A theory of the world.

"One  theory of the world is that there is a group of like a dozen people who control every large corporation on earth and so wield immense though quiet power. 'The Problem of Twelve,' Harvard professor John Coates  calls it, and it is one of my favorite conspiracy theories in that it is (1) boring and straightforward in its premises, (2) profound and far-reaching in its implications, and (3) kinda true. The 12 people (give or take) are the heads of the big asset-management firms, companies like BlackRock and Vanguard, and they collectively control much of the voting power at almost every public company. Most companies are answerable to them; they get to tell companies what to do, and they exercise this power to push their particular priorities.

-- Matt Levine, Bloomberg Opinion

One call defined investing in 2019. Now 'bubble' trouble mounts.

When Tim Rudderow settles into his office in a small town outside Philadelphia, the hedge-fund manager has a shortcut these days to figure out what’s been happening in the stock market. He just sizes up the bond market. (Bloomberg Markets | Dec 10)

Wall Street’s fear gauge is acting up. That could signal trouble.

The VIX, also known as Wall Street’s “fear gauge,” jumped 16% on Monday to 15.86, while the S&P 500 Index retreated just 0.3% and is still less than a percent away from its record high. (Bloomberg BNN - Canada | Dec 10)

Repo firepower reduced by falling cash levels at big U.S. banks

Even as hedge funds and smaller broker-dealers lean more heavily on the biggest U.S. banks for borrowing in repo markets, the lenders’ cash holdings have been declining, reducing their ability to jump in and relieve pressure when rates spike. The average portion of liquid assets held as cash by the six biggest lenders fell to 31% by the end of September, down from more than 40% in the previous two years. The portion of Treasuries and other securities considered easy to sell under international regulations, meanwhile, rose. (Bloomberg Law | Dec 10) See also: Liquidity perils fuel volatility in US repo market (Bloomberg Markets | Dec 8)

ETFs that hide their portfolios get go-ahead from U.S. regulator

Four new types of exchange-traded funds that allow money managers to hide their holdings have been approved by the Securities and Exchange Commission, and will be able to create ETFs that disclose their holdings once a quarter, rather than every day like conventional ETFs. Their next battle is against one another, transparent ETFs. (Bloomberg Markets | Dec 10)

CFTC moves toward activity-based oversight of nonbanks

The Commodity Futures Trading Commission is following the lead of the Financial Stability Oversight Council in moving to activity-based regulation of nonbanks from an entity-based approach. "Although the 2008 financial crisis demonstrated the usefulness of entity-based designations, it also revealed a more acute need for an activities-based regulatory approach to systemic risk," CFTC Chair Heath Tarbert says. (Futures & Options World | Dec 9)

How remote working increases cyber security risks

As many as 50 per cent of employees globally work away from their office at least two and a half days a week. Some analysts predict that up to half of the workforce will be freelance within 10 years, as short-term work becomes more common. Meanwhile, many businesses have increasingly long  –  and global  –  supply chains. Inevitably, these changes come with added cyber-security risks.

—  Financial Times

What global companies need to know about U.S. national security policy

Driven by sober security concerns about China and other nations, the U.S. government is retooling its federal regulatory apparatus to incorporate public safety and national security into commercial decisions  –  and will go beyond dialogue to start bringing other countries along in the process, writes King & Spalding’s Sumon Dantiki, former senior counselor to the director of the FBI.

—  Bloomberg Law

FBI to smart-TV buyers: Beware of hackers

The FBI is warning holiday shoppers about the risks of hackers tapping into security vulnerabilities on smart TVs due to their internet connections, as well as the presence of cameras and microphones on many sets. Most smart TVs lack security protection, the FBI noted, urging buyers to take steps  –  such as putting black tape over cameras  –  to protect themselves.

—  TechCrunch

Silicon Valley is listening to your most intimate moments

Ruthy Hope Slatis couldn’t believe what she was hearing. She’d been hired by a temp agency outside Boston for a vague job: transcribing audio files for Amazon.com Inc. For $12 an hour, she and her fellow contractors, or "data associates," listened to snippets of random conversations and jotted down every word on their laptops. Amazon would only say the work was critical to a top-secret speech-recognition product. The clips included recordings of intimate moments inside people’s homes.

—  Bloomberg Businessweek

People created their own false information

In a world inundated with fake news, it's easy to cast blame on others for spreading misinformation. This study at The Ohio State University gives credence to notion that we create our own "alternative facts" to align with our biases. In this instance, the researchers showed that people misremember accurate statistics, such as the number of Mexican immigrants in the United States, which actually decreased between 2007 and 2014.

—  Ohio State University

Scientists took a step toward the "DNA of things"

Perhaps you've heard of the internet of things, in which objects are connected with information via the internet. Researchers in Switzerland and Israel are close to taking that concept to the next level with the "DNA of things," which entails turning nearly any object into a data storage unit. To demonstrate this potential, the researchers 3D-printed a plastic rabbit. The plastic contains DNA molecules that have the printing instructions encoded.

—  Wired online (UK)