Week InReview

Optimism & Caution
  • At the World Economic Forum's annual meeting in Davos this week, the International Monetary Fund argued that while the outlook for this year and the next was better than previously anticipated, a recession may be closer than many acknowledge and that investors and policy makers should guard against complacency.
  • "The bull market seems to be steamrollering over everyone who has a bearish view," said Tim Adams, president of the Institute of International Finance, who was in Davos. "But there's a lot of complacency. There are termites in the foundation and a number of those are gnawing away at night."
  • Signaling other causes for concern a new report released on Monday by the United Nations showed global flows of foreign investment fell 16 percent in 2017 to $1.52 trillion, while the International Labor Organization said progress in reducing vulnerable jobs had stalled.
Friday | Jan 26, 2018
Let's recap
In case you missed it . . .
Bullish U.S. trading threatened by overextended optimism; volatility, drawdowns tend to follow extreme points in indexes (Jan 24)

Don't party too hard is Davos warning as world economy picks up
IMF warns downside risks exist amid best global growth in seven years; CEOs report mounting optimism in outlook, PwC survey finds (Jan 23)

Banks 'don't even have a plan A' for another financial crisis
"If we have another financial crisis, there isn't even a plan A," with regard to what central banks would do, a Harvard economics professor told an audience during a panel entitled "The Next Financial Crisis" at the World Economic Forum in Davos, Switzerland (Jan 23)

The fatal conceit of the government mortgage complex
Debate over housing finance reform has raged for ten years. A favorite argument of those wishing to preserve some version of Fannie and Freddie has been: Without Fannie and Freddie, there is not enough private capital to sustain the housing market. (Jan 23)

Who should pay for financial transparency? Banks or government?
The issue of who pays for compliance is taking on added urgency with new financial regulations to fight money laundering and foreign corruption through increased transparency set to take effect in May (Jan 22)
The Cyber Cafe
Cybersecurity news every Friday
WEF launches cybersecurity center 
In a bid to safeguard the world from hackers and growing data breaches - especially from nation-states - the World Economic Forum announced a new Global Centre for Cybersecurity to be headquartered in Geneva, Switzerland

The future of AI and endpoint security
Endpoints are the weakest link in your enterprise security chain. Is AI the solution?

Bank regulator flags cyber risks in first threat report
OCC's Otting issues initial six-month report on industry risks; says competition over loans may be weakening standards
The Week in Davos
IMF says global growth will accelerate to its fastest pace in seven years as U.S. tax cuts spur investment.

Some Davos delegates are concerned things look too good to be true.

With the stock market soaring, finance executives are telling investors to avoid repeating the mistakes of 2006.

Every year, news breaks far away only to reverberate in Davos hours later. Often it comes from Washington; in this case it was U.S. tariffs on solar panels and washing machines.

Booming markets or no, the financial crisis has had a lasting impact on who's hot and who's not in the Swiss Alps.
Whether or not the White House choreographed the dollar's slide, it may have just declared open season on the currency.

German Chancellor Angela Merkel  warned against the "poison" of populism that leads nations to look inward;  French President Emmanuel Macron  urged global elites to do more to narrow the inequalities that have resulted from global capitalism's excesses.

Wall Street executives brace for higher interest rates, but bet incoming Federal Reserve Chair Jay Powell and his global counterparts can tighten monetary policy without crashing markets.
Treasury Secretary Steven Mnuchin argued his dollar-weakening comments Wednesday were "consistent" with the U.S.'s long-standing exchange rate policy, and that he isn't concerned by short-term fluctuations in the greenback.

Theresa May isn't ruling out paying for access to the European single market after Brexit.

The IMF is aware there will be innovations but believes crypto-anonymity and its use to conceal illicit trades such as terror financing and money laundering is unacceptable.
Key takeaways from the U.S. President's speech:
  • Trump stuck to his America First theme, explaining that the U.S. will act in its best interests in trade and foreign policy 
  • He expressed a willingness to negotiate not just bilateral trade agreements but perhaps a multilateral deal with some of the countries in the Trans Pacific Partnership
  • Made a sales pitch to global business leaders, boasting about his tax overhaul, efforts to reduce regulations and the strength of the country's colleges and universities
Binge reading disorder
Hand-curated, chosen with love.
Rolling back regulations often comes before a financial meltdown, according to 300 years of history
The blame for financial meltdowns often focuses on  irresponsible traders and greedy bankers. But politicians, whose policies sometimes fan the flames, deserve scrutiny as well, according to a  fascinating analysis of booms and busts since the 18th century
- Quartz

Disinformation is becoming unstoppable
We are in the midst of a "tech-lash." For months, the leading internet companies have faced a wave of criticism  sparked by revelations that they unwittingly enabled the spread of Russian disinformation  that distorted the 2016 election. They are now beginning to listen.
- Time

12 interesting predictions for 2018
With self-driving vehicles, virtual reality, quantum computing, gene therapy, 2017 saw a number of major breakthroughs enter the public eye. This year will be no different.
- Forbes