(ZH) Jamie Dimon Warns SWIFT Sanctions May Bring Unintended Consequences, Can Be

Jamie Dimon Warns SWIFT Sanctions May Bring Unintended Consequences, Can Be Circumvented

Just hours after western leaders slapped Russia with unprecedented sanctions the likes of which the world has never seen, including a targeted SWIFT expulsion of key Russia banks as well as an asset and transaction freeze of the Russia central bank, JPMorgan CEO Jamie Dimon explained not only why this harsh escalation may be futile but why it could backfire spectacularly in the years to come.
In an interview with Bloomberg TV, the CEO of the world's largest bank said that "there are a lot of workarounds for SWIFT, so there are different tools we use for different reasons" adding that “the banks are talking with the government so everyone understands the issues, not because they’re for or against any particular thing."
While SWIFT sanctions mean companies can’t use the messaging system to do business with the Russian entities affected, they can still do business with them, Dimon said. In fact it's as simple as sending an email with payment instructions, because what SWIFT really is, is a messaging remnant from a bygone era, before emails, even before the fax machine.
Dimon also said that disconnecting Russian banks from the SWIFT messaging system may bring “unintended consequences” that include third parties finding ways around the penalty.
“What countries do you hurt? What people are going to do workarounds?” Dimon said, referring to "bad players" and others finding workarounds, not his own firm, according to a company spokesperson. Dimon said sanctions, by contrast, are “very targeted, very specific, very clean.”
As Bloomberg reported on Friday, JPMorgan was among Wall Street firms that had counseled Washington against kicking Russia off SWIFT, arguing that it could have far-reaching fallout that could hurt the global economy and undermine the purpose of the penalties.
Dimon's full interview is below...

... and unlike his brutally wrong bitcoin predictions, Dimon will be right about SWIFT. In a rhetorical Q&A about the consequences of Russian SWIFT expulsions, Goldman asked whether there is concern this this would undermine the reserve currency status of the Dollar (and Euro) and responded:
The US is in a unique position of having the global reserve currency, which underpins a substantial portion of international trade and foreign exchange transactions, while also granting the Executive fairly broad discretion through IEEPA to restrict US capital flows by invoking security concerns. The widespread use of the Dollar in international markets, for instance, allows the United States to affect foreign policy goals through financial market channels (hard power) and may also confer certain reputational benefits (soft power). However, overuse of these powers could compel other actors to try to replace Dollar transactions, as Russia already did to some extent following earlier sanctions.
In this regard, the coordination across the G-7 is particularly important. Already, global reserve managers had relatively limited options for shifting reserves out of Dollars given limited supply of strong investment grade assets in the Euro area and limited capital market depth elsewhere. This is especially true for the large reserve managers, like China. But there are also implications for smaller central banks, many of which have used the BIS to facilitate new FX reserves in Chinese securities given the capital constraints, which supports our view that those investments are primarily aimed at diversifying and improving returns. Overall, while these actions could ultimately compel a change in reserve accumulation behavior, and support additional inflows to CNY, there is not really a viable alternative available at the moment for large reserve holders, especially when Europe is also participating in the sanctions.
An even more accurate take comes from the Bloomberg editors who wrote an article this morning explaining why "Wielding SWIFT Against Russian Banks Is a Big Risk" and in which they wrote:
Aside from the immediate collateral damage, excluding Russian banks from SWIFT risks longer-term consequences for international finance. As with any network (think Facebook), the value of SWIFT depends on the number of banks that use it. To that end, the cooperative seeks to encourage the broadest possible participation by maintaining neutrality. Only Iran, which was already isolated financially, has ever been cut off. The example of Russia could prompt others — such as China — to turn to alternatives, fragmenting the payments system and potentially even undermining the U.S. dollar’s dominance as the global reserve currency. One could even imagine a future in which rival nations turned similar financial weapons against the U.S.
* * *
Western leaders should be wary of going further and ejecting Russia from SWIFT completely. The effect would be utterly indiscriminate: Supplies of Russian oil, gas and other commodities could collapse, foreign creditors would suffer heavy losses, and even Russians who scorned Putin’s actions and sought to emigrate would have to resort to laundering techniques to get their money out of the country. Putin might well interpret such a cutoff as an act of war and respond accordingly.
As the conflict continues, the international community should work together to coordinate more traditional sanctions aimed at an increasing number of Russian banks, which would impose similarly harsh punishment without such dire unintended consequences — and on measures (such as those already announced) aimed at limiting the Russian central bank’s ability to support targeted institutions. Western nations’ desire to do something big and bold is correct, but they — and the U.S. especially — should be wary of taking actions that they’ll regret.
Whether Putin will interpret the Western expulsion from SWIFT as an acto of war remains to be seen, but one thing is clear: on Monday morning, stocks linked to China's version of SWIFT - the Cross-Border Inter-Bank Payments System (CIPS) - exploded limit up.
The reason: at least some in the market are betting that the glory days of SWIFT are coming to an end thanks to the West's own actions, and its replacement is an acronym that very few have heard... for now.

