Finance

JPMorgan Chase CEO Jamie Dimon said Monday that while the U.S. economy is doing well, it would be a “huge mistake” to believe that it will last for years.
Topping his concerns include central banks reining in liquidity programs via “quantitative tightening,” the Ukraine war, and governments around the world “spending like drunken sailors,” the CEO said.
“To say the consumer is strong today, meaning you are going to have a booming environment for years, is a huge mistake,” Dimon said.

Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., speaks during the Institute of International Finance (IIF) annual membership meeting in Washington, DC, US, on Thursday, Oct. 13, 2022.
Ting Shen | Bloomberg | Getty Images

JPMorgan Chase CEO Jamie Dimon said Monday that while the U.S. economy is doing well, it would be a “huge mistake” to believe that it will last for years.
Healthy consumer balance sheets and rising wages are supporting the economy for now, but there are risks ahead, said Dimon, who was speaking at a financial conference in New York. Topping his concerns include central banks reining in liquidity programs via “quantitative tightening,” the Ukraine war, and governments around the world “spending like drunken sailors,” the executive said.

“To say the consumer is strong today, meaning you are going to have a booming environment for years, is a huge mistake,” he said.
The world’s largest economy has defied expectations for a downturn for the past year, including from prognosticators like Dimon, head of the biggest U.S. bank by assets. Last year, he warned that a potential economic hurricane was on the way, citing the same concerns around central banks and the Ukraine conflict. But the U.S. economy has proven resilient, leading more economists to expect that a recession might be avoided.
“Businesses feel pretty good because they look at their current results,” Dimon said. “But those things change, and we don’t know what the full effect of all this is going to be 12 or 18 months from now.”
While JPMorgan and other banks have been “over-earning” on lending for years because of historically low default rates, strains were emerging in parts of real estate and subprime auto lending, Dimon said.
“If and when you have a recession, which you’re eventually going to have, you’ll have a real normal credit cycle,” Dimon said. “In a normal credit cycle, something always does worse than” expected, he added.

Dimon on regulations, markets, China

Dimon struck a note of caution throughout the panel discussion. JPMorgan is repurchasing stock at a “lower level” than before, a pace which might last through 2024, he said, as the bank husbands capital to adhere to upcoming rules.
He called the new regulatory mandates “hugely disappointing” and pushed for greater transparency from regulators, saying that JPMorgan would have to hold about 30% more capital than European banks.
“Is that what they want? Is that good, long term?” Dimon asked. “What was the goddamn point of Basel in the first place?”
When asked about whether the IPO and merger markets were picking up given the upcoming Arm listing, Dimon said he encouraged CEOs to take action rather than waiting too long.
“I think the uncertainties out there ahead of us are still very large, and very dangerous,” Dimon said.
Among those risks is the deterioration in relations with China, he said. Prospects for JPMorgan operations in China went from looking bright to only “just OK” because of the rising risks, he said.
“I don’t expect war in Taiwan, but this can go south,” Dimon said. More

Qualcomm CEO Cristiano Amon.
Carlo Allegri | Reuters

Check out the companies making headlines in premarket trading Monday.
Tenable Holdings — The exposure management solutions provider rose 3% before the market opened following an upgrade to overweight from neutral at JPMorgan. The bank said the company is positioned to see better business fundamentals in the future.

Alibaba — Shares lost 1% after outgoing CEO Daniel Zhang unexpectedly quit its cloud business. In June, the company had said Zhang was leaving as chairman and CEO of Alibaba Group to focus on the cloud intelligence unit.
Qualcomm — The semiconductor stock jumped 7.4% premarket after saying Monday it will supply Apple with 5G modems for smartphones through 2026. Continued sales to Apple will benefit Qualcomm’s handsets business and could soften the blow of potentially losing a critical customer, analysts said. Apple’s shares were 1% higher premarket.
Kenvue — Shares added 3% in early trading after Deutsche Bank upgraded to buy from hold. The Wall Street firm said the slide in the Band-Aid maker has created an attractive entry point. The J&J spinoff has shed 15% since going public in May.  
Oracle — The database software provider gained 1.2% ahead of its quarterly earnings due postmarket Monday. Analysts surveyed by FactSet estimate earnings per share of $1.15 against company guidance of $1.12 to $1.16, and revenue of $12.47 billion. The stock has gained nearly 55% so far this year, boosted by excitement around generative AI.
Tesla – The electric vehicle stock popped more than 6% before the bell after Morgan Stanley upgraded shares to overweight from equal weight, citing autonomous driving growth. The Wall Street firm called software and services revenue the “biggest value driver” for Tesla.

