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- Greece's departure from euro wouldn't be catastrophic, investors say
If Greece withdraws from the euro, the eurozone could manage the departure in an orderly way, investors and banks said. There was a sell-off of Italian and Spanish bonds immediately after Greek election results were announced Monday, but the bonds largely recovered by the end of the day. "Unless you have strong contagion into Spain and Italy, it's unlikely to be really an issue that would undermine the whole eurozone," said Valentijn van Nieuwenhuijzen, ING Investment Management's head of strategy. Reuters
(08 May.), BBC
(08 May.), The Telegraph (London)/Daniel Hannan blog
(08 May.)     
- U.S. lawmakers are expected to boost Ex-Im Bank lending cap
Republican and Democratic leaders in the U.S. House of Representatives anticipate approval for a bill that would increase the lending limit of the Export-Import Bank by 40%. The measure has some Republican opposition, but House Minority Whip Steny Hoyer, D-Md., said Democrats overwhelmingly support the increase. Bloomberg
(09 May.)
 | Morningstar Direct – The New Efficient Frontier
Normal distributions underestimate risk. Click here to read our article on how tail-risk optimization performed in a back-test of the 2008 financial crisis, as published in the Financial Analysts Journal. |
| Market Activity | |
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- Eurozone anxiety sends most Asian-Pacific markets lower
Most Asian-Pacific share markets were mostly down Wednesday as Greece's politicians sought to form a coalition government. China's Shanghai Composite dropped 1.7%. Japan's Nikkei 225 fell 1.5%. Hong Kong's Hang Seng Index lost 0.9%. Australia's S&P/ASX 200 slid 1%. South Korea's Kospi gave up 0.9%. India's Sensex was up 0.2% shortly before midday. MarketWatch
(09 May.), The Economic Times (India)
(09 May.)
- Unusual trend emerges in currency trading
Trading in currencies has taken an unusual twist. Rather than trading against the U.S. dollar, a small but increasing number of investors are trading emerging-market currencies against one another; for example, the South African rand versus the Israeli shekel and the Mexican peso against the Brazilian real. These atypical trades, called "crosses," are becoming more common because volatility is down, while trade volume for emerging-market currencies has increased, investors said. The Wall Street Journal
(08 May.)
 | Learn how to stay on top of the muni market. Principles of Municipals is designed to help you gain a deep understanding of the workings of the municipal market and effectively evaluate state and local opportunities and risks. Spend two days going through a series of lectures, case studies and group exercises and earn CE or CPE Credits. Click here for details. |
| Economics |  |
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- Experts: Moody's downgrades of bank ratings will threaten growth
Moody's Investors Service is scheduled this month to downgrade the credit ratings of BNP Paribas, Deutsche Bank and other major financial institutions. Industry experts said the move could threaten economic growth as it drives up banks' funding costs and forces them to rein in lending. "I'd like to say the views of the rating agencies don't matter anymore but, unfortunately, they do," said PIMCO executive Philippe Bodereau. "This is a setback for the banks, particularly when you consider how much progress they have made in making themselves safer and more transparent." Bloomberg
(09 May.)
- U.S. job openings in March reached highest level in 4 years
U.S. employers sought workers to fill more vacant positions in March than at any time since 2008, the Labor Department said. In a separate report by the National Federation of Independent Business, small-businesses owners said that they were more optimistic about the prospects for the economy in April than at any time in the past 14 months and that they planned to increase spending and hiring. Bloomberg
(08 May.), The Hill/On the Money blog
(08 May.)
- Fed's low-rate policy will drive economy, CME economist says
Blu Putnam, chief economist at CME Group, said U.S. economic activity in the near future likely will be driven by the Federal Reserve's policy of low interest rates. "The zero-interest-rate policy will be the driver for this year and next year, helping the economy do well, so you don't need a [quantitative easing] 3 or anything like that," Putnam said. OpenMarkets.com
(07 May.)
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- U.S. legislator opposes self-regulation of financial advisers
U.S. Rep. Maxine Waters, a highest-ranking member of the House Financial Services Committee, said she opposes a bill by Chairman Spencer Bachus to have financial advisers supervised by one or more self-regulatory organizations. Waters said at an industry conference that she prefers giving the Securities and Exchange Commission more funding to regulate advisers. InvestmentNews (free registration)
(08 May.)
- U.S. lawmaker's comments appear to support Volcker rule
U.S. Rep. Paul Ryan said at a town hall meeting that banks shouldn't "use their customers' money to do anything other than traditional banking." Ryan, an opponent of the Dodd-Frank Act, appeared to endorse the idea behind the Volcker rule. "If you're a bank and you want to operate like some nonbank entity like a hedge fund, then don't be a bank," Ryan said. Bloomberg editors said they agree with Ryan's comments. ThinkProgress.org
(07 May.), Bloomberg
(08 May.)
- High-frequency traders warn EU curbs will hurt markets
High-frequency traders said EU lawmakers are going in the wrong direction regarding their industry. Plans to curb transaction speed and scrutinize strategies will only increase costs for investors and damage market stability, they said. "It is ironic that growth market exchanges in countries such as Brazil, Hong Kong and Singapore are making substantial investments in technology in order to improve liquidity, whilst Europe is contemplating doing the reverse," according to an industry association. Bloomberg
(08 May.), Financial Times (tiered subscription model)
(08 May.)
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