FT : Turkish opposition presents ‘historic’ pact to defeat Erdogan

Turkish opposition presents ‘historic’ pact to defeat Erdogan
Diverse alliance promises to overhaul institutions and restore rule of law after years of backsliding

Six Turkish opposition parties pledged to overhaul the country’s electoral laws and institutions as they signed an “historic” pact aimed at bringing an end to president Recep Tayyip Erdogan’s almost two decades in power.

Leaders of the country’s biggest political parties — with the exception of a key pro-Kurdish party — on Monday vowed to limit Erdogan’s role and restore the rule of law after what they say is years of democratic backsliding as the president established a system of one-man rule.

“We are determined to build a strong, liberal, democratic and fair system that establishes the separation of powers with an effective and participatory legislature, a stable, transparent and accountable executive, an independent and impartial judiciary,” their joint declaration said.

Kemal Kilicdaroglu, of the secularist Republican People’s party (CHP) and Meral Aksener, of the right-wing IYI party, were among the party leaders who signed a pact that marked the most significant moment in an effort by Erdogan’s rivals to unite against him that began five years ago.

They were joined by Ali Babacan and Ahmet Davutoglu, who both served as senior ministers under Erdogan in the past but later quit his ruling Justice and Development party (AKP) to form two separate breakaway groups. Two other small parties, the Islamist Saadet (Felicity) party and right-wing Democrat party also took part.

The declaration took place against the backdrop of mounting public discontent about the economy, particularly soaring inflation that reached almost 50 per cent last month, that has eroded the popularity of Erdogan and AKP.

In a nod to the country’s deep cultural and social faultlines, the six parties said that they strived to build a democratic country “where individuals can freely express their thoughts as equal and free citizens and live in accordance with their beliefs”.

Seren Selvin Korkmaz, executive director of the Istanbul-based think-tank IstanPol, described the declaration as “a historic day for Turkey”, adding that the fragmentation and polarisation of Turkey’s opposition had hampered their ability to present a credible challenge to Erdogan. “It is crucial because these kinds of regimes are very vulnerable when the opposition is united,” she said. 

At the heart of the declaration was a promise to abolish the presidential system of governance, introduced in 2018 after a referendum, that has concentrated huge powers in the hands of Erdogan.

Other pledges included placing a seven-year term limit on the president and stripping the leader and his council of ministers of powers to announce a state of emergency.

The six parties vowed to implement rulings by the constitutional court and European Court of Human Rights — something that Erdogan has repeatedly refused to do in recent years. They said that they would guarantee the independence of Turkey’s central bank, which has faced heavy interference from Erdogan in recent years. 

The president’s rivals face an uphill struggle in convincing voters that they could fix the country’s economy and, if they win, repairing institutions, analysts say.

Despite the show of unity, tensions remain over who will be the opposition’s joint presidential candidate.

Notable in their absence from Monday’s event was the Peoples’ Democratic party (HDP). A left-wing party with strong links to the country’s minority Kurdish population, the HDP helped the opposition alliance to win control of Turkey’s largest cities in 2019 local elections. The party’s supporters will be crucial to any campaign to defeat Erdogan but are seen as too divisive to have an official role within the opposition.

FT : Payments: Russian banks may boost renminbi’s status via China’s ‘Swift’

Payments: Russian banks may boost renminbi’s status via China’s ‘Swift’
Moscow and Beijing share common cause to reduce use of dollars worldwide

China has long hoped for independence in cross-border payments and a widely used digital currency. Despite heavy investment and effort, those goals have remained elusive. Now the EU plans to expel some Russian banks from Swift, the world’s interbank payments network. This may just be what China needs to make its version of Swift, the Cross-Border Interbank Payment System (Cips), a serious proposition.

Backed by China’s central bank, Cips offers clearing and settlement services for cross-border renminbi payments. The small share of the currency in international payments — 2 per cent — means Cips is a long way from challenging Swift. The US dollar remains dominant in global payments with a share of around 40 per cent.

