As financial markets enter a more challenging phase, investors and analysts are looking for signs that can indicate financial stress. Here are some of the main contenders (Financial Times | Nov 15):
Vix: the champion of fear gauges
Skew: a challenger for the title
Yield curve: old champion still in the ring
Cross-currency basis: King Dollar's favourite contender
Financial conditions: the Frankenstein's monster of fear gauges
It's been a bumper year for passive investing, judging by the increase in indexes. There are now more than 3.7 million benchmarks globally. That dwarfs the roughly 50,000 stocks that trade on exchanges around the world.
Gauges tracking bonds and companies that address environmental, social and governance issues helped fuel the rise.(Bloomberg Markets | Nov 14)
Investment products that use derivatives to improve returns are threatening the reputation of the $3.6 trillion market for exchange-traded funds, according to one of five commissioners at the Securities and Exchange Commission. (Bloomberg Markets | Nov 12)
Tuesday's trading showed that in spades, with Japan's Nikkei 225 Stock Average sliding 3.5 percent at one point before paring to close 2.1 percent lower. China's Shanghai Composite Index quickly erased
its 1.3 percent slump and soared 0.9 percent as trade talks with the U.S. were said to have resumed. And the Hang Seng Index climbed 0.6 percent after slumping more than 2 percent. U.S. index futures also reversed earlier declines. (Bloomberg Markets | Nov 13)
The Federal Reserve plans to start publishing a periodic report on the stability of the U.S. financial system on Nov. 28. The semiannual Financial Stability Reports will identify potential risks to the economy and assess the financial sector's ability to withstand a crisis. (The Wall Street Journal | Nov 9)
The
Cyber Cafe
Cybersecurity news every Friday
What Dr. Seuss can teach us about bringing cybersecurity onto the blockchain
"Oh, the things you can find, if you don't stay behind!" Those words, uttered by Theodor Seuss Geisel, or as we know him, Dr. Seuss, still has the power to change the world, even with cybersecurity and blockchain technology.
SEC wants better controls after rash of cyber fraud
The SEC opted to share details about email scams and cyberattacks as a warning to the broader marketplace rather than penalize the defrauded companies for lax internal controls. Nine issuers improved their training for accounting controls and information technology after the incidents. They also updated their payment authorization procedures and verification requirements for vendor information changes.
U.S., Russia, China don't sign so-called Digital Geneva Convention
Three of today's major cyber-powers have not signed the Paris Call for Trust and Security in Cyberspace, that was signed by 51 other countries, 224 companies, and 92 non-profits and advocacy groups. The new peace pact is the most coordinated effort to date to get countries to agree on a set of international rules for cyberspace.
We've known for 85 years that forecasters can't forecast
I've noticed a tendency in the financial media to talk about the failure of active funds to outperform the market net of costs as if it's something we've only recently discovered. In fact, for those who were prepared to look for it, the evidence behind evidence-based investing has been around for a very long time.
Bigger bonuses are coming for (almost) everyone on Wall Street
Wall Street stock traders, money managers, commercial bankers, underwriters and even bean counters are poised for bigger year-end bonuses. But if you advise on mergers and acquisitions, sorry.
The first ETF was launched in 1993. You would think by now we would have moved beyond the idea that this not-so-new structure is going to somehow implode the markets. Remember 2000-2001? What about 2008-2009? Neither had anything to do with ETFs.
