by Daniel | Last Updated Feb 10th, 2022
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SEC to Speed Up Time It Takes To Complete Stock Trades.
Gary Gensler the Chairman of the Securities and Exchange Commission is looking to shorten the time that it takes to complete a stock trade.
Currently, it takes two days for a trade to be completed, and the SEC wants to make it 1 day.
The SEC believes that it will help to reduce market risk as there won’t be as much margin needed.
Speaking to journalists on Wednesday Gary Gensler said:
“As the old saying goes, time is money,” “Shortening the settlement cycle should reduce the amount of margin that counterparties would need to post with clearinghouses.”
This comes as a result of the massive short squeeze of GameStop last year when retail investors teamed up to buy shares in the company, a stock that was known to be Short by a number of Hedge funds.
As the price of the stock shot through the roof, Hedge fund traders found it extremely difficult to find any shares to buy so they could cover their short positions.
As the price of the stock kept going up so much, some brokerages actually risked running out of money and not being able to pay their customers.
And during this time Robinhood actually halted trading of the stock to avoid massive losses.
If the SEC is successful in speeding up the transaction time of stock trades it will force brokerages and traders to find out where the stocks and money is coming from to cover each trade.
Apparently, it will also push central clearing facilities to build and implement fully automatic trade processing in the future.
Russia will treat Bitcoin as a currency
The Central bank and government in Russia have agreed on how to regulate Cryptocurrency.
The law that will be launched on Feb1 8th will define Crypto as an “analogue of currencies’ as opposed to digital financial assets.
They said that cryptocurrencies will only function in the legal industry if they have been identified by the banking system in Russia or by licensed intermediaries
Also, any crypto transactions of more than 600,000 rubles (which is about $8,000) will now have to be declared, otherwise, it will be considered a criminal act and will incur a fine.
Fed To Hike Rates Multiple Times This Year
Raphael Bostic the Atlanta Federal Reserve President has said that he expects three or four interest rate hikes this year, but he did say that the central bank is not locked into a specific plan.
Whilst speaking CNBC on Wednesday he said – “In terms of hikes for the interest rates, right now I have three forecasts for this year,” “I’m leaning a little towards four, but we’re going to have to see how the economy responds as we take our first steps through the first part of this year.”
Apparently, the Fed has said that it may enact its first rate hike in March, which would be the first rate increase in more than 3 years.
Raphael Bostic also said recently in an interview with the Financial Times that he expects the first rate increase to be 0.5 percentage points, which is 50 basis points.
But when speaking with CNBC yesterday he said – “For me, I’m thinking very much of a 25-basis-point perspective,” “But I want everyone to understand that every option is on the table, and I don’t want people to have the view that we’re locked into a particular trajectory in terms of how our rates have to move over time. We’re really going to let the data show us to what extent a 50 basis point or 25 basis point move is appropriate.”
Oil Could Hit $120 a Barrel
On Tuesday, a report from JPMorgan said that an invasion of Ukraine would send oil prices to $120 a barrel.
The report by Natasha Kaneva who is the head of global commodities at JPMorgan read – “Any disruptions to oil flows from Russia in a context of low spare capacity in other regions could easily send oil prices to $120,”
With a current price of $91 a barrel, which is a 7 year high, it would significantly increase the price of fuel at the pump.
Along with this, JPMorgan said that if Russia did cut its oil exports by 50%, the price of oil would most probably reach $150 a barrel, which would be an all-time high.
Ivy League University of Pennsylvania to accept Bitcoin
The Wharton School, one of the leading Business School’s in the US will now accept Bitcoin as a form of payment for tuition fees for one of its online courses.
The six-week online program is expected to attract thousands of students each year and is called “Economics of Blockchain and Digital Assets,” and costs $3,800.