Week InReview
Friday | Nov 8, 2019
Down a rabbit hole of old trading videos.
A collection of classics, including the great 1987 Paul Tudor Jones documentary "Trader."

in case you missed it...
U.S. financial regulators led by the Treasury's Steven T. Mnuchin and the Federal Reserve's Jerome Powell have been put on notice about the risk of an economically damaging cash crunch in the $11 trillion home mortgage market. Behind the concern aired recently at the Financial Stability Oversight Council headed by Secretary Mnuchin: The rapid growth of so-called shadow banks in the origination and servicing of home loans, especially riskier ones. (Bloomberg Economics | Nov 5)

U.S. business titans are a step closer to winning a long fight to overhaul corporate voting rules that they say subject them to unfair shareholder campaigns. The Securities and Exchange Commission on Tuesday proposed changes that would rein in proxy advisory firms and make it easier for companies to block submissions from newer stockholders who don’t own many shares. Several investor advocates, pension fund managers and hedge funds have already signaled they’re concerned that changes the SEC is seeking comment on will weaken shareholder protections. (Bloomberg Law | Nov 5)

Wall Street is getting a three-year reprieve from the Securities and Exchange Commission on Europe’s tough investment research rules, as the U.S. regulator said it needs additional time to evaluate sweeping changes affecting the brokerage industry. (Bloomberg Markets | Nov 4)

The US Supreme Court has agreed to hear a challenge to the Securities and Exchange Commission's authority to require disgorgement of profits made through fraud. The court will also examine whether the SEC can seek disgorgement from foreign entities. The court will also review whether the SEC has the authority to pursue securities fraud against foreign buyers when the conduct happens in the U.S. (Pensions & Investments | Nov 4)

Research by the Federal Reserve Bank of New York tried to answer why Fedwire Funds transfers and total reserves have been moving in sync. This co-movement is expected to weaken over time due to interest rate increases and the elimination of the ability for arbitrage. (Liberty Street Economics - NY Fed | Nov 4)
TMPG publishes minutes, materials
(Nov 5) — The Treasury Market Practices Group has published the meeting  minutes and materials  for their September 24, 2019 meeting.

The TMPG is a group of market professionals committed to supporting the integrity and efficiency of the Treasury, agency debt and agency mortgage-backed securities (MBS) markets. The group sponsored by the Federal Reserve Bank of New York is composed of senior business managers and legal and compliance professionals from a variety of institutions, including securities dealers, banks, buy-side firms, and market utilities. The TMPG meets regularly to discuss and promote best practices related to trading, settlement and risk management in the Treasury, agency debt and agency MBS markets.

From time to time, the TMPG publishes guidance to market participants, including the Best Practices for Treasury, Agency Debt, and Agency Mortgage-Backed Securities Markets and Fails Charge Trading Practice recommendations for the Treasury, agency debt, and agency MBS markets.
FSOC meets in closed session
(Nov 7)  — U.S. Treasury Secretary Steven T. Mnuchin held a closed meeting of the Financial Stability Oversight Council on Thursday, at which FSOC members:
  • Discussed the development of its 2019 annual report and potential amendments to its interpretive guidance on nonbank financial company designations.
  • Heard a presentation from Federal Reserve staff, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and Treasury regarding cloud service providers.
  • Discussed financial institutions’ use of cloud service providers, banking agencies’ authorities to oversee third-party service providers, and regulators’ current supervisory activities related to cloud service providers.
  • Heard a presentation from Fed staff, the OCC, and the FDIC regarding the upcoming implementation of the Financial Accounting Standards Board’s (FASB) new accounting standard for credit losses, commonly referred to as the current expected credit losses methodology (CECL).
  • Discussed the status of CECL implementation, several recently published studies regarding CECL’s potential impact on financial institutions, and the ongoing efforts of the FASB and the federal banking agencies to facilitate the implementation of CECL.

The Council voted to approve:
  • The appointment of Stephen Ledbetter, the director of policy in the Office of the Financial Stability Oversight Council at Treasury, as Executive Director of the Council.
  • The minutes of its previous meeting on September 4, 2019.
cyber cafe
Drones will pose cybersecurity threat
Experts are warning that cybercriminals could use drones to conduct reconnaissance, attack people, and harvest data from buildings and IoT devices, Booz Allen Hamilton wrote in a report. Defenses against drones include jamming signals, turning off wireless networks, changing router passwords frequently, and establishing firewalls and wireless traffic encryption.

Chrome introduces patch for 2 serious vulnerabilities
Last week, Google started rolling out a Chrome update that addresses two vulnerabilities that the Cybersecurity and Infrastructure Security Agency says could be used to take control of a vulnerable system.

Biometrics are banks' latest defense against cyberattacks
US banks are adopting new types of security to protect consumers and assets from cyberattacks. Some of the high-tech tools banks are using include voice biometrics, fingerprints, facial recognition and behavioral biometrics, which tracks how users interact with websites.
binge reading disorder
Deep sleep gives your brain a deep clean
Why sleep has restorative  –  or damaging  –  effects on cognition and brain health has been an enduring mystery in biology. Researchers think cerebrospinal fluid (CSF) may flush toxic waste out, “cleaning” the brain and studies have shown that garbage clearance is hugely improved during sleep.

What investors can learn from the best poker players
Some of the biggest investors on Wall Street are known to be ace poker players. Are there things we small fish can learn from Texas Hold ’em that will make us better investors? Researchers on the subject say the answer is yes.

10 attributes of great financial advisors
Not all financial advisors are created equal. Here are 10 qualities we believe investors should expect from their advisor.
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