Welcome back everyone. So for today, what we're going to do, carrying on from what we've done for the last time, we'll have some few exercises. We'll go through a case study and give you a little bit of an insight of how you can prepare for your tests. Today's case study is about a financial institution that is based in the US. This financial institution has few subsidiaries under its belt. And the question and the main theme here is around financial technology. So fintechs, cryptocurrencies, it's also around money laundering and compliance and compliance issues. So this is going to be the main predominant theme of the case here today. Again, as we've done last week, what I would recommend is that you go through the case, analyze its merits, have a notepad near you, just take some of the important issues, note them down, keep them handy so that when the questions come, you know exactly how to answer them. Without further ado, let's start with the very first question. So one of the companies that are owned by Porto is called Jam. And Jam is thinking about implementing the new measures and you appropriate anti-money laundering measures. And so for us and for this particular question, the company or the financial institution wants to basically... The very first question is about one of the subsidiaries owned by Porto. So the subsidiary is Jam and Jam is basically implementing anti-money laundering measures. And now the question here is asking us about the importance of adapting new measures and why should we care about implementing anti-money laundering measures. Now here what you'll have to do, you'll have to go through the material that we studied in Unit 10 and you'll have to remember what are the consequences of allowing dirty money to be floating within the economy. And of course, one of the main side effects or one of the main consequences if we allowed dirty money to be floating in the economy is basically higher inflation. Thus, the answer to this particular question is A. Now, moving on to the next question. The next question is about the compliance. The compliance department in Peachtree. Again, another subsidiary of Porto. The question here is asking you to position yourself as a member of the compliance department. And here what you need to do is basically you'll have to pot some of the dirty money that's been coming in. And here what you need to look into is the question is trying to ask you about a specific frame or about a specific stage in the phase of washing or laundering dirty money. And as you remember, there are three main stages or three main levels for money laundering and for the money to be integrated within the financial system. The first one starts basically with the placement and then we go into the layering phase and then after this into the integration phase. And so here very much what we are looking into is the layering phase. And so what you'll have to keep in mind is what is the definition or what are the actions that fall under the layering phase. Now, normally within the layering phase, it is when you try to hide the source of the money. So here you are trying to relocate and disguise basically the source of the dirty money just to basically make it look as if it is legitimate. So the answer to this question is basically a number B. What I would recommend of course is for you to go again through the material through unit 10 try to understand the differences between the different layers and between the different stages of washing dirty money and how money laundering takes place. This will help you understand the how to answer this particular question. Now, as we move forward, this particular question is asking us about fat about the recommendations and specifically recommendation number nine that is implemented by fact. And here what you are based with the question is trying to ask you to position to position yourself as the senior compliance officer within three and to implement the recommendation number nine of fact. And so this is a very straightforward question. So the only thing that you'll have to remember is what is recommendation number nine all about. And if you look at the answers, you'll understand basically that some of them are trying to trick you that three of them are trying to get you to answer the wrong way. And of course, as part of the recommendation, the fact recommendation number nine, you as a compliance officer will have to request to basically report transactions that are above $15,000, 15,000 US. And so the answer to that question is basically number D. Now, this particular question that we're dealing with right now is above the regulatory framework that the financial institutions so peach tree in our case is expected to comply with. Now, peach tree is basically considering to keep the same level of equity that they have now. So what you are meant to be is trying to advise each tree how they can comply with that with the regular with the regulatory frameworks all while basically they keep the level of equity in the same way that that it is currently. And what we need to keep in mind what we need to understand here is that what are the consequences of increasing equity and how this increasing equity or decrease equity. And that is all in line within the different regulatory frameworks. Now, the, some of the answers here are trying to take you into the wrong directions so some of them will, as you'll see are citing the Frank act, some of them are citing the recommendations and SCC regulations, or some issue or some recommendations by the Fed. Now, the main focus. And if you remember from what we studied together in unit number 10 and you're from unit number 10 and number six. You would remember from that, basically, the main predominant theme or the regulator in that respect is going to be the basal three recommendations and so the company or the financial institution will have to comply and take into accordance or into account. The recommendations set forth within the basal three within within the basal three. And so, for this reason, the answer to this particular question is basically be now as we move forward. The next question is asking us about central bank backed digital currencies. And here what we're looking into is basically whether the Fed should consider allowing or issuing a central bank backed central bank currency, a digital currency or not. And for us what we need to look into within this sphere here is the, what are the consequences of issuing digital currencies. And so one of the main things that we need to keep in mind when issuing digital currencies and as we begin to phase out traditional currencies is that we don't leave segments of the society or some members of the society behind and so integrating the digital currencies and allowing it to be circulated through the mass and by the mass is going to be key. And thus, the answer to this particular question, as you can see is basically number C. Now, moving forward, the, this question is basically asking us about some of the situations or economic downturns and financial downturns that one of the countries where portal the financial institution has invested in is experiencing. And so this particular question is about Argentina is about the case of Argentina and is asking us basically what kind of measure we need to look into what is the situation basically that Argentina is suffering from and how do we understand the consequences that we might experience due to this particular situation that the country is going through. And, as you can see, there are a few different options here. One of them is citing hyperinflation. Another is citing hyper deflation. One is just discussing normal rising a normal raise in inflation while other normal decline in deflation. Now, of course, based on the mirrors that we have here in the question, we can see that this case is very much related to