Week InReview
Friday | Aug 27, 2021
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As we inch back to office life and renegotiate working remotely, what will the midday meal look like? Here are tips on emerging trends, how to get the most out of the lunch hour and what we can expect to pay. One thing is clear: Lunch, like nearly everything else in our lives, is changing.
— The Wall Street Journal
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Photo illustration by 731; Photos: Getty Images, Shutterstock, AP |
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Having already dashed plans for Federal Reserve officials to meet in person in Jackson Hole this week, rising coronavirus cases are now limiting what Jerome Powell can say about what comes next for U.S. monetary policy. The Fed chair will speak at 10 a.m. Washington time on Friday and is expected to reinforce the message that it will probably be appropriate to begin scaling back the Fed’s $120-billion-a-month bond-buying program by the end of the year. (Bloomberg Economics | Aug 26)
Securities and Exchange Commission Chair Gary Gensler has a warning for hundreds of Chinese companies that have raised billions of dollars in U.S. markets: Submit to more scrutiny soon or get kicked out. In a Tuesday interview, he pledged to strictly enforce a three-year deadline that requires Chinese firms to permit inspections of their financial audits. If businesses refuse, their shares could be delisted from the New York Stock Exchange and Nasdaq as soon as 2024. “The path is clear,” Gensler said. “The clock is ticking.” (Bloomberg Business | Aug 25)
Despite the seemingly endless supply of brainpower and cutting-edge technology that’s put to work in financial markets, at times it feels as if nobody knows anything. That’s perhaps the hardest-to-digest lesson learned – or at least reinforced – from the past year and a half, during which the U.S. stock market doubled at the fastest pace since 1932: The accrued wisdom of Wall Street can be a swiftly depreciating asset. (Bloomberg Businessweek | Aug 24)
Federal Reserve Chair Jerome Powell has built a reputation as a skilled advocate for the U.S. central bank, thanks to strong personal ties forged with Congress that will help if he’s nominated for a second term. Powell has worked Congress during his three years at the helm like no Fed chair since Alan Greenspan. But where Greenspan was a regular of the cocktail party circuit, Powell has taken a more workmanlike approach. (Bloomberg Politics | Aug 24) see also Fed’s ability to set rates floor weakening on cash deluge (Bloomberg Markets | Aug 23)
The so-called private-label mortgage market – in which financial firms serve the middleman role of creating giant pools of loans and selling them to investors – had more than $42 billion of issuance in the second quarter. (The Wall Street Journal | Aug 23)
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Reverse Goldilocks sees optimism return to markets |
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(Aug 24) — Tapering fears are suddenly just a little bit further in the future. Traders are, probably rationally, taking the view that pushing the Jackson Hole confab to a virtual format this year will add just that little bit extra in central bankers’ minds that they’ll want hold fire on tightening policy.
That creates a beautiful reverse-Goldilocks situation for markets, where there’s just enough doubt about the impact of the delta variant on growth that liquidity will remain ample for the time being. And let’s be honest, that’s what really matters for stocks at the moment.
Talking to sources over the last few days, a few people have mentioned they think the virtual symposium will be a damp squib. I struggle to see how that would be the case. Either we get the tapering signal, or we don’t. But one way or another, it’s a pretty significant event. Where’s vol trading at the moment?
Source: Eddie van der Walt/Bloomberg Government
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Fed's reverse repo rises to fresh record as imbalances persist |
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(Aug 25) — Pressure is still prevalent in the Federal Reserve’s reverse repo facility as demand on Wednesday rose to a new all-time high amid ongoing asset purchases and the Treasury’s dwindling general account pushing more cash into the system as it strives to remain under the debt ceiling.
- Seventy-seven participants took $1.147 trillion, which exceeded Tuesday’s volume of $1.13 trillion, and the previous record of $1.136 trillion reached on Aug. 23. Overnight GC repo traded as high as 0.07% before closing at 0.05%, according to Curvature Securities; it first traded at 0.05% with a bid-ask of 0.05%/0.04%, according to ICAP
- The Treasury’s cash balance was $284 billion as of Aug. 24, the lowest since December 2019, and down from $317 billion the previous session
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Since the debt ceiling was reinstated at the beginning of the month, bill supply this month will total -$79 billion, bringing the total amount of paydowns to $915 billion this year
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Treasury bills maturing around Nov. 1 have cheapened relative to the rest of the bill curve, even though the timing as to when the government will exhaust its borrowing authority remains murky
- Elsewhere, stablecoins such as Tether create “difficult policy questions” for the Federal Reserve, regarding market liquidity support and the regulation of non-banks, according to Barclays note
Source: Alexandra Harris/Bloomberg Government
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"Hackers (pt. 2)" by Ifrah Yousuf is licensed under CC BY 4.0 |
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SolarWinds and the Holiday Bear Campaign
A piece adapted from the newly-released eCasebook “Cybersecurity Law, Policy, and Institutions,” which is available free and in full (270+ pages) in pdf format here.
Cybersecurity the ‘core national security challenge’: Biden at CEO summit
The U.S. president hosted executives from major technology, financial, and energy companies on Wednesday for a summit on national cybersecurity. Biden highlighted estimates that roughly half a million cybersecurity jobs in the U.S. are currently unfilled and stressed the private sector needs to do more to safeguard digital systems from criminal and state-backed hackers and spies.
U.S. signs cybersecurity agreements with Singapore
The U.S. and Singapore agreed to work together more closely on cybersecurity training, exercises and information sharing. The countries said they will also increase their coordination in responding to significant cyber incidents.
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Illustration: Christian Northeast |
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Life after white collar crime
A support group launched in Greenwich serves “guys detoxing from power.” Every week, fallen executives come together, seeking sympathy and a second act.
Hot ginger, whiskey and tennis may just stave off your jet lag
Bloomberg Pursuits talks to globe-trotters in all of our luxury fields – food, wine, fashion, cars, real estate – to learn about their high-end hacks, time-saving tips, and off-the-wall experiences. Here are some hacks from a Distinguished Travel Hacker.
New regulation could cause a split in the crypto community
The infrastructure bill is a watershed moment in the history of cryptocurrency. The technology – at its core a crypto-anarchist, anti-bank, borderline anti-government manifesto disguised as code – has finally acquired that great marker of prestige: a lobby. The fact that some senators were ready to fight in crypto’s corner appears to show that the cryptocurrency industry is more than a gaggle of Twitter accounts and some blue-sky venture capitalists.
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