Week InReview

" I compare the timing of information acquisition among institutional investors and sell-side analysts, and I show that hedge fund trades predict the direction of subsequent analyst ratings change reports while other investors' trades do not. In addition, hedge funds reverse trades after analyst reports, while other investors follow the analysts. Finally, I show that hedge funds perform best among stocks with high analyst coverage. These results suggest that hedge funds have superior information acquisition skills, and that analysts assist hedge funds in exploiting information acquisition advantages."

From a working paper by Nathan Swem of the Federal Reserve about Information in Financial Markets: Who Gets it First?
Fri Mar 31, 2017
Let's recap
In case you missed it . . .
Negotiations will take place in rounds, starting this May; e xit bill, expats in limbo are among the thorniest issues (Mar 30)

US Senate votes to repeal Labor Dept municipal retirement plan rule
A divided U.S. Senate sent a resolution to the president's desk killing a Labor Dept. regulation aimed at lightening federal restrictions for new municipally sponsored retirement savings plans for lower-income workers (Mar 30)

Fannie-Freddie fix is the focus of senators' bipartisan push
Corker, Warner seek common ground on housing-finance overhaul; lawmakers started failed 2014 effort to unwind the companies (Mar 28)

Republican senators want review of 'too big to fail' process
Lawmakers asked Treasury secretary to review the process FSOC uses to label non-bank institutions "too big to fail," saying the additional capital requirements and regulations are too onerous (Mar 28)

'Big Bang' of new collateral management requirements: grappling with the detail
March 1: the introduction of new regulations covering the posting of collateral for variation margins; simple on the surface, but the details pose real challenges (Mar 27)
The Cyber Cafe
Cybersecurity news every Friday
How to design your cybersecurity portfolio
This is the second article in a series on building the right cybersecurity profile for your business
- Forbes

Want to fix cybersecurity? Think about worst-case scenarios first
Scenario thinking sketches out future cybersecurity problems and helps policymakers begin addressing tomorrow's digital dilemmas

Wall Street's WhatsApp secret: illegal texting is out of control
Encrypted messaging apps are raising risk of widespread abuse; e mployees at big banks share gossip, client data and more
Binge reading disorder
Hand-curated, chosen with love
The return of the tontine investor
This 17th-century financial vehicle required investors to put equal amounts in a government fund in order to draw an annuity until their death. Agatha Christie, Robert Louis Stevenson and P.G. Wodehouse based murder plots on the concept. There's even a Simpsons episode about it.

HFT as an insight into where fintech is going
Markets are cyclical, Darwinian and subject to diminishing returns. Nothing new in that observation. But people do seem to forget it all the time.

Exchange-traded donkeys are no joke in the land of 1,000 markets
From livestock to flowers, exchanges are popping up everywhere in China. So is speculation.
Transparency.
Inclusiveness.
Consensus.