inflate to inflation. However, the question that we need to look into or perhaps the analysis that we need to make further is whether this inflation is a normal type of inflation or is it hyperinflation. And so the analysis that we need to do is based on that and also what we need to understand is the answers that are provided the question that so the answers that we have here we've limited them to basically A and C. Now, you need to take this a little bit further and you need to read A and C carefully to understand which one basically applies. Now as hyperinflation is when you have a rapid increase or a rapid inflation inflammatory rate and within the economy of a particular country, and here the money basically loses its value rapidly so the money becomes worthless. And because of that, any investments that have been made within this particular region or within this particular economy that is suffering from hyperinflation is likely to suffer from sufficient losses. And so, based on that, answer number A is basically the most accurate answer to describe the situation in Argentina and to describe basically the consequence that the investments made by the portal would have based on the economic situation or the current economic situation in Argentina within this particular question. Now, in here, in this question, again, where we are asked about one of Porto subsidiaries, Peachtree, and here we are thinking and what we're doing is basically we're trying to understand whether Peachtree as an organization is regarded as a systemically important financial institution or not. Now, if you remember from unit number 10, and from unit number six, when we discussed the interconnectedness of financial institutions, we explained that financial institutions are very much interconnected to one another. And so whatever touch, whenever something, whenever a one of the financial institutions suffers from a particular downturn, this may affect other financial institutions, whether on a national or international level. So they are very much in a way interconnected to one another. Thus, since Peachtree is basically considered to be one of these financial institutions, they are going to be interconnected. So they are systemically important financial institutions. They are interconnected with other financial institutions, and they'll have to be basically overseen by the financial services oversight. And the correct answer for us for this particular question is number B. Now, here in this question, again, we are looking at Peachtree, and a Peachtree is asked to flag suspicious transactions. Now, these suspicious transactions that is basically the company is asked to flag, you have different, you have basically different scenarios on how you can spot these suspicious transactions. And as one of the very first things that we need to keep in mind is the amount of money that is being transacted and the persons that are involved within these transactions and basically their backgrounds and what they do. And to whom the funds are going to. And based on these merits, every time there is a transaction, we need to ask clients, whoever they may be, who are making these large transactions, questions about the reasons for these transactions, who the ultimate beneficiary from the transaction. Thus, if we go into that direction, as you can see, the answer for this question would be number C. Now, central bank digital currencies. And the question here that we are trying to answer is basically if issuing central bank digital currencies would have an effect on the interest rates that are paid by the financial institution. In our case study basically quarter. And you are presented with numerous options or with numerous different possible scenarios. One of these scenarios basically revolve around whether the whether portal would have to basically be sorry, I'm mixing this up now. Now, as you can see for this question we are again discussing the issue of central banks digital currencies. And here, what we're looking into is basically if having or issuing central bank digital currencies will have an effect on the interest rates that are paid by the financial institution subject to our case study portal or not. Now, what we need to keep in mind is that central bank digital currencies could if they are interest bearing basically or if they are interest bearing, they might have an effect on the interest pay interest rates paid. Now, the reason being is because, again, financial institutions that are holding these digital currencies, they are also holding other liquid, low risk instruments and so there would be an effect on how on the interest rate that is paid by the financial institutions holding these digital currencies and thus, for this reason, answer number B answer number D is the correct answer in our case. Now moving forward to the next question, as you can see the next question is about portal. And what you are doing here is you are advising portal on whether they could use the blockchain technology and how it could help them with it could help them raise their international trade into a new level. Now, here, it's very much all about blockchain technology and what you need to know you need to recall the material that we studied together in unit number 10. You will have to remember some of the benefits of using blockchain technology within the financial industry. And one of the main things that this technology allows us to do is basically to have better transparency and allows even better access or more enhanced access for smaller organizations or smaller firms to do to access international or global markets. Now with that in mind. Yes, these are some of the main benefits of the block of blockchain technology. However, the transactions that take place within the blockchain technology or using the blockchain technology are very much slow. And as you can see, the correct answer in our scenario is going to be answer number D. Moving on to the next question, the next question is again about cryptocurrencies. And what we're thinking what we're doing here you are having a chat with the board of director you're working with the board of directors of Porto, the financial institution that you're working with about some of the negative, the negative sentiments that central banks have about on cryptocurrencies. And what you're trying to do is you're trying to represent to present the point of the digital banks as to why digital currencies or cryptocurrencies are not a good option. And here, it's very much all about you trying to recall the material that we studied in the December seven years somebody trying to understand the nature of cryptocurrencies and some of the criticism that was made to cryptocurrencies. And as you can remember, many states basically or many countries do not believe or do not trade a treat cryptocurrencies as a medium of trade or as a medium of payment, they do not give it the same treatment as they give to money. Thus, it is not considered as a monetary element or as a monetary as a monetary instrument, rather, it does not meet the criteria according to these states, and based on that analysis as you can see, the correct answer is going to be B for this particular question. Now, the next question that we are handling is basically about a possible. Now, we are presented with specific data about this new member state or this new candidate to become a member state. Some of the data that we have is that this new potential member state has a 2% annual growth, 2% annual government deficit. They have a 59% of governmental debt, and they have a long term interest rate of 3%. Now, what you are asked to do is to provide recommendation for this particular country as to whether they need the criteria set forth within within the EU or not. So, here to answer this question, you'll need to recall what we studied together in unit number eight, and