J. M. Smucker, Hostess —  J.M. Smucker slumped 10% in early trading after the peanut butter and jelly maker agreed to buy Twinkies maker Hostess Brands for $34.25 per share in cash and stock, valuing the cupcake maker at roughly $5.6 billion, including debt. Shares of Hostess popped 17.3%. The deal’s expected to close by the end of January, 2024.
Meta — The Facebook parent rose 1.5% after the Wall Street Journal said Meta is developing a new AI system as capable as OpenAI’s most advanced model, and more powerful than the one it released two months ago called Llama 2. Meta hopes its new AI model will be ready next year, the report said.
RTX — Shares of the company formerly known as Raytheon Technologies fell 3% after it revealed an engine manufacturing flaw would lower its pretax earnings by $3 billion. The problem forced it to speed up inspections.
— CNBC’s Alex Harring, Hakyung Kim, Michelle Fox Theobald, Samantha Subin, Sarah Min and Kif Leswing contributed reporting. More

In a filing Monday, Instacart said it is setting an offer price of between $26 and $28 for its IPO.
At the higher end of the pricing scale, Instacart will be looking to net roughly $616 million in proceeds.
The IPO could also value Instacart at up to $9.3 billion on a fully diluted basis.

Instacart on Monday submitted an updated filing for its upcoming initial public offering, saying it is looking to raise up to $616 million of fresh capital alongside existing shareholders at a valuation of as much as $9.3 billion.
In the filing, Instacart said it is setting an offer price of between $26 and $28 for its IPO. Instacart said it would issue 22 million shares in total, comprising 14.1 million of newly issued shares from the company and 7.9 million shares from selling stockholders. At the higher end of that pricing scale, Instacart will be looking to net roughly $616 million in proceeds.

Instacart looks set to attract a valuation of between $8.6 billion and $9.3 billion. On a fully diluted basis, its share count will total 331 million. That’s including restricted stock units, stock options, and warrants.
Instacart previously said that multinational food giant PepsiCo would come on board as an investor in the company, purchasing $175 million of shares in a concurrent private placement. Goldman Sachs, one of the underwriters, will act as an agent in connection with the private placement and receive a fee equal to 1.5% of the total purchase price of shares sold.
Instacart said in its filing that Norges Bank Investment Management, Norway’s massive sovereign wealth fund, had also expressed interest in becoming a cornerstone investor in the firm’s IPO. Alongside TCV, Sequoia Capital, D1 Capital Partners, and Valiant Capital Management, the fund would purchase up to roughly $400 million in the offering.
However, underwriters “could determine to sell more, fewer, or no shares to any of the cornerstone investors, and any of the cornerstone investors could determine to purchase more, fewer, or no shares in this offering,” Instacart added.

Instacart, one of the largest U.S. online grocery delivery firms, will be among the biggest public flotations to take place this year. The company competes with traditional retailers, as well as tech firms like Amazon, DoorDash, GoPuff, and Grubhub.

The company’s updated IPO filing comes as British chip design firm Arm prepares for a blockbuster debut that could value it at as much as $52 billion. Last week, Arm said the New York IPO could fetch it up to $4.87 billion in fresh capital.
The debuts will put the IPO market to the test after a year-long freeze on stock market listings as a result of higher interest rates and rising inflation. Investors are hoping for a good showing from the latest raft of public offerings — but performance will depend heavily on market conditions when the companies actually list.
Clarification: The headline of this story has been updated with the valuation using the total share count on a diluted basis. More

Over 2,500 attendees are gathered to hear hip-hop legends Method Man and Redman, and financial headliners like Jeremy Siegel, Jeff Kleintop, Emily Roland, Cliff Asness, Jeff Gundlach and Jan van Eck. 
Plus there’s dancing, swimming, surfing, yoga, pizza and sushi and beer and wine sessions.
Over four days, the emphasis is on personal interaction, with numerous “networking dinners” — giant parties for young RIAs and investors to get together and socialize. 

