Feb 08, 2024

I recently learned about the challenges facing China’s smaller banks, as the People’s Bank of China has increased lending to other depository corporations by 50% since mid-2022. This has led to a migration of deposits away from small and medium-sized banks towards larger institutions, with the reasons for this shift not yet clear. Additionally, there has been a surge in travel among Hongkongers, leading to increased travel insurance sales, and expectations for growth in Japanese life insurers and flat salary hikes for Singaporean workers.

I also came across news about a joint streaming service being launched by ESPN, Fox, and Warner Bros. Discovery, with potential implications for the cable bundle landscape. Several venture capital deals were announced, including investments in various startups, highlighting the ongoing activity in the investment space. In addition, I read about the changing landscape of stock and bond trading, with a distinction being made between investors and dealers and the evolving dynamics of the financial markets.

There has been a discussion about the role of dealers in the financial market, with the US Securities and Exchange Commission publishing new rules to clarify who is considered a dealer. This has sparked a debate about whether firms that make two-sided markets should be regulated more strictly than those who make directional bets. Additionally, there has been scrutiny of the compensation structure at private equity firms, raising questions about the balance between management fees and performance fees and their impact on employee motivation and shareholder value.

Finally, I learned about Carlyle Group Inc.’s changes to how it pays dealmakers, with the firm aiming to provide more stable cash flows for shareholders. The Kelly criterion is also being discussed as a guide for financial market professionals, emphasizing the importance of understanding the true size of one’s bankroll. Various financial events, such as NYCB’s credit grade being cut to junk, UBS restarting buybacks, and Shein seeking Chinese regulators’ approval for a US public offering, provide a broad overview of recent happenings in the financial sector.

Stay Well!