you'll need to recall the criteria for member states to become for potential candidates to become a member state of the EU. Now, as you remember, member potential member states should have their interest rate reduced to 2%. And so that because of that, and since this potential member state within this particular case within this particular question has an interest rates of 3%. So, the application should be rejected until they are able to reduce the interest rate limit to 2%. Does the correct answer here is going to be number D. As we move to the next question is about the different types of currencies. And so here this question is trying to ask you about what kind of currency do you think is a fixed currency that is allowed to slowly appreciate by the central bank. Now, you may remember we have different types of currencies we have we have fixed currencies we have basically pegged currencies we have unpacked currencies or free floating currencies. We also have currency boards. And what you are meant to be doing here is explain what do you think this question is related to. Now, if we're looking at currency that is that has a fixed rate. It is slowly is slowly allowed to appreciate by the central bank what we're looking into is basically a crawling peg type of currency. And thus, the correct answer is answer number eight. Now, as we continue on to move forward. Again, this question is all about currencies. Now here the difference is the question is asking you what you believe is going to be a better solution. Do you think that pegging a currency is a viable solution or dollarization is a viable solution for the question that we are basically handling. Now, here, as you will see, the answers are very much mixed up just to confuse you. And so you'll have to analyze and you'll have to have a deeper understanding of the differences between tax currencies and the differences between and have a deeper understanding of dollarization and how dollarization works. And if you analyze the different possible answers and for this question you're going to notice that the correct answer is going to be answer number C about dollarization. And the reason being is that the this particular answer have involved have included the correct details about what dollarization is all about, unlike the other answers unlike the other potential or possible answers that had the details a little bit mixed up. And for this question you a forward question like these are you will have to have a deeper analysis of each of the possible answers to understand which one applies and how it applies, which one is correct. And basically, for you to undo. I mixed that part up. Although it was going good. So it's good. Sure. I think if we can just remove the last part when I was saying okay you just have to analyze, maybe if we can stop it from there and just keep going what do you think. That's great. Okay, I think I'm ready and ready to move on to the next question as well. Now are discussing another subsidiary invest and invest is basically a hedge fund company. And this hedge fund company is considering to implement a event driven strategy. And as you remember we have different strategies that financial institutions will deploy. This question is very much asking you to look at what the meaning of event driven strategy is and how events strategies are basically deployed. And if you remember event driven strategies are very much related to when when an organization or financial institutions, a financial institution buys the debt of companies that are suffering from severe financial distress. And these particular institutions or the companies that they're buying into our on the verge of bankruptcy and have indeed have indeed filed for bankruptcy. And so, for this reason, you will notice that correct answer for this particular question is answer number C. Now, again, this question, the question that we have on the screen right now is also about another strategy that is implemented by financial institutions. Well, this time we are discussing a merger arbitrage investment. And the question that we have in front of us is asking us about the measures that we need to consider before we implement a merger arbitrage investment strategy. And as you can notice, all of these answers are very much logical and will be correct in theory. However, there is something there is one of those that would stand out among the others. And I think you are able to notice which one. So question that the answer number C estimating the likelihood of a government or antitrust organizing of a government on antitrust investigation is something that is very much going to be the center of attention. And it is going to be very important for us to consider. Thus, the answer for this question is going to be basically answer number C. Moving on to the next question. The next question is basically discussing a recommendation that you made to Porto, the financial institution that they use a currency hedging investment strategy. Now, what you're trying to do and what you're trying to explain to Porto is some of the effects that Porto should expect as a result of deploying the currency hedging investment strategy. And what you'll need to do here is to recall the material that you learned in a unit seven and units five. You'll need also to understand what is currency hedging and what are some of the, the impacts of implementing currency hedging. And as you remember currency hedging is all about moving large sums of money over a short period of time. And so here what you're trying to do is basically to sorry for that. I think after I've presented the question. I think from there we can basically starting. Great. Now, as you can remember from the material that we studied together in unit seven and unit and unit five about currency hedging currency hedging is all about moving large amount of money within a short time frame. Thus, due to this, you can see that the answer or the correct answer for this particular question is number eight. Now, the next question is, again, you trying to assume a position of advocacy to court and you are trying to to advise Porto on using head hedged and unhedged strategies. What you're trying to do here is basically recommend something that would help them gain better, better position in foreign bonds. And so what you're going to have to do is to remember and to recall again. Number seven units number five, in particular, you have to remember what unhedged and hedge strategies are all about. Now, in our case, because we're looking into into bonds basically into foreign bonds, what you remember is that unhedged portfolios basically would have higher type of volatility or higher rates of volatility, just due to their nature. Now, because of this, you can see that the correct answer here that we have is answer number C. Now the other answers that were presented here are very much have inaccurate data and inaccurate information. And thus, your analysis is going to be very crucial and your deeper understanding of what hedged and unhedged strategies are all about is also going to be important. So, keep that in mind as you answer as you answer questions like these. Now, as we move forward to the next question is about some of the strategies that you could recommend to Porto. Sorry, can we stop for a second. Just as I was catching my momentum. Exactly. Sometimes in my lectures I would be drinking three or four bottles of water. No, I think it's a valid hypothesis to be fair. Perfect. Let me check. Okay, so we are looking for investment strategy. Okay, so we still have here. Okay, ready for now so I'm going to get away. Now for this. Sorry. Don't worry about it. Don't worry about it. Now for this question. Again, we are asked about different investment strategies that you could recommend to Porto. And here, as you can see, there are different options. But most of