Markets News 

The mortgage-backed investment behind the financial crisis is in trouble again. One market expert explains the new risk, and how to sidestep painful losses.

“It is none other than mortgage-backed securities, the bundles of homeowner debt that played a tragic role in exacerbating the 2008 financial crisis” writes Akin Oyedele for businessinsider.com. The precipitous drop in bond yields is to blame for the trouble in mortgage-backed securities.These days, the issue with mortgage-backed securities is more technical than fundamental.But behind the scenes, a sizeable corner of the bond market is contributing to this slump as its investors hedge their own set of risks.She added that she is underweight mortgage-backed securities. Source: businessinsider.com

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Markets News Stocks 

A ‘tug-of-war’ is pulling the stock market in 2 distinct directions — and how investors combat it will determine whether they survive the next meltdown

“While global stocks have gained 11% this year, $46 billion has been pulled from equity funds, according to Bank of America Merrill Lynch” writes Akin Oyedele for businessinsider.com. This risk helps explain why some investors have stood on the sidelines of this rally, and even pulled money from equity funds.According to Alain Bokobza — Societe Generale’s head of global asset allocation and equity strategy — investors must posture for the ongoing “tug-of-war” between the bullish and bearish forces pulling on the stock market.Several investors have kept their enthusiasm tempered even…

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Asbestos has been found in Claire’s eye shadow, highlighting a disturbing ‘black hole’ in beauty-product safety

“PFAS chemicals are not the only problematic ingredients in makeup: Asbestos, a known cancer-causer, was found in Claire’s eye shadows and face powder last week” writes Hilary Brueck for businessinsider.com. So fragranced beauty products could easily contain a toxic compound without consumers ever knowing.Even so-called “natural” beauty products, which purport to have fewer fragrances and plasticizers than others, can still masquerade as a healthier alternative with largely the same ingredients. Source: businessinsider.com

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Global debt is not yet at financial crisis levels — but could be set for an explosion with China leading the way

“Global debt is at elevated levels, but isn’t high enough to draw comparisons with the 2008 financial crisis just yet” writes Callum Burroughs for businessinsider.com. The danger of not adjusting debt levels could have a severe impact on already slowing global growth. Emerging markets are seeing a boom in private sector debt Oxford Economics/Haver Analytics. Emerging markets have been the main driver of this trend with debt levels in major growing economies such as China increasing rapidly in the past decade.Since 2015, world private sector debt has risen by around…

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Hedge fund investors are facing ‘existential questions’ about the kinds of managers they back

“Risk-averse insurance companies now make up a larger proportion of hedge fund assets (7%) than family offices, which control 3% of all hedge fund assets” writes Bradley Saacks for businessinsider.com. This has cut hedge funds’ average portfolio volatility, Novus said, as funds became more correlated with the overall market.These platforms currently hold roughly 10% of assets in the hedge fund industry.But the aggregate hedge fund index has not finished a year with 20% returns, but has recorded several down years, including 2018.A smaller, more nimble industry in the 90s had…

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Markets News 

The riskiest part of the corporate debt market is inching toward a historic danger signal

“Those three charts all suggest that the corporate debt market is becoming bigger and riskier as time goes by” writes Jim Edwards for businessinsider.com. But the market for the riskiest type of risky corporate debt — leveraged loans — remains at an elevated level.Last year, the multiple of leveraged-buyout debt to earnings hit 5.8, its highest since the financial crash, according to LCD/S&P, a research organization that monitors the corporate debt market.Leveraged buyouts are among the riskiest debt deals in the corporate credit market.But 12% to 16% of all companies…

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EXCLUSIVE: Controversial experiments that could make bird flu more risky poised to resume

“The HHS panel did not ask that any proposed experiments be removed or modified” writes Jocelyn Kaiser for sciencemag.org. Controversial lab studies that modify bird flu viruses in ways that could make them more risky to humans will soon resume after being on hold for more than 4 years.But by enabling the bird virus to more easily spread among mammals, the experiments also raised fears that the pathogen could jump to humans.After extensive discussion about whether the two studies should even be be published (they ultimately were), and a voluntary moratorium…

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Markets News 

Remember the subprime mortgage mess? $1.2 trillion in risky corporate debt is flashing similar warning signs

“In those ways, leveraged loans are similar to the junk bonds that became popular in the 1980s and fueled corporate deals” writes Jim Puzzanghera for sun-sentinel.com. Leveraged loans, while growing rapidly, account for less than 5% of the more than $42-trillion U.S. fixed income debt market, which also includes corporate and municipal bonds.Leveraged loans in and of themselves aren’t bad. Source: sun-sentinel.com

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YOUTUBE clarifies rules on pranks as risky memes rage…

“Accounts that post videos violating policies on pranks will get a “strike” that will limit some features such as live streaming” reports france24.com. It made clear the updated policies ban pranks that trick people into thinking they are in danger, such as fake home invasions or drive-by shootings.YouTube made clear that its updated policies ban pranks that trick people into thinking they are in danger YouTube on Tuesday clarified rules against posting videos of dangerous pranks, as risky “challenges” prompt people to video themselves doing things like biting into laundry…

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Crypto News 

Indian Central Bank Shelves Plan to Launch Cryptocurrency

“Last year in April, the Indian central bank first floated the idea of issuing a national digital coin called Central Bank Digital Currency (CBDC)” writes Arnab Shome for financemagnates.com. The Reserve Bank of India (RBI) has shelved its plan to launch a national cryptocurrency, according to a local business news outlet Business Line.Though the RBI did not announce anything officially, the anonymous source of the newspaper said: “The government doesn’t want the digital currency anymore.The cryptocurrency community in the country is also skeptical about a national cryptocurrency. “It is premature…

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