Russia, however, may have little choice. There are too many constraints on its own local alternative, SPFS. The Russian central bank set this up in 2014 following previous threats to disconnect its banks in the wake of its invasion of Crimea. But there are only 20 foreign banks on SPFS, too few to make it particularly useful.

That compares with more than 1,200 financial institutions in 100 countries, including big global banks, that are active on Cips. More than 20 Russian banks are already connected. Digital payments between the two countries have risen sharply in recent years. So has settlement in renminbi, which quadrupled to almost a fifth of all trade between the two in 2020. Russia’s central bank has invested in Chinese assets even as it has cut exposure to the US and western Europe.

Chinese payment solution providers stand to benefit as payment volumes grow. Shares of Client Service International and Lakala Payment rose about 5 per cent on Monday. These Chinese payments fintechs provide third-party services including central bank-led initiatives. Lakala’s stock had fallen 15 per cent over the past year because of the slow rollout of the local digital renminbi.

The polarisation of world politics is nudging China and Russia closer together. A common cause for both is to reduce the use of dollars worldwide. Tough new sanctions on Russia give China the chance, via Cips and other projects, to promote the renminbi as an alternative.

Business Of fashion : The Plan for Off-White After Virgil Abloh

The Plan for Off-White After Virgil Abloh
Executives at New Guards Group and LVMH reveal exclusively to BoF the ‘endless’ pipeline Abloh left behind and their plans to harness his legacy to build a multi-billion-dollar brand.

KEY INSIGHTS
  • New Guards Group and LVMH plan to harness the “endless” pipeline of ideas left behind by Virgil Abloh to build Off-White into a multi-billion-dollar brand.
  • Off-White’s next chapter starts tonight at Paris Fashion Week with a show that will include couture-like “high fashion” and tease a move into beauty.
  • No decision has been made on creative succession, but executives have floated the idea of a “collective.”

MILAN — In 2017, Virgil Abloh, Davide De Giglio and Andrea Grilli all got the word “WOLF” tattooed on their right arms. “We were like a pack, we were like brothers,” said De Giglio, the quiet mastermind behind New Guards Group, the Milanese company that co-founded luxury streetwear sensation Off-White with Abloh, a trained architect turned Kanye West creative director. “Virgil was a legend, but first he was a friend,” said Grilli, Off-White’s CEO since 2019.
Piloted by Abloh, De Giglio and Grilli, Off-White became one of the fastest growing brands in fashion. But in November 2021, less than four years after the polymathic Abloh was recruited to luxury’s big leagues as men’s artistic director of Louis Vuitton, he died suddenly, at 41, after a private battle with cardiac angiosarcoma, a rare heart cancer. Now, Off-White is gearing up for its first show since the death of its founding designer, to be held tonight at Paris Fashion Week.
Louis Vuitton chief Michael Burke, who hired Abloh in 2018, has compared him to Karl Lagerfeld. “I saw the same visionary approach to life, the same attraction between designer and audience — not intellectual, but popular. They were both absolutely fearless about doing things differently, tireless in their work ethic, identical in their curiosity and equally plugged into the zeitgeist.”
But despite his genius, Abloh was always going to be “a chapter” in the story of Louis Vuitton, a 168-year-old luggage-maker that has become one of the world’s most recognisable consumer brands, alongside Apple, Coca-Cola, Disney and Nike. Vuitton’s leadership will no doubt find a way to turn the page, entrusting its men’s business to a new designer in due course.

For Off-White, where Abloh was practically the brand incarnate, the situation is very different. Losing a founder can present an existential threat to a young label, even one as successful as Off-White.
But the strength of Alexander McQueen more than 10 years after the 2010 suicide of its visionary founder suggests that, with a sound strategy and careful management, it’s possible for a young brand to not only survive but thrive after the loss of its creator.
De Giglio and Grilli both knew about Abloh’s heart cancer, and yet his sudden death last November came as a shock. “We never imagined that,” said De Giglio. “There was no planning.”
“I was fully aware of his condition from the beginning of his illness until the last day. But by that time, the cancer was well controlled and we were very positive about the future,” said Burke. “The timing of his passing was absolutely brutal.”
Virgil Abloh, Davide De Giglio and Andrea Grilli before Off-White’s Spring/Summer 2019 Women’s Ready-to-Wear show.(New Guards Group)
Luxury conglomerate LVMH, which owns Louis Vuitton, was enthused with Abloh’s work for the French house and eager to deepen their partnership. In July 2021, the group took control of the Off-White brand, activating provisions in its original agreement with Abloh to increase its stake to 60 percent. As part of the deal, LVMH also took a minority stake in Off-White’s operating company, which remains controlled by New Guards Group and its parent, the e-tailer Farfetch. The current licensing agreement between the Off-White brand and New Guards Group, by which the Milanese firm manages design, production, marketing and sales, will remain in place through at least 2026.
Now, De Giglio and Grilli, together with mentor Burke, plan to harness the legacy left by the late Abloh to turn Off-White into an “eternal” brand that Burke believes can grow to the scale of Dior, the couture house which became the cornerstone of the LVMH empire and whose fashion and leather goods business alone generated estimated sales revenue of $7 billion last year.
‘Like Dior in 1957’
“Off-White is in the position that Dior was in 1957,” said Burke. “Monsieur Dior had only been at the house for 10 years when he died. Off-White, too, was conceived almost 10 years ago. The question is: what has the founding father left? If the legacy is rich, authentic and steeped in values that go beyond fashion, the odds of turning a passing into something eternal are spectacular.”