these options, as you will notice, have in an accurate information. So they are represented inaccurately just to try to confuse you. And so you have to be a little, you have to pay a little more attention and you'll have to recall everything that you studied in unit seven and unit five. Now, for us, what we need to look into is basically a triangle or arbitrage, which is the correct answer, because the answer here for triangular arbitrage is very much the exact definition of what triangle or arbitrage is all about. As you can see, triangular arbitrage as it was represented here is basically one of the strategies that would allow Porto to take advantage of the exchange rate discrepancies if basically it was performed quickly and in large sizes. And so if you look at the other options, you will see that they have been misrepresented on purpose. Keep, stay focused and pay close attention to the answers. Read them carefully so that you can spot where the answer is inaccurate. Now, the next question is again about Porto and Porto is considering to use a value investing strategy. Now, the question here is, how would you implement a value investing strategy? As you recall from the material that we learned in unit five, a value investing strategy is all about trying to filter the stocks that have been that have not been presented within their proper value. So they have been underestimated within the market. And thus, the correct answer for this particular question is answer number B. Now, the next one or the next question is about growth investing. Now, here what you are asked is, you are asked to present the reasoning behind why you would have suggest growth investing as a suitable investment strategy for Porto. And again, what you'll need to remember, you'll need to recall the data and information you know about growth investing, and as growth investing basically leads to higher growth rates to higher revenue growth. When you invest in small companies that have basically high potential. And thus, the correct answer here for this case is number C. Now, moving on to the next question, we are we are discussing again another investment strategy, an investment strategy that represents or resembles momentum investing. Here, what you have to do is try to remember what momentum investing is all about and what it does and its consequences to implement a proper momentum and momentum investing strategy. What you'll need to do is to watch the yield curve, the treasure yield curve and use the data that you collect from the treasure yield curve as a signal for you to for entries and exits from for entries and exits. And as you can see the correct answer here is basically number eight. Now the next question is about the profit that Porto is likely to see if they use a momentum investment strategy. Like the previous question here, you'll have to again consider the data and the knowledge that you have on the momentum investing. And as if you were to deploy a momentum investing strategy, some of the profits that you will see are going to be generated from buying and selling short securities whenever they are strongly traded. And thus the correct answer in our scenario is going to be number D. Now, the next question is about a recommendation that you made to Porto to invest in money markets and why you recommended money markets over capital markets. Now here you'll have to remember the differences between money markets and capital markets and what are the benefits of investing in either of these markets as well. These are things that we started together in unit number four. And as you remember investing in capital markets could be a little volatile as compared to money markets. And also what you what you may remember is that money markets provide an extra layer of security or better security as compared to money markets. Thus, if we look at the answers or the possible answers that we have here we can find out that answer number A is the correct answer or the most suitable answer. The next question, again, is about one of the countries that Porto has invested within. So Porto invested in the Argentinean currency and the Argentinean government because of the economic situation that they were going through they've introduced what is known as a Tobin tax. Now, as a result of this Tobin tax, what you're expected to do here is explain why do you think Argentina introduced a Tobin tax. And thus, you'll have to recall the data that we've learned together about what Tobin tax is, when Tobin tax is deployed or implemented. And as you remember, we've also gone through an example while we studied Tobin taxes on during unit seven that Italy even implemented the Tobin tax to control its inflation. Now, recall the data about Tobin tax and try to analyze it and to help and use it to help guide you to answer the to choose the correct answer. Now, if you recall what we've said about Tobin tax, especially here now in the case of Argentina, what you may need to consider is that when it's used to control currency is basically used to regulate and penalize short term currency trading speculation. The reason being here is that if the country is going through hyperinflation, and we are trying to control the currency, what we want to do is we want to cut down on speculation, and thus introducing a measure that would help us to cut down on speculation and short term trading is something that is meant to be an effective measure. That's the correct answer for our case is going to be number eight. Now, as we move forward, the next question is about one of the subsidiaries of Porto. Porto, so sand basically is a hedge fund organization or hedge fund financial institution that in that is considering to invest in a new startup. The startup here is called wind. Now, as sand is considering to invest in wind, they are presented with a few options a few stock options to recommend that that may that they may opt for investing within. And here what you're looking into is basically what are these different options and why should they basically recommend within the stocks of wind. Now, for our particular case and for this question. Now, the company sand is one of the active investors and as an active investor, what they need to do they want to have a control over the organization so they want to have a say in the organization and having and using or investing in common shares is something that would provide sand with the opportunity to control and to have a say in the decision making of wind as an organization. That's the correct answer here is going to be answer number eight. So remember the different answers or the possible answers that were presented here we're trying to mix the data about or trying to confuse you about the difference between the common shares and preferred shares. So, you have to have a deeper understanding of what is a common share and the attributes of common shares, and the same thing what kind of rights and obligations are attached to preferred shares. And these are things that we started together and unit number four so try to recall them. And as you go through this particular question alone and try to read it, you will notice and you will end up while you analyze it you will notice where the discrepancies lie, and why we chose basically answer number eight. Now the next question here is asking you to position yourself as an advisor that or as an expert that was commissioned by the Fed to conduct a systematic risk risk assessment. Now, as you do a systematic risk assessment this question is trying to basically ask you about the very first step that you would do to implement a risk analysis to to implement a systematic risk assessment. Now, from among the different options that we have here, the very first thing that you want to do is to define the critical elements of the financial system. And then, based on that you can see that answer