Tag: WSJ

Banks Share Data to Block Cyberattacks

Mary Pat Campbell

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

Graphic:

Excerpt:

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

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

Europe’s Covid-19 Vaccination Success Faces Winter Test

Mary Pat Campbell

Link: https://www.wsj.com/articles/europes-covid-19-vaccination-success-faces-winter-test-11632303001?mod=djemwhatsnews

Excerpt:

Europe has pushed ahead of the U.S. in vaccinating its citizens and has experienced a summer of relatively subdued Covid-19 caseloads, hospitalizations and deaths, despite the spread of the Delta variant.

Deaths from Covid-19 in the European Union averaged around 525 over the seven days through Tuesday and around 140 in the U.K. In January, daily deaths peaked at 3,500 in the EU and around 1,200 in the U.K., according to national data compiled by the University of Oxford’s Our World in Data project.

Adjusted for population, EU deaths equate to around 1.2 per million a day, and U.K. deaths to 2.1 per million. That compares with 6.1 per million currently in the U.S.

The difference reflects wider vaccine coverage, especially of older and high-risk groups. The 27 countries of the EU have fully vaccinated 61% of the bloc’s 448 million population, compared with 55% in the U.S., according to data from the U.S. Centers for Disease Control and Prevention and its EU counterpart. Big EU nations picked up the vaccination pace after a slow start this year. France has fully vaccinated 67% of its population, Germany 63% and Italy 66%. The U.K., which left the EU in 2020, has fully vaccinated 66% of its residents.

Author(s): Jason Douglas in London, Erin Delmore in Berlin and Eric Sylvers in Milan

Publication Date: 22 Sept 2021

Publication Site: Wall Street Journal

U.S. Covid-19 Death Toll Surpasses 1918 Flu Fatalities

Mary Pat Campbell

Link: https://www.wsj.com/articles/u-s-covid-19-death-toll-surpasses-1918-flu-fatalities-11632176583

Excerpt:

The U.S. on Monday crossed the threshold of 675,000 reported Covid-19 deaths, according to Johns Hopkins University, which tracks data from state health authorities. The Centers for Disease Control and Prevention estimates the influenza pandemic killed about that many people in the U.S. a century ago, in 1918 and 1919. Both figures are likely undercounts, epidemiologists and historians say.

There are several differences between the current pandemic and the one that claimed nearly as many lives more than 100 years ago. The U.S. at that time was roughly one-third its current size, so the flu pandemic took a proportionately bigger toll on the population. That pandemic had a devastating effect on young people, including small children and young-to-middle-aged adults, while Covid-19 has hit older people hardest, according to health officials.

Author(s): Jon Kamp and Jennifer Calfas

Publication Date: 20 Sept 2021

Publication Site: WSJ

Tax Me, I’m From New Jersey

Mary Pat Campbell

Link: https://www.wsj.com/articles/regressive-tax-new-jersey-salt-cap-reconciliation-2017-cuts-and-jobs-act-aoc-biden-11632167030

Excerpt:

I am no billionaire. But like Mr. Buffett, I am willing to take one for the team. So as Democrats in Congress come under pressure to roll back the $10,000 cap on the federal tax deduction for state and local taxes, or SALT, this long-suffering resident of New Jersey offers his own Buffett-like message:

Don’t do it. Make me and people like me — those who choose to live in high-tax states — pay our full, fair share of federal taxes.

Such an approach accords well with what Mr. Biden has been saying about taxes and the wealthy. In his most recent remarks about his Build Back Better plan, the president said he’s “tired” of the rich not paying their “fair share.” And he attacked the 2017 tax cuts passed under Donald Trump as a “giant giveaway to the largest corporations and the top 1%.”

But that’s exactly who would benefit most from any expansion of the SALT deduction. According to the Tax Policy Center, 57% of the benefits of eliminating the cap on the SALT deduction would go to the top 1% of filers. The same researchers likewise reckon that the top 1% would get an average tax cut of more than $35,000 — against just $37 for middle-class taxpayers.

Author(s): William McGurn

Publication Date: 20 Sept 2021

Publication Site: WSJ

Pfizer, BioNTech Say Covid-19 Vaccine Is Safe for Children Aged 5 to 11

Mary Pat Campbell

Link: https://www.wsj.com/articles/pfizer-biontech-say-covid-19-vaccine-is-safe-for-young-children-generates-immune-response-11632134701

Excerpt:

Pfizer Inc. and partner BioNTech SE said their Covid-19 vaccine was found to be safe in children ages 5 to 11 years in a late-stage study and generated a strong immune response in them, bringing the prospect of broader vaccination coverage closer.

Pfizer said it would share the results with regulators in the U.S. and other countries and seek emergency-use authorization in the U.S. as early as the end of the month.

