market risk

Shelter Inflation

The welcome news this summer is that the overall rate of inflation is easing up, both in the U.S., where it has dropped to its lowest level in over two years, and to a lesser extent, in Canada, where in July, Canada’s inflation rate fell to 2.8 percent. Gasoline is pulling the inflation rate down, while food and mortgages were pushing it up. How has the U.S. housing market responded to the rise in interest rates? How do recent trends in the cost of house prices and rents affect the likelihood of future shelter inflation? “Various market indicators, including house […]

Chemistry and the Economy

Risks are multiplying and becoming more complex. The chemical industry is intrinsically connected to the economy. Can chemistry help solve the biggest crises facing us today? On December 15, 2022, the American Chemical Society hosted a virtual webinar, “Chemistry and the Economy.” The moderator was Bill Carroll, principal of Carroll Applied Science, who spoke to Paul Hodges, chairman of the Swiss-based strategy consulting firm New Normal. In speaking about risks, Hodges does not beat around the bush. He began with what he called “the four horsemen of the apocalypse.” He stated, “First there was the pandemic and associated supply chain […]

E-Growth in Emerging Markets

What is happening in emerging markets? Are there areas where an informed investor can make a profit? What are the pitfalls to avoid? On November 22, 2022, the CFA Society of Toronto hosted a virtual webinar, “Rethinking Emerging Markets: The Case for Growth & How to Capture It.” The speaker was Kevin T. Carter, the founder and Chief Investment Officer of EMQQ Global. Carter began by providing his background. “I pray toward Omaha,” he quipped, because he considers himself an active “value” investor first and foremost, along the lines of “the oracle of Omaha,” Warren Buffett. Carter has collaborated with […]

Drivers of Inflation

What is causing the current inflationary environment? How are financial risk managers (FRMs) coping with escalating prices and renewed demand? What are the best strategies for addressing unanticipated inflation—what should a risk manager recommend to hedge against inflation? These and related questions led to a recent survey by the Global Association of Risk Professionals (GARP). “In June 2022, we surveyed 350 FRMs and found that most respondents expected inflation to remain high over the next year, followed by a significant reduction in the next five years,” said William May, Senior VP, Global Head of Certifications and Educational Programs, GARP. The survey […]

Carbon, Cargo, Covid

As we slide into summer 2022, what are the big factors affecting the markets? Carbon, cargo, Covid. Governments and companies are starting to address the excessive carbon dioxide that is causing climate change. Interruptions of the supply chain, heavily dependent on cargo ships, continue to worsen operational risk. Meanwhile, the global economy is still dealing with the Covid-19 pandemic. On May 2, 2022, Derek Walter, head of the Institutional Asset Management Committee at the CFA Society Toronto, moderated two panelists during a webinar to discuss the underlying drivers of market changes. “We need to separate the short-term from the long-term […]

Death of Fundamental Analysis?

Have you been following the market frenzy around stocks for GameStop, AMC and Bed Bath & Beyond? Or the news on Wall Street Bets and Robinhood? How disruptive are these events for traditional valuation methods? What new factors must be considered when investing and allocating capital? Recent shifts in market dynamics have altered the perception of capital markets in meaningful ways. On April 8, 2021, the Corporate Finance Committee of the CFA Society of Toronto convened a panel of experts to discuss the reasons market valuations are so out of synch with fundamental analysis. Moderator Stephen Foerster, Professor of Finance […]

From brown energy to green

How will climate change affect the financial sector and the broader economy? What policy responses will mitigate climate change risks? Recently, the US Federal Reserve Bank (FRB) sponsored the first conference dedicated to exploring the economic and financial risks associated with climate change. “Climate change will have sweeping effects on our economy and financial system,” says the report summarizing the main themes of the conference. The report, released on December 16, 2019, was co-authored by Galina B. Hale, Òscar Jordà, and Glenn D. Rudebusch. Hale is a research advisor and Jordà and Rudebusch are both senior policy advisors at the Federal […]

Recent SEC Enforcement

Given the trends that are emerging for enforcement by the U.S. Securities and Exchange Commission (SEC), what’s a risk manager to do? “Risk managers should use data and data analytics to identify patterns,” said Steven Hilfer, Managing Director in the Disputes & Investigations practice, Capital Markets at Navigant. He was the fourth and final speaker in a four-part webinar panel titled “SEC 2018 Enforcement Trends” sponsored by the Global Association of Risk Professionals (GARP) on July 25, 2018. He argued that the SEC is plunging ahead in the area of data analytics, and it expects companies “to identify patterns prior to being […]

Supreme Court’s Impact

The U.S. Supreme Court will have a significant effect on the interpretation and enforcement of rules at the U.S. Securities and Exchange Commission (SEC) , according to Thomas Zaccaro, Partner, Litigation Department, Paul Hastings LLP. He was the third speaker in a four-part webinar panel titled “SEC 2018 Enforcement Trends” sponsored by the Global Association of Risk Professionals (GARP) on July 25, 2018. “The disgorgement remedies are now limited to five years,” Zaccaro said. This is as a result of the Kokesh vs. SEC case. Disgorgement refers to the act of giving up something (such as profits illegally obtained). Previously the time […]

An Insider’s View

“Quite frankly, I think some have underestimated Clayton,” said Ken Joseph, Managing Director, Disputes and Investigations practice, at Duff & Phelps. “There is a de-emphasis on some areas and re-prioritization of other areas—but he is still focused on wrongdoing.” Joseph was referring to Jay Clayton, the recently appointed chair of the U.S. Securities and Exchange Commission (SEC). Ken Joseph was the second speaker in a four-part webinar panel titled “SEC 2018 Enforcement Trends” sponsored by the Global Association of Risk Professionals (GARP) on July 25, 2018. He is also former Head of the Securities and Exchange Commission’s New York Regional Office Investment […]