"Forget Bitcoin. There’s a new digital currency that is surging as online drug-dealers begin adopting it to conduct business with more anonymity. The two-year-old currency Monero has more than quadrupled this month after gaining support from prominent websites that anonymously peddle drugs. It spiked to as much as $10 on Sunday after AlphaBay, one of the most popular sites for buying drugs like liquid LSD and hybrid cannabis, said last week it will begin accepting the currency on Sept. 1. The total value of all Monero in circulation pushed past $100 million on Monday, up from about $25 million at the end of last month, according to coincap.io."
"Global regulators called for urgent action to enact new collateral rules for derivatives to prevent the $493 trillion market from fracturing. The U.S., Japan and Canada are the only three countries that will meet an internationally agreed deadline of Sept. 1 for the rules to start phasing in, the Financial Stability Board said on Friday in a review of 24 countries’ oversight of over-the-counter derivatives. A second deadline in March for additional requirements will probably be met in about half of the countries, according to the FSB, whose members include the U.S. Federal Reserve, the Bank of England and the Hong Kong Monetary Authority."
"The Pew Charitable Trusts’ raw data is taken from the CAFRs of over 230 public pension plans comparing liabilities and assets (in thousands) by state. Five of those states happen to have liability amounts in the $190 billion range but when you look at the assets each has accumulated to pay those benefits a stark trichotomy emerges"
"But the reality is very different: there was never a time when most Americans had traditional pensions, and most lower-income retirees collected little or nothing from such plans. But 401(k)s, which are more affordable to employers and thus more widespread, mean that more lower-income Americans are likely to reach retirement with private retirement plan benefits than ever before."
"The shift from pensions to 401(k) plans is making retirement inequality much worse—and education is what separates the haves from the have-nots, a new study has found."
"The cause is the U.S. Securities and Exchange Commission’s new rules for the $2.7 trillion money-fund market, which will become effective Oct. 14. From that day on, money funds that invest on private-sector debt, such as commercial paper or certificates of deposit, will be forced to let their share prices float to reflect the value of the assets they hold. Currently, many of these funds fix their share prices at $1 to give them the appearance of actual cash."
"We argue that the appropriate discount rate for pension liabilities depends on the objective. In particular, if the objective is to measure pension under- or over- funding, a default-free discount rate should always be used, even if the liabilities are themselves not default-free. If, instead, the objective is to determine the market value of pension benefits, then it is appropriate that discount rates incorporate default risk. We also discuss the choice of a default-free discount rate. Finally, we show how cost-of-living adjustments (COLAs) that are common in public pensions can be accounted for and valued in this framework."
"Illinois Teachers' Retirement System, Springfield, lowered its assumed rate of return to 7% from 7.5% starting with the fiscal year beginning July 1, 2017, at a board meeting Friday."
"Unlike corporate pensions, US public pensions discount their liabilities using the rate of return they expect to generate on their investments. Some experts complain that these rates have been set unrealistically high. Lower return expectations would push up the cost of liabilities on their balance sheet, and force Illinois to make higher contributions. If costs to the pension were to increase by $250m it would nearly equal an entire year’s appropriation for six universities."
Unlike corporate pensions, US public pensions discount their liabilities using the rate of return they expect to generate on their investments. Some experts complain that these rates have been set unrealistically high. Lower return expectations would push up the cost of liabilities on their balance sheet, and force Illinois to make higher contributions. If costs to the pension were to increase by $250m it would nearly equal an entire year’s appropriation for six universities.
In today’s daily blockchain bulletin we bring you news that next big thing in financial back-office technology isn’t actually the blockchain. Apparently it’s something called a “distributed concurrence ledger”.
"This process has been made all the more difficult by the fact there’s now a cross-border element to this. The splintering of the timetable adds to the compliance complexity and could disrupt cross-border trading – margin requirements may or may not apply depending on the status and location of the counterparty, whether it has a guarantee from its parent, and whether it is consolidated with the parent entity for accounting purposes, among other things."
"The one thing that might actually improve your metabolism is periodic fasting—that's right, the very same eating pattern that the early European settlers deemed uncivilized. Mark Mattson, a neuroscientist at the National Institute on Aging, has observed in a series of mice experiments over the past two decades that mice who skip feedings are leaner and live longer than their nonskipping counterparts. The fasting mice also have more robust brain cells than those who consume regular meals. Mattson, who skips breakfast and lunch most days, theorizes that caloric deprivation acts as a mild stress that helps cells build up their defenses—warding off damage from aging, environmental toxins, and other threats. Other research has shown that periodic fasting may also prevent heart disease."
"Now, after years of back-and-forth between large financial institutions and the CFTC, the agency issued a one-year delay on overseas application of swaps rules, stating that if trades are held by foreign affiliates, certain derivatives transactions are exempt from U.S. rules until September 30, 2017."
"The SEC’s proposal would limit the derivatives exposures of mutual funds and exchange-traded funds to 150 percent of their total net assets. Funds would also have the option of a 300 percent ratio if they meet the criteria of a risk test. The rule “could have unintended consequences and provide incentives for funds to move away from exchange-traded, safe derivatives to other types of derivatives that may carry more risk,” said Jim Overdahl, a former SEC chief economist who represents asset managers organized as the Coalition for Responsible Portfolio Management, in an interview."
"Ten years ago, after bipartisan negotiations and amid high expectations, President George W. Bush signed the Pension Protection Act into law. Today, even PPA supporters acknowledge it failed to protect pensions, which are now on the actuaries’ endangered species list."
"Current monetary policies by central banks are perhaps causing more harm than help. Negative interest rates, coupled with heightened capital requirements from Basel III, are putting enormous pressure on the FCM model. With the number of FCMs in the space continuing decline and increased costs being passed down the chain, at the end of the day there will be one sucker to bear the brunt of it all: the end-user."
"Credit Suisse scored an industry first in May by securitising its operational risk exposures, but risk managers and industry experts say the transaction is unlikely to be replicated by other firms. While other banks are intrigued by the deal and its funding structure, the transaction took years to come to fruition, and the level of investor interest was lower than initially anticipated. Moreover, likely changes to capital rules from the Basel Committee on Banking Supervision will stop banks from using insurance to obtain capital relief."