Treasurys Gain 5.51% in 2010
BY DEBORAH LYNN BLUMBERG, WSJ.com
Treasurys prices rose on the final trading day of 2010, allowing the government bond market to end a volatile year on a high note. U.S. government debt posted gains of 5.51% for 2010, according to Barclays index data. TIPS, or Treasury inflation protected securities, chalked chalk up gains of 5.84% for the year.
http://jlne.ws/hamiwt
U.K. Think Tank Sees 20% Chance Of Euro’s Survival
By Javier E. David, WSJ.com
Europe’s common currency, battered for more than a year by a sovereign debt crisis, is unlikely to survive the next decade in its current form, the Center for Economics and Business Research warned Friday.
http://jlne.ws/i9Re3L
Bond fund investors face tough new era
By Rachel Koning Beals, MarketWatch
Much of the buzz in the bond market nowadays is all about bubbles, and not the champagne kind. As a year of respectable gains for government debt funds and even stronger returns for high-yield and emerging market bond funds comes to a close, bond mutual-fund managers are bracing for a period of rising interest rates and diminished returns.
http://jlne.ws/hf7qif
Three risks to start 2011
By Jeremy Gaunt,Reuters
Financial markets enter 2011 with many investors persuaded that the world economy is on the mend and that riskier assets such as stocks are set to do well.
http://jlne.ws/h54N1W
Greece in talks on extending debt repayment
Reuters
Greece is in talks with commercial banks on extending the repayment of its outstanding debt, in line with a similar plan to stretch out paying back its EU/IMF bailout, an Athens weekly reported on Friday.
http://jlne.ws/glsLeN
Most British financiers happy to stay in UK: survey
Reuters
The majority of people working in Britain's financial services industry are happy to stay in the UK, said a survey by the eFinancialCareers.com website, despite fears a clampdown on pay may force top performers overseas. The online poll of 415 workers in London's City finance district said only 14 percent were actively seeking a job overseas, with the rest happy to remain in the UK.
http://jlne.ws/fUxTAT
Pimco to Pay $92 Million to Settle Market Manipulation Lawsuit
By Sree Vidya Bhaktavatsalam, Bloomberg
Pacific Investment Management Co., manager of the world’s biggest bond fund, agreed to pay $92 million to settle a private class-action lawsuit that accused it of manipulating the price of Treasury futures contracts.
http://jlne.ws/ew7eXd
PIMCO's El-Erian, managing the “new normal” investment landscape
Daniel P. Collins, Futures Mag.com
Mohamed El-Erian, CEO and co-chief investment officer of PIMCO, is one of the most knowledgeable people you can find on global financial issues. Prior to joining Bill Gross as co-CIO at PIMCO, El-Erian managed the Harvard University endowment fund, was a managing director at Salomon Smith Barney/Citigroup and spent 15 years at the International Monetary Fund.
http://jlne.ws/hKSAQJ
Venezuela estimates economy shrank 1.9 percent in 2010
By Andrew Cawthorne, Reuters
Venezuela's economy shrank an estimated 1.9 percent in 2010, marking a second year of recession as the South American nation fails to match the recovery in other countries after the global financial crisis, the Central Bank said on Thursday.
http://jlne.ws/hH44ZL
Venezuela to Devalue Currency
BY KEJAL VYAS AND DAVID LUHNOW, WSJ.com
Venezuela will devalue its "strong bolívar" currency on New Year's Day, the government said Thursday, the second such devaluation within a year and at least the fifth major devaluation during the decade-long populist government of President Hugo Chávez. News of the devaluation came just after the central bank said the Venezuelan economy contracted 1.9% in 2010, the second consecutive year of declining output in the oil-rich nation after a 3.3% decline in 2009.
http://jlne.ws/gNyX80
China's CICC investment banking head quits
Reuters
The head of investment banking of China International Capital Corp (CICC), the country's top investment bank, is stepping down, local media reported on Friday.
