— SEC, CFTC open VIX probe. Bloomberg: "Allegations that Cboe Global Markets Inc.’s widely used VIX benchmark is being manipulated have drawn attention from regulators. The nation’s top two markets watchdogs -- the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission -- opened investigations into the gauge of stock market volatility, according to people familiar with the matter. One topic of examination is the monthly process through which the price of VIX futures contracts is calculated... That monthly auction has been the focus of intense scrutiny this year, spurred by wild price swings and a 2017 research paper alleging the process is rigged. The stakes are big. Billions of dollars of derivatives contracts and exchange-traded products are tied to the index. " … [Read more...] about The Finance 202: Beijing trade talks conclude with no progress. Get ready for a long slog.
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The Dow Jones Industrial Average slid more than 640 points on Monday, marking the worst Christmas Eve trading day on record. The major indexes on Wall Street fell another 2 percent Monday, making it very possible that the market will end this month as the worst December for stocks since 1931. … [Read more...] about Dow Falls 640+ Points in Worst Christmas Eve Trading Day on Record
— Ackman faces exodus. WSJ's David Benoit: "William Ackman, the famed shareholder activist, is losing investors at a rapid pace and facing a future that would no longer include managing a private hedge fund. After three years of subpar performance, most investors in his Pershing Square Capital Management LP have asked for their money back, with about two-thirds of the cash that could be withdrawn at the end of the year being pulled... Longtime backer Blackstone Group LP has been taking cash out, and JPMorgan Chase & Co.’s asset-management group told clients it could no longer recommend the fund... While a sharp reversal in performance could stem the tide, the fund declined again in the first quarter, trimming its total assets 12% to $8.2 billion... Mr. Ackman is paring staff, stepping back personally from investor relations and isn’t seeking to replace departing money." … [Read more...] about The Finance 202: Trump tariffs aren’t going to impede economic growth (yet)
The move comes as Trump as his team zero in on isolating Beijing in their budding trade confrontation. Trump officials believe they’ve already seized some momentum in that fight. They plan on pressing that perceived advantage by detailing new tariffs on Chinese imports and announcing limits on Chinese investment in the U.S. tech industry, The Wall Street Journal’s Bob Davis and Lingling Wei report. “The actions come as administration officials argue the Chinese are already bending to the U.S.’s will,” they write. “They point to a speech on Tuesday by [Xi], who promised to roll out measures this year to lower tariffs on imported cars and to ease foreign ownership restrictions on auto makers in China.” … [Read more...] about The Finance 202: Trump’s flirtation with rejoining TPP is surprisingly serious
Concerns have been raised that China, the largest foreign holder of U.S. Treasurys, might start dumping its holdings as a way to pressure the United States in the trade dispute. But Mnuchin said this possibility didn't concern him because it would be contrary to Beijing's economic interests to start dumping its Treasury holdings. … [Read more...] about Prospect of China Talks Raises Hope for Thaw in Trade War