Banks Share Data to Block Cyberattacks

Mary Pat Campbell

Link:https://www.wsj.com/articles/banks-share-data-to-block-cyberattacks-11632389402

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Competing banks are cooperating more than ever before to beat cybercriminals.

As the number and sophistication of cyberattacks jumps, financial firms are sharing more threat intelligence with each other, according to the Financial Services Information Sharing and Analysis Center, a nonprofit group that facilitates the exchange of cybersecurity intelligence.

This collaboration has thwarted a number of attacks in the past year, bank executives say.

In September 2020, Santiago, Chile-based Banco Falabella became concerned it would soon come under attack by hackers.

Distributed denial of service attacks, which flood servers with traffic to shut down websites and applications, were rippling across the financial sector as part of a long-running extortion campaign. Meanwhile, certain criminal gangs were besieging Latin American companies in particular with ransomware attacks.

Author(s): James Rundle

Publication Date: 23 Sept 2021

Publication Site: WSJ

British pension funds plough more cash into China

Mary Pat Campbell

Link: https://finance.yahoo.com/news/british-pension-funds-plough-more-155119851.html

Excerpt:

British pension funds are ramping up their investment in Chinese companies despite growing tensions between the West and the Communist state.

According to a new report by Hong Kong Watch, a pro-democracy advocacy group, the amount of cash invested by Western pension funds and other institutional investors in China has hit a record high in recent months.

It comes amid rising criticism in the West about China’s human rights record, including its brutal treatment of Uighur Muslims and its suppression of democracy campaigners in Hong Kong.

…..

The report cites the Universities Superannuation Scheme (USS), one of the UK’s largest private pension schemes, and Legal & General, Britain’s biggest pensions manager, as two British firms with “problematic” investments in China.

It found that L&G’s China fund was previously investing UK pensions in Zhejiang Dahua Technology, which is alleged to produce facial recognition software for the Communist Party that detects the race of individuals and alerts the police when it identifies Uighur Muslims.

L&G has since divested from Zhejiang Dahua Technology.

Author(s): Simon Foy

Publication Date: 22 Sept 2021

Publication Site: Yahoo Finance

Taylor Heinicke Was Solving Differential Equations. Then the NFL Called.

Mary Pat Campbell

Link:https://www.wsj.com/articles/taylor-heinicke-washington-football-team-math-engineering-old-dominion-11632328555

Excerpt:

Last December, a student in professor Fang Hu’s partial differential equations class at Old Dominion University reached out with a problem Hu had never experienced in decades of academia. His pupil said he had just been offered a high-profile job, starting immediately, and might need some special accommodation to finish his course work.

“I got called by an NFL team,” Taylor Heinicke told Hu. “I’m going to be very, very busy.”

“I was like seriously? Really? Professional football?” Hu says. “‘He really takes this course very seriously,’ was my first reaction.”

Heinicke had bounced around the fringes of the NFL for years, but by last year he had bounced out so far that he went back to school to finish his degree. Then, in the span of a month, Heinicke went from taking the highest-level undergraduate mathematics courses at Old Dominion to playing quarterback for the Washington Football Team. He started a playoff game in which he nearly outdueled Tom Brady.

….

When Heinicke was the school’s quarterback from 2011 to 2014, he rewrote record books. He owns the all-time mark for most passing completions in a season in FCS history, and he even broke the record for all of Division I with 730 passing yards in a single game. (That was later surpassed by two quarterbacks. One of them was Patrick Mahomes.)

Heinicke’s success on the field at ODU was boosted by the same traits that led him to take engineering and math classes. His coaches found that their quarterback was both talented and capable of understanding things on a football field that other quarterbacks simply couldn’t.

…..

Just days after Washington’s season ended, Hu heard again from his student. Heinicke finally had time to turn in his final exam.

Author(s): Andrew Beaton

Publication Date: 23 Sept 2021

Publication Site: WSJ

Is The Worst Over? Models Predict A Steady Decline In COVID Cases Through March

Mary Pat Campbell

Link:https://www.npr.org/sections/health-shots/2021/09/22/1039272244/is-the-worst-over-modelers-predict-a-steady-decline-in-covid-cases-through-march?utm_source=facebook.com&utm_term=nprnews&utm_campaign=npr&utm_medium=social

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The most likely scenario, says Lessler, is that children do get vaccinated and no super-spreading variant emerges. In that case, the combo model forecasts that new infections would slowly, but fairly continuously, drop from about 140,000 today now to about 9,000 a day by March.

Deaths from COVID-19 would fall from about 1,500 a day now to fewer than 100 a day by March 2022.

That’s around the level U.S. cases and deaths were in late March 2020 when the pandemic just started to flare up in the U.S. and better than things looked early this summer when many thought the pandemic was waning.

And this scenario projects that there will be no winter surge, though Lessler cautions that there is uncertainty in the models and a “moderate” surge is still theoretically possible.

There’s wide range of uncertainty in the models, he notes, and it’s plausible, though very unlikely, that cases could continue to rise to as many as 232,000 per day before starting to decline.