LVMH chairman Bernard Arnault, Virgil Abloh and Louis Vuitton CEO Michael Burke at Louis Vuitton’s Spring/Summer 2019 Men’s show.(Getty Images)
Off-White’s next chapter is starting with a tribute show tonight at Paris Fashion Week, to be staged at the Palais Brongniart and livestreamed in over 100 storefronts across the French capital. Alongside Abloh’s final ready-to-wear collection, the brand will present couture-like “high fashion,” tease Off-White’s move into the lucrative beauty category and showcase a collaboration with Prada-owned shoemaker Church’s, projects Abloh was planning before his death.
“Off-White is like Dior was in 1957.”
But there is still much more in the “pipeline” of ideas that Abloh left behind, said Grilli. Much of this is captured in thousands of messages on WhatsApp, which the globe-trotting designer, who has called a “fully charged iPhone” his primary tool, used to stay connected with the Off-White team. “The connection with Virgil was mainly on WhatsApp. The number of ideas that we have directly from him — that were unmanageable on a daily, weekly and monthly basis — it’s endless,” said Grilli. “This is the legacy that we’re going to build around.”
“The next two years, we are going to go full-speed,” he said. “The fuel being poured into the brand, it’s for decades, for centuries. Virgil would have wanted us to do it. He always said this has to be a multi-generational brand; our kids need to go on Rodeo Drive and Rue Saint-Honoré and see it.”
From start-up to global sensation to stabilisation
Off-White rocketed to success soon after its launch, powered by a highly profitable blend of American streetwear and high-end Italian manufacturing. “Chanel meets Supreme,” as Abloh put it to De Giglio. A set of high-visibility signifiers — including diagonal stripes, arrows, tape and pithy text in quotation marks — helped make its simple but well-made t-shirts, sweatshirts, sneakers, belts and bags appealing to fashionistas, hypebeasts and luxury clients alike, especially as they were priced lower than the luxe streetwear statements of peers like Demna Gvasalia’s Vetements.
A top with Off-White’s arrow logo paired with Fendi and Chanel.(Getty Images)
Then, there was a constant stream of collaborations with everyone from Nike to Ikea, which kept the brand in the conversation. “What Virgil did for Nike was exceptional. It was almost like a religion,” said Grilli. A focus on emerging markets also contributed to the label’s rapid rise. The brand was just as likely to launch stores in fast-growing shopping hubs in Asia as in traditional Western fashion capitals.
But it was ultimately the charismatic Abloh who animated Off-White, injecting it with hip-hop’s penchant for sampling and remixing, skateboarding’s sense of community and a desire for social progress just as a new generation of consumers was acquiring greater purchasing power and looking not just for cool-looking clothes, but something to believe in and belong to.
By 2018, the year Abloh joined Louis Vuitton, Off-White was “officially the hottest brand on the planet,” surpassing the likes of Gucci and Balenciaga, according to the Lyst Index, which measures brand heat based on sales, search and social media data. Off-White maintained its leading position, placing first or second for eight consecutive quarters. But as the streetwear trend waned, Off-White began to cool, placing fourteenth in the third quarter of 2021. (At the same time, sales of Abloh’s more sophisticated offering for Louis Vuitton were exploding).