The companies said the two-dose shot was found to be safe and well tolerated among the children in the study. The vaccine generated levels of antibodies that were similar to those of younger adults, meeting the study’s measurements of success, according to the companies.

Pfizer and BioNTech said they hadn’t yet determined vaccine efficacy — how well it protects against Covid-19 — for children in the age group. Not enough young subjects in the study have become sick to compare rates between children who got a vaccine and those who got a placebo, but researchers could still learn more as the trial continues.

Author(s): Jared S. Hopkins

Publication Date: 21 Sept 2021

Publication Site: Wall Street Journal

How Beijing’s Debt Clampdown Shook the Foundation of a Real-Estate Colossus

Mary Pat Campbell

Link: https://www.wsj.com/articles/how-beijings-debt-clampdown-shook-the-foundation-of-a-real-estate-colossus-11631957400

Graphic:

Excerpt:

The party has ended. Years of aggressive borrowing have collided with Beijing’s crackdown on debt, leaving the developer on the brink of collapse. Construction of Evergrande’s projects in many cities has stopped. The company has faced a litany of complaints and protests from suppliers, small investors and home buyers who sank their savings into properties the company promised to deliver.

Cash is so short that this summer, the developer said it began paying bills to contractors and suppliers with unfinished apartments instead of actual money. A paint supplier based in the southeastern province of Fujian said Evergrande recently paid off the equivalent of $34 million in bills with three unfinished properties, which the supplier is trying to sell. At a construction firm in Wuhan, more than 200 employees have been forced to take pay cuts because some of Evergrande’s bills are past due, a manager at the firm said,

Former and current employees say layoffs are adding up, and free meals that Evergrande used to provide for staffers at its headquarters have been canceled. In central China’s Hubei province, Evergrande has asked the local government to take over homeowners’ funds held in escrow accounts so they can’t be seized in legal disputes with creditors, according to people familiar with the matter.

Evergrande didn’t respond to requests for comment. The company said on Sept. 14 that its apartment sales have slowed markedly since June, its asset-disposal plans haven’t materialized, and it has hired financial advisers — a move that brings it closer to a potential debt restructuring.

Author(s): Xie Yu and Elaine Yu

Publication Date: 18 Sept 2021

Publication Site: WSJ

Elon Musk’s Push to Expand Tesla’s Driver Assistance to Cities Rankles a Top Safety Authority

Mary Pat Campbell

Link: https://www.wsj.com/articles/elon-musks-push-to-expand-teslas-driver-assistance-to-cities-rankles-a-top-safety-authority-11632043803

Excerpt:

Tesla Inc. is readying a major upgrade of its driver-assistance software but the top federal crash investigator says the move might be premature.

Chief Executive Elon Musk said last week that drivers would soon be able to request an enhanced version of what Tesla calls its “Full Self-Driving Capability.” The upgrade is expected to add a feature intended to help vehicles navigate cities, expanding the suite of driver-assistance tools that had been designed mainly for highways.

Despite its name, Full Self-Driving doesn’t make cars fully autonomous, and Tesla instructs drivers to remain alert, with their hands on the wheel.

Jennifer Homendy, the new head of the National Transportation Safety Board, said Tesla shouldn’t roll out the city-driving tool before addressing what the agency views as safety deficiencies in the company’s technology. The NTSB, which investigates crashes and issues safety recommendations though it has no regulatory authority, has urged Tesla to clamp down on how drivers are able to use the company’s driver-assistance tools.

Author(s): Rebecca Elliott

Publication Date: 19 Sept 2021

Publication Site: WSJ

Yellen, IRS Push Democrats to Require Banks to Report Taxpayers’ Annual Account Flows

Mary Pat Campbell

Link: https://www.wsj.com/articles/yellen-irs-push-democrats-to-require-banks-to-report-annual-account-flows-11631727020

Excerpt:

Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig pressed lawmakers Wednesday to give the Internal Revenue Service more information about taxpayers’ bank accounts, as the Biden administration tries to salvage its tax-compliance proposal.

In letters to lawmakers, the administration officials again asked Congress to require banks to report annual inflows and outflows from bank accounts with at least $600 or at least $600 worth of transactions, a proposal aimed at letting the IRS target its audits more effectively. It would generate about $460 billion over a decade to cover the costs of Democrats’ planned expansion of the social safety net and climate-change policies, according to the administration.

But after a flurry of opposition from banks and credit unions, House Democrats omitted the proposal from their list of tax-policy changes this week. That was a sign that it lacked the support in the party to advance, though a scaled-back version raising about half as much money could still emerge from ongoing talks between administration officials and Congress.