Beach goers take to the water to cool off amid high temperatures Wednesday, June 10, 2020 in Huntington Beach, CA.
Allen J. Schaben | Los Angeles Times | Getty Images

Huntington Beach, California
Over 2,500 investors and financial advisors have descended on Huntington Beach, California — a.k.a. Surf City USA —for a financial conference. 

A financial conference on a beach? In Huntington Beach, home to nine miles of shoreline and the world center of beach volleyball? 
Yep.  And I mean, it is on the beach. 
And who are attendees coming to see? They’re coming to see big stars. 
They’re coming to see Method Man & Redman. 
Wait, who? They’re coming to see hip-hop legends Method Man (Wu-Tang Clan) & Redman (Def Squad), who will perform Tuesday night. 

They’re not the only stars. There will be financial luminaries as well. Jeremy Siegel from Wharton/WisdomTree. Jeff Kleintop from Charles Schwab. Emily Roland from John Hancock. Cliff Asness from AQR. Jeff Gundlach from DoubleLine. ETF and commodity maven Jan van Eck. 
But this is one of those conferences where the social interaction is as important as the content. 
Reinventing the financial conference 
Welcome to FutureProof, billed as “the largest gathering of top-tier wealth management professionals, CEOs, CTOs, COOs, and fast-growing financial advisors.” 
It’s the brainchild of Barry Ritholtz, co-founder, chairman, and chief investment officer of Ritholtz Wealth Management, and CEO Josh Brown. 
“Coming out of the pandemic, it was obvious to us that the traditional financial conference was past its sell-by date,” Ritholtz told me. “Everybody was bored with lectures and tedious panels forecasting the future in giant windowless conference centers. Instead, we imagined what it would be like if events were more social and interactive and useful and (dare I say) fun! That was how FutureProof came about.” 
Yoga?  It’s so 2008 except… 
Those of you accustomed to going to conferences with a Yoga class at 5:45 a.m. on the agenda (who goes to those things?), prepare for the New Hipness. 
Straight Yoga? It’s so 2008. Oh sure, there’s a yoga class, but you’ll have a special instructor. You’ll have: 
Seaside Yoga: The Path to Mindfulness with a Goldman Sachs Instructor. Seriously? Goldman Sachs will teach me how to do yoga? What’s next? Acupuncture with Morgan Stanley? Chiropractic with Wells Fargo? Massage therapy with JP Morgan? 
Keep dancing, you fools 
Forget yoga. There’s a concerted effort to keep everyone dancing and swimming, starting with the FutureProof Kickoff Party (“relax, unwind and connect”) and continuing with: 
Health is Wealth: Surfing.  “We invite you to join us and embrace the thrill of learning to surf!” 
Dance Culture: An Interactive Session.  “Immerse yourself in the rhythm, movements, and rich history of Salsa dancing!” 
OK that’s an improvement, but I think I’d rather go to: 
Battle of the Buds: Wine vs. Craft Beer.  “Engage in a lively and interactive debate as you explore the unique characteristics, flavor profiles and food pairings of both wine and craft beer.” 
Now I’m starting to get interested. I’ll have to squeeze that in between: 
Mastering Pizza Dough: Techniques for any Home Pizza Maker.  “Learn the secrets to achieving the ideal texture, flavor, and elasticity as you explore different kneading, proofing and shaping techniques.” 
Let’s Roll: The Art of Sushi Making. “This interactive session offers a unique opportunity to unleash your creativity and refine your knife skills.”  Refine your knife skills?  OK…might be safer to just go to Mastering the Grill:  Barbecue Techniques. 
Oh yeah. The financial content
Last year’s conference attracted 2,000 attendees, about half mostly young RIAs (Registered Investment Advisors), several hundred active trader types, ETF sponsors and a smattering of vendors. 
Not surprisingly, much of the content is geared toward RIAs, with topics like, “The Personal Brand Blueprint: 5 Easy Steps to Attract High-Value Clients in 2023.” 
For investors, there is the ubiquitous tech bull Dan Ives from Wedbush, with “Five Tech Predictions for 2024.” 
DoubleLine’s Jeff Gundlach will return again this year, and will speak with my CNBC colleague Scott Wapner on Halftime Report on Tuesday. 
I will moderate a panel on “Global Macro Predictions” with Professor Siegel, Jeff Kleintop and Emily Roland. 
Morningstar will also be out in force, with stalwarts Christine Benz, Jeffrey Ptak, Ben Johnson and PitchBook’s Nizar Tarhuni talking about everything from retirement to 401(k) planning to the difficulty of market timing to private equity investing. 
Ritholtz Wealth Management’s bloggers and podcasters Michael Batnick and Ben Carlson will also dispense advice. 
But even amidst this ocean of content over four days, the emphasis is still on personal interaction. There’s numerous “networking dinners” which, if they are anything like last year’s, are giant parties for young RIAs and investors to get together and socialize. 
And that is where much of the real action happens. Last year I met a 35-year old RIA at one of these parties on the beach on a Monday night. He had flown in with his team the day before. 
“I brought all seven members of my team,” he told me. “It’s a team-building thing. I’m going to see a bunch of the speakers, but mostly I’m here to meet other people who do what I do.” 
And that seems to be the theme:  “Meeting other people who do what I do.” RIAs. Young investors. Financial stars. Bloggers. ETF sponsors. Hip-hop stars. 
It’s a strange brew, but exhilarating.  
Who knows what could happen? Maybe Method Man will announce Wu-Tang Clan is going on tour and is launching an ETF.  
Hey, a typical conference it’s not. More