number C is the correct answer. Now again, try to recall whatever we studied together in unit number six. I will help you understand different steps associated with conducting a systematic risk assessment, which ones comes first, and why, and what are they related to. The next question is, again, asking you to be in a position as a financial expert, and again recommend to the fed on on how they are implementing basically the risk, their systematic risk assessment. Now, what you are meant to be doing is basically to use the Bank of England's wheel of misfortune. Now, what you'll have to do again you'll have to recall the material that we studied in unit six. And you'll have to remember what are the components of the wheel of misfortune that is basically introduced by the Bank of England. And if you remember, the one of the elements of the wheel of misfortune is basically distinguishing between the internal damages to the financial system and the damage to the real economy. And thus, the answer here for this question is a number C. Now, as we move forward, we are, we are looking at another subsidiary of Porto Mark, and you are working with Mark on identifying different risks that Mark may be experiencing or that they may encounter. The question here is asking you to choose which of these different risks that are presented are going to be the most prominent type of risk. Again, the different options that are presented here, they have been misplaced and miss, they have been misplaced in a way to try to confuse you into choosing them. So you'll have to have a deeper understanding of each of these components, and you'll have to recall again the data that we studied together in unit number six. Now, for our particular, for this particular case, you'll have to think about what credit risk is all about, what default risk is, what is operational risk. And finally, get to understand moral hazard. And as moral hazard is all about when you take risk, or when you're comfortable taking risk because you know that you'll have the backing off of another institution that will help you, or that will save you in case you fail. And here you're taking bigger risk than you normally would do. And this is what moral hazard is all about. And thus, the correct answer for that question is going to be number C. Now for this question, which is our final question, what we're looking into, we're looking at the peach tree, again, one of the subsidiaries of Porto, and here what you're doing, you are assuming a position within the Fed. So you're trying to advise the Fed whether peach tree, who is currently experiencing somewhat difficult situations, somewhat difficult financial situations. Are they considered to be, should they be considered for bailing out or not? Now, again, the bailout is going to be, again, what you'll have to consider here is the basal three recommendations and how you think the total loss observing capacity could affect peach tree. Here you're going to have to recall the material that we've learned in unit number six. You'll have to recall the data about the total loss observing capacity, what it means, what it stands for, and how it would connect to the decision making as to whether peach tree deserves to be saved as a financial institution or it should be allowed to fail. Now, after analyzing the different possible answers that you have or that you've been presented with, you can notice that the answer number C, which is the correct answer, is basically provides the correct analysis of the total loss observing capacity and its consequence. Now, here, the way it was presented to us as peach tree being as big as it is considered as a too big to fail financial institution, and because it is considered as a too big to fail financial institution, we may have to save it because not saving it could lead us to basically financial losses to significant market chaos. And that's answer number C here, as we mentioned, is the correct answer. Now, I hope you have a better clarity as to how you can analyze the case studies that you are presented with and how you can analyze the answers and choose the correct answer. And I wish you all the best of luck with your studies. And I hope to see you again very soon. Good luck.


Censorship by proxy is something that's been used recently, where the idea is that maybe what these private companies are doing is not censorship, but they're doing it under the influence of government. That is, the government is plotting them to do it. They can't pass a law. Is that then censorship? Yes, I think it is. And I think that is a real worry here. But I'm usually not sympathetic to the people raising this, and we can talk about why. But I think it is a real worry here. It's my reading of Facebook, of what's happened with Facebook. And when you look at Zuckerberg's history, and what he said in responses to calls that, oh, the Facebook shouldn't allow this on their platform and so on. I think he started off much more as, no, we believe in a lot of robust speech. People are going to disagree. And yeah, we're not going to have criminal things on our site. But we're going to have things that people don't like on our site. And you can see a movement towards, then I think in March 2019, he writes an op-ed about, oh yeah, government should regulate us. And that's a change, I think, and it's coming, or at least there's strong reason to think it's coming in part from government intimidation. Yeah, I mean, I think it's self-defense. He knows government is going to regulate them. So you might as well get ahead of the curve in a sense of defining what those regulations look like, and not making sure that the regulations are not so harmful to your business. It's sad that they have to do this. Yeah. And I think here the issue of antitrust is important because I read again Zuckerberg's email, I mean, sorry, op-ed where he's saying, well, we need his regulation. And he suggests some things and says, like this is likely not everything, but this is a start and so on. The antitrust is one of the most non-objective areas of law. I mean, this is a point I ran stressed that you're basically guilty if you're in business under antitrust, like you could be prosecuted under the antitrust laws if you're in business, because there's all kinds of contradictory, vague, arbitrary things in the antitrust laws. So you could see in a context where they're starting to talk about, like, yeah, maybe Facebook's too big and we should use antitrust to break it up. And should we really have allowed them to buy Instagram and think it's, you can't, there is no defense in that. So that you would as think of a solution, like if we could get some better that it wasn't so totally non-objective regulation where we could say, look, we're actually complying, like, what's your problem? Ask different regulations and so on if you want something different, but don't come threatening us every month saying, look, if you don't do something, we're going to break you up or do some damage to your company, it would be more clear cut what the regulation is. And if, I mean, if you're faced with this kind of antitrust intimidation, I can see that as a, this is a way out is like, let's pass some regulation that I can actually meet. Now there might be an anti competitive element to it. I mean, this is part of the tragedy when you get government involved like this. It is true, I mean, you know this, that the bigger companies can deal with regulation. So there is a phenomenon of when companies get big, they ask for regulation of the industry, knowing that that will make it harder for startups to compete because they can't comply. I mean, the compliance costs with regulation or I mean, the better terms of government controls are high. But I don't, I mean, that's not my read of the primary thing going on with Zuckerberg. No, I don't think so either.  