Author(s): Rob Stein, Carmel Wroth

Publication Date: 22 Sept 2021

Publication Site: NPR

Covid-19: Life expectancy is down but what does this mean?

Mary Pat Campbell

Link:https://www.bbc.com/news/health-58659717

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Despite the name, these life expectancy figures, known as “period life expectancy”, do not predict an actual lifespan.

Instead, they show the average age a newborn would live to if current death rates continued for their whole life.

And as Covid death rates are unlikely to continue long-term, the new estimates do not mean a boy born in 2020 will have a shorter life than one born in 2019.

But they do provide a snapshot of the effect of the pandemic that can be compared over time and between countries and different populations.

Author(s): Christine Jeavans

Publication Date: 23 Sept 2021

Publication Site: BBC

How Will The Biden Medicare Dental Plan Affect The Trust Fund Solvency?

Mary Pat Campbell

Link:https://www.forbes.com/sites/ebauer/2021/09/20/how-will-the-biden-medicare-dental-plan-affect-the-trust-fund-solvency/

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Among the changes coming if the Democrats succeed in their $3.5 trillion reconciliation bill would be the inclusion of dental, vision, and hearing coverage through Medicare, possibly in 3 – 5 years due to implementation challenges, and with suggestions of a voucher/cash payout in the meantime. There is not yet an official cost estimate as the details are still being negotiated, but a similar proposal in 2019 would have cost $358 billion over 10 years.

At the same time, late last month, the latest Trustees’ Report for Medicare determined that the Medicare Part A Trust Fund will be exhausted in the year 2026, which, if you do the math, is a mere five years from now. At that point, Medicare would have to cut reimbursement rates for doctors by 9%, increasing to 20% in 2045, or even more if the report’s assumptions don’t pan out.

How will the new dental benefits — assuming they remain in the bill — affect Medicare Part A and its trust fund? Strictly speaking, not at all. The new benefits would be a part of Part B of the program, that is, doctors’ charges, rather than Part A, which covers hospital charges. In one respect, it would be its own benefit structure entirely, since, unlike “regular Part B” Medicare, the proposal would have the federal government pay 100% of the benefit’s costs, rather than requiring participants to pay a 25% cost-share premium. It would, in a way, become Medicare Part E.

Author(s): Elizabeth Bauer

Publication Date: 20 Sept 2021

Publication Site: Forbes

State of Pensions 2021

Mary Pat Campbell

Link: https://equable.org/state-of-pensions-2021/

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Link to PDF report:https://equable.org/wp-content/uploads/2021/09/Equable-Institute_State-of-Pensions-2021_Final.pdf

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State retirement systems in America improved from last year, but are still Fragile. 

This an annual report on the current status of statewide public pension systems, put into a historic context. State and local governments face a wide range of challenges in general – and some of the largest are growing and unpredictable pension costs. The scale and effects of these challenges are best understood by considering the multi-decade financial trends and funding policy decisions that have brought public sector retirement systems to this moment. 

The financial market volatility over the past 18 months of the COVID-19 pandemic has ultimately been a positive investment climate for institutional investors like state pension plans. And the federal government has provided substantial financial aid to states and municipalities, smoothing over what could have been seismic budgetary shortfalls in some jurisdictions due to tax revenue declines. The combined historically unprecedented nature of these events continues to create an unpredictable environment for state pension plans. However, in this report Equable uses patterns of behavior from the past two decades as a guide to what might happen in the coming decade while also a means to identify areas of concern that should be monitored closely or acted upon immediately.

Authors: Anthony Randazzo, Jonathan Moody, PhD

Publication Date: Accessed 23 Sept 2021

Publication Site: Equable Institute

Stock Market Helps State Pension Debt Hit 10-Year Low, But Crisis Still Looms Large

Mary Pat Campbell

Link: https://www.forbes.com/sites/lizfarmer/2021/09/23/stock-market-helps-state-pension-debt-hit-10-year-low-but-crisis-still-looms-large/

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After state pension debt grew to more than $1.4 trillion last year, two new reports estimate that gap between the total amount states have promised to retirees and what they’ve actually set aside in their pension investment funds will shrink dramatically. A recent analysis by the Pew Charitable Trusts says the gap could dip below $1 trillion this year. And a report released today by the Equable Institute estimates that 2021 returns will shrink state pension debt to $1.08 trillion.

The gains in the stock market played a big role. Equable’s report calculates that preliminary 2021 investment returns averaged an astounding 20.7% return. That’s nearly triple the average assumed rate of return in any given year. Those gains will boost the average pension plan to about 80% funded, the highest funding ratio since 2008.

Author(s): Liz Farmer

Publication Date: 23 Sept 2021

Publication Site: Forbes

States Have $95 Billion to Restore their Unemployment Trust Funds—Why Aren’t They Using It?