Among all the central banks, the Bank of England has been the most aggressive in selling the bonds purchased to bolster the economy during the quantitative easing era, according to Christopher Mahon of Columbia Threadneedle.
Yields on benchmark 10-year U.K. gilts rose from around 2.99% in early February to a 13-year high of almost 4.75% in mid-August, before moderating slightly. Yields move inversely to prices.
“In our view, the actions of the … Bank of England could again mark the bottom of the market,” Mahon said.

People walk outside the Bank of England in the City of London financial district, in London, Britain, January 26, 2023.
Henry Nicholls | Reuters

LONDON — The Bank of England’s rapid pace of bond sales is creating a “selling gold at the bottom” moment for investors, according to Christopher Mahon, head of dynamic real return at Columbia Threadneedle.
In the aftermath of the 2008 financial crisis, the central bank spent 13 years buying up £895 billion ($1.12 trillion) of U.K. government bonds — known as gilts — while interest rates were historically low.

Now, despite the fact that the value of gilts has fallen dramatically since then, the central bank is unwinding those holdings, and fast.
Among all the central banks, the Bank of England has been the most aggressive in selling the bonds purchased to bolster the economy during the quantitative easing era, according to Mahon.

“Selling bonds on this scale has never been done before, nor has it been tried when bond markets have had to digest the ramifications of both high inflation and substantial rate hikes,” he said in a video blog last week.
The BOE is crystallizing massive losses as a result of the sales, which are being backstopped by the U.K. Treasury. In late July, the central bank estimated that it would require the Treasury to indemnify £150 billion ($189 billion) of losses on its asset purchase facility (APF).
“Our analysis suggests the reduction has been the equivalent of around 7.5% of all outstanding government debt,” Mahon said. “This is a huge amount, and is effectively additional issuance that the market has had to digest.”

Yields on benchmark 10-year U.K. gilts have risen from around 2.99% in early February to a 13-year high of almost 4.75% in mid-August, before moderating slightly. Yields move inversely to prices.
Columbia Threadneedle’s analysis suggests that the pace of bond sales is 70% faster than that of the U.S. Federal Reserve and around twice the rate of the European Central Bank.
“It’s unclear to us why the Bank has been so hasty. The fast pace of these sales has been pushing down on gilt prices, it’s been worsening the losses for the taxpayer, and worse, it crystallizes what would have been paper losses into a drain that the U.K. Treasury has to make good,” Mahon said.
“For markets, the pace of such hefty selling pressure by the U.K. central bank is in our view, one factor why gilts have struggled this year and struggled to find buyers.”

