Week InReview
Friday | Dec 17, 2021
|
|
The SEC was busy this week. |
|
The SEC under Chair Gary Gensler plans to offer changes to make the most-vulnerable subset of money-market funds less susceptible to investor runs. Photo: Justin T. Gellerson for The Wall Street Journal |
|
According to The Wall Street Journal, some of the SEC's proposals surprised Wall Street executives with their scope, and indicate that Chair Gary Gensler is moving quickly to enact a policy agenda that observers have called the agency's most ambitious in decades. That stands in contrast to other financial regulators, for which President Biden has yet to fill key positions, and saw a nominee withdraw amid Senate skepticism during confirmation.
|
|
Illustration: Nicole Shinn for Bloomberg Businessweek |
|
There was a huge merger in 2021: the combination of popular culture and modern finance. Tom Brady and Matt Damon were suddenly shilling for cryptocurrency exchanges. Digital tokens that started off as elaborate pranks represented tens of billions of dollars of paper wealth. And cartoon pictures of apes were selling for millions of dollars on something called the nonfungible token market, which almost no one had heard of in the long-ago days of 2020. (Bloomberg Businessweek | Dec 16)
A record one-third of U.S. loans sold to investors this year came from companies that borrowed more than financial watchdogs recommend, raising concerns over rising reliance on corporate credit that could exacerbate an economic downturn. (Financial Times | Dec 16)
Most central bank officials, in projections released Wednesday at the conclusion of their two-day meeting, penciled in at least three quarter-percentage-point rate increases next year. In September, around half of those officials thought rate increases wouldn’t be warranted until 2023. (The Wall Street Journal | Dec 15)
Treasury investors are losing more money than they have in four decades, once inflation is taken into account. And if markets are right, they’re unlikely to come out ahead for years. (Bloomberg Markets | Dec 13)
Expensive air filtration systems to prevent the spread of Covid-19. Rooftop gardens irrigated by rainwater. A lunchtime menu from Michelin star chef Daniel Boulud. Developers and the tenants that occupy big blocks of space across the U.S. are making expensive gambles on real estate perks designed for the uncertainties of the pandemic era, hoping the additions will be enough to lure reluctant employees back to the office and retain top talent in high demand. The changes offer hope to owners of trophy properties from New York to Seattle who feared disaster for their investments not that long ago. The question now is whether their wagers will pay off. (The Wall Street Journal | Dec 10)
|
|
Libor phaseout rule under White House review |
|
(Dec 15) — The White House’s regulatory review office has begun reviewing final rules (RIN 1545-BO91) that ensure that companies won’t face capital gains tax when they alter loan and derivative contracts to comply with the global phaseout of the London Interbank Offered Rate and other interbank offered rates.
Companies expect a massive undertaking to amend hundreds of trillions of dollars worth of contracts with references to Libor and other interbank rates to insert new benchmark interest rates. In the proposed rules, the Internal Revenue Service said such contract modifications will not be subject to capital gains tax under tax code Section 1001.
After an extensive rate-rigging scandal came to light in 2012, regulators pledged to phase out Libor and encourage the markets to shift to rates less subject to manipulation.
The Office of Information and Regulatory Affairs received the rules on Tuesday, according to its website.The IRS released proposed rules (REG-118784-18) in October 2019.
Source: Nicola M. White/Bloomberg Tax
|
|
Security responders are scrambling to patch the bug, which can easily be exploited to take control of vulnerable systems remotely. Photo: Miragec/Getty Images |
|
The Log4J vulnerability will haunt the internet for years
A vulnerability in the open source Apache logging library Log4j sent system administrators and security professionals scrambling over the weekend. Known as Log4Shell, the flaw is exposing some of the world's most popular applications and services to attack, and the outlook hasn't improved since the vulnerability came to light last Thursday. If anything, it's now excruciatingly clear that Log4Shell will continue to wreak havoc across the internet for years to come.
Hackers backed by China seen exploiting security flaw in internet software
Hackers linked to foreign governments are among a growing assortment of cyberattackers seeking to exploit a security flaw in widely used internet software, according to cybersecurity firms and Microsoft. Security researchers have seen no signs to date that China or another nation-state hacking group is attempting widespread exploitation of the Log4j issue on the same scale as the Microsoft Exchange attacks, which infected hundreds of thousands of servers across the globe. But ransomware groups are also exploiting the security hole, raising fears of more disruptive cyberattacks ahead.
China and Russia threaten ‘free and open’ internet, U.K. warns
The U.K. said on Tuesday that the “free and open internet” was at risk from censorship by China and Russia, with western allies in a race to write the rules governing cyber space. The warning was contained in a document setting out the country’s new cyber strategy, which predicted a “clash of values” between world powers as the U.K. developed its cyber warfare capabilities.
|
|
Photo illustration by Daisy Korpics/WSJ; Photos: Getty Images/iStock |
|
How to tell the boss you're burned out (without derailing your career)
Talking about burnout with a boss isn’t the same as talking about it with a friend. Stigma around mental-health challenges is real, psychologists warn. How can you get some breathing room, and back to feeling like yourself, without jeopardizing your career?
How to figure out the Covid-19 tests you need for air travel
The rules for flying into the U.S. have changed yet again. International travelers including U.S. citizens coming into the country by air now must have a negative Covid-19 test within a day of departure, regardless of vaccination status. Previously, fully vaccinated travelers could have a negative test within the three days before departing for the U.S. The requirements don’t apply to people entering the country by land or sea. The changing requirements show how much attention travelers need to pay to entry rules and health guidelines before and even during a trip.
What could possibly go wrong? The biggest economic risks for 2022.
Most forecasters, including Bloomberg Economics, have as their base case a robust recovery with cooling prices and a shift away from emergency monetary-policy settings. What could go wrong? Plenty. Omicron, sticky inflation, Fed lift-off, China’s Evergrande slump, Taiwan, a run on emerging markets, hard Brexit, a fresh euro crisis, and rising food prices in a tinder-box Middle East — all these feature in a rogues’ gallery of risks.
|
|
|
|
|
|
|
