up — scooping the news of CME bidding for NEX while on the other side of the Atlantic, from entirely the wrong timezone remains an EI highlight.

Macro Thoughts

Editorial | US Dollar Is No Longer King As Asean Adopts Currency Swaps

South China Morning Post

Why Is There A Global Shipping Container Crisis?

South China Morning Post

COVID-19

Sage Admits Its Models Were ‘At Variance To Reality’. But Why?

The Spectator

PLY: We reach an interesting point in the narrative. Covid is endemic (as predicted it would be within 2 years — almost 2 years ago… Do we maintain a Covid section in the weekend edition? I say yes because we want to see how the blob morphs or protects the linear charlatans who inflicted lockdowns and many other regulatory discombobulations which ultimately achieved little other than gratification of an arrogantly inept elite of scientists (sic).

Thankfully Professor Graham Medley, chair of the Sage modellers, has accepted that his statistics were, let’s face it, rubbish or “at variance to reality” as has become the blob phrase. That said, as can be read in the above article, the blobsters are still lying / covering their backsides / delusional.

Of Interest

As always, a review of interesting reading to provoke thoughts and consideration…

These Students Want To Revolutionise The Weather Prediction Market With Hyperlocal Forecasting Startup

Your Story

PLY: “ The trouble with weather forecasting is that it’s right too often for us to ignore it and wrong too often for us to rely on it.” — Patrick L Young

Grape Expectations: Wine Is Starting To Attract Big Money Among Investors

Financial Post

How Nixon’s Visit To China 50 Years Ago Changed The World Forever

South China Morning Post

Women Entrepreneurs Are An Overlooked Source Of Growth And Job Creation

The Brussels Times

Branch Banking To Be Dead And Gone In Europe By 2025

City A.M.

The Commodity Kings: Have Traders Finally Discovered A Moral Compass?

The Spectator

Last Word

Catch up Monday for Exchange Invest 2299…

the future continues in the water cooler for the bourse business…

-Patrick

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