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February 13, 2013

Daily newsletter from NYSSA for investment professionals

Top Story

Fed presidents say industry's money-fund ideas aren't enough
The presidents of the 12 regional Federal Reserve banks wrote in a letter to the Financial Stability Oversight Council that industry-backed ideas such as "redemption gates" are not enough to stabilize money market mutual funds. "[W]e do not believe this reform proposal contains the fundamental elements needed to address the financial stability risks posed by MMFs," according to the letter. Reuters (2/12)

Industry Update

DTCC: Data-sharing obstacles might hamper regulatory progress
Although Depository Trust & Clearing is seeking to become a worldwide derivatives-data repository, differences between U.S. and EU law are proving difficult to overcome, the company says. "There are fairly major impediments to data sharing at the moment," said Stewart Macbeth, president of DTCC unit Deriv/SERV. Reuters (2/12)

Hedge fund managers are optimistic about CMBSs
Many hedge fund managers say they foresee last year's rebound in subprime home loans carrying over to commercial mortgage-backed securities in 2013. "CMBS underperformed many of the other sectors last year from a price perspective, but actually performed quite well from a fundamental credit perspective," says Philip Weingord, CEO at Seer Capital Management. Bloomberg (2/12)

T. Rowe Price joins opposition to Dell LBO
Mutual fund giant T. Rowe Price says it opposes Michael Dell's plan to take Dell private in a leveraged buyout, joining Southeastern Asset Management and smaller shareholders in criticizing the deal. Holders of about 19% of the computer company's shares that are independent are against the deal. The New York Times (tiered subscription model)/DealBook blog (2/12)

Barclays overhaul includes exiting certain businesses
Barclays plans to exit some controversial businesses that generate hundreds of millions of pounds in annual revenue and reduce its staff by 3,700 positions as part of a revamp. "Barclays is changing," CEO Antony Jenkins said. "There will be no going back to the old way of doing things. We get it. We are changing the way we do business, we are changing the type of business we do, and we are setting a new course for the future of Barclays." The Telegraph (London) (tiered subscription model) (2/12), Financial News Online (U.K.) (subscription required) (2/12), The Wall Street Journal (2/12)

New York Focus

New York state postpones decision on gas-drilling method
The New York state Health Department says it needs more time to study the use of hydraulic fracturing, commonly called "fracking," to drill for natural gas in the state. An impact statement on fracking by the Department of Environmental Conservation won't be made public until the Health Department completes its review. The Wall Street Journal (2/13)

People & Personalities

No plans to leave Goldman, Blankfein says
Lloyd Blankfein, CEO of Goldman Sachs Group, says he isn't going anywhere. "The combination of this being who I am and what I do and having absolutely no other interests makes me think this is what I'll be doing for a while," Blankfein said on Bloomberg Television. Bloomberg (2/13)

Sen. Lautenberg says he'll finish the work he's doing
New Jersey Democrat Frank Lautenberg, 89, is the oldest member of the U.S. Senate, but he talks like somebody who isn't ready to retire from politics, despite a challenge for his seat by Newark Mayor Cory Booker. "I'm going to finish the work I'm doing," Lautenberg said. "And [Booker] should finish the work he is doing instead of traipsing around the country." The New York Times (tiered subscription model) (2/12)

On The Economy

Obama calls for legislation to bolster middle class
President Barack Obama's State of the Union address proposed economic initiatives that include raising the minimum wage to $9 an hour, creating "manufacturing-innovation institutes" and increased investment in clean energy. He said it is the task of today's generation to "reignite the true engine of America's economic growth -- a rising, thriving middle class." Good middle-class job creation "must be the North Star that guides our efforts," Obama said. The Washington Post (2/12), USA Today (2/13), Los Angeles Times (tiered subscription model)/Politics Now blog (2/12)

Financial Products

Van Eck debuts ETF investing in business-development companies
Van Eck Global has brought to NYSE Arca an exchange-traded fund that buys shares of business-development companies. The Market Vectors BDC Income ETF, linked to the proprietary Market Vectors US Business Development Companies Index, invests in 25 companies that have a weighted average market capitalization of $2 billion. IndexUniverse.com (2/11), Benzinga.com (2/12), The Wall Street Journal/Deal Journal blog (2/12)

SmartQuote

Several excuses are always less convincing than one."

--Aldous Huxley,
British author

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