Week InReview
Friday | Sep 13, 2019
Tweet of the Week
in case you missed it...
The administration plans to require Fannie Mae and Freddie Mac to begin paying a fee for support from the Treasury Department in exchange for a change to the mortgage-finance companies’ status that will allow them to  retain their earnings, Treasury Secretary Steven Mnuchin said Tuesday. Testifying before Senate lawmakers, Mnuchin said he hopes to quickly reach a deal with the regulator of Fannie and Freddie, the Federal Housing Finance Agency, to amend the terms of the firms’ government bailout agreements. (The Wall Street Journal | Sep 10)

The for mer Federal Reserve chair, who championed the restrictions while serving as an adviser to President Barack Obama after the 2008 financial crisis, said regulators have used “simplification” as an excuse to weaken the rule’s core concepts. Agency chiefs were pushed to make the changes by “well-compensated industry lobbyists,” he wrote to current Fed chief Jerome Powell in an Aug. 20 letter. (Bloomberg Business | Sep 10)

New York and a half dozen other states accused the Securities and Exchange Commission of botching a final regulation intended to protect broker-dealer customers from conflicts of interest under the landmark Dodd-Frank Act passed nearly a decade ago. The new rule, set to take effect Tuesday, continues to allow broker-dealers to market themselves as trusted advisers while giving recommendations that may leave conflicts undisclosed and “siphon investors’ hard-earned savings” as a result, the states said in a lawsuit filed late Monday in federal court in Manhattan. (Bloomberg Markets | Sep 10)

US mutual funds' significant increase in holdings of illiquid assets during the past 10 years has raised concerns about how the funds would respond to a crisis, according to a Federal Reserve study. The funds have increased borrowing in response to rising redemptions, a trend that "could further reinforce fire sale dynamics" during economic stress, the study says. (MLex | Sep 9)

The rise of synthetic deals is seen as a warning sign, as such deals were a key ingredient of the financial crisis. Banks are using these deals to shore up balance sheets and hedge default risk. (Bloomberg Pro | Sep 9)
Mnuchin may appeal Fannie-Freddie ruling
(Sep 10) —  Treasury Secretary Steven Mnuchin said he’s considering appealing, to the Supreme Court, Friday’s  court ruling overturning  a judgment that backed government’s right to take all of Fannie Mae and Freddie Mac’s profits, CNBC said, citing an interview with him. 

the cyber cafe
SIM swapping is a difficult-to-stop fraud technique
Hackers recently took control of Twitter CEO Jack Dorsey's account using a technique called SIM swapping, which involves hijacking a person's telephone number. It is a generally low-tech approach in which hackers may deceive phone companies into switching phone numbers to new devices.

First cyberattack on US power grid reported
A cyberincident in March at an undisclosed utility disrupted operations at several small power-generation sites in the western US for about five minutes  – the first such attack of its kind on the nation's power grid. It is not clear if the utility was targeted or if it simply experienced a random hit by a bot, but the North American Electric Reliability Corp. urged utilities "to have as few internet facing devices as possible."
—  E&E News

Ex-DHS chiefs urge US to "raise our game" in cybersecurity
Three former Department of Homeland Security secretaries called on the US to "raise our game" in preparing for cyberattacks, to use creativity in developing cyberdefenses and to adequately penalize attackers. Janet Napolitano, Michael Chertoff and Jeh Johnson spoke Monday at ground zero in advance of the 18th anniversary of the Sept. 11 terrorist attacks.
—  Roll Call
binge reading disorder
Knowing if you can stomach the next big market swing
If I ask you in a questionnaire whether you are afraid of snakes, you might say no. If I throw a live snake in your lap and then ask if you’re afraid of snakes, you’ll probably say yes  –  if you ever talk to me again. Investing is like that.

How misinformation spreads — and why we trust it
The most effective misinformation starts with seeds of truth.

Sneakers: The ultimate guide for obsessives
An extensive primer, including the threats to Nike’s dominance and five game-changing technological innovations.
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