Week InReview
Friday | Nov 1, 2019
Repo riches.

"Exiles from Wall Street’s old proprietary trading desks were among those who cashed in on September’s spiking repo rates, and now they’re lining up for the next big move.

"Tucked away at funds from Sydney to Boston, traders who make their livelihood arbitraging dislocated market rates are eyeing another windfall like the repo madness that caught the Federal Reserve on the back foot and left the likes of Jamie Dimon largely on the  sidelines ."

in case you missed it...
Republican politicians and regulators, along with securities industry advocates, are making another push to derail the Securities and Exchange Commission’s plan to create a single, real-time record of trade prices, arguing it will become a tool for government over-reach or a target for hackers. (Financial Times | Oct 29)

After the financial crisis, Washington focused on the credit-ratings firms and the conflict of interest that made them “essential cogs in the wheel of financial destruction,” according to the federal government’s report on the crisis. But the government didn’t eliminate the conflict, where the firms are paid by the entities whose bonds they rate. Instead, the Securities and Exchange Commission decided that enabling ratings firms to publish unsolicited ratings on securities they weren’t hired to analyze would be the best solution. The agency crafted a rule to give them access to deal data to publish such ratings. (The Wall Street Journal | Oct 29)

Giants like JPMorgan, Morgan Stanley, and Tradeweb are embracing a credit-trading revolution to move multi-billion-dollar bond portfolios in minutes , fueling an arms race among Wall Street giants who want a piece of the action. (Business Insider | Oct 29)

Exchange-traded funds have swelled into a $4 trillion juggernaut over the past quarter of a century, but many asset managers say the industry is entering a new phase of competition and oversaturation that threatens to squeeze out smaller funds. (The Wall Street Journal | Oct 28)

Regardless of what you think about the Federal Reserve’s decision to get back into the business of  buying Treasuries , one thing is clear: It’s a good time to be a primary dealer. While this elite-bond trading club may never fully regain its former  glory , the prospect of the Fed once again purchasing hundreds of billions of dollars worth of U.S. government debt is set to be a boon for the select group of banks and dealers at the center of the $16.3 trillion Treasury market. (Bloomberg Markets | Oct 27)
FSOC to meet in closed session
(Oct 31) —  The Financial Stability Oversight Council will meet on Thursday November 7 in a closed session at the Treasury Department. The preliminary agenda includes:
  • Proposed amendments to FSOC's interpretive guidance on nonbank financial company designations.
  • FSOC's 2019 annual report.
  • A discussion of the activities of cloud service providers.
  • A discussion of the current expected credit losses (CECL) accounting standard.
the cyber cafe
Millions of Adobe accounts exposed in privacy snafu
An Adobe database was left online without password protection, exposing about 7.5 million Creative Cloud accounts for about a week, security researcher Bob Diachenko found. No financial information was exposed, but data such as email addresses and member IDs could be used in phishing attacks.
—  Infosecurity

Chinese malware creates 'magic password' for MSSQL servers
Chinese cyberspies have developed malware that alters Microsoft SQL Server (MSSQL) databases and creates a backdoor mechanism that can let hackers connect to any account by using a "magic password." The backdoor also hides user sessions inside the database's connection logs every time the "magic password" is used, helping hackers remain undetected even when administrators may suspect something is wrong. The malware, called skip-2.0, works with only versions 11 and 12.
—  ZDNet  

False-flag hackers present a major security concern
A Russia-linked group’s use of stolen tools is having as worrying repercussions. In the sordid world of cyber war, there is no such thing as professional courtesy. That was the finding of a report this week, which said a Russian cyber espionage unit carried out attacks under the guise of being Iranian. The growing difficulty of finding the provenance of hacks is only matched by the rising damage which cyber attacks can achieve. The risks from misguided retaliation demand continued efforts to identify the origins of attacks.
—  Financial Times (opinion)
binge reading disorder
Different kinds of stupid 
There  are types of smart  that have nothing to do with intellect. And there are types of stupid that have nothing to do with unintelligence. Smart is the ability to solve hard problems, which can be done many ways. Stupid is a tendency to not comprehend easy problems. It’s also is a diversified trait.

Be efficient, not productive
There's a difference between being  productive  and being  efficient , and efficiency wins every time. Productivity measures how much you do or produce within a given timeframe. Efficiency, on the other hand, is about being productive  with less effort
—  Zapier

Amateurs and professionals. What's the diff?
Why is it that some people seem to be hugely successful and do so much, while the vast majority of us struggle to tread water? The answer is complicated and likely multifaceted. One aspect is mindset –  specifically, the difference between amateurs and professionals. Most of us are just amateurs. What’s the difference?
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