Abloh had seen the shift coming, telling Dazed in late 2019 that streetwear was “gonna die.” “He was the one saying streetwear is dead, not in terms of culture but aesthetic,” said Grilli. “And we were already noticing some signs from the market.” The brand embarked on a revamp, working to elevate its seasonal collections with some success. Retailers report privately that Off-White’s share of sales has slipped since its early days. But some say its more tailored ready-to-wear has gained traction, as its logo-driven streetwear offer has cooled.
Gigi Hadid in a ball gown fused with an Arc'teryx jacket at Off-White’s Autumn/Winter 2020 Women’s Ready-to-Wear show.(Getty Images)
“Everyone knows hype can fade, and sales have slowed on the more obvious items, but the more elevated ready-to-wear works now,” said Tiffany Hsu, Mytheresa’s vice president of fashion buying for womenswear.
At the same time, with the support of New Guards owner Farfetch, Off-White has rapidly expanded its direct-to-consumer e-commerce business and reduced its wholesale exposure, boosting its margins. Today, the brand has 78 boutiques from Hong Kong to Mykonos, selling everything from hoodies to umbrella stands.
In fiscal 2020, total sales were €306 million, up from €273 million the year before, though earnings before interest and taxes dropped from €98 million to €90 million, according to a recent filing with Milan’s chamber of commerce. New Guards declined to comment on whether that filing was an accurate reflection of the brand’s global business.
A future without Virgil
Now, Off-White faces the challenge of moving forward without its creator. His legions of fans didn’t flock to the brand’s drops just to purchase product; they came to hang out with their tribe and Abloh was the chief. How can Off-White maintain that unique positioning without Abloh to animate it?
“The positioning of Off-White is beautiful for us and it’s still selling very well,” said Selfridges buying and merchandising director Sebastian Manes. “But Virgil was so present and meant a lot to many people. He was as big as the brand. It’s hard to dissociate the two.”
Virgil Abloh flanked by Gigi Hadid at Off-White’s Autumn/Winter 2019 Women’s Ready-to-Wear show.(Getty Images)
Grilli, too, sees Off-White and Abloh as inextricably linked. “Off-White is Virgil and will be forever,” he said. But despite his creative genius and almost superhuman energy, the peripatetic Abloh — who often hopscotched around the planet from meeting to meeting, DJ gig to DJ gig — worked extensively through a loyal team, providing early direction and final approval, and otherwise mostly leaving the design work to his deputies. Creative directors often work this way, but Abloh was more hands-off than most, sending input via WhatsApp messages from the other side of the world.
“He was very pragmatic, he trusted people. Trust is the number one quality that Virgil had,” said Grilli. “This allowed him to achieve what he achieved. Virgil was a maestro leading a perfect orchestra, and we’re super confident in the team in terms of executing his legacy.”
Currently creative decisions on product are made by head designers who each oversee categories including women’s, men’s, shoes, bags, knitwear and jewellery. “Every division has its own conductor,” said Grilli. “The team has been working with Virgil for six to seven years.”
Burke, too, has faith in the team at Off-White. “There’s been plenty of time for Virgil’s values to take root in the psyche and soul of the company,” he said. “Are they embodied in the studio? In the company? The answer is a resounding yes. And Andrea and Davide are the strongest team in Italy.”
While the licensing agreement between New Guards Group and Off-White’s new owner LVMH can be renegotiated or terminated in 2026, both parties say the alliance is cemented for the long term. “Contracts are contracts, but the wedding is super solid, now more than ever,” said Grilli.
Critically, the backing of LVMH gives Off-White plenty of breathing space to find the right creative configuration for the future, said Burke. “They are under no pressure to quickly come up with a singular answer. The coming seasons will give us indications as to what the right answer is.”
“It’s a defining moment when you have to replace the founding father. Yves Saint Laurent replaced Mr Dior, but Virgil’s passing doesn’t need to lead to the hiring of a messiah à la Virgil. It’s not impossible, but it’s not the only outcome,” said Burke. “There has been no precise decision on succession. But the brand has many cultural aspects — music, sport — and this allows us to go down different avenues, and going down one doesn’t preclude doing another a few seasons later.”
Grilli and De Giglio currently favour the notion of a “collective” to take the brand forward. “It’s going to be a group of people, a movement, a collective,” said De Giglio. “Think about Linux, open-source: you can inject something new and the software pattern evolves.”
“Virgil’s passing doesn’t need to lead to the hiring of a messiah à la Virgil.”
Whatever comes next, the brand will remain firmly rooted in Abloh’s legacy. “It might sound crazy, but I talk to Virgil every day,” said De Giglio. “It’s my way of moving forward. I ask him questions. I study. It’s like a religion, you don’t need to have someone next to you if you know the rules.”
The “rules” that define Off-White may still need to be pinned down. “In the beginning, we said, ‘What’s your idea?’ And Virgil said: ‘No rules, that’s the plan.’ The only rule is no rules,” said De Giglio. But the trick, according to Burke, is defining the rules and then knowing when to break them, resulting in a brand that can stand the test of time without becoming boring.
More than a fashion brand
Whether Off-White can continue to scale and become a multi-billion-dollar legacy brand remains to be seen. Today, the fashion market moves far faster than it did in 1957 when Christian Dior died, or even when Alexander McQueen lost its founder, Lee, in 2010.
The success of Off-White’s next chapter may be less about conjuring the ghost of Abloh than fulfilling his founding vision for a brand not just about clothes but community.
A PowerPoint slide in Grilli’s office lists a series of keywords that encapsulate his priorities for Off-White: “Keep Surprising,” “Elevate,” “Dream,” “Journey,” “Values,” “Culture,” “Accessibility” and “Fun.” Clustered next to “Culture” are also “Art,” “Sport,” “Music” and “Couture.”
Davide De Giglio and Andrea Grilli at the New Guards Group offices.(Claudia Ferri)
Grilli and De Giglio want to keep the brand fun and surprising, continuing Abloh’s practice of reaching beyond fashion into art, architecture, music, sport, even food. “Off-White is one of the few brands that can sell a mug, a rug, an ashtray and a leather jacket,” said Grilli.
This week, Off-White will tease its beauty line — a genderless range that’s more about self-expression than prettification and will be worn by the models at tonight’s show — as well as launch a collaboration with restaurant group Caviar Kaspia that will be a “100 percent takeover down to the tableware,” said Grilli.
“This is not a brand that is closed,” said De Giglio. “This is Off-White, come let’s talk. Virgil always said, ‘I want to open doors, to do something new with new people, with the kids.’ And the door is still open. We’ve suffered a big loss, but on the other side there is happiness.”

