Week InReview
Friday | Oct 1, 2021
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Deflation, inequality, hackers... oh my!! |
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Mohamed El-Erian, Cathie Wood, and Scott Minerd
Photo: Bloomberg
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THE RISKS facing investors and the global economy are myriad and growing. Bloomberg asked three of the most visionary people in the financial industry what they’re most worried about over the next five to 10 years: Cathie Wood, whose Ark Investment Management attracted billions of dollars in the past year after her tech-focused bets trounced the market in 2020; Mohamed El-Erian, chief economic adviser to Allianz SE and a Bloomberg Opinion columnist; and Scott Minerd, chair of Guggenheim Investments.
— Bloomberg Wealth
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Photo: Angus Mordant/Bloomberg |
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Transport and health ministers of the Group of Seven countries agreed to work toward common standards to accelerate a pickup in international travel as the aviation industry clamors for an end to a patchwork of rules and restrictions. In a statement issued after a virtual meeting held Thursday, officials from the G7 countries said they would align their policies around principles such as fairness, protecting privacy, and relying on scientific evidence when setting travel rules. However, the meeting was short on concrete action. (Bloomberg Politics | Sep 30)
The U.S. and the European Union agreed for the first time to work together to shape the rules and standards around crucial technologies and coordinate their approaches to key trade issues. Officials outlined collaboration in areas ranging from screening potentially hostile foreign investments and export controls, to artificial intelligence and ensuring the security of semiconductor supply chains. (Bloomberg Politics | Sep 29)
Banks have announced more than $54 billion in deals through late September, according to Dealogic. That puts industry mergers and acquisitions on pace for their biggest year since 2008, when some big banks had to sell themselves to stave off collapse. At this time last year, banks had announced just $17 billion in mergers. (The Wall Street Journal | Sep 28) see also Fed reverse repo use hits $1.6 trillion on last day of quarter (Bloomberg Markets | Sep 30)
The combination of extremely low and relatively stable U.S. government bond yields has confounded many market watchers for quite a while now, also challenging traditional economic analyses. This has made the move up in yields over the past couple of weeks particularly notable, raising interesting questions for markets, policies, and therefore the global economy. (Financial Times - opinion | Sep 29)
U.S. cryptocurrency markets and related platforms will “not end well” if they stay outside the purview of regulators, according to Securities and Exchange Commission Chair Gary Gensler. “There’s trading venues and lending venues where they coalesce around these, and they have not just dozens but hundreds and sometimes thousands of tokens on them,” Gensler said Monday at the Code Conference in Beverly Hills, California. “This is not going to end well if it stays outside the regulatory space." (Bloomberg Technology | Sep 27) see also SEC panel backs letting ordinary investors into private equity (The Wall Street Journal | Sep 27) and SEC proposal seeks transparency in how money managers wield vast voting power (The Wall Street Journal | Sep 29)
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Crypto products with returns can't avoid rules: Gensler |
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Gary Gensler, chair of the SEC, has urged cryptocurrency platforms to contact the agency and discuss whether they should register with it.
Photo: Reuters
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(Sep 30) — Cryptocurrency platforms promising returns to investors are wrong to think they can avoid regulation by the SEC, the agency’s chair Gary Gensler told the Financial Times’s Future of Asset Management North America conference, according to a report by the newspaper.
- Gensler warned that many people would be hurt without safeguards
- The SEC’s position is based on the “Howey Test,” which says an investment contract subject to federal securities law if a person invests in common enterprise and expects profits solely from the efforts of a third party
- He said that many crypto platforms that accepted funds from investors and offered returns should register now, or should have in the past
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see also The fight to control the $2 trillion crypto market is heating up
Source: Max Zimmerman/Bloomberg Government
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SEC proposes rule requiring money managers to disclose more info on how they use their voting power |
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(Sep 29) — On Wednesday, the Securities and Exchange Commission proposed amendments to Form N-PX to enhance the information mutual funds, exchange-traded funds, and certain other funds report about their proxy votes. The proposed rulemaking would require funds to tie the description of each voting matter to the issuer’s form of proxy and to categorize each matter by type to help investors identify votes of interest and compare voting records. The proposal also would prescribe how funds organize their reports and require them to use a structured data language to make the filings easier to analyze. Funds would also be required to disclose how their securities lending activity impacted their voting.
Since 2003, funds have been required to file Form N-PX reports disclosing how they voted on proxy proposals relating to investments they hold, but investors may face difficulties analyzing these reports. For example, funds may report their votes in an inconsistent manner or in a format that is not machine readable. This can make it more difficult for investors to analyze the reported data. The proposal would make funds’ proxy voting records more usable and easier to analyze, improving investors’ ability to monitor how their funds vote and compare different funds’ voting records.
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U.S., Russia resumed cybersecurity cooperation: Kommersant
(Sep 29) — Russia and the United States resumed cooperation on information security frozen since 2014, Kommersant reports, citing unidentified officials from the Russian side.
- Over the past three months, negotiators have made progress in some areas; in particular, regular dialog of experts has been resumed
- Parties also restored cooperation within the framework of the U.S.-Russian Treaty on Mutual Legal Assistance in Criminal Matters of 1999
- United States sent information on a number of international cyber groups, in particular Evil Corp., TrickBot and REvil
- Russian side requested information from American colleagues about the activities of a group of hackers associated with the use of malicious software REvil/Sodinokibi
— Bloomberg Government
Banks share data to block cyberattacks
As the number and sophistication of cyberattacks jumps, financial firms are sharing more threat intelligence with each other, according to the Financial Services Information Sharing and Analysis Center (FS-ISAC), a nonprofit group that facilitates the exchange of cybersecurity intelligence.
Microsoft warning: This malware creates a 'persistent' backdoor for hackers
Microsoft has uncovered another piece of malware used by the attackers who were behind the SolarWinds software supply chain attack discovered in December. The newly discovered malware, called FoggyWeb by Microsoft, is a backdoor used by the attackers after a targeted server has already been compromised.
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Illustration: Michael Kennedy/Bloomberg Businessweek |
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Insiders’ winning trades are so good they have online followers
In many ways, insider trading is the exemplar white-collar transgression. It’s what drives Bobby Axelrod’s nefarious profits in the Showtime series Billions and what Wall Street’s Gordon Gekko was engaged in when he said, “Greed is good.” In the real world, too, the crime captures, almost perfectly, the sense that the market is biased in favor of a corporate elite — a sentiment that undergirds both the recent meme-stock explosion and the rise of cryptocurrencies.
These 4 things made people think about changing jobs
While the pandemic provided an opportunity for bosses to prove they care more about the well-being of their workforce than their own bank balances — many failed to do this, and staff are returning the favor by quitting. A lack of flexibility and mental health support at a current company may be the final reasons to embrace a new role.
Restaurants and hotels push back against the uptick in customer tantrums
Restaurants and others in the hospitality business have long espoused “the customer is always right” and “all are welcome.” Now, many are rethinking that philosophy thanks to a surge in toxic customers and poor behavior.
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