The SEC has announced an eye-opening revelation—its online EDGAR filing system was hacked in 2016, and the hackers may have used the data to execute trades on non-public information. The hack did not involve any personal information, but the corporate results taken may have allowed the hackers to make “illicit gains” in the stock market. The report on the hacking was unusual and posted by the SEC near 8 pm in the form of an eight-page statement from SEC chief Clayton.
FINSUM: No report yet on the size of the gains, which may have been major. Will we go back to paper filing? (only half kidding)
One of the big head-scratchers of the real estate market the last few years, especially following our natural disasters of late, has been that home price appreciation has been highest in areas prone to natural dangers. Since 2012, counties at the greatest risk of hurricanes, earthquakes, and other catastrophes saw the highest overall price appreciation, with home prices rising 55% on average. Homes that have ocean or mountain views are very sought after, and may implicitly come with higher risk, explaining the trend. Additionally, the riskiest 20% of counties have the most homes, so population density and scarcity may be another factor.
FINSUM: We expect that buyers are going to start paying more attention to natural disasters after this year, but it is hard to imagine that making much of a dent in prices except in hard-hit markets like Houston.
Equifax, one of the largest credit-reporting companies, announced yesterday that it has suffered an epically large data hack. Over a period of more than two months, hackers stole mountains of personal data on 143m consumers. Other than Yahoo, this would be the largest hack on record in terms of personal information taken. Additionally, the hackers were able to take a bundle of info on each consumer, maker it much easier to commit fraud than when one only gets fragments on many. Equifax said that hackers got info including names, Social Security numbers, birth dates, and addresses.
FINSUM: This could be the most damaging hack yet, as Equifax, because of is nature, holds a lot of personal data. The fallout is hard to predict, but it may be extensive.
There has been a lot of hype surrounding self-driving cars for the last year or two, including in stock markets. However, one of the big question marks has been the legal status of self-driving cars. Some states have legalized them or their testing, but the federal government had not issued much guidance, until now. Yesterday, the House of Representatives passed a bipartisan bill laying out rules for the use and testing of autonomous vehicles. It is yet to be passed by the Senate, but if it goes through, it would supersede the conflicting set of rules between states, and help companies to test vehicles.
FINSUM: This is great news for autonomous car makers and consumers. It could also prove to be an inflection point for the industry (and electric vehicle makers’ stocks).
There has been a lot of speculation in recent months about who the next Fed chief might be. President Trump has long been critical of current Fed head Yellen, but less so since he became president. That has left a lot of uncertainty over who might replace her if Trump does decide to do so. Gary Cohn, former Goldman Sachs COO and a top economic advisor to Trump seemed a likely candidate, but apparently he wont be the next Fed boss. According to people close to Trump, Cohn’s stock fell when he criticized the president’s response to Charlottesville, which has apparently put him on the outside of considerations.
FINSUM: We don’t know how much to trust these reports. Perhaps more importantly, Trump has recently praised Yellen, which means he might ask her to fulfil another term.
We have been covering the development of the subprime auto loan market for a while now as it has eerie echoes of the buildup in mortgage debt prior to the Crisis. Well, the market has just hit another ominous record—delinquency rates on so-called “deep subprime” loans have just matched the level they hit in 2007, according to Equifax. Lending standards have continually fallen in recent years leading to very poor performance in recent loans.
FINSUM: The good news here is that this sector is much smaller than the mortgage market, so when it blows up it will likely be an isolated event.