There's so many different social media platforms right now. I just got invited to a new one two days ago called Clubhouse, never heard of it. But all the Silicon Valley people on Clubhouse and it's, it's, it's more based on verbal discussion, not video, not writing, but just, just people talking and every, you know, they keep popping up. I mean, new ones keep coming up. So the whole idea that there's some monopoly here or, or dominance is, is ludicrous, but it's used as because it's so non objective, because there are no standards. It's used as a way to put pressure on these companies to do what the government wants it to do. And in that sense, to the extent that it causes them to silence themselves or to silence others, that's the sense in which it's proxy by its censorship by proxy. Yeah, and I'd be more sympathetic if the first time these companies were hauled before Congress, and it's, you have Zuckerberg and Jack Dorsey, CEO of Twitter, and you have, Google sometimes didn't show up at Google and Apple. And when they're being hauled before Congress, and it's, it really is a show trial of what is going on. If people at that time had said, so this is a violation of these companies' rights, this is a violation of freedom of speech, you're trying to get them to take actions against speech and content that you happen not to like. And it was, I mean, it's both sides of the aisle in Congress were that going out of the way to have sound bites and say, look how tough we were on Zuckerberg or on Dorsey. And they're exercising their rights. And here it's the government threatening them. And if at that point, including like some of their smaller competitors saying, like if, if, if Parler say was defending Facebook at that time, I'd be more sympathetic to or, or in the, I mean, they went after Amazon for antitrust, certainly Trump was saying, if companies at that point had said, look, this is a, this is really wrong. You should be, they're not monopolies. They're just good. And, and when you start telling them this is how they have to make content decisions, this is a violation of freedom of speech. I'd be more sympathetic than now when it's the, it's, they don't like what's happened to them now that they, it would be, look, we were trying to defend freedom of speech and defend these companies. But if you sort of look the other way or, or happy when Congress goes after these companies, because you think of them as monopolies or be a myth. So whatever. And then it's, you want to turn around and say, no, you shouldn't do this. I don't have sympathy for that. Yeah. I mean, I agree. It's, it's, and nobody spoke up because I did. So I know I was the only one nobody spoke up the Institute spoke up. But other than objectivists, you really got nothing that conservatives didn't, many of the libertarians either remain quiet or just, it's not an issue that, you know, they hate big, right? So if it's, I think I'm into attacking big tech, that's fine. As long as we can, as long as we get away. So nobody really stood up and you're right, certainly the companies competing with these companies didn't stand up.  Why wasn't free speech an issue at that point? Yeah, because if you think of even, so if you think of Facebook, Twitter, taking down Trump's things, but if you think even of Amazon, the web service, taking Parler off, you can wonder, like, is it partly because of the intimidation and threats they're facing from government that it's, look, we can use antitrust against you, Amazon too. And if you're allowing this kind of content and it helped people storm the Capitol and so like, you better worry about this. And it, I mean, it might be a safe force of action for them to say, okay, we're not going to host. I mean, it's not going to impact Amazon's bottom line very much that they don't have this one. And it might be, yeah, if this gets us on the good side of the antitrust busters, maybe we do it. So who do you blame in that circumstances? Because everybody's blaming Amazon. It's the one thing you don't blame. I blame everybody that it's the everybody who didn't speak up when this started happening. And it goes back at least. I mean, I do think I think you have that same view that a pivotal moment here was Microsoft and the Justice Department and that. And if the business world and particularly the tech world doesn't speak up in defense of Microsoft and say, this is outrageous. Yeah, even though it has 90% market share and so on, it's not a monopoly. It hasn't forced us to do it. It's just hard to compete with Microsoft. And if you that was the beginning, I think of government scene, yeah, we can get our hands on tech in a way that they were much more separate before that. And if certainly people in the tech world, but just more generally, people who are pro freedom, if they didn't speak up, this is a seminal issue. And if it goes badly, it's going to have long term consequences. So I mean, the idea that you blame Microsoft or Amazon or Apple, it's the last people to blame. Yeah, I mean, it's stunning because during the Microsoft case, like two so-called libertarian CEOs in Silicon Valley, one supported the government and one just stayed quiet, which was Sam McNeely at Sun, actually who was in the board of Cato at the time. He supported the government in going after Microsoft. And Larry Ellison at Oracle just, I think, stayed quiet and they didn't speak up. And partially, I can understand it because they were probably afraid that they would go after them next. But yeah, I mean, that fear, this is what you get. You get government more and more influential in tech business. And then tech companies do stuff in order to try to appease government because they have no choice because the alternative is that they get crushed and they know that and then people blame the yeah, it drives me nuts. I mean, I can understand blaming the government for being in that position. And as you say, the companies who didn't stand up to defend them, but to blame Amazon for it. And I'm not even talking about the parlor case where the Amazon warned parlor over and over again, supposedly, at least according to the judge who did not give parlor the they're not ruling their favor for an injunction.  So let's talk a little bit about these tech companies. And so we've got we've got so so we got Twitter, we got Facebook, we got parlor, we got all these all these entities when they restrict somebody from posting, like they restricted Donald Trump. And I, you know, the first, it's interesting how people think about these issues, right? The first thing that came to my mind when Twitter restricted Donald Trump's speech was, and I think I tweeted this, was, I'm so happy I live in a country where a private company can, you know, ban the president from using his platform. I mean, that to me was just whether you agree with Twitter's decision or not. The ability to do that was like, yes, this is fantastic. What a what a great, you know, because you can do that in China and Tokyo and my guess is, in a lot of countries, I mean, I wonder if in Israel, you could, you could say Prime Minister, you can't post anything. My guess is the answer is no. So we still live in a country where there is that. So first of all, what do we call that if it's not censorship? I mean, the one of the terms that you use is the platform. I think if you understand what that term means, it's the right term. It's we've built the platform. We decide who uses it and not. And if you're meeting or either sort of formal terms of services or informally, the like the reason we created this and we want to create something of value and so on. And keep in mind like Trump was on these platforms for a long, long time. So, but it's after January 6th, if it's even so you might think there's government pressure for them to do this. And again, they had to go. But even if they're even if so, let's just say for the sake of argument, it