WSJ : Basquiat Is Hotter Than Warhol—and Now a Billionaire Wants to Sell a 1982

Basquiat Is Hotter Than Warhol—and Now a Billionaire Wants to Sell a 1982 Work for $70 Million
Collector Yusaku Maezawa is auctioning off his wall-size Basquiat featuring a devilish figure at Phillips this spring

A billionaire who recently rocketed to the International Space Station said he’s sending one of his prized Jean-Michel Basquiat paintings to auction this spring for an estimated $70 million. The move hints at the shifting whims of the world’s wealthy but also underscores the continuing strength of the art market overall.
Yusaku Maezawa wasn’t well known in art circles when he paid Christie’s a record-breaking $57.3 million for his untitled 1982 Basquiat six years ago. The collector reveled in the win by posting an image on his Instagram account, shrugging off the typical discretion exercised by some top buyers.
Now, the fashion mogul behind e-commerce site Zozotown said he’s ready to resell his breakout Basquiat, enlisting boutique auctioneer Phillips to offer up the painting in May in New York. The 16-foot-wide work is splashed with red and salmon hues and features a horned devil-like figure that curators have suggested could be the former New York graffiti artist’s conflicted self-portrait.
Untitled 1982 work by Jean-Michel Basquiat, estimated at around $70 million, to be offered at Phillips in May.

The 46-year-old collector, in an email, called the painting “​​overwhelmingly powerful yet melancholic,” adding that it “makes me feel a sense of euphoria and despair at the same time.”
The sale comes as the art market is enjoying its own measure of euphoria, as collectors spent last year logging on or showing up at auctions around the world to bid for everything from luxury goods to vintage sports cars to NFTs. Phillips reported a company-high $1.2 billion in sales last year, up 32% from its pre-pandemic 2019 total. It’s unclear how the Russian invasion of Ukraine could affect collectors’ eagerness to splurge on blue-chip art, dealers said.
In a sign of confidence, Phillips has given the Basquiat its highest-ever estimate at $70 million.
The move isn’t likely to break the $110.5 million record for a Basquiat, held by an untitled blue work from 1982 that Mr. Maezawa won in 2017. Still, the upcoming red example could offer a fresh test of the global appeal of the 1980s New York artist known for his frenetic self-portraits covered in witty social critiques. Last year, four other examples by Basquiat each sold at auction for more than $40 million, including a red-hued image of a head, “In This Case,” that topped $93.1 million. Other examples by him have also sold privately for more than $100 million, said Jean-Paul Engelen, Phillips’s Americas president.
The untitled 1982 work by Jean- Michel Basquiat that Yusaku Maezawa bought for $110.5 million.

