Institutional Investor (March 29)
“Personal coaches to private-equity executives report that their clients are increasingly worried about their impact on their employees, business, and even the world.” While fundraising dominates their concerns amid recent market uncertainty, “executives are also thinking hard about other broad changes in their industry. Investment committees, limited partners, and employees increasingly expect firms — and their portfolio companies — to be more diverse, inclusive, and generally better places to work than in the past.”
Tags: Diverse, Employees, Executives, Fundraising, Impact, Industry, Investment, Market uncertainty, Personal coaches, Portfolio, Private equity, Worried
Economic Times (March 28)
Regulators suspect a single “trade on Deutsche Bank AG’s credit default swaps… fuelled a global selloff on Friday.” The roughly £5 million bet was for swaps on the bank’s junior debt. Likely due to market illiquidity, along with market jitters, the “knock-on effect was a rout that sent banking stocks tumbling, government bonds higher and CDS prices for lenders soaring.”
Tags: Bonds, CDS, Deutsche Bank, Global selloff, Illiquidity, Jitters, Junior debt, Market, Regulators, Rout, Suspect, Trade, Tumbling
Equities News (March 28)
“The petrodollar was born” in 1975. When OPEC members exclusively adopted the dollar for pricing, it “had the immediate effect of strengthening the U.S. dollar,” with the greenback becoming “the world’s reserve currency, a status formerly enjoyed by the British pound, French franc and Dutch guilder.” Today, however, “we may be witnessing the end of the petrodollar as more and more countries, including China and Russia, are agreeing to make settlements in currencies other than the U.S. dollar. This could have wide-ranging implications on not just a macro scale but also investment portfolios.”
Tags: 1975, China, Currencies, Franc, Greenback, Guilder, Implications, Macro scale, OPEC, Petrodollar, Pound, Reserve currency, Russia, Settlements, Strengthening, U.S.
American Banker (March 27)
“Silicon Valley Bank was not the only institution that loaded up on bonds at precisely the wrong time. Based analyzing the regulatory filings of over 4,700 U.S. banks, “dozens of other banks — most of them quite small — are deeply underwater on their bond investments and could hit trouble if they were unexpectedly forced to liquidate the investments.” Still, “many experts say there is very little risk that those unrealized losses could ever turn into a problem, given the many options available to banks and regulators’ focus on avoiding that type of scenario.”
Tags: Banks, Bonds, Experts, Forced, Investments, Liquidate, Regulators, Regulatory filings, Risk, SVB, U.S., Underwater, Unrealized losses, Wrong time
Market Watch (March 27)
Remote work was one of the “few positives” to emerge from the pandemic. Its various benefits have proven “particularly important for working women.” The U.S. birthrate has now slipped to just 1.6., well below the replacement rate of 2.1 births per woman. Remote work “could be a simple and cost-effective way to help women achieve a work-life balance and increase fertility rates for those who want to have children…. U.S. employers should take note, and be more willing to continue remote and hybrid work.”
Tags: Benefits, Birthrate, Children, Cost-effective, Employers, Fertility rates, Pandemic, Positives, Remote work, Replacement rate, Simple, U.S., Work-life balance, Working women
Wall Street Journal (March 25)
The aggregate M-Score index, which measures manipulation across corporate America “shows that the collective probability of fraud across major companies is the highest in over 40 years,” possibly foreshadowing economic downturn. “The theory is that their index might be catching distress in the stages when some companies are taking steps to try to cover it up…. The stock market might behave like the corporate sector is still humming along when in reality, its earnings are increasingly buoyed by tricks.”
Tags: Aggregate, Distress, Earnings, Economic downturn, Fraud, Highest, Index, M-Score, Major companies, Manipulation, Stock market
The Economist (March 23)
“On Ukraine China has played an awkward hand ruthlessly and well. Its goals are subtle: to ensure Russia is subordinate but not so weak that Mr Putin’s regime implodes; to burnish its own credentials as a peacemaker in the eyes of the emerging world; and, with an eye on Taiwan, to undermine the perceived legitimacy of Western sanctions and military support as a tool of foreign policy.”
Tags: China, Legitimacy, Peacemaker, Perceived, Putin, Russia, Ruthlessly, Sanctions, Subordinate, Taiwan, Ukraine, Undermine
Investment Week (March 23)
“The UK’s higher than expected inflation results forced the Bank of England to prioritise bringing it down, rather than focusing on the fractures of the banking sector.” In February, “UK inflation hit 10.4%…an unexpected increase that followed three months of consecutive declines.”
Tags: 10.4%, Banking sector, BOE, Declines, February, Fractures, Increase, Inflation, Prioritize, UK, Unexpected
Washington Post (March 21)
“The aim of setting the cap on Russian crude at $60, roughly 20 percent below the main international benchmark price, was to whittle away at Russia’s cash hoard while still providing it with sufficient incentive to maintain exports and keep global oil markets stable. It is now time to lower the Western cap further, in increments, to $40 per barrel or less.”
Tags: $40, $60, Aim, Barrel, Benchmark, Cap, Crude, Exports, Incentive, Oil markets, Russia, Stable, Sufficient, Western
New York Times (March 21)
“The failures of Silicon Valley Bank and three other lenders over the past 11 days” have “put the Fed in a difficult position as it prepares to deliver on Wednesday one of the most consequential decisions on interest rates of the Jay Powell era.” In addition to tightening rates to curb inflation while somehow avoiding a recession, the “banking crisis hands the central bank a third crucial challenge: how to steer the banking sector out of the predicament and restore confidence in the sector.”
Tags: Banking crisis, Consequential, Decisions, Failures, Fed, Inflation, Interest rates, Powell, Predicament, Recession, SVB
