Davos problems.

Next week, the World Economic Forum holds its annual meeting in Davos, Switzerland, where the business, political and academic elite will share insights and start framing plans for the year ahead. Here’s what’s keeping them up at night.

US inflation set to have fallen to slowest pace in more than a year

Annual US inflation fell in December to its lowest level in more than a year, in a further sign that price pressures have peaked amid the Federal Reserve’s historic campaign to tighten monetary policy. The consumer price index, published by the Bureau of Labor Statistics on Thursday, declined for a sixth consecutive month, registering an annual increase of 6.5 percent. (Financial Times | Jan 12)

Fractional shares become focal point for Finra over disclosures

Brokers that offer traders the chance to buy less than a full share of a stock are set to face more scrutiny from a key industry watchdog. The Financial Industry Regulatory Authority said how fractional-share trades are reported will be a focus of its examinations in 2023. The industry-backed regulator said supervisors will also look at compliance with fair-pricing rules for fixed-income trades, according to a report released on Tuesday. (Bloomberg Markets | Jan 10)

Bond whisperer

Investors trying to figure out how the interest-rate situation will play out should pay attention to the bond market rather than the Federal Reserve, says prominent fixed-income manager Jeffrey Gundlach. “My 40 plus years of experience in finance strongly recommends that investors should look at what the market says over what the Fed says,” the DoubleLine Capital LP Chief Investment Officer told listeners on a webcast. (Bloomberg Markets | Jan 10) see also All of the simple signals have disappeared (The Wall Street Journal | Jan 8) 

Bigger bill sales put market on alert for debt-cap measures

The US Treasury Department is lifting the size of its shortest-term bill auctions, a move that potentially eats up some more of the government’s borrowing authority as it closes in on its statutory debt limit. Observers are focusing keenly on the size of Treasury auctions, as that could impact how quickly its borrowing authority is used up and when it might need to enact special measures that it has historically taken to avoid an official breach. Tuesday’s announcements mean that could now come sooner rather than later. (Bloomberg Markets | Jan 10)

Fannie-Freddie investors rejected by high court on profit sweep

The US Supreme Court turned away four appeals from Fannie Mae and Freddie Mac shareholders who said they were entitled to compensation after the Treasury collected more than $100 billion in profits from the government-sponsored enterprises. The investors argued unsuccessfully that the so-called profit sweep, part of the 2012 agreements that modified the government’s bailout of the companies, was an unconstitutional taking of private property. (Bloomberg Markets | Jan 9)

The Cyberspace Administration of China will begin enforcing new regulations on deepfakes starting this week. Photo: Thomas Peter | Reuters

China, a pioneer in regulating algorithms, turns its focus to deepfakes

China is implementing new rules to restrict the production of ‘deepfakes,’ media generated or edited by artificial-intelligence software that can make people appear to say and do things they never did. Beijing’s internet regulator, the Cyberspace Administration of China, will begin enforcing the regulation – on what it calls “deep synthesis” technology, including AI-powered image, audio and text-generation software – starting Tuesday.

— The Wall Street Journal

Government agencies, companies race to adopt zero-trust security in 2023

A security practice that few know how to define will take up a lot of the federal government's and the private sector's attention this year: zero-trust architecture. Federal agencies are racing to meet a September 2024 deadline to transition to it — and companies are looking to the government for guidance on what an esoteric zero-trust framework actually looks like. "Zero trust" refers to a combination of security principles that can take several forms. Simply put, the idea focuses on limiting employees' internal access to the documents and files they need for their jobs.

— Axios

A UN committee is struggling to define what cybercrime is in upcoming treaty

A United Nations committee – whose members include delegates from the US, China and Russia – is meeting throughout this week and next to continue negotiations for a new international cybercrime treaty. The finished UN cybercrime treaty will jumpstart a wave of new laws around the world based on the agreed-upon principles in the document.

— Cyber Security Review

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Behind the scenes at the Encyclopedia Britannica of memes

In the 15 years since its founding, KnowYourMeme has established itself as the ultimate authority on the jokes, turns of phrase and images that gain currency online. Its writers and editors treat every viral nugget as modern history to be recorded for future civilizations, like a digital Rosetta Stone. 

— The Wall Street Journal

Don’t try to worry less. Worry smarter.

Worry is the thinking part of anxiety, directing us to figure out why we’re anxious and what to do about it. Worry is a form of problem solving, where we use “what-if” simulations to picture worst and best outcomes to find solutions. In that sense, worry is an attempt to control the future. That’s why worry agitates us, because it exists to engage us in dealing with future uncertainties and working to make things turn out all right.

— The Washington Post

The seven types of email you should never, ever send

Whether you’re a cubicle dweller or a corporate communications supremo, here are the seven types of email you should never send. Guilty of these shocking breaches of epistolary etiquette? Do better.

— Financial Times