Investment opportunity?

The U.K. certainly has a shaky track record when it comes to the mass disposal of assets.
Between 1999 and 2002, the U.K. controversially offloaded 401 metric tons of gold — out of a total holding of 715 tonnes — at what turned out to be the bottom of the market for the precious metal.

For Mahon, there are clear similarities in how the Bank of England is now disposing of its gilt stock.
“Similar pre-announcements of sales are used which act to depress the prices, similar disinterest is expressed by the Bank of England in the prices achieved or the scale of the losses crystallized, and similarly, there is a big fear in the market that the pace of the sales could even increase,” he said.
“In our view, the actions of the … Bank of England could again mark the bottom of the market.”
A spokesperson for the Bank declined to comment when contacted by CNBC.
Mahon added that, with inflation coming down and peak interest rates in sight, this could provide an opportunity for investors and “is one of the reasons why we think that gilts and indeed fixed income are very attractively priced.”

Next meeting

The central bank’s Monetary Policy Committee is next due to meet on Sept. 21. At its last meeting, the committee did not provide any further information on its plans for gilt sales, but Deputy Governor Dave Ramsden in July suggested that the pace of quantitative tightening could be set to increase.
In a research note last month, BNP Paribas economists predicted that the central bank will hike the pace of gilt sales from £80 billion a year to £95 billion.
The Bank of England, for its part, disputes that the asset sales are affecting markets in any substantive way. In his July speech, Ramsden said analysis of the evidence to date suggested that “QT [quantitative tightening] effects on gilt yields, while greater than zero, appear to be materially smaller than the effects of QE [quantitative easing].”
“Given our experience so far, as a very rough indication of scale, Bank staff estimate that a one-off additional £80 billion of QT relative to expectations is likely to increase 10-year gilt yields by less than 10 bps in prevailing market conditions,” Ramsden added. More

