Tag Archives: Regime Uncertainty

Dodd-Frank Creates a Liquidity Crunch for Bonds

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“While each individual institution is undoubtedly safer due to capital constraints imposed by Dodd-Frank, this makes for a more illiquid market overall. The lack of liquidity will be especially potent in the bond market, where all securities are not mark-to-market and many bonds lack a constant supply of buyers and sellers.  The bond market is much larger than the equity market, and a 30-year bond bull run has many investors and institutions heavily invested in the asset class. Furthermore, studies have shown bond investors to be more sensitive to poor performance since the asset class is usually perceived as having lower risk than equities.”

http://www.investopedia.com/articles/investing/072915/doddfrank-creates-liquidity-crunch-bonds.asp

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U.S. Banks to Face $120 Billion Shortfall in Fed Crisis Plan

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“The largest U.S. banks would face a $120 billion total shortfall of long-term debt under a Federal Reserve proposal aimed at ensuring their failure wouldn’t hurt the broader financial system.  Banks such as Wells Fargo & Co. and JPMorgan Chase & Co. will be required to hold enough debt that could be converted into equity if they were to falter, according to a Fed rule that was approved by a unanimous vote on Friday. The Fed’s proposal, which applies to eight of the biggest U.S. banks, requires debt and a capital cushion equal to at least 16 percent of risk-weighted assets by 2019 and 18 percent by 2022.”

http://www.bloomberg.com/news/articles/2015-10-30/u-s-banks-to-face-120-billion-shortfall-under-fed-crisis-plan

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Uber ruling may reverberate through Silicon Valley

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“A U.S. judge expanded the scope of the suit Wednesday, allowing drivers who did not opt out of an arbitration clause to participate.  U.S. District Judge Edward Chen in San Francisco granted the case class-action status in September, but said drivers who had waived their right to class-action arbitration, by not opting out of a clause, could not participate. Wednesday’s news stands to widen the scope of a case that will reverberate through Silicon Valley and the broader sharing, or gig, economy, which connects freelancers with available work and includes everything from car and home sharing to hiring workers to run errands and deliver food.”

http://www.cnbc.com/2015/12/09/uber-ruling-may-reverberate-through-silicon-valley.html

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Elon Musk’s growing empire is fueled by $4.9 billion in government subsidies

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“Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.  The figure compiled by The Times comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars.”

http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html

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Tax Collectors Are Going After Netflix, Airbnb, Uber, Burning Man

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“In June, Chicago decided that its 9 percent ‘amusement tax’ should cover Netflix, Spotify, Hulu, Amazon Prime, and other streaming services, to help make up for sales tax revenue lost to falling DVD and CD sales.  In Rhode Island in July, a 13 percent ‘short-term room rental’ tax went into effect that covers Airbnb and other home-sharing sites.  Chicago’s busy mayor proposed $48 million come from higher fees on taxis and ride-sharing services.  Nevada expanded the “live entertainment” tax to cover two of its biggest attractions for the first time: the Burning Man festival, held every year in the Nevada desert, and the Electric Daisy Carnival, a Las Vegas dance festival.”

http://www.bloomberg.com/news/articles/2015-10-23/tax-collectors-are-going-after-netflix-airbnb-and-burning-man

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Democrats Work To Block Regulations, After Flood Of Campaign Cash

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“The Obama administration’s efforts to rein in Wall Street face opposition from members of the president’s own party.  Since 2011, after Dodd-Frank became law, Democrats have raised over $330 million from the financial industry, and their party’s presumptive incoming Senate leader, New York’s Chuck Schumer, is considered a close ally of the financial sector.  As the year-end legislative wrangling intensifies, here are the other Democrats who have been Wall Street’s key allies in fighting the Obama administration. They have all raised big money from the financial industry.”

http://www.ibtimes.com/political-capital/wall-street-democrats-work-block-new-regulations-after-flood-campaign-cash-2196874

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DOL Opens the Door for State-Run Retirement Initiatives; CA, IL, OR First

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“States seeking to require employers to establish ‘automatic IRAs’ and ERISA-compliant 401(k) programs received a green light from the Obama administration with the release of rules designed to relieve concerns that state-directed retirement programs would be preempted by the federal government.  The interpretive rule specifies that the state, and not the employer, would function as fiduciary in such retirement saving programs.  Speaking to reporters in Chicago, Perez called states ‘great laboratories of public policy innovation.’ He said that more than two dozen states are currently considering legislation permitting them to establish savings programs.”

http://www.bna.com/dol-opens-door-n57982063631/

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DOL Fiduciary Rule Is ‘Biggest Change’ To Investment Advice Industry

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“The final version of the Department of Labor’s rule to amend the definition of fiduciary under the Employee Retirement Income Security Act is expected sometime next year.  Under ERISA, advisors would be prohibited from engaging in transactions that entail conflicts of interest for the client unless there is an exemption. Advisors and clients would be required to sign best interest contract exemption contracts, in which broker-dealers and advisors acknowledge the new fiduciary standards and their impartial conduct codes. The DOL’s fiduciary rule also requires information on exactly what and who gets paid via product sales to be published in detail on publicly available websites.”

http://www.thinkadvisor.com/2015/11/23/dol-fiduciary-rule-is-biggest-change-that-well-go?page_all=1

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The Feds Won’t Stop Terrorism This Way

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“While the current rationale for encryption back doors is to fight terrorism, they wouldn’t be used just for that purpose. For proof, just look at the history of the PATRIOT Act. This law gives the US government unprecedented civil forfeiture authority over the US ‘correspondent accounts’ of any bank in the world. If an alleged terrorist or other criminal deposits money at the bank overseas, the PATRIOT Act allows the government to seize an equivalent sum of money in the correspondent account in the US.  Proponents justified the law as a necessary escalation in the ‘War on Terror.’ But the very first time the government used its new civil forfeiture authority, it had nothing to do with terrorism.”

http://www.nestmann.com/the-feds-wont-stop-terrorism-this-way

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Supreme Court declines to require a warrant to get cell site data

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“Cell-site tracking has become extremely important to crime fighting in the wake of the high court’s 2012 ruling that they need a warrant to place GPS trackers on vehicles. Equally important, in all the cases on the cell-site location tracking, the government argues that cell-site records are not constitutionally protected. Instead, the authorities maintain that they are business records that the telcos may hand over if the government asserts that reasonable grounds exist to believe the data is relevant to an investigation.”

http://arstechnica.com/tech-policy/2015/11/supreme-court-punts-issue-if-warrants-needed-to-get-your-cell-site-data/

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