was for Twitter, Jack Dorsey, after January 6th, it was, yeah, this is too much. I don't want to be part of this anymore. And even if Trump's not legally guilty of incitement, it's from a moral point of view, this was inciting a crowd. And I don't want to give this person a platform anymore. Yeah, I agree completely with your reaction that it's great to live in a country where that is possible. And notice even the European Union, I think Merkel and others, it was like really a company can do this. And that's the I mean, I ran pointed out many times about Europe, their statism is much more ingrained that like doesn't government have absolute power sort of and then we claw we get some permissions and claw it back a bit. But it's that reaction really government private company can kick off the president and the president can't just say, no, I'm nationalizing your company or whatever. And yeah, I agree with you completely, it's to live in a place where that's possible. It's that is so rare historically. It's so rare now. And it's what freedom, it's part of what freedom means. What we need today, what I called a new intellectual would be any man or woman who is willing to think, meaning any man or woman who knows that man's life must be guided by reason by the intellect, not by feelings, wishes, wins or mystic revelations, any man or woman who values his life, and who does not want to give in to today's cult of despair, cynicism and impotence and does not intend to give up the world to the dark ages and to the role of the collectivist growth. All right, before we go on, reminder, please like the show. We've got 163 live listeners right now. 30 likes. That should be at least 100. I think at least 100 of you actually like the show.  But at least the people who are liking it, I want to see a thumbs up. There you go. Start liking it. I want to see that go to 100. All it takes is a click of a thing, whether you're looking at this. And you know the likes matter. It's not an issue of my ego. It's an issue of the algorithm. 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First of all, thank you for the opportunity to share some of the work that we've done in my lab with you. My lab is interested in the genomic and chromatin consequences of specific genetic mutations in cancer.  So chromatin essentially is the complex of DNA and its associated proteins as they exist in the nucleus of a cell. And that really involves, here we go, that really involves the modification of DNA, DNA as it's wrapped around octameric histones and then formed into higher order structures. And through the generation of these higher order structures essentially leads to specific regulation of the genome. So we know there are a number of ways that chromatin is regulated from a class of molecules that have been termed writers, editors, or sometimes erasers, readers, and then remodelers. And these exist as enzymes in the nucleus for both DNA and for nucleosomes or histones. So in the writer component, the canonical would be DNA methylation. And then for the nucleosomes, there's a large number of enzymes that are involved in post-translational modification of the histone tail, including things like acetylation and methylation. The editors essentially will can change those marks or remove those marks. Readers read those marks, essentially interpret those marks into the transcriptional machinery. And then of course the position of those nucleosomes themselves have significance. And the remodelers, their role is essentially to move them around the genome. So over the last several years, beginning with cytogenetics and now in the era of high-throughput sequencing, mutations in chromatin regulatory molecules have been identified across a wide range of tumors across the age spectrum. In clear cell renal cell carcinoma, there have been a class of mutations that have been identified through a number of publications that are frequently mutated in clear cell renal cell carcinoma, including those remolar, PBRM1, which somebody mentioned a minute ago, as well as histone modifiers, and other nuclear enzymes. So interestingly, three of these, PBRM1, CET2, and BAP1, which are all the most common mutated in clear cell renal cell carcinoma, essentially coexist on the short arm of chromosome 3, which has VHL at the very distal end of it. So there is often loss of the short arm of chromosome 3. So we proposed a project several years ago that we embarked on to study the consequences of mutations in these chromatin regulatory proteins across clear cell renal cell carcinoma. So we essentially gene a type for about 250 mutations in 36 tumors and eight matched uninvolved tissue, as well as performing FAIR. FAIR is a simple and chemical method for identifying nucleosome deficient regions of chromatin, which essentially is all the regions that are things like promoters and enhancers and early replication origins. So it's an unbiased way of sort of filtering the genome. We also performed RNA-seq for all these samples, and then we performed an integrative analysis. And this work was primarily performed by Jeremy Simon and Kate Hacker, and actually the paper just came out yesterday in genome research. So the first thing we did is we asked, does the application of chromatin accessibility studies in FAIR do anything? And we actually make any heads or tails out of the results. So we've been essentially across the genome in 500 base pair of windows and looked at FAIR signal. We identified those windows that most discriminated between tumor and non-tumor. And here in this heat map where every row is a window in the genome in every column is a tumor or normal. You can see there's cluster 3 identified sort of a normal specific cluster, whereas cluster 1 was sort of the most diversely spread through all the tumors. So we focused our attention initially on cluster 1. And we looked at the genes that were nearby and associated them with regulatory ontologies. And what we found actually to our great, I guess shouldn't I say surprise, but is that it identified with very high statistical significance, essentially HIF regulation across multiple data sets. Cluster 2 did not identify any similar pathway, actually. We then looked at the DNA elements in here. We found the HIF regulatory element that was highly prevalent. And then using chip seek data from another group that had studied in breast cancer, we identified a strong association in cluster 1 but not cluster 2 and cluster 3 with HIF 1 and HIF 2 binding. So again, for this group, that's going to seem pretty predictable that we identified HIF. But remember, had we known absolutely nothing about HIF or VHL when going into the study and just looked at chromatin accessibility, we would have landed right on HIF. So we thought that was actually pretty neat. So now we turned to the chromatin regulatory molecules that we were really most interested in. And we focused on set D2. So set D2 is a large protein. It interacts based on its carboxyl terminal tail with the CTT of RNA polymerase. And it essentially is dragged along by RNA polymerase. The set domain is the enzymatic machine, essentially, that places this very specific mark. It marks the 36 lysine and it puts a trimethyl mark on it, essentially trimethylates it. So we looked at mutations in our data set and we identified a number of mutations of high and moderate severity that spanned the set D2 molecule. And this really matched what other people had found in other deep sequencing efforts. Then we turned to tumors themselves and we made a tissue microarray and studied that specifically for the H2K36 status. And you can see here, compared to matched kidney where you can see nice, strong nuclear standing for H2K36, as you predict, there were some tumors for which there was similarly nuclear staining and many for which there was a deficiency of nuclear staining for H2K36, indicating