http://jlne.ws/feTjym
Germany 'stronger' after economic crisis
BBC News
The German people have emerged stronger from Europe's economic crisis, Chancellor Angela Merkel has said in her annual new year's message. The country now enjoys its lowest unemployment rate since reunification 20 years ago despite the worst crisis in more than 60 years, she said.
http://jlne.ws/eI0KNp
IMF to discuss Polish credit line in mid-Jan
Reuters
The IMF's executive board has not yet approved an extension and increase of Poland's flexible credit line (FCL) facility but will consider the request in mid-January, Poland's deputy finance minister said on Thursday. The ministry said on December 23 that the International Monetary Fund had initially approved an increase in the credit line to $29 billion from $21 billion in a previous facility and its extension by two years.
http://jlne.ws/fMrgtO
Year-End Position Squaring Boosts Bonds
Reuters
U.S. Treasurys may struggle to replicate this year's relatively strong returns in 2011 if the economy grows as much as some expect, as riskier assets could continue to outperform the government debt.
http://jlne.ws/gaGLEz
Deutsche Bank Challenges JPMorgan's Bond Dominance
By Bryan Keogh, Bloomberg
Deutsche Bank AG climbed three places to No. 2 in the global corporate bond underwriter rankings this year, challenging JPMorgan Chase & Co.’s three- year reign as the top manager of debt offerings.
http://jlne.ws/eH3E4Y
Argentina Reaches 80% Acceptance in 'Brady Bond' Swap
BY SHANE ROMIG, WSJ.com
The holders of more than 80% of Argentina's defaulted Brady bonds have accepted a debt-swap offer in exchange for a basket of U.S. dollar-denominated bonds and a cash payment, Economy Minister Amado Boudou said in comments to local radio stations Thursday.
http://jlne.ws/fOjJZz
Jumat, 31 Desember 2010
Kamis, 30 Desember 2010
Top Interest Rate Headlines 12-30-10: Italy's Debt Costs Approach Red Zone
Italy's debt costs approach red zone
The Telegraph
Italy's borrowing costs have jumped to the highest level since the financial crisis over two years ago, raising concerns that Europe's biggest debtor may slip from the eurozone's stable core into the high-risk group on the periphery.
http://jlne.ws/gf7s34
Venezuela devalues currency again
The Globe And Mail/ Reuters
Venezuela said Thursday it was abolishing the lowest exchange rate of 2.6 bolivars to the U.S. dollar in a measure effectively devaluing the South American OPEC nation’s currency for a second time in 12 months.
http://jlne.ws/dOhNnw
Bank of America Settlement with Lehman Not Yet Final
American Banking & Market News
Bank of America (NYSE: BAC) may be in for an expensive settlement, pending a final decision by a bankruptcy judge. The firm had received notice that a bankruptcy judge amended his order that they pay Lehman Brothers Holdings Inc. $590 million in compensation for taking its deposits, saying “the judgment is hereby deemed not to be a final judgment.”
http://jlne.ws/eCime9
Brazil's inflation seen easing-finance minister
Reuters
Brazil's Finance Minister Guido Mantega said on Thursday that inflation is giving signals of easing, and that lower economic activity in 2011 would help control prices next year.
http://jlne.ws/hT6d03
Business Activity in U.S. Grows at Fastest Pace in Two Decades
Bob Willis, Bloomberg
Businesses in the U.S. expanded in December at the fastest pace in two decades, adding to evidence the world’s largest economy is accelerating heading into 2011.
http://jlne.ws/e7kalc
Schwarzenegger's Build America Bonds Outperform With 7% Yield: Muni Credit
By Brendan A. McGrail and Ashley Lutz, Bloomberg
Build America Bonds from California, the biggest issuer of the taxable debt in 2010, outperformed the market in the last six weeks as the state’s 7.25 percent yield lured investors unfazed by the lowest state credit rating.