“Ever since the Chinese housing bubble burst,” said Richard Koo of the Nomura Research Institute in a recent talk, “I’ve been getting tonnes of calls from Chinese journalists, economists, investors and sometimes policymakers asking me, ‘Are we going the way of Japan?’”Mr Koo is a good person to ask: he has devoted his career to studying the aftermath of financial excess. When the American economy’s recovery from the first Gulf War faltered in 1991, his then boss at the New York Federal Reserve, Edward Frydl, began to worry about an overhang of debt and commercial property. This was “feeding a pervasive financial and economic conservatism among businesses and consumers”, Frydl argued. Demand for credit was subdued, because firms were “directing their efforts toward balance-sheet restructuring”. To describe these strains, he coined the term “balance-sheet recession”.Mr Koo later realised that Japan was suffering from the same overhangs, only far worse. After its stockmarket bubble burst in 1989, share prices plunged by 60% in less than three years. Property prices in Tokyo fell for over a decade. Deflation, by some measures, persisted even longer. Even the price of golf memberships—tradeable on organised exchanges in Japan—tumbled by 94%. Many companies, which had borrowed to buy property or shares in other firms, found themselves technically insolvent, with assets worth less than liabilities. But they remained liquid, earning enough revenue to meet ongoing obligations. With survival at stake, they redirected their efforts from maximising profit to minimising debt, as Mr Koo put it.In a healthy economy, corporations use funds provided by households and other savers, ploughing the money into growing their businesses. In post-bubble Japan, things looked different. Instead of raising funds, the corporate sector began to repay debts and accumulate financial claims of its own. Its traditional financial deficit turned to a chronic financial surplus. Corporate inhibition robbed the economy of much-needed demand and entrepreneurial vigour, condemning it to a deflationary decade or two.So is China going the way of Japan? Chinese enterprises have accumulated even more debt, relative to the size of the country’s gdp, than Japan’s did in its bubble era. China’s house prices have begun to fall, damaging the balance-sheets of households and property firms. Credit growth has slowed sharply, despite cuts in interest rates. And flow-of-funds statistics show a narrowing in the financial deficit of China’s corporations in recent years. In Mr Koo’s judgment, China is already in a balance-sheet recession. Add to that a declining population and a hostile America and it is easy to be gloomy: will it go the way of Japan? It should be so lucky.Look closer, though, and the case is less conclusive. Much of the debt incurred by China’s corporations is owed by state-owned enterprises that will continue to borrow and spend, with the support of state-owned banks, if required by China’s policymakers. Among private enterprises, debt is concentrated on the books of property developers. They are reducing their liabilities and cutting back on investment in new housing projects. But in the face of falling property prices and weak housing sales, even developers with robust balance-sheets would be doing the same.The end of China’s property boom has made households less wealthy. This is presumably breeding conservatism in their spending. It is also true that households have repaid mortgages early in recent months, contributing to the sharp slowdown in credit growth. But surveys show that household debts are low relative to their assets. Their mortgage prepayments are a rational response to changing interest rates, not a sign of balance-sheet stress. When interest rates fall in China, households cannot easily refinance their mortgages at the lower rates. It therefore makes sense for them to repay old, relatively expensive mortgages, even if that means redeeming investments that now offer lower yields.What about the switch in corporate behaviour revealed by China’s flow-of-funds statistics, which show the corporate sector moving to a financial surplus? This narrowing is largely driven by the crackdown on shadow banks, points out Xiaoqing Pi and her colleagues at Bank of America. When financial institutions are excluded, the corporate sector is still demanding funds from the rest of the economy. Chinese businesses have not made the collectively self-defeating switch from maximising profits to minimising debts that condemned Japan to a deflationary decade.Japanese lessonsThese differences show China is not yet in a recession akin to Japan’s. And Mr Koo is himself keen to emphasise one “huge” difference between the two countries. When Japan was falling into a balance-sheet recession, nobody in the country had a name for the problem or an idea of how to fight it. Today, he says, many Chinese economists are studying his ideas.His prescription is straightforward. If households and firms will not borrow and spend even at low interest rates, then the government will have to do so instead. Fiscal deficits must offset the financial surpluses of the private sector until their balance-sheets are fully repaired. If Xi Jinping, China’s ruler, gets the right advice, he can fix the problem in 20 minutes, Mr Koo has said.Unfortunately, Chinese officials have so far been slow to react. The country’s budget deficit, broadly defined to include various kinds of local-government borrowing, has tightened this year, worsening the downturn. The central government has room to borrow more, but seems reluctant to do so, preferring to keep its powder dry. This is a mistake. If the government spends late, it will probably have to spend more. It is ironic that China risks slipping into a prolonged recession not because the private sector is intent on cleaning up its finances, but because the central government is unwilling to get its own balance-sheet dirty enough. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

Cryptocurrency company Ripple announced on Friday it will acquire Fortress Trust, a startup specializing in crypto infrastructure, for an undisclosed sum.
The deal will give Ripple a license in Nevada and allow it to expand beyond its core bread and butter of blockchain-enabled payments.
In May, Ripple agreed to buy Metaco, a Swiss provider of crypto custody services, for $250 million.

Brad Garlinghouse, chief executive officer of Ripple, speaks during the CoinDesk 2022 Consensus Festival in Austin, Texas, US, on Saturday, June 11, 2022.
Jordan Vonderhaar | Bloomberg | Getty Images

Cryptocurrency company Ripple announced on Friday it will acquire Fortress Trust, a startup specializing in crypto infrastructure, giving it a license in Nevada and allowing it to expand beyond its core bread and butter of blockchain-enabled payments.
Ripple did not disclose the terms of the deal.

Founded in 2021 by Scott Purcell, an entrepreneur with a background in equity and debt crowdfunding, Fortress Trust aims to help large enterprises interact with digital currencies. Purcell was formerly CEO of Prime Trust, a crypto custodian which shut down after BitGo abandoned a deal to acquire the firm.
Ripple is mostly known for its role as a cross-border payments firm. The company uses a blockchain-based messaging system, akin to SWIFT, to approve speedy transactions between a network of banks and other financial institutions.
Ripple’s partners include Britain’s Modulr, Singapore’s Nium and Japan’s SBI Remit.
The company also uses XRP, a cryptocurrency it owns a significant portion of and has become closely associated with, for cross-border payments between banks and other financial institutions.
XRP didn’t move substantially on the news. The token was up about 0.4% in the past 24 hours, trading at a price of 50 cents.

