Week InReview
Friday | May 2, 2019
in case you missed it...
Wall Street sleuths are wondering whether the Federal Reserve is quietly doing more to calm the U.S. repo market than just the headline-grabbing liquidity injections that have captivated observers for months. Foreign central banks have reduced usage of a U.S. repo pool. That fits with Fed’s strategy of expanding banking reserves. (Bloomberg Markets | Dec 23)

The $2.2 trillion repurchase agreement market  –  part of the inner workings of the U.S. financial system  –  is facing what could be another strain as the year comes to a close. That could have wider implications than just Wall Street. (Reuters | Dec 23)

The North American Securities Administrators Association is warning investors to “be wary of bond ratings” because inflated ratings, which were a key factor in the 2008 financial crisis, remain a concern today. (ThinkAdvisor | Dec 20)

US junk bonds may fall “significantly” after  a rally  this year that has left the riskier end of the corporate bond market in a perilous state, Moody’s has warned. (Financial Times | Dec 20)
the cyber cafe
Quiet for years, Chinese hacking group resumes global attacks
A Chinese government-linked hacking group that was thought to be dormant has been quietly targeting companies and government agencies for the last two years, harvesting data after stealing passwords and circumventing two-factor authentication intended to prevent such attacks, according to researchers.

FBI alerts businesses to 2 ransomware strains
The FBI has issued an alert to businesses about the MegaCortex and LockerGoga ransomware, both of which are being used against large corporations to encrypt data. Hackers are thought to be lying low for months after gaining access to corporate networks  –  possibly exfiltrating data  –  before deploying MegaCortex or LockerGoga to lock devices for ransom.

Cyber remains top risk in OFR 2019 review, insurers question claims exposure
The Office of Financial Research’s annual report to Congress assesses financial stability. For several years, respondents to a survey of industry leaders have ranked cyber risk as the top risk facing the financial system. Geopolitical risk almost always has ranked second. Brexit risk has come in third or fourth in recent years.

Think twice before using that public device charging station
The risks of using Wi-Fi in public spaces such as airports are well-known, but using charging stations for a phone, tablet or laptop can be just as dangerous, writes Jim Calloway, a blogger and director of the Oklahoma Bar Association Management Assistance Program. Picking up malware or ransomware from a public USB charger has become so common that it has a name: juice jacking.
binge reading disorder
A funny thing happened on the way to the stock market record
Apologies for being churlish in the holiday season, but the let-nothing-ye-dismay attitude of the financial markets has me worried. The exuberance feels irrational. Asset bubbles form, remember, when greed overwhelms fear. It’s a truism that bad loans are made in good times when lenders relax their standards. As the American economist Hyman Minsky once put it,  stability breeds instability .

Repo oracle Zoltan Pozsar expects even more turmoil
In the aftermath of September's repo market short-circuit, people in the market sought answers. Many have turned to a Credit Suisse Group AG analyst named Zoltan Pozsar, who predicted the breakdown with almost eerie accuracy in an August research note. Pozsar has some bad news: There’s more trouble ahead. Despite the Federal Reserve’s recent move to pump  almost $500 billion into the repo market  to prevent a yearend funding squeeze, deep-rooted problems remain.

99 good news stories you probably didn't hear about in 2019
"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way."  –  Charles Dickens (1859)
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