“He’s besting Andy Warhol for popularity now,” Mr. Engelen said. “Young people and classic collectors relate to him.”
For Mr. Maezawa, the coming sale represents a full circle. Though widely known now for his blue-chip collection of pieces by artists like Brice Marden, Mark Grotjahn and Yoshitomo Nara, he was virtually unknown among the art world’s upper ranks when he won the piece he’s reselling now.
A year after buying the red work, Mr. Maezawa reset the Basquiat record when he bought the untitled blue portrait, which is widely considered to be the star of his collection. He has exhibited it at museums from Brooklyn to Seattle and references it regularly on his social-media feeds. One year, friends even made a blue cake version of it for his birthday, according to his Instagram.
The fate of his red Basquiat was a mystery in the intervening years. The collector said he has displayed both Basquiats at his home or office over the years but has decided one is enough, for now. He has gravitated to collecting outdoor sculptures lately, he said, which he plans to display along with his blue Basquiat in a museum in Japan that he aims to open at some point.

As for why he’s auctioning off his red example now, he said, “I believe that art collections are something that should always continue to grow and evolve as the owner does, and so my parting with ‘Untitled’ was relative to that.”

For Phillips, the red work will likely be a boon. Mr. Engelen said he intends to preview the work at Phillips’s showrooms in London, Taipei and Los Angeles in coming months. But he said he has already found an anonymous third-party investor willing to buy the 1982 red work for an undisclosed sum if no one else bids higher in the sale.
And—in another sign of the increasing mainstream acceptance of cryptocurrency within the art market—Mr. Maezawa has agreed to accept cryptocurrency as payment, making the Basquiat one of the most expensive paintings to come to auction willing to be traded using the alternative currency.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • BEAM -6.4%, VTRS -3.7% (also provided EpiPen settlement information), XRAY -1.2%,

M&A news:

  • HR -9.2% (and Healthcare Trust of America (HTA) enter into $18 billion strategic combination), HTA -4.4% (and Healthcare Realty Trust (HR) enter into $18 billion strategic combination), BRO -2% (to acquire Orchid Underwriters Agency and CrossCover Insurance Services; transaction is expected to close before April 2022)

Other news:

  • RSX -24.7% (Russia's Central Bank increased rates to 20% from 9.5%; announces additional reserves releases )
  • OZON -19% (provides update regarding developments at Ozon Bank)
  • CANO -8.9% (will delay its fourth quarter earnings release, conference call and 2022 guidance updates)
  • LXRX -8.8% (voluntary withdraws and plans near-term resubmission of the its NDA for sotagliflozin to correct a technical issue)
  • BP -7.5% (will exit its shareholding in Rosneft (OJSCY)
  • BP has held a 19.75% shareholding in Rosneft since 2013)
  • AER -6.9% (signs lease agreements with Norwegian Air Shuttle ASA for ten new Boeing 737 MAX 8 (BA) aircraft and eight Boeing 737-800 NG aircraft )
  • TTE -6% (wins maritime lease to develop a 3 GW+ offshore wind farm on the East Coast of New York and New Jersey)
  • RETA -3.7% (FDA issues letter re NDA for bardoxolone methyl, FDA says it does not believe the data demonstrates that bardoxolone is effective in slowing the loss of kidney function)
  • CRH -3.6% (KPS Capital Partners to acquire Oldcastle Buildingenvelope from the Co)
  • EWU -1.8% (UK Government sanctions Russian President Vladimir Putin and Foreign Minister Sergey Lavrov )
  • LAC -1.6% (submitted a draft application for funding to be used at its 100%-owned Thacker Pass lithium project in Humboldt County, Nevada)
  • UAA -1.5% (files mixed securities shelf offering)

Analyst comments:

  • EPAM -4.3% (downgraded to Neutral from Overweight at Piper Sandler)
  • FL -3.2% (downgraded to Sell from Buy at Citigroup and downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • QRTEA -2% (downgraded to Neutral from Buy at BofA )
  • ABBV -1.5% (downgraded to Neutral from Buy at UBS)
  • GILD -1.2% (downgraded to Market Perform from Outperform at BMO),

>>> US Gapping Up

Gapping up
In reaction to earnings/guidance:

  • NLSN +7.6% (and Experian (EXPGY) announced an expanded strategic initiative to enhance identity data in the United States for digital measurement of the open web), EYE +2.7%, RIDE +1.6%,

M&A news:

  • REGI +37.2% ( Chevron in advanced talks to acquire co for approx $61.50/sh), FHN +32.1% (to be acquired in an all-cash transaction valued at $13.4 bln, or $25.00 for each share by TD), . 

