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02 October 2012
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  Top Stories 
  • Spain reportedly is prepared to seek rescue from eurozone
    Abandoning a long-standing position that it doesn't need help with debt, Spain is prepared to accept a financial rescue and is eager to get the process started, eurozone officials said. "The Spanish were a bit hesitant, but now they are ready to request aid," a senior European source said. Other eurozone officials confirmed that Spain is no longer resisting aid. Reuters (01 Oct.), Irish Examiner (02 Oct.), City A.M. (London) (02 Oct.) LinkedInFacebookTwitterEmail this Story
  • Flood of orders drives expansion of U.S. manufacturing
    After contracting for three months, the U.S. manufacturing sector surprised economists by expanding in September, fueled by an unexpectedly large volume of orders. The Institute for Supply Management's factory index rose from 49.6 in August to 51.5 in September on a scale in which anything above 50 indicates growth. Bloomberg (01 Oct.) LinkedInFacebookTwitterEmail this Story
  • Wider base for setting Libor might boost borrowing costs
    With smaller banks that have higher borrowing costs entering the club of institutions that set the London Interbank Offered Rate, borrowing rates are bound to go up, said James Edsberg of Gulland Padfield, a financial-services consultancy. One result might be increased stress on eurozone nations that are already struggling with debt. Bloomberg (01 Oct.) LinkedInFacebookTwitterEmail this Story
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.
  Reader Survey 
  • Is Germany, Finland and the Netherlands' objection to using the European Stability Mechanism's bailout money to purchase existing bad loans appropriate?

  Market Activity 
  • Google's market capitalization tops Microsoft's
    Google replaced Microsoft as the world's second-biggest technology company, measured by market capitalization. Google's market capitalization hit $249.9 billion after its shares rose 1% in New York on Monday. Microsoft's value declined to $247.2 billion after its stock fell less than 1%. Bloomberg (01 Oct.), (01 Oct.) LinkedInFacebookTwitterEmail this Story
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  • Australian central bank reduces rates in surprise move
    The Reserve Bank of Australia lowered interest rates, surprising economists as it reacted to evidence that a mining boom is ending. The central bank reduced its benchmark lending rate to 3.25% amid concern that the global economy is slowing. "Credit growth has softened of late, and the exchange rate has remained higher than might have been expected, given the observed decline in export prices and the weaker global outlook," RBA Governor Glenn Stevens said. (Australia) (02 Oct.), The Wall Street Journal (02 Oct.) LinkedInFacebookTwitterEmail this Story
  • Analysis: Baby boomers might block necessary economic policy
    Government policy encouraging a higher inflation rate could ease problems created by America's huge national debt and aging workforce, but the political power of baby boomers might make that approach impossible, according to The Economist. "A recent paper by the Federal Reserve Bank of St Louis suggests that as a country ages, its tolerance for inflation falls," the magazine notes. The Economist (29 Sep.) LinkedInFacebookTwitterEmail this Story
  • Adviser and asset departure from Wall Street likely will accelerate
    Financial advisers and assets they manage continue to leave big Wall Street wire houses, and the trend is expected to pick up during the next three years, according to Cerulli Associates. The biggest beneficiaries will be high-end registered investment advisers, regional brokerages and dually registered advisers, the researcher said. InvestmentNews (free registration) (01 Oct.) LinkedInFacebookTwitterEmail this Story
What is the largest city in the U.S. that is not the headquarters of a Federal Reserve System district?
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  • Position-limit court ruling leaves CFTC with unpalatable choices
    Investors and derivatives dealers won big when a U.S. judge tossed out a position-limit rule weeks before implementation. The decision set back the Commodity Futures Trading Commission, which must decide whether to appeal, adjust the rule or get Congress to tweak the Dodd-Frank Act. Commissioner Bart Chilton said the agency should appeal. "The struggle isn't over," Chilton said. "I think the court opinion is deeply flawed." Reuters (01 Oct.), Bloomberg (01 Oct.) LinkedInFacebookTwitterEmail this Story
  • Liikanen group is expected to propose ring-fencing bank activities
    A group led by Erkki Liikanen, governor of the Bank of Finland, is expected Tuesday to make recommendations regarding the structure of European banks, such as ring-fencing investment activity from retail business. The group, appointed by the European Commission, is also expected to suggest that bankers' bonuses be paid in debt. The European Commission will consider the recommendations and could turn them into a formal legislative proposal. Financial Times (tiered subscription model) (01 Oct.), The Wall Street Journal (01 Oct.) LinkedInFacebookTwitterEmail this Story
  • Collateral rules are coming early next year, Gensler says
    Gary Gensler, chairman of the Commodity Futures Trading Commission, said margin rules for uncleared swaps could be in place by early 2013. The regulations are required by the Dodd-Frank Act, which seeks greater transparency and reduced risk in the $648 trillion over-the-counter swaps market. International regulators weighed in on the collateral rules, too. Reuters (01 Oct.) LinkedInFacebookTwitterEmail this Story
The Gold Standard: A Fifty-Year History of the CFA Charter
An exclusive book offer from CFA Institute
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  Financial Products 
Asset Allocation in a Non-Normal World
Peng Chen, CFA Chief Executive Officer, Asia (ex-Japan) Dimensional Fund Advisors

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