http://jlne.ws/i9gTjU
Coincident indexes for 11 states expected to grow between 1.5 % & 4.5 % over next 6 months
The Federal Reserve Bank of Philadelphia produces leading indexes for each of the 50 states. The indexes are calculated monthly and are usually released a week after the release of the coincident indexes. The Bank issues a release each month describing the current and future economic situation of the 50 states with special coverage of the Third District: Pennsylvania, New Jersey, and Delaware.
http://jlne.ws/eiV8ug
Economists: China won't hurt growth with excessive tightening
People’s Daily Online
China increased its benchmark interest rates last week for the second time in two months. While expecting similar moves to come in the near future, economists from major international investment banks do not seem to be worried about the impact of China's increasingly tight monetary policy on economic growth.
http://jlne.ws/dNnqdP
Pending Sales of U.S. Existing Homes Rose 3.5% in November
By Bob Willis, Bloomberg
The number of contracts to buy previously owned homes rose more than forecast in November, a sign sales are recovering following a post-tax credit plunge.
http://jlne.ws/gFfKo0
US mortgage foreclosures rise sharply
By Suzanne Kapner, Financial Times
US mortgage foreclosures jumped in the third quarter as fewer borrowers qualified for loan modifications that would have reduced their monthly payments, bank regulators have said.
http://jlne.ws/eg2yUX
Six Financial Institutions Repay TARP Funds, Deliver $626 Million In Proceeds For Taxpayers
Press Release
The U.S. Department of the Treasury announced that the following six financial institutions have repurchased Troubled Asset Relief Program (TARP) Capital Purchase Program (CPP) investments, delivering a total of $626.0 million in proceeds today for taxpayers.
http://jlne.ws/cxgbC7
Fed's Dudley Scheduled Meetings With Wall Street, Global Chiefs
BusinessWeek
Federal Reserve Bank of New York President William Dudley scheduled meetings with top Goldman Sachs Group Inc. and Citigroup Inc. officials in his first days on the job, his daybook showed today.
http://jlne.ws/h8NqSg
The Telegraph
Italy's borrowing costs have jumped to the highest level since the financial crisis over two years ago, raising concerns that Europe's biggest debtor may slip from the eurozone's stable core into the high-risk group on the periphery.
http://jlne.ws/gf7s34
Venezuela devalues currency again
The Globe And Mail/ Reuters
Venezuela said Thursday it was abolishing the lowest exchange rate of 2.6 bolivars to the U.S. dollar in a measure effectively devaluing the South American OPEC nation’s currency for a second time in 12 months.
http://jlne.ws/dOhNnw
Bank of America Settlement with Lehman Not Yet Final
American Banking & Market News
Bank of America (NYSE: BAC) may be in for an expensive settlement, pending a final decision by a bankruptcy judge. The firm had received notice that a bankruptcy judge amended his order that they pay Lehman Brothers Holdings Inc. $590 million in compensation for taking its deposits, saying “the judgment is hereby deemed not to be a final judgment.”
http://jlne.ws/eCime9
Brazil's inflation seen easing-finance minister
Reuters
Brazil's Finance Minister Guido Mantega said on Thursday that inflation is giving signals of easing, and that lower economic activity in 2011 would help control prices next year.
http://jlne.ws/hT6d03
Business Activity in U.S. Grows at Fastest Pace in Two Decades
Bob Willis, Bloomberg
Businesses in the U.S. expanded in December at the fastest pace in two decades, adding to evidence the world’s largest economy is accelerating heading into 2011.
http://jlne.ws/e7kalc
Schwarzenegger's Build America Bonds Outperform With 7% Yield: Muni Credit
By Brendan A. McGrail and Ashley Lutz, Bloomberg
Build America Bonds from California, the biggest issuer of the taxable debt in 2010, outperformed the market in the last six weeks as the state’s 7.25 percent yield lured investors unfazed by the lowest state credit rating.
