Week InReview

Beanie Babies. Due for a rally?

"Two decades after the great Beanie Baby boom, where old and young hit Hallmark stores around the country in search of rare examples, the speculators are back, living in an alternate Beanie reality.

"Some on eBay insist that their rare Beanies, with mistakes in the tags, from a specific generation or with PVC beads as their fillings instead of the more common polyethylene, are worth tens of thousands of dollars.

"Such dreams are crushed for anyone calling Rogue Toys, a collectibles store with branches in Las Vegas and Portland, Ore. The store's answering machine specifically says the store doesn't want to buy your Beanies."

Friday | Feb 16, 2018
Let's recap
In case you missed it . . .
Mutual funds have six more months to satisfy parts of an SEC rule intended to enhance liquidity risk management, following an industry push for an extension of what it termed "costly and vexing" requirements (Feb 22)

U.S. 'too big to fail' regime set for overhaul
Treasury plans 'Chapter 14' bankruptcy process to shield taxpayers from bank collapses (Feb 21)

From growth to value: the great rotation is finally happening
How should investors manage their portfolio during a 'regime change'? (Feb 21)

Investors rejected by top court on Fannie, Freddie suits
U.S. Supreme Court dealt hedge funds and other big investors a blow by refusing to take up challenges to "net-worth sweep"; rebuff leaves 2017 ruling against GSE investors intact (Feb 20)

Washington's $500 million financial-storm forecaster is foundering
The Office of Financial Research (OFR) was supposed to anticipate trouble and issue warnings , but initiatives have been delayed or scaled back (Feb 19)
The Cyber Cafe
Cybersecurity news every Friday
U.S. SEC calls for 'clearer' cyber risk disclosure from companies
SEC commissioners voted unanimously to approve guidance aimed at helping public companies prepare disclosures about cybersecurity risks and incidents, marking the first such move since 2011.

Inconsistent reporting and information sharing can cause headaches
A recently formed group is tackling the challenge by creating a standardized system to measure and report risk in a way everyone can understand.

Financial firms collaborate to defend against cyber-threats
Following a successful cyber-security simulation exercise between public and private sectors, called the "Hamilton Series," industry leaders set out to conduct exercises led by the Financial Services Sector Coordinating Council, in coordination with the U.S. Treasury Department and with support from the Financial Services Information Sharing and Analysis Center. Based on lessons learned from the Hamilton Series, Sheltered Harbor was created.
FSOC weighs recent market turmoil
Approves December meeting minutes 
(Feb 21) -- The Financial Stability Oversight Council discussed volatility of trading in cryptocurrencies and other financial markets at a closed meeting on Wednesday. FSOC's members - including heads of Treasury, Fed, SEC, and CFTC - were given updates on "fluctuations in various asset classes" and how they're affecting financial institutions. Member agencies said they will "continue to monitor market developments." FSOC also discussed its ongoing reevaluation of the risk designation of its last remaining nonbank systemically important financial institution, Prudential Financial Inc. and voted to approve the minutes of its Dec. 14, 2017 meeting.
Treasury plans 'Chapter 14' bankruptcy process
Keeps orderly liquidation as backstop 
(Feb 21) -- U.S. bank regulators should retain the ability to dismantle massive, complex financial firms after a collapse, but should ensure the power is reserved "as an emergency tool for use under only extraordinary circumstances," a Treasury report said. The administration's disdain for the so-called Orderly Liquidation Authority granted to regulators after the 2008 financial crisis is clearly reflected in the report, which cites "serious defects" in the Dodd-Frank Act measure.
Fed funds futures
Show two hikes by September likely
(Feb 21) -- The amount of tightening priced in for 2018 by fed funds futures market held steady after minutes of the FOMC's Jan. 30-31 FOMC meeting showed a majority of participants saw stronger growth lifting the likelihood of further hikes.  Market pricing in two full increases through September 2018 Fed meeting and 80% chance of a third hike by December; two full hikes had previously been priced in by September, though numbers have firmed.  Odds of increase at March meeting = about 92%.
Binge reading disorder
Hand-curated, chosen with love
10 stories that will have to wait for the next market downturn
The good times - and bad times - won't last.

Amazon is taking over the stock market, too
The online retail giant has accounted for 27% of the S&P 500's gains this year, followed by Microsoft and Netflix.

The curse of intelligence
Some of the smartest people outside the world of finance can also be terrible investors.