Other news:

  • ABUS +11.3% (and Genevant Sciences (ROIV) filed a patent lawsuit against Moderna (MRNA)
  • LHX +3.6% (increases dividend)
  • NG +3.1% (reports the final set of assay results from the 2021 drill program)
  • OPY +3% (authorizes repurchase of up to 518,000 common shares)
  • WRB +2.5% (announces three-for-two stock split)
  • NIO +1.3% (announces proposed secondary listing on the stock exchange of Hong Kong)
  • IFRX +1.3% (provides update on development plans for vilobelimab in hidradenitis suppurativa)
  • EQNR +1.2% (Board of Directors has decided to stop new investments into Russia, and to start the process of exiting Equinor's Russian Joint Ventures)

Analyst comments:

  • AXL +5.6% (upgraded to Overweight from Underweight at Morgan Stanley)
  • TS +2.1% (upgraded to Overweight from Equal Weight at Barclays)
  • PHM +1.4% (upgraded to Buy from Underperform at BofA )

>> US Research Calls I

Research Calls I

  • Upgrades:
    • American Axle (AXL) upgraded to Overweight from Underweight at Morgan Stanley; tgt raised to $16
    • American Electric (AEP) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $101
    • Autohome (ATHM) upgraded to Buy from Hold at The Benchmark Company; tgt $44
    • Block (SQ) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt $159
    • Bloom Energy (BE) upgraded to Positive from Neutral at Susquehanna; tgt raised to $33
    • Cable ONE (CABO) upgraded to Overweight from Equal Weight at Wells Fargo; tgt $2100
    • Dollar Tree (DLTR) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $170
    • ExlService (EXLS) upgraded to Outperform from Market Perform at Cowen; tgt raised to $145
    • MacroGenics (MGNX) upgraded to Buy from Neutral at Citigroup; tgt lowered to $21
    • Ovintiv (OVV) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $50
    • Paylocity (PCTY) upgraded to Buy from Hold at Jefferies; tgt $255
    • PulteGroup (PHM) upgraded to Buy from Underperform at BofA Securities
    • TechnipFMC (FTI) upgraded to Buy from Hold at Kepler
    • Tenaris (TS) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $32
    • Texas Roadhouse (TXRH) upgraded to Buy from Hold at Gordon Haskett; tgt $110
    • Toll Brothers (TOL) upgraded to Buy from Underperform at BofA Securities; tgt raised to $63
  • Downgrades:
    • AbbVie (ABBV) downgraded to Neutral from Buy at UBS; tgt raised to $147
    • Bally's Corporation (BALY) downgraded to Hold from Buy at Jefferies; tgt lowered to $38
    • Deciphera Pharmaceuticals (DCPH) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $6
    • EPAM Systems (EPAM) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $410
    • Foot Locker (FL) downgraded to Sell from Buy at Citigroup; tgt lowered to $25
    • Foot Locker (FL) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $23
    • Gilead Sciences (GILD) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $65
    • Goldman Sachs BDC (GSBD) downgraded to Equal Weight from Overweight at Wells Fargo
    • Jack In The Box (JACK) downgraded to Hold from Buy at Gordon Haskett; tgt $96
    • Lear (LEA) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $175
    • Prelude Therapeutics (PRLD) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $12
    • Qurate Retail Group (QRTEA) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $6.30
    • Universal Health (UHS) downgraded to Neutral from Buy at Seaport Research Partners
  • Others:
    • Ambrx Biopharma (AMAM) initiated with a Neutral at Goldman; tgt $6
    • First Bancorp (FBNC) resumed with an Outperform at Raymond James; tgt $49
    • GoPro (GPRO) initiated with a Buy at Jefferies; tgt $12
    • Jasper Therapeutics (JSPR) initiated with an Overweight at Cantor Fitzgerald; tgt $10
    • Kinetik (KNTK) resumed with an Outperform at Credit Suisse; tgt $72
    • Olema Pharmaceuticals (OLMA) initiated with a Neutral at H.C. Wainwright
    • Travere Therapeutics (TVTX) initiated with a Buy at H.C. Wainwright; tgt $45
    • Virgin Orbit Holdings (VORB) initiated with a Buy at Canaccord Genuity; tgt $20

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • FHN +32.1%, REGI +31.9%, ABUS +13.8%, LHX +4.9%, OPY +3%, WRB +2.5%, NIO +1.2%,
  • Gapping down:
    • RSX -24.5%, OZON -19%, CANO -10%, HR -9.1%, BP -7.2%, LXRX -7%, HTA -6.6%, TTE -6.4%, RETA -3.7%, CRH -3.6%, EWU -2.2%, BRO -2%, LAC -1.8%, GSK -1.6%, X -1.2%,