Author(s): Richard Rubin and Orla McCaffrey

Publication Date: 15 Sept 2021

Publication Site: Wall Street Journal

How to Stop Politicians From Cooking the Books

Mary Pat Campbell

Link: https://www.wsj.com/articles/budget-reform-deficit-government-spending-3-5-trillion-reconciliation-bill-fasb-biden-11631465087

Excerpt:

The federal government ran budget surpluses from 1998 to 2001. Yet the national debt went up in every one of those four years. How can debt go up when you’re running surpluses? Easy, borrow the surpluses then flowing into the Social Security Trust Fund and call it income. Any corporate CEO who tried this stunt would go to jail. But no CEO would try because Wall Street made such boldface accounting fraud impossible more than a century ago.

…..

How can we stop politicians from so casually lying to their stockholders (you and me) for their own short-term political benefit and to the country’s long-term financial detriment? What’s needed is the equivalent of the reforms forced on corporations 140 years ago.

One justification for the Federal Reserve is to keep the power to print money out of the hands of politicians. A Federal Accounting Board would keep the power to cook the books out of their hands as well. Like the Fed, it would be run by a board of seven members, all professional accountants of long experience, serving 14-year terms. They could be removed only for cause. One member would be appointed chairman, serving a four-year term.

The board would take over the duties of the Congressional Budget Office, and the White House Office of Management and Budget would be reduced to formulating the annual budget. The board would estimate future revenue and the costs of all legislation. It would also set the rules for how the federal books must be kept (no calling borrowed money “income”), and would determine if they are accurate and complete, as a CPA does for corporate books.

Author(s): John Steele Gordon

Publication Date: 12 September 2021

Publication Site: Wall Street Journal

Libor Transition Stokes Sales of Risky Corporate Debt

Mary Pat Campbell

Link: https://www.wsj.com/articles/libor-transition-stokes-sales-of-risky-corporate-debt-11631451601

Excerpt:

Managers of collateralized loan obligations — securities made up of bundled loans with junk credit ratings — are rushing to close deals ahead of the year-end move away from the London interbank offered rate. The interest-rate benchmark underpins trillions of dollars of financial contracts but was scheduled for phaseout after a manipulation scandal.

That is helping push CLO sales to records. U.S. issuance topped $19.2 billion in August, a monthly record in data going back a decade, according to S&P Global Market Intelligence’s LCD.

…..

A wave of CLO refinancings this year allowed some managers to include fallback language shifting to SOFR in their documents, analysts said. But for other deals, CLO managers and investors must negotiate that changeover, which could create conflicts if they have different rate preferences.

Disruptions to the transition could increase the extra yield, or spread, that investors’ demand to hold triple-A rated CLO debt during the fourth quarter of this year, depending on how quickly the loan market transitions and how new CLO deals and investors position themselves, said Citi analysts in a June note.

SOFR is based on the cost of transactions in the market for overnight repurchase agreements, where large banks and hedge funds borrow or lend to one another using U.S. Treasurys as collateral. Unlike Libor, which tends to rise during periods of market stress, it doesn’t adjust for shifts in credit.

During last year’s spring selloff, the difference between three-month Libor and SOFR rose to 1.4 percentage points at its peak, according to BofA. That means CLO debtholders received a higher rate than what they would have if their bonds were linked to SOFR.

Author(s): Sebastian Pellejero

Publication Date: 12 September 2021

Publication Site: Wall Street Journal

Covid-19 Could Become Like the Flu if More People Get Vaccinated

Mary Pat Campbell

Link: https://www.wsj.com/articles/covid-19-could-become-like-the-flu-if-more-people-get-vaccinated-11631439002

Excerpt:

Covid-19 might become a routine illness like a common cold or the flu one day, virologists and epidemiologists say. But it will take a lot to get there, and the ferocious spread of the Delta variant that has filled hospitals again shows how challenging that path could be.

More than 20 months after the pandemic began, people around the world are having to change the way they think about a disease that many public-health authorities once believed they could conquer. A terrifying emergency has become a long, grinding haul.

The supercontagious Delta variant has made the virus virtually impossible to get rid of. It has fueled surges in cases across the globe, even in countries like Australia that had largely kept the pandemic out.

…..

For Covid-19 to become mild, most people will need some immunity, which studies have shown reduces the severity of the disease. Infections provide some immunity, but that comes with the risk of severe illness, death and further spread of the virus, compared with vaccines. People could become vulnerable to SARS-CoV-2 if that immunity erodes or is weak, or if the virus mutates.

….

A future Covid-19 could be less deadly than the flu, which kills up to a half-million people a year globally, because the most widely used Covid-19 vaccines are better than flu vaccines, said Dr. Garcia-Sastre, an influenza expert. The disease could still remain serious for people with weaker immune systems, doctors said.

Author(s): Betsy McKay

Publication Date: 12 September 2021

Publication Site: Wall Street Journal