Week InReview

The Story of Mankind

"In the past, pension funds, endowments and family offices pursued relatively safe investments. After interest rates collapsed on the heels of the financial crisis, they ran into challenges paying pensioners and filling university budgets, and added riskier bets on hedge funds and venture capital in the hopes of winning better returns.

"More recently, some of these investors also made big, unpublicized wagers seeking to benefit from what had been an unusually long period of low volatility, according to pension-fund consultants and others who deal with these institutions. The strategies, often involving the writing of complicated options contracts, were for years a source of easy money. Markets hadn't been so calm since the 1950s."

Friday | Feb 16, 2018
Let's recap
In case you missed it . . .
Market volatility adds to scrutiny over ETFs' use of derivatives to juice up returns (Feb 14)

Flash-boys regulation fight returns to U.S. derivatives agency
Two top officials at the main U.S. agency that regulates derivatives are rekindling a fight over how aggressively it should police computer-driven trading strategies that dominate markets (Feb 14)

`Ghost liquidity' in currency markets is a concern for the CFTC
U.S. regulators are keeping a keen eye on liquidity in the world's largest financial market (Feb 13)

U.S. regulator probes possible rigging of VIX
FINRA to investigate whether traders have manipulated derivatives prices (Feb 13)

'Shut up and let me trade': The week that rocked stock markets
One of the wildest runs in U.S. stock-market history began with the collapse of arcane bets on volatility and ended with a sober realization: The easy ride is over.  Among the lingering questions is the big one: Is this a hiccup or the start of something worse?  (Feb 12)
The Cyber Cafe
Cybersecurity news every Friday
Looming N.Y. cybersecurity deadline puts pressure on companies
Time is running out for financial institutions to certify compliance with New York cybersecurity rules that may expose certifying officers to liability for program lapses.

Finance cyber chiefs need more CEO face time
Industry group's poll finds employee training as top priority; group recommends direct flow of information to CEO and board.

The case for integrating physical and cyber security
One may not think of internet-connected doors, lighting, and emergency management equipment as digital assets, but they must be treated as such and kept safe from hackers.
CFTC user fee proposal
Senate ag chair shoots it down 
(Feb 15) -- Two Republican senators who oversee the nation's swaps and derivatives regulator said they don't support assessing transaction fees on companies regulated by the CFTC.  The Commodity Futures Trading Commission requested a total budget of $281.5 million for fiscal 2019, with $31.5 million of the budget proposed as user fees.  "I'm not happy with that," Senate Agriculture Committee Chair Pat Roberts (R-Kan.) said during a CFTC oversight hearing. "I view user fees as a tax on all the farmers, ranchers, and growers, and all the people that depend upon you to make sure that their risk management strategy is protected," Roberts told CFTC Chair J. Christopher Giancarlo.  Sen. John Boozman (R-Ark.), who also sits on the Senate Appropriations Committee, also came out against the idea.
Binge reading disorder
Hand-curated, chosen with love
What investors need to know about the new tax law
For Washington, the federal tax overhaul is done. For companies around the globe, it is only beginning. And for investors, it's time to understand just how the changes are sweeping through the companies and industries in their portfolios.

WEF warns focus on GDP as economic performance indicator fuels inequality and short-termism
Although GDP remains a necessary condition for achieving progress in living standards, the World Economic Forum said more needs to be done by policymakers in this period of global growth to "futureproof" their economies "without unduly straining the environment."

Tech companies are the new investment banks
The much-lauded overseas 'cash' pile is actually a giant bond portfolio.
Transparency.
Inclusiveness.
Consensus.