(Washington)

Between all the whistleblowers, and the questions over whether they actually had first hand knowledge, the ongoing impeachment inquiry centered on Trump’s phone call with Ukraine has become more confusing by the day. However, fresh news today has added weight to the situation. In particular, career US envoy to Ukraine William Taylor gave a deposition to the House inquiry which stated that Trump made the payment of US security assistance to Ukraine explicitly tied to the Ukrainian president opening a public investigation into Biden. Taylor says that in exchange for the aid to Ukraine, “President Trump did insist that President Zelensky go to a microphone and say he is opening investigations of Biden and 2016 election interference, and that President Zelensky should want to do this himself”.

FINSUM: Regardless of your position on this, Taylor’s testimony adds a lot of weight to the situation, as this is no longer an anonymous whistleblower. The impeachment inquiry just got more serious.

(Hong Kong)

Beijing is making a big change at the very top of Hong Kong’s leadership. Xi Jinping is said to be drawing up a plan to replace Hong Kong’s leader Carrie Lam with an interim chief. Beijing has been critical of Lam’s handling of the Hong Kong protests. Lam reportedly already offered to resign, but Beijing made her stay. Evidently, Beijing is now concerned about any timing of the move to replace her as they don’t want to further inflame the situation.

FINSUM: Beijing wants to replace her because of mismanagement, but they do not want to be seen to cave into the violence of protesters. Big pickle.

(New York)

Retirement takes a lot of planning, which every financial advisor knows intimately. Yet, retirees themselves often forget some of the big things that can derail their financial plans. Accordingly, here is a list of several important high expense items that retirees forget to account for. Firstly, one-time big ticket things, like new furnaces, air conditioning units, repainting the house etc. This big expenses can catch retirees off-guard. Relatives in need are often another big commitment that retirees don’t see coming. Additionally, many don’t realize that as their Social Security distributions rise, they can be moved into a higher tax bracket and may also see their Medicare premiums rise.

FINSUM: This is a just a good reminder piece of some of the pitfalls of retirement.

(Washington)

Speaking as a financial publication, the SEC’s new Reg BI has been an odd story to cover. For something so consequential to the industry, there has been quite scant coverage of it, and very little industry commentary from actual advisors and networks. Unlike the DOL rule, there has not been the ceaseless cacophony of voices chiming in for and against the rule. But why? The answer is that the SEC has much sharper teeth than the DOL. Unlike the DOL, which has a very narrow scope of regulation in wealth management, the SEC is the principal regulator of the industry, and thus nobody wants to get on its bad side with aggressive commentary about the rule. Accordingly, everyone has been quite tight-lipped, even in interview requests.

FINSUM: This makes a lot of sense. If one wants to get really critical of the SEC’s new rule, they better have very deep pockets for lawyers, as the SEC can basically put any firm out of business.

(New York)

There is serious trouble brewing in the riskiest corners of the debt market. The lowest rated group of corporate bonds have seen their yields rise for months as a host of factors are causing losses. Whether it be the switch to ecommerce, poor energy prices and renewables, or prescription drug regulations, companies across multiple sectors have been getting hammered. The problem is that the issues hurting these CCC rated companies are not just isolated to them, the move in sentiment and selling is spreading to the broader high yield and speculative loan market. More companies are being downgraded too, and default rates are picking up.

FINSUM: Rather than a panic, this is a broad-based and fundamental move away from risky debt. It may not lead to huge losses—yet—but expect spreads to keep rising.