What we’re reading (3/19)
“Jeff Bezos In Talks To Raise $100 Billion For AI Manufacturing Fund” (Wall Street Journal). “The Amazon.com founder is meeting with some of the world’s largest asset managers to raise funding for the project. A few months ago, he traveled to the Middle East to discuss the new fund with sovereign wealth representatives in the region. More recently, he went to Singapore to raise funding for the effort as well, according to people familiar with the matter.”
“Wall Street Faces A $5.7 Trillion Triple-Witching Jolt On Friday” (Bloomberg). “Wall Street equities traders are bracing for an unusually large tally of options expiring on Friday, which risks injecting even more volatility into a market that’s seen weeks of turbulence amid the raging Mideast conflict.”
“Can Companies Buy Their Way Into The S&P 500?” (Project Syndicate). “Joining the S&P 500 can transform a company’s fortunes, making confidence in the selection process essential for investors and markets alike. But a new study finds that companies purchasing S&P credit ratings were more likely to be admitted, raising questions about the influence of commercial incentives on firms' inclusion.”
“The Music Has Stopped In Private Markets” (CFA Institute). “Many fund managers, journalists, and investment advisors continue debating whether the run on private credit funds…is merely a hiccup in a maturing industry or the beginning of a panic that is likely to accelerate rapidly. My assessment comes out squarely on the latter side…My rationale begins with recognizing the true nature of semi-liquid private market funds. Fund managers portray them as innovative marvels of modern financial and liquidity engineering, but that characterization only holds when they are positioned as solutions to immediate challenges within a compressed time frame. When evaluated against centuries of financial history, they appear neither novel nor durable. Instead, they are simply an ill-advised revival of a structure that has appeared many times before — and often fail. Semi-liquid private market funds suffer many flaws, but the most egregious is that they violate one of finance’s oldest principles: never fund illiquid assets with redeemable claims unless a lender of last resort stands behind the structure.”
“Big Banks Score Win Under New Plan To Loosen Capital Rules” (Wall Street Journal). “America’s biggest banks would be allowed to hold billions of dollars less in capital on their books under proposals unveiled Thursday, easing rules put in place after the 2008 financial crisis that were meant to help shield against meltdowns. The proposals introduced by the Federal Reserve and other regulators would hand a major victory to big banks, which had resisted sharply higher requirements proposed under the Biden administration. Wall Street’s embrace of a second Trump administration had largely centered on the prospect that plans for those stricter requirements would be scrapped.”
