Sales of subprime auto ABS surge, Deutsche Bank data show | Citi plans global revamp to focus on growth markets | Analysis: Soaring Dow comes with risk
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March 12, 2013
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Top Story
Mortgage-bond provisions prompt rating agency concerns
As the residential mortgage-backed securities market begins to recover, banks looking to issue more mortgage-backed bonds want to include more restrictions in the documentation that assures the security of the underlying loans. Credit rating agencies remain concerned with the practice, with Moody's Investors Service and Fitch Ratings citing concerns that the restrictions might shield lenders and issuers from their legal liabilities. Moody's also said that the issue could keep some of the securities from getting top ratings. The Wall Street Journal/Developments blog (3/11)
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Industry Update
Sales of subprime auto ABS surge, Deutsche Bank data show
Sales of securities backed by subprime auto loans in the U.S. have jumped to almost $4 billion so far this year, according to data from Deutsche Bank. Financial Times (tiered subscription model) (3/11)
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Citi plans global revamp to focus on growth markets
Citigroup CEO Mike Corbat, as part of a global overhaul, plans to shift resources from underperforming nations to countries where the bank is expanding. "These days, all banks have finite resources," said Jim Cowles, chief for Europe, the Middle East and Africa. "At Citi, we have prioritized countries we operate in, balancing where opportunities lie and where we are best positioned. We are focusing on what we do well and what our clients' needs are in each of our countries." International Financing Review (free content) (3/9)
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Analysis: Soaring Dow comes with risk
The Dow Jones industrial average's historic high should be greeted with a bit of caution, according to The Economist. "The central banks are pursuing the right policy for a weak world economy, but it has risks. ... The kind of high-risk securities that marked the credit bubble are starting to reappear," the magazine notes. The Economist (tiered subscription model) (3/9)
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New York Focus
NYC's restrictions on sugary drinks are blocked by judge
A New York City judge has invalidated the limits on large sugary drinks that were backed by Mayor Michael Bloomberg, calling them "arbitrary and capricious" and ruling that the city's Board of Health overstepped its authority in adopting the restrictions. Bloomberg said the city will appeal the ruling. The New York Times (tiered subscription model) (3/11)
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Urban officials are concerned about New Jersey tax plan
Officials from cities including Newark and Jersey City say legislation aimed at updating New Jersey's tax-incentive programs could draw development away from urban centers and out to the suburbs. The proposal has bipartisan support but it isn't certain whether it will make it through both houses of the Legislature before the April recess. The Wall Street Journal (3/11)
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People & Personalities
SEC nominee White emphasizes need to understand HFT
In testimony prepared for a confirmation hearing, Mary Jo White, nominated to head the Securities and Exchange Commission, highlights a need to better understand high-frequency trading, as well as a need for strict enforcement. "There must be a sense of urgency brought to addressing these issues to understand their impact on investors and the quality of our markets so that the appropriate regulatory responses can be made," White says in reference to HFT. She also says an aggressive enforcement policy "is not only the right thing to do, but it also will serve to deter the sharp and unlawful practices of others." Bloomberg (3/11), Reuters (3/11), The Washington Post (3/11)
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Lew works on international outreach right off the bat
U.S. Treasury Secretary Jack Lew talked to numerous international officials during his first week on the job, according to a list published by his department. His calls included leaders from the Group of Seven nations, the International Monetary Fund, the European Central Bank, Russia and India. The Wall Street Journal/Real Time Economics blog (3/11)
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On The Economy
Mapping the U.S. housing recovery
Learn more about the U.S. housing recovery:
Click on image to enlarge map.
Lost amid all the political gridlock in Washington has been one major positive indicator for the U.S. economy: The housing market is starting to rebound. Real estate foreclosures, mortgage delinquencies and vacancies are all on the decline. This article uses maps to drill down to the state and ZIP code level to analyze the most promising sections of the country for housing-related businesses. SmartBrief/SmartBlog on Finance (3/8)
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Financial Products
Global X ETF focuses on low volatility and high dividends
Global X Funds is introducing on NYSE Arca an exchange-traded fund that buys low-volatility equities that pay high dividends. The Global X SuperDividend U.S. ETF is linked to the INDXX SuperDividend U.S. Low Volatility Index. The ETF invests in stocks, real estate investment trusts and master limited partnerships. (3/11)
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We are all worms. But I do believe that I am a glow-worm."
-- Winston Churchill,
British prime minister
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