Week InReview

Are stock buybacks a bad thing?

"... the historic spending spree on share buybacks has some analysts worried companies are buying their shares at excessive valuations during the peak of the economic cycle and at a time when the market rally is nine years old. Others warn the billions of dollars spent to buy back shares could have gone toward capital improvements like new factories or technology that could lead to stronger long-term growth."

- The Wall Street Journal
Friday | Jul 13, 2018
Regulators loosen guidance so banks return to buyout lending; non-traditional lenders that filled void vie for junk debt.  For the $2.3 trillion-plus market in junk bonds and leveraged loans, the question is whether all this competition ultimately brings new, greater risks. Underwriters have already been piling more and more leverage  onto companies and watering down various protections for investors. Much of that debt is being packaged into complicated structured investments at a pace reminiscent of the subprime boom a decade ago. (Bloomberg Business | Jul 12)

Goodbye inverted yield curve? Fed looks for alternative signals to guide policy
Federal Reserve officials are scouring new niches of the financial markets to find signals accurate enough to warn the central bank when it is time to stop hiking interest rates before they risk tipping the economy into a recession. It is a tricky exercise that pits standard views about the importance of longer term yield curves as signs of recession risk against new variations that look at shorter term interest rates. But it could influence just how far the Fed goes in its current rate hiking cycle. (Reuters | Jul 12)

Stocks quants are reeling from the worst run in 8 years
The dog days of summer have arrived for quants. Systematic traders who tie their fortunes to the ebbs and flows of stock markets are experiencing some of their worst returns in eight years relative to a key benchmark, according to one Wall Street estimate. (Bloomberg Markets | Jul 11)

Titans of Junk: Behind the debt binge that now threatens markets
They're the headliners in a decade-long, $11 trillion corporate borrowing frenzy, fueled by central banks that flooded the global financial system with ultra-cheap money. Investors have been lending to virtually anyone willing to pay a decent yield. But now the easy money is coming to an end. (Bloomberg | Jul 11)

U.S. Treasury researchers seek mandate on repo reporting
Treasury Department's Office of Financial Research has proposed rules to mandate reporting of repo trades cleared through central counterparties. Treasury officials say the proposal would allow "the office to gather data on a mandatory basis on what it estimates to be approximately one-quarter of the U.S. repo market." (Pensions & Investments | Jul 10)
The Cyber Cafe
Cybersecurity news every Friday
Security remains top public cloud concern
Enterprises are making wider use of private and public cloud-based services, but security remains a leading concern, a survey found. Among public cloud customers, security was cited as a top concern by 62% of respondents, while 46% of private cloud users were primarily concerned about it.

The top 10 phishing lines luring employees
A report by UK-based security software firm Sophos revealed that some of the top phishing scams employees fell for in a training simulation were mundane, seemingly work-related emails. In addition to education about scams, employers must make it easy for workers to report suspected phishing attempts without fear of repercussions, even if they were fooled, according to Sophos.

Cisco exec: Lack of visibility is a barrier to Industry 4.0
Industrial executives remain hesitant to invest in Industry 4.0 because they lack the visibility necessary for safe cybersecurity practices, according to a Cisco Advanced Services executive, who also discussed destruction-of-service attacks, in which ransomware is used to damage systems and data.
Binge reading disorder
Hand-curated, chosen with love
Suck it, dudes. Science proves women are better coders.
Guys may loudly rule the dark corners of the internet and be considered the "computer nerds," but according to a new paper - still awaiting peer review and thus subject to all the criticism dudes will no doubt hurl at it - it's the ladies who are kicking ass and taking names when it comes to coding.
What the most hyped financial thriller of the summer gets right
"The Banker's Wife," a new novel from Cristina Alger, tracks a group of globe-trotting financial criminals and the women who love them.
Your favorite martini garnish could suffer in new trade dispute
The U.S. International Trade Commission will impose anti-dumping duties of as much as 25.5 percent on Spanish olives after finding that the imports hurt American producers. Anti-subsidy duties of 27.02 percent will also be levied.