Ripple has struggled in recent years, with the U.S. Securities and Exchange Commission targeting the firm with a lawsuit alleging XRP should be considered a security and that its executives sold over $1 billion worth of the token to investors in an illegal securities offering.
Ripple had previously partnered with MoneyGram, which used XRP in a pilot to make instant transfers, using XRP as a “bridge” currency to move funds without the need for pre-funded accounts. Following the lawsuit, MoneyGram and Ripple abandoned their partnership in March 2021.
In July, though, Ripple secured a key victory as a judge ruled that the XRP token was “not necessarily a security on its face.”
Ripple has seen momentum in its business build recently — particularly outside the U.S., where most of its clients are based. Asked whether the ruling meant that American banks would return to Ripple to use its ODL product, Stu Alderoty, Ripple’s chief legal officer, told CNBC, “I think the answer to that is yes.”
Fortress is Ripple’s second acquisition this year. In May, the company agreed to buy Metaco, a Swiss provider of crypto custody services, for $250 million.
A Ripple spokesperson declined to comment on the size of the deal but said that it is less than the sum Ripple paid to buy Metaco. Ripple was a minority investor in Fortress Trust’s seed funding round.
Ripple said the deal would “support our existing lines of business — specifically in terms of improving the customer experience within our payments and liquidity solutions.”
Ripple also obtained a Nevada trust with its acquisition of Fortress Trust, adding to its growing list of regulatory permits globally. A company spokesperson said this would enable the firm to “provide regulated services — for both fiat and crypto —  to certain customers in the U.S.”
Ripple already holds a New York BitLicense, which lets it engage in regulated virtual currency activities in the state of New York, as well as 30 money transmitter licenses across the U.S. and an in-principle Major Payment Institution License from the Monetary Authority of Singapore, the country’s central bank. The company told CNBC previously it was also looking to get an e-money license with the Irish central bank.
“Longer term, we anticipate there will be ways we can leverage the technology to support new initiatives on our roadmap and enable Ripple to serve a broader segment of customers and use cases,” a Ripple spokesperson told CNBC via email.
Ripple is one of many players in the so-called “crypto custody” space, meaning it’s focused on helping companies and individual users store their tokens in a secure, decentralized address without requiring all the technical knowhow.
Fortress Trust uses application programming interfaces, or APIs — programs that allow different apps to interact with each other — to allow companies to pull data from other bits of software, such as wallets holding cryptocurrencies and nonfungible tokens.
Per Fortress’s website, the startup works with “crypto exchanges, NFT marketplaces, tokenization platforms, corporate brands, agencies, securities exchanges, real estate, healthcare, neobanks, sports and entertainment celebrities, musicians, influencers and other innovators.” More

Indian Prime Minister Narendra Modi and U.S. President Joe Biden pledged to deepen the partnership between both countries in their second bilateral meeting in less than six months.
With both Russian and Chinese presidents absent at this weekend’s G20 leaders’ summit, hopes were low that a binding agreement among member states would be forged since both countries objected to the reference to Russia’s war in Ukraine.
India and the U.S. hope to present themselves as a viable alternative to China for the Global South at a time of shifting global geopolitical alliances.

Indian artist Jagjot Singh Rubal gives final touches to an oil painting of U.S. President Joe Biden, at his workshop in Amritsar on September 5, 2023, ahead of the two-day G20 summit in New Delhi.
Narinder Nanu | Afp | Getty Images

NEW DELHI — Indian Prime Minister Narendra Modi and U.S. President Joe Biden pledged Friday to deepen the partnership between their countries in their second bilateral meeting in less than six months, as Delhi prepares to host a meeting among leaders of the Group of 20 leading industrialized and developing countries.
The two leaders met shortly at Modi’s official residence after Biden’s arrival in Delhi and then issued a 29-point statement that highlighted the depth and breath of their relationship at a time of evolving global alliances — from building resilient strategic technology value chains and linking defense industrial ecosystems, to collaborating on renewable and nuclear energy, climate financing and cancer research.

