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05 March 2013
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  • EU ministers give in to demands for relaxed budget controls
    After running into backlash in Italy and France over their austerity policies, EU finance ministers have opened the door to looser national spending and borrowing policies. EU Economic and Monetary Commissioner Olli Rehn said after a meeting of eurozone finance ministers that difficult economic conditions "may also justify in a certain number of cases reviewing deadlines for the correction of excessive deficits." Bloomberg (04 Mar.) LinkedInFacebookTwitterEmail this Story
  • Fannie-Freddie securitization company in the works, FHFA says
    Fannie Mae and Freddie Mac will launch a joint company responsible for home-loan securitization, said Edward DeMarco, acting director of the U.S. Federal Housing Finance Agency. "The overarching goal is to create something of value that could either be sold or used by policymakers as a foundational element of the mortgage market of the future," DeMarco said. Reuters (04 Mar.) LinkedInFacebookTwitterEmail this Story
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  Reader Survey 
  • What will be the next major financial-market mover (i.e. effects lasting for 1 year+)?
A macroeconomic event, such as a sovereign-debt crisis or inflation
A central bank action, such as more QE or no more QE
A change in corporate profits (up or down)
An announced technological revolution, such as a new computing technology or biotechnology
A political event, such as a U.S. government shutdown or a shift in the EU's makeup
A geopolitical event, such as an incident in the South China Sea or in the Middle East
A random, unforeseeable event

  Market Activity 
  • China rebounds as Asian-Pacific markets gain
    Asian-Pacific markets made a comeback Tuesday with China posting the biggest gain. China's Shanghai Composite closed up 2.3% after dropping 3.7% Monday. Hong Kong's Hang Seng Index edged up 0.1%. Japan's Nikkei 225 gained 0.3%. South Korea's Kospi rose 0.2%. Australia's S&P/ASX 200 moved up 1.3%. India's Sensex was up 1.4%. MarketWatch (05 Mar.), The Economic Times (India) (11 Mar.) LinkedInFacebookTwitterEmail this Story
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Featuring James G. Rickards (JAC Capital Advisors LLC) and John Taft (RBC Wealth Management)
7 & 8 March 2013
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  Economics 
  • Leftist politicians across Europe celebrate pay caps
    EU and Swiss efforts to cap corporate compensation have emboldened leftist politicians to press for further measures against what they call corporate greed "gone wild." Political parties once opposed to state interference in corporate pay are starting to see the matter differently, according to German magazine Der Spiegel. Spiegel Online (Germany) (04 Mar.), SwissInfo (04 Mar.) LinkedInFacebookTwitterEmail this Story
  • Tax-exempt bonds used by companies prompt questions
    Bonds that pay tax-exempt dividends that are being used to finance private projects are getting a closer look, as the U.S. searches for revenue to narrow the budget deficit. Since 2003, more than $65 billion in such bonds have been sold by state and local governments on behalf of companies, according to an analysis by The New York Times. Ending this tax-exempt borrowing could produce $50 billion in revenue for the U.S. government over 10 years, according to the Bipartisan Policy Center. The New York Times (tiered subscription model) (04 Mar.) LinkedInFacebookTwitterEmail this Story
  • Analysis: U.K. needs smarter -- not more -- austerity
    The U.K. is cutting spending as much as it can without seriously harming the economy, but the government could do a better job of managing resources to encourage growth, according to The Economist. "Improved railways, roads and broadband give the economy a short-term boost as they are built, and increase future productivity too. ... It is hardly impossible to find more money for infrastructure," the magazine notes. The Economist (tiered subscription model) (02 Mar.) LinkedInFacebookTwitterEmail this Story
Venture Exchanges and Investor Risk and Returns
CFA Institute report looks at reporting issues, fraud, and other problems by exchange
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  Geopolitical/Regulatory 
  • U.S. Treasury wants one version of Volcker rule, official says
    Mary John Miller, U.S. Treasury undersecretary for domestic finance, said at an industry conference that the five regulators working on the Volcker rule should produce a single version. "We think a joint rule is optimal," she said. "To have a different rule developed by a banking regulator and a securities regulator would not be helpful to the market ... That requires a significant amount of coordination and discussion to think about how they can all work together. And that process takes time -- it has taken time." Meanwhile, former Federal Reserve Chairman Paul Volcker says progress on the rule has been hindered by a fragmented regulatory landscape and other obstacles. Risk.net (subscription required) (04 Mar.), Reuters (04 Mar.) LinkedInFacebookTwitterEmail this Story
  • SEC finds erroneous compliance with custody rule among advisers
    The Securities and Exchange Commission has discovered compliance deficiency in one-third of investment advisers reviewed regarding a rule governing the custody of clients' funds. "We take deficiencies in this area very seriously and want to put advisers on alert about the importance of complying with the custody rule," said Carlo di Florio, director of the SEC Office of Compliance, Inspections and Examinations. Reuters (04 Mar.), InvestmentNews (free registration) (04 Mar.), AdvisorOne (04 Mar.) LinkedInFacebookTwitterEmail this Story
  • FSA is set to issue report about benchmark-rate warnings
    The U.K. Financial Services Authority is under fire from lawmakers for missing warning signs about manipulation of benchmark interest rates, including the London Interbank Offered Rate. After an internal audit, the regulator is poised to issue a report in which it is expected to defend its position. "There are some issues for which you just cannot have a police force big enough ever to spot all these problems," Chairman Adair Turner recently told lawmakers. "We could not have got at it by intensive supervision." Bloomberg (04 Mar.) LinkedInFacebookTwitterEmail this Story
  • U.S. regulators prosecute financial crime worldwide
    In recent months, HSBC Holdings, Standard Chartered and Royal Bank of Scotland have admitted criminal wrongdoing in agreements with U.S. regulators, despite being European entities. Legal experts cite better resources and a system more conducive to prosecuting corporate criminal liability for the far reach of the U.S. justice system. "The U.S. will assert jurisdiction aggressively, even if there's only a minimal link," said Judith Seddon of law firm Clifford Chance. Financial News Online (U.K.) (subscription required) (05 Mar.) LinkedInFacebookTwitterEmail this Story
  Financial Products 
  • SSgA aims to launch index-tracking, dividend-focused ETF
    State Street Global Advisors is seeking Securities and Exchange Commission approval of an exchange-traded fund that would buy stocks of companies worldwide that pay high dividends. The SPDR S&P Global Dividend ETF would select investments from the S&P Global Dividend Aristocrats Index, using representative sampling. ETF Trends (02 Mar.), IndexUniverse.com (01 Mar.) LinkedInFacebookTwitterEmail this Story
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