| Global News Coverage for Investment Professionals |  |
- Economic recovery requires fresh tactics, experts say
Authorities worldwide have spent a staggering amount of money, estimated at more than $14 trillion, to rescue the economy since the beginning of the Great Recession. However, some experts warned that keeping the spigots open will not resolve the issues. "The real solution has to do with the fiscal and structural reforms that address the real causes of this crisis, particularly in Europe, but also elsewhere," said Singaporean Finance Minister Tharman Shanmugaratnam. "The firewall is absolutely essential, but by itself it is not sufficient, and the real solutions require attention." Reuters
(23 Apr.)     
- Former Icelandic leader found guilty of not preventing crisis
Former Icelandic Prime Minister Geir Haarde was found guilty of failing to act to avert the 2008 financial crisis. Prime minister from 2006 to 2009, Haarde is the world's only politician to be prosecuted for such an allegation. Haarde will not spend time in jail because he was found not guilty of more serious charges. "I don't shy away from my responsibilities, but I have not committed criminal acts," Haarde said. "This court outcome shows and confirms that even though there's this formalistic detail for which I was found guilty of without punishment." The Guardian (London)
(23 Apr.), Bloomberg
(23 Apr.)
- Citi, Credit Suisse and Goldman team up for AIG bonds
Citigroup, Credit Suisse Group and Goldman Sachs are combining to battle five other Wall Street dealers for about $7.5 billion in commercial mortgage-backed securities that the Federal Reserve Bank of New York took on in 2008 as part of its rescue of American International Group. Last week, the Fed asked eight dealers to bid on the Maiden Lane III portfolio, which is part of the $47 billion of debt held by the bank. Final bids are due Thursday. The Wall Street Journal
(23 Apr.), Bloomberg
(23 Apr.), Financial Times (tiered subscription model)
(23 Apr.)
 | 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. |
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- Most Asian-Pacific markets fall in mixed session
Asian-Pacific share markets declined Tuesday with a rising yen putting heavy pressure on Japan's exporters. Japan's Nikkei 225 gave up 0.8%. South Korea's Kospi lost 0.5%. Hong Kong's Hang Seng Index, Taiwan's Taiex and Australia's S&P/ASX 200 each advanced 0.2%. China's Shanghai Composite was flat, as was India's Sensex shortly before midday. MarketWatch
(24 Apr.), The Economic Times (India)
(24 Apr.)
- Analysis: TIPS is relied on too much as an inflation hedge
Financial advisers have widely embraced Treasury Inflation-Protected Securities as a way to protect clients from inflation, but these securities are of limited value as an inflation hedge. TIPS are linked to the U.S. government's Consumer Price Index, a flawed indicator that reflects only half of the inflation experienced by consumers in the real economy. Registered Rep.
(23 Apr.)
| Economics | | |
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- Obama, Romney call for extension of low-interest student loans
Seeking to benefit from enthusiasm among young voters that energized the last presidential election, U.S. President Barack Obama and Republican challenger Mitt Romney devoted campaign time to the issue of student loans. The candidates called for an extension of low-interest, government-backed student loans. Some Republicans in Congress oppose the idea. The Washington Post
(23 Apr.)
- Small businesses take a beating from rising gasoline prices
Small businesses in the U.S. are suffering disproportionately from rising gasoline prices because they don't have the market power enjoyed by bigger companies to pass along higher costs to their customers, experts said. In a survey by the National Federation of Independent Businesses, the owners of small businesses said fuel costs are their top business problem. TheFiscalTimes.com
(23 Apr.)
- Texas Instruments Q1 profit plummets 60%
Computer-chip manufacturer Texas Instruments reported that its first-quarter profit dropped 60% compared with the same period last year. The company said costs associated with its acquisition of National Semiconductor, weakening demand for chips and expenses incurred from closing two manufacturing plants dragged down its performance. RTT News
(23 Apr.), TheStreet.com
(23 Apr.)
- Spain slips into recession
The Bank of Spain estimated that the economy contracted 0.4% in the first quarter compared with Q4, putting the nation into recession. The government predicted that gross domestic product will drop 1.7% this year. EuroNews.net (France)
(23 Apr.), Bloomberg
(23 Apr.)
- Analysis: U.S. Chamber of Commerce is at the peak of its power
America's most powerful business lobby, the U.S. Chamber of Commerce, is at its most influential, according to The Economist. Chamber President Thomas Donohue said he wants policymakers to consider the organization's opinion before they act. "Love him or hate him, that is precisely what Mr Donohue has achieved," the magazine notes. The Economist
(21 Apr.)
| Geopolitical/Regulatory | | |
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- Think tank warns of dangers of financial-transaction tax
The Center for Policy Studies published a report that raises concern about Europe's proposed tax on financial transactions. The report says the tax would hurt the City of London as well as ordinary people. It also says the levy would not result in benefits touted by proponents. The think tank urged U.K. Prime Minister David Cameron to use "every possible method to ensure that a Tobin Tax is not introduced at any level in the EU." City A.M. (London)
(23 Apr.), The Huffington Post
(23 Apr.)
- EU pushes for delay in U.S. swaps-dealer regulations
Michel Barnier, the EU's internal-market commissioner, wrote to numerous U.S. government agencies expressing concern about how over-the-counter derivatives regulations will affect European firms. He asked for postponement of certain provisions. "Commissioner Barnier has sent letters ... encouraging them to delay the swap-dealer registration process as regards EU firms until there is legal clarity about the substantive conditions that such registration will entail," a spokeswoman said. Reuters
(23 Apr.), Bloomberg
(23 Apr.), City A.M. (London)
(24 Apr.)
- CFTC isn't obligated to study position-limit cost, group says
Better Markets, a financial-reform advocacy group, said in an amicus brief filed in U.S. District Court that the Commodity Futures Trading Commission is not legally obligated to assess the cost of a position-limit rule. The nonprofit argued that requiring the CFTC to study such costs could hinder the overhaul financial regulation. Platts
(23 Apr.), Reuters
(23 Apr.)
| Financial Products | | |
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- PowerShares aims to launch ETF for small-cap stocks
Invesco PowerShares filed with the Securities and Exchange Commission to introduce an exchange-traded fund that would invest in small-capitalization stocks. The PowerShares DWA SmallCap Technical Leaders Portfolio would buy stocks of small-cap companies on an index run by technical-analysis firm Dorsey Wright. IndexUniverse.com
(20 Apr.), Benzinga.com
(20 Apr.)
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