Week of April 25th, 2022 - The Cryptocurrency Executive Order
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The Cryptocurrency Executive Order
On March 9, 2022, President Biden issued an executive order on cryptocurrency to regulate this fast-growing digital industry. This order comes in response to the widespread criticism about cryptocurrency being used to conduct illicit transactions as well as being responsible for ransomware in several hacks, such as the infamous Equifax hack in which the hacker group was paid in Bitcoin as ransom.
The Changing Dynamics of Investing in China
China’s model of state-controlled capitalism has made economic regulation very easy. In recent times there have been 50+ antitrust crackdowns on some of the countries largest tech firms including Alibaba and DeeDee, which has led to an overall wipeout of over $1 trillion in market cap. So what does this mean for investors? In order to understand the effects of this on investors’ portfolios, we first need to understand why these crackdowns occur in the first place.
Intro to Bank Stress Tests
Ever since the 2008 financial crisis, US banks have been under a great deal of scrutiny. Whether it was providing mortgages to risky borrowers or creating risky products such as CDOs (Collateralized Debt Obligations), these bad practices led to one of the most severe economic recessions in US history. The US government bailed out industry giants such as Goldman Sachs and AIG. In addition, many other businesses such as Lehman Brothers went bankrupt.
After the crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to reform the financial industry. This law brought several changes such as creating the Consumer Financial Protection Bureau (CFPB) and having the Federal Reserve perform bank stress tests to ensure that the largest banks in the US are financially sound. Recently, the Federal Reserve released the results of the latest bank stress tests. Let’s take a look at bank stress tests.
In this episode of Finance Simplified, we put together a summary of the best insights from each of our 30 episodes for you to learn for the new year!
“To be a successful investor, you don't need to take excessive risks and be involved in all sorts of financial instruments. You need to understand your risk appetite and understand a few asset classes well. Stay within your boundaries, and your wealth will grow at a decent pace.” — Naved Abdali