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09 October 2012
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  Top Stories 
  • Risk of another global recession is "alarmingly high," IMF says
    The International Monetary Fund cut its projection for global economic growth this year to 3.3%, the lowest since the recession in 2009. The IMF said the chance of an even sharper decline, with growth falling as low as 2%, is "alarmingly high." The U.S. could slip back into recession if leaders fail to prevent a "fiscal cliff" of tax hikes and spending cuts from taking effect at year-end, the IMF said. Bloomberg (09 Oct.), Google/Agence France-Presse (08 Oct.), BBC (09 Oct.) LinkedInFacebookTwitterEmail this Story
  • Smaller core group of banks is setting Libor
    A smaller group of banks, including Bank of America, Lloyds Banking Group and Citigroup, is setting the London Interbank Offered Rate after the benchmark was manipulated. "You have a core group setting the rate, and that's a major concern," said Bret Barker of TCW Group. "It's going to be very tough to fix that and very tough to replace Libor." Bloomberg (08 Oct.) LinkedInFacebookTwitterEmail this Story
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  Market Activity 
  • Chinese stocks lead gains on mixed Asian-Pacific markets
    Share prices rose on Hong Kong and mainland Chinese exchanges Tuesday after the People's Bank of China made a substantial injection of liquidity. Hong Kong's Hang Seng Index advanced 0.5%. China's Shanghai Composite rose 2%. Australia's S&P/ASX 200 index gained 0.5%. South Korea's Kospi slid 0.1%. Japan's Nikkei 225 fell 1.1%. India's Sensex was up 0.8% before midday. MarketWatch (09 Oct.), The Times of India (09 Oct.) LinkedInFacebookTwitterEmail this Story
  • Global default rate on high-yield debt rises, Moody's says
    Moody's Investors Service said the global default rate on speculative-grade debt increased to 3% in September. Though the rate climbed only 0.1 percentage point, it reached its highest level in nearly two years. Still, the rate was less than the historical average of 4.8%, based on data dating to 1983. Bloomberg Businessweek (08 Oct.) LinkedInFacebookTwitterEmail this Story
  • Currency-options prices ease as economic waters are calmed
    As central banks handle economic slowdown with quantitative easing, slackening demand has put a damper on currency-options prices, seen as a measure of expected volatility. "Foreign exchange options aren't likely to return to the very elevated levels seen in recent years," said David Gary, Deutsche Bank's head of foreign exchange derivatives for North America. "Instead, the market may see short-term, smaller jumps." The Wall Street Journal (08 Oct.) LinkedInFacebookTwitterEmail this Story
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  • Analysis: Politicians' dithering brings global recession closer
    Failure of politicians in the U.S., Europe and China to demonstrate leadership on economic issues is driving the world toward another recession, according to The Economist. "Not all politicians are behaving irresponsibly. ... But in the world's big three economies, politicians are either dithering or doing damage," the magazine notes. The Economist (06 Oct.) LinkedInFacebookTwitterEmail this Story
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  • Some nations are expected to miss Basel III deadline
    Although progress is being made on Basel III implementation, a January deadline likely will be missed by some nations, including the U.S. and some in the EU, according to a report by the Basel Committee on Banking Supervision. Lawmakers are particularly challenged by requirements to triple core capital at banks. Bloomberg (08 Oct.), Reuters (08 Oct.) LinkedInFacebookTwitterEmail this Story
  • Editorial: Financial advisers should prepare for money-fund rules
    The Financial Stability Oversight Council is likely to make important changes to the way money market funds work, or persuade the Securities and Exchange Commission to make those changes. Financial advisers should start preparing clients for them, according to this editorial. Some changes are almost certain to be adopted after Treasury Secretary Timothy Geithner wrote to the council asking for consideration of rules aimed at preventing a run on money funds, which could lead to another crisis. InvestmentNews (free registration) (07 Oct.) LinkedInFacebookTwitterEmail this Story
  • Law lets Congress members back legislation, then profit from it
    In recent years, 73 members of Congress have backed legislation that could result in financial gain for industries or companies in which they or family members are involved or have money invested, according to a review by The Washington Post. The practice does not violate U.S. law or self-imposed ethics rules, the newspaper reported. The Washington Post (07 Oct.) LinkedInFacebookTwitterEmail this Story
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  Financial Products 
  • Nationwide launches group fixed annuity for 401(k) plans
    Nationwide Financial Services introduced a group annuity contract that qualifies for inclusion in 401(k) retirement plans, as well as several other group savings plans. Principal and interest payments of the Nationwide Fixed Select Contract are guaranteed by Nationwide Life Insurance. (04 Oct.) LinkedInFacebookTwitterEmail this Story
Policy, Politics, and Bond Markets
James Grant

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