Structured products slice and dice debt, equities or other assets and can mix in some derivatives to offer buyers a narrowly defined exposure. They have been known to explode spectacularly on occasion, usually when something happens that wasn't built into their risk models. For example, French banks lost hundreds of millions of euros on their structured products when European bank dividends were banned at the start of the pandemic-a long-tail event not foreseen by their financial engineers. The collateralized debt obligations at the heart of the 2008 banking crisis were also a type of structured product built on what turned out to be faulty assumptions.
GLOBAL NEWS
Job Openings Hover Near Record Highs
The number of job openings continued to dwarf the number of people looking for employment last month, according to private-sector estimates.
Employers had 11.2 million job openings on March 18, according to estimates from jobs site Indeed. That is a slight decline from the number the government reported in January but remains a historically high figure.
Property Investors Target Small Businesses as Market Heats Up
Some real-estate investors looking for the next big thing are turning to small businesses.
A new breed of property firms is buying up buildings occupied by gas stations, doctors' offices and corner grocery stores. They see an opening because big asset managers typically avoid these properties, which they consider risky.
Environmental Groups Pressure Bitcoin Community to Lower Energy Use
A consortium of environmental groups launched a campaign on Monday seeking to change bitcoin's code to decrease its energy use, which has grown substantially in the past few years.
Bitcoin is popular among some investors, but its energy use has riled environmental groups, alarmed some lawmakers, and put the cryptocurrency at odds with a green movement that has some supporters on Wall Street. The new campaign aims to persuade people involved with the cryptocurrency, from mining companies to investors to software developers, that a change is better for the environment and bitcoin's reputation and support.
Japan, U.S. to Communicate Closely on Forex Issues, Japan's Currency Official Kanda Says
The Japanese government will keep close communication with the U.S. about the foreign-exchange market, Japan's top currency diplomat said Tuesday after meeting with a U.S. Treasury official.
"The stability of foreign exchange rates is important, and rapid moves are not desirable," said Masato Kanda, Japan's vice finance minister for international affairs.
Oil Prices Fall as Lockdowns in China Weigh on Demand
New Covid-19 restrictions in China dragged oil prices further below recent highs on Monday, with the prospect of reduced fuel demand easing some pressure on global crude markets.
U.S. oil prices slid 7% to $105.96 a barrel, continuing their fall from a recent closing high of $123.70 reached earlier this month. Oil prices remain sharply higher since Russia invaded Ukraine in February, as Western sanctions and boycotts against Russia have effectively cut world-wide supply. Brent crude, the global price benchmark, dropped about 6.8% to $112.48.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
03-29-22 0632ET