The two leaders “reaffirmed the importance of the Quad in supporting a free, open, inclusive, and resilient Indo-Pacific” and “expressed their appreciation for the substantial progress underway to implement the ground breaking achievements of Prime Minister Modi’s historic June 2023 visit to Washington.” The Quad is an informal security alignment of Australia, India, Japan and the U.S., which came about in response to China’s rising strength in the Indo-Pacific region.

This closed-door meeting with Biden was the third — after meetings with leaders from Mauritius and Bangladesh — that Modi convened on the eve of the G20 leaders’ summit and part of the dozen or so bilateral meetings planned for this weekend, underscoring India’s strategic ambitions as a key global player connecting the developed world and the Global South.
The summit is an important one for Modi, whose government has turned the normally sedate rotating G20 presidency into a branding vehicle to burnish India’s geopolitical importance ahead of national elections next year. Many governments, investors and businesses are also starting to look toward India — as China slows — which the International Monetary Fund expects to be the fastest growing economy this year.

Weekend consensus

This weekend’s agenda includes the expected admission of the African Union as an official G20 member as part of India’s broad focus on elevating the place of the Global South and fostering inclusive and sustainable growth in the multilateral forum founded in 1999 as a platform to address issues afflicting the global economy.
Russian President Vladimir Putin and China President Xi Jinping though won’t be in attendance this weekend.

While Putin is sending Foreign Minister Sergey Lavrov to take his place, China Premier Li Qiang will take Xi’s place — the first time Xi is skipping the G20 meeting in the decade since he became president.

Putin has not traveled outside of Russia since the International Criminal Court issued a warrant for his arrest for war crimes in Ukraine.
The pair’s absence has sparked fears that a communique binding member states may not be issued at the end of a G20 leaders’ summit — undercutting India’s clout and diminishing his domestic messaging.
India’s diplomats have been unable to foster binding agreements in the key discussion tracks since it assumed the rotating presidency in December 2022 — because Russia and China have objected to the wording referring to the war in Ukraine.
A war of words has ensued ahead of this weekend’s meeting.
“The G7 countries (primarily the US, the UK, Germany, and France) have been exerting pressure on India in a bid to have their unilateral approaches to the Ukraine situation reflected in the final documents of G20 forums,” the Russian foreign ministry said in a statement.

At a pre-summit press conference Friday, India’s G20 sherpa Amitabh Kant said the final declaration “is almost ready.”
“I can assure you our presidency has been inclusive, decisive and action-oriented,” Kant said.

Alternative to China

With Putin and Xi conspicuously absent this weekend, India and the U.S. will hope this will be sufficient to persuade member states and other observers from the Global South they represent a more viable proposition from food security to debt resolution.
In their joint statement after their Friday bilateral meeting, Biden and Modi “reaffirmed their commitment to the G20.”
They also “expressed confidence that the outcomes of the G20 Leaders’ Summit in New Delhi will advance the shared goals of accelerating sustainable development, bolstering multilateral cooperation, and building global consensus around inclusive economic policies to address our greatest common challenges, including fundamentally reshaping and scaling up multilateral development banks.”

While Putin has an obvious reason accounting for his absence, Xi, though, has not indicated a reason — triggering speculation the Chinese leader may be snubbing Modi for a variety of reasons.
Despite recently traveling to South Africa for a BRICS meeting, Xi has rarely traveled abroad. Instead, he has tended to receive visiting dignitaries in Beijing — including Zambia and Venezuela in overlapping visits this weekend.
India’s warming ties with the U.S. also sharply contrasts against its standoff with its neighbor, China.
India — along with Malaysia, the Philippines, Vietnam and Taiwan — sharply rebuked China last week for a new national map that Beijing claims contested territories as its own.
India also stands to gain from American companies looking to diversify their supply chains — at China’s expense — as the U.S. ramps up efforts to limit the transfers of strategic technology to China on the grounds of national security.
This would likely be what Modi and Biden conceived as “their ambitious vision for an enduring India-U.S. partnership that advances the aspirations of our people for a bright and prosperous future, serves the global good, and contributes to a free, open, inclusive, and resilient Indo-Pacific.” More