K36 loss. So we quantified that and saw that, again, the normal sort of clustered here, but we saw a fairly wide distribution of tumors. And then if we look at the ones that are sort of below normal, we identified a class of H3K36 deficient tumors. And again, it was good reassuring to see that those tumors with the mutation, specifically the high severity mutation, had the greatest loss in H3K36. But we did identify other ones that did not have a detectable mutation. Some of these we found had low protein, and other ones had no expression of RNA. So now we went back to the method that I explained to you earlier, and we said, can we use now H3K36 status or 62 status to drive the identification of regions of the genome that have a different chromatin status? So again, we made windows across the genome and we allowed them to self-segregate based on their 62 status. And we identified those regions that were essentially the most different. And we identified, as you can see, about 7,000 regions across the genome that met our status. Interestingly, the largest group here demonstrated an increase in chromatin accessibility that was associated with the loss of set D2. So essentially, the loss of this mark came along with nucleosomes that were essentially less stable, where the chromatin was essentially more open, if you will. So then we turned our attention to the RNA. So we had performed RNA-seq using ribosomally depleted RNA. And we did that intentionally so we could look across all the spectrum of RNA and not focus exclusively on mature, processed RNA. So for those of you who aren't familiar looking at RNA-seq data, essentially, when you line up the tags, what you usually see are these peaks here. And the peaks correspond to exons, because that's what's preserved in the mature message as the intronic regions are spliced out. In polyadenylated messages, you should see virtually no intronic signal. But here in the ribosomally depleted RNA, you can see some signal. But what caught our attention was that when we looked just really visually and compared the H3K36 normal tumors, we identified clear signal over the exons. But that was gone in many of the genes in the H3K36 deficient tumors. And then we noticed that you'd have these regions like peaks of signal outside of the exons, basically an intronic sequence. So we essentially derived a score that we came up with called an intron retention score that essentially ran from 0 to 1, where 0, all the signal came from exons. And a score of 1 would essentially be represented evenly. And what we found is that for the H3K36 deficient tumors, there was a very strong enrichment in genes for which there was a high intron retention score. And this extended across thousands of genes, of course, with various degrees of significance, but really affects a very significant fraction of the transcriptome of CCRCC in the H3K36 deficient tumors. When we flipped our analysis and we looked at it based on PBRM status, this association was completely gone. So it was very specific to H3K36 status or set D2 status. Now, as I mentioned, this is done in ribosomally depleted RNA. So it gave us a view of RNA from the time it was synthesized or in the process of synthesis all the way through the end. So for validation, we looked at the TCGA dataset. So this is a much larger dataset with, at that point, about 400 tumors in it. Now that's different in that it's polyadenylated. PolyA selected. So this is looking at mature message. And we asked the question, is there sort of a shadow of this that persists all the way through into mature messages? So we had to use a different tool because our tool, which really looked at introns, was not really, is not useful, essentially, for polyadenylated RNAs. So we used a tool called FDM, which is developed by the computer science group at the University of North Carolina, that looks at sort of the break points at the end of every exon and the beginning of every intron and looks for statistically significant changes in the utilization of each of those points. And then what we did is we essentially looked at the mutant tumors versus the normal tumors and randomized in a control set and looked essentially for the manifestation as alternative splicing, intron retention, or alternative TSS and TTS, transcriptional start site or transcriptional termination site utilization. And what we found is that for, again, for a large number of transcripts here, probably near 4,000 transcripts, we saw a statistically significant change in the RNA. And it's dominated in this case by alternative splicing. And now that makes sense because really aberrant messages should be filtered out during RNA processing. So what you'd expect to see when you purify mature message would be essentially alternative splicing that sort of persists through. So we saw that as the significant sort of phenotype or the major phenotype in this experiment. So then we turned our attention back to the chromatin to wrap this background to the beginning. And we said, well, what's going on at the level of chromatin and is there any evidence of what we're seeing? So here we're looking at essentially a raw, fair signal. So again, nucleosomal signal. And I've overlaid H3K36 trimethylation chip over it. So these are just the normal tumors. And what you see is, and sorry, and then what I've done is I've aligned every exon that was mispliced together here. So really mainly focus on this box here. And what you see is we, you'd predict is H3K36 essentially is enriched right over the exon as it should be. And this correlates with a nucleosome that sits right over the exon. And then in fair space, what that looks like is a dip right here. And that was actually, you could even see that in some of these random internal exon start sites. So the phenotype was evident sort of in lots of exons. Okay, so now what we did is we compared just fair signal between the deficient tumors and the normal tumors. So in the bottom here is essentially the same plot as this one here, you can see this drop. But what we were amazed to see is that in the H3K36 deficient tumors, there was a strong peak now that preceded immediately the exons here. And so what this signifies is essentially a weak nucleosome or essentially a deficient nucleosome that just precedes the exon position, okay? So we were surprised to see that. But remember, and the other thing that we were so surprised is this is looking at primary human tissue, which again, applying this to primary human tissue and seeing these kinds of differences was really remarkable to us. So it's in conclusion what I've hopefully I've been able to show you today is that chromatin accessibility offers an approach to study epigenetic or chromatin changes in cancer and really in a non-biased way. I've shown you that 72 mutation and more globally H3K36 trimethylation loss leads to large changes in transcription globally. That 72 mutational status actually underestimates H3K36 trimethylation loss. And that's important because like the TCGA doesn't have fair data in it. So all we could look at for our TCGA analysis was 72 mutational status. And finally, that exonic chromatin accessibility is altered in the absence of H3K36 trimethylation. And what I didn't write down here is I hope this also tells you that we think that chromatin and epigenetics may be a new biological target essentially for therapeutic intervention. And with that, I just want to acknowledge the people who did the work, primarily Jeremy Simon in my lab, as well as Kate Hacker in Kim Rathmell's lab.


This study offers molecular insight into the Cialidase and Fucosidase decapping apparatus that initiates growth on mucin and promotes nutrient sharing by the dedicated mucolitic symbiote Acomantia mucinella with the mucous-associated microbiota. This article was authored by Bashar Shuaqa, Michael J. Pitchler, Chunxing Jin, and others.