Week InReview
Friday | Jan 7, 2022
How's your B.S. meter working?
Illustration: Steven Salerno/WSJ
HAS YOUR B.S. detector gotten rusty?

It’s understandable. We’ve been isolated for so long, interacting in narrow circles, often of like-minded people. We’re unprepared for the assault of someone spewing false information right to our face. But detecting B.S. – shorthand for a coarser version of what my grandmother called hogwash – is a crucial skill, also known as critical thinking, as we head back out into the world.

— The Wall Street Journal
let's recap...
Photo illustration: 731; photos: Alamy
Some U.S. politicians have been calling for companies to back away from China, over concerns about national security and human rights. But Wall Street banks are instead deepening their ties. Both the U.S. and Chinese governments have cracked down on Chinese companies listing their shares in New York, hurting a lucrative business that was driven from Hong Kong. But U.S. banks that want a piece of the world’s second-largest economy – and second-biggest issuer of equities – are shifting gears to take on China’s top lenders on their own turf. (Bloomberg Businessweek | Jan 5)

Federal Reserve officials said a strengthening economy and higher inflation could lead to earlier and faster interest-rate increases than previously expected, with some policy makers also favoring starting to shrink the balance sheet soon after. Minutes published Wednesday of the Dec. 14-15 meeting of the Federal Open Market Committee showed officials were fully on board with plans to accelerate the withdrawal of the massive bond-buying program adopted at the onset of the pandemic. (Bloomberg Economic | Jan 5)

Investors dumped shares in many of the technology companies that surged during the pandemic as the looming specter of higher interest rates prompted them to buy into businesses more tightly linked to the economic recovery. With yields on U.S. government debt climbing, the appeal of many unprofitable companies – including some that had only recently gone public – has been knocked. Their valuations are dependent on potential earnings in the future and therefore sensitive to rising rates. (Financial Times | Jan 5)

Fannie Mae and Freddie Mac will raise guarantee fees for high-cost loans and second-home loans in April the Federal Housing Finance Agency said Wednesday. Starting April 1, the companies will charge fees between 0.25 percent and 0.75 percent higher for mortgages with high balances, depending on the loan-to-value ratio. The fee for mortgages on second homes will rise between 1.125 percent and 3.875 percent. (Housing Wire | Jan 5)

As 2022 begins, the overriding message from almost 50 financial institutions across Wall Street and beyond is that conditions still look good, but the rip-roaring rallies powered by the reopening are history. Growth will ease. Returns will moderate. Risks abound — but so do opportunities. (Bloomberg | Jan 3)
the cyber cafe
Photo illustration: Jamie Chung
Faces are the next target for fraudsters
Hackers are pioneering new ways of tricking facial-recognition systems, from cutting the eyes out of photos to making a portrait 'nod' with artificial intelligence. 

Hackers exploit a flaw Microsoft fixed 9 years ago
The widely used malware ZLoader crops up in all sorts of criminal hacking, from efforts that aim to steal banking passwords and other sensitive data to ransomware attacks. Now, a ZLoader campaign that began in November has infected almost 2,200 victims in 111 countries by abusing a Windows flaw that Microsoft fixed back in 2013. Unless you go out of your way to install the patch, your system could be exposed.
— Wired

Don't relax Log4j remediation, Microsoft says
Coming up on one month after vulnerabilities in the free Log4j logging tool came to light, Microsoft urged security chiefs to apply patches and stay watchful. Microsoft, cybersecurity company CrowdStrike Holdings Inc., and the Cybersecurity and Infrastructure Security Agency have released scanners to help assess tech set-ups for Log4j risks.
— ZDNet
binge reading disorder
Illustration: 731
What happens when bonds lose money?
With the Federal Reserve focused on fighting inflation, rate hikes could mean losses for the "safe haven" side of your portfolio.

This was the year when finance jumped the Doge
From GameStop to bored apes, weirdness abounded among meme-loving amateur investors. This is something that cannot be ignored, and you can bet finance professionals and regulators alike have taken notice. Wall Street firms are already devising ways of integrating meme-stock movements into their investment strategies. Among U.S. lawmakers, conversations about reining in trading apps are already raging; cryptocurrency is also in the crosshairs. Soon we will know whether meme finance will be tamed by new rules and restrictions — or will have reshaped finance for good.
— Wired

New York governor vows to make takeout cocktails permanent
“To-go drinks were a critical revenue stream for New York’s bars and restaurants during the pandemic, helping many small businesses across the state pay their rents or mortgages,” a written copy of Gov. Kathy Hochul's policy agenda states. The state’s takeout cocktail program was first enacted by Gov. Andrew Cuomo in March 2020 through an emergency executive order at the onset of the pandemic.
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