What we’re reading (10/9)
“TD Bank Faces $3 Billion In Penalties And Growth Restrictions In U.S. Settlement” (Wall Street Journal). “As part of the agreement, the bank’s primary U.S. regulator, the Office of the Comptroller of the Currency, is expected to impose an asset cap barring the bank from growing above a certain level in the U.S., according to people familiar with the matter.”
“Fed Officials Were Divided On Whether To Cut Rates By Half A Point In September, Minutes Show” (CNBC). “Federal Reserve officials at their September meeting agreed to cut interest rates but were unsure how aggressive to get, ultimately deciding on a half percentage point move in an effort to balance confidence on inflation with worries over the labor market, according to minutes released Wednesday.”
“Venture Capital's ‘Crisis’” (Spyglass). “Without question, the past decade-plus has been an unprecedented build up and expansion of VC as an asset class. This was seemingly happening more naturally and then the pandemic came and threw the world into crisis. But channeling JFK, with the danger, many VCs also saw an opportunity. It seemed like there were suddenly new opportunities in a changed world – social voice networks, virtual conference software, 15-minute delivery apps, etc – but what really happened is that the pandemic just created this sort of temporary bubble, which rather quickly deflated. But it also impacted basically every other company, with most others that operate online in meaningful way seeing growth pulled forward by a couple of years or more. This was true of Amazon on down. But as the world normalized, it became clear that growth would return to the place where it was almost as if the pandemic hadn't happened – it was just a blip, a massive one. But this all was largely masked by both stimulus and zero interest rates that the government put in place to try to avoid economic collapse.”
“Owners Of ‘Catastrophe Bonds’ Are Staring Down Big Losses As Hurricane Milton Barrels Toward Florida” (Business Insider). “The back-to-back barrage of hurricanes Helene and Milton could trigger big losses for investors in catastrophe bonds. The fixed-income securities allow insurers and reinsurers to transfer risks associated with major weather events to investors. Investors who buy cat bonds can see big returns if it’s a relatively quiet year for hurricanes and other natural disasters. As long as there are few extreme weather events or damage from any event is mild, investors continue to collect the relatively high yield on the bonds.”
“Nobel Prize In Chemistry Awarded To Three Scientists For Work On Proteins” (Washington Post). “The discoveries by David Baker at the University of Washington and Demis Hassabis and John M. Jumper of Google DeepMind in the United Kingdom have rapidly transformed science. Hassabis and Jumper developed a powerful computational tool that gave researchers the long-sought ability to predict how proteins twist and fold to create complex 3D structures that can block viruses, build muscle or degrade plastic.”