Mary Pat Campbell

Link:https://taxfoundation.org/state-unemployment-trust-funds-2021/

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States are permitted to replenish their unemployment compensation (UC) trust funds using the $195.3 billion they received in Fiscal Recovery Funds under the American Rescue Plan Act (ARPA)—and they need the help, having paid out $175 billion in state-funded benefits since the start of the pandemic, in addition to the $661 billion shelled out by the federal government in extended and expanded benefits, for a total of about $836 billion between January 27, 2020 and September 11, 2021.[1]

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Pre-pandemic trust fund balances stood at $72.5 billion. Today, aggregate trust fund balances are negative, at -$11.1 billion, reflecting $44.8 billion in indebtedness currently incurred by 10 states and the U.S. Virgin Islands. By federal standards, 34 state accounts are currently insolvent, with $114.6 billion needed to bring them all up to what the federal government regards as minimum adequate levels.

Author(s): Savanna Funkhouser, Jared Walczak

Publication Date: 22 Sept 2021

Publication Site: Tax Foundation

5 THINGS WRONG WITH ILLINOIS HOLDING 30% OF U.S. PENSION BOND DEBT

Mary Pat Campbell

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It is bad Illinois has the nation’s worst pension crisis, but state politicians have made it worse by using risky debt to delay the day of reckoning, and done so to the point that Illinois now owes 30% of the nation’s pension obligation bonds.

Pension obligation bonds are a form of debt used by state or local governments to fund their pension deficits. Illinois holds $21.6 billion of the nation’s $72 billion pension obligation bond debt.

The theory behind the bonds is that if a pension system can borrow money at a lower rate by selling bonds and earn a higher percentage from investing those funds, then it has realized a net gain using them. The issue is the gamble rarely works out that way, as the Government Finance Officers’ Association points out. Pension obligation bonds place taxpayer money at risk and often leave governments saddled with more debt rather than less. They often do not achieve a high enough return to justify their use.

Illinois’ five statewide retirement systems hold $144 billion in debt, according to official state reporting based on optimistic investment estimates. But Moody’s Investors Service says the true debt is $317 billion, which it calculates using more accurate methods common in the private sector.

Author(s): Adam Schuster, Aneesh Bafna

Publication Date: 10 Sept 2021

Publication Site: Illinois Policy Institute

Modern Portfolio Theory Faces Issues As Correlations Turn Positive

Mary Pat Campbell

Link: https://www.thewealthadvisor.com/article/modern-portfolio-theory-faces-issues-correlations-turn-positive?mkt_tok=NDQ2LVVIUy0wMTMAAAF_mViiBJO-qrg7D4DudMyxmY2hssLidn3lEOlX-kAIh3R_yylYhWdr5_fo6QtLbdN1_nODniHhefsm5_gZSApaxmU5Rf8Kz5XOyKg-v1SmPwQe

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However, Modern Portfolio Theory may have a problem going forward. Don’t worry, we are not going to hack on bonds based on a fear that yields may rise in the future, creating a portfolio drag. There are already enough bond haters out there. The issue we are seeing goes beyond just the bond argument – correlations have been rising just about everywhere. In today’s world, correlations have been changing, with more and more asset classes becoming increasingly correlated. The problem: when the correlations between investments are higher, it becomes harder to diversify risk in a portfolio.

Let’s start with the big one, global bonds and global equities. Combining equities and bonds has benefitted from a generally negative correlation for much of the past few decades. However, this correlation has turned positive of late (chart 1), implying reduced diversification benefits when combining bonds and equities. This isn’t too much of a concern, given that the long-term average is slightly positive.

But don’t throw out your bonds just yet. This correlation tends to return to be strongly negative during risk-off periods in the equity markets. This reflex action during corrections helps maintain bonds in portfolios, even if they experience periods of low or even negative performance.

Publication Date: 15 Sept 2021

Publication Site: The Wealth Advisor

Johnson and Sunak urge UK pensions to back riskier investments

Mary Pat Campbell

Link: https://www.theguardian.com/business/2021/aug/04/johnson-and-sunak-urge-uk-pensions-to-back-riskier-investments

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Boris Johnson and Rishi Sunak will urge UK pension schemes to back Britain’s “entrepreneurial spirit” with billions of pounds of savers’ funds to fuel the economy’s post-pandemic recovery in a message to investment bosses.

The prime minister and chancellor will issue a joint call to action on Thursday aimed at “igniting an investment big bang” that would “unlock the hundreds of billions of pounds sitting in UK institutions”.

Citing the success of long-term investment programmes by Australian and Canadian pension schemes, Sunak and Johnson will say that British pensioners are missing out on “better retirements” after investors focused too heavily on the returns from stock market listed companies.

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Critics warned that pension schemes would become riskier and more expensive to run and accused the prime minister of failing to understand how they worked.

John Ralfe, an independent pensions consultant, said: “This is 90% hot air from the prime minister.

“Defined benefit pension schemes need assets that generate a guaranteed inflation linked return to pay guaranteed pensions. Most of the things the PM is banging the drum for don’t do this.

Author(s): Phillip Inman

Publication Date: 4 Aug 2021

Publication Site: The Guardian UK