http://jlne.ws/i9gTjU
Coincident indexes for 11 states expected to grow between 1.5 % & 4.5 % over next 6 months
The Federal Reserve Bank of Philadelphia produces leading indexes for each of the 50 states. The indexes are calculated monthly and are usually released a week after the release of the coincident indexes. The Bank issues a release each month describing the current and future economic situation of the 50 states with special coverage of the Third District: Pennsylvania, New Jersey, and Delaware.
http://jlne.ws/eiV8ug
Economists: China won't hurt growth with excessive tightening
People’s Daily Online
China increased its benchmark interest rates last week for the second time in two months. While expecting similar moves to come in the near future, economists from major international investment banks do not seem to be worried about the impact of China's increasingly tight monetary policy on economic growth.
http://jlne.ws/dNnqdP
Pending Sales of U.S. Existing Homes Rose 3.5% in November
By Bob Willis, Bloomberg
The number of contracts to buy previously owned homes rose more than forecast in November, a sign sales are recovering following a post-tax credit plunge.
http://jlne.ws/gFfKo0
US mortgage foreclosures rise sharply
By Suzanne Kapner, Financial Times
US mortgage foreclosures jumped in the third quarter as fewer borrowers qualified for loan modifications that would have reduced their monthly payments, bank regulators have said.
http://jlne.ws/eg2yUX
Six Financial Institutions Repay TARP Funds, Deliver $626 Million In Proceeds For Taxpayers
Press Release
The U.S. Department of the Treasury announced that the following six financial institutions have repurchased Troubled Asset Relief Program (TARP) Capital Purchase Program (CPP) investments, delivering a total of $626.0 million in proceeds today for taxpayers.
http://jlne.ws/cxgbC7
Fed's Dudley Scheduled Meetings With Wall Street, Global Chiefs
BusinessWeek
Federal Reserve Bank of New York President William Dudley scheduled meetings with top Goldman Sachs Group Inc. and Citigroup Inc. officials in his first days on the job, his daybook showed today.
http://jlne.ws/h8NqSg
Senin, 27 Desember 2010
Top Interest Rate Headlines 12-27-10: ECB Weekly Bond Buys Rise To E1.121 Bln In Week Ending Dec 24
ECB Weekly Bond Buys Rise To E1.121 Bln In Week Ending Dec 24
MarketNews.com
The European Central Bank significantly increased its purchases of sovereign EMU debt last week, the ECB announced Monday. The bank purchased E1.121 billion bonds through last Friday, December 24, it said. The figure was nearly double the E603 million in purchases made the week prior, which was the lowest amount settled since October, during which time the central bank made only E9 million in bond buys.
http://jlne.ws/h3N7ru
Citadel Founder Offers Thanks and Apologies on Anniversary - NY Times.com
By Azam Ahmed, DealBook
Kenneth C. Griffin, founder of the Citadel Investment Group, offered investors some thanks, apologies and wisdom on the 20th anniversary of his firm. In his year-end letter to clients, obtained by DealBook, he took the opportunity to outline the four main lessons gleaned over that period
http://jlne.ws/fm2FGt
AIG Gets $4.3 Billion of Credit as Insurer Seeks to Exit Bailout
By Noah Buhayar and Hugh Son, Bloomberg
American International Group Inc., the insurer bailed out by the U.S., garnered $4.3 billion in bank credit lines in another step toward repaying taxpayers and gaining independence.
http://jlne.ws/dPvd5Y
ICE Trust Withdraws Credit Default Swaps-Clearing Application
By Katy Burne, Dow Jones Newswires
A unit of IntercontinentalExchange Inc. (ICE) dedicated to clearing credit derivatives has withdrawn an application it had filed with the Commodity Futures Trading Commission to be a clearinghouse under the post Dodd-Frank financial regulatory regime.
http://jlne.ws/hEm5aJ
H&R Block Says '11th-Hour' U.S. Bar Ends HSBC Refund-Loan Deal
BusinessWeek
H&R Block Inc. said an "11th-hour" decision by U.S. regulators prevents a lending partner from offering tax-refund loans and that it'll be hard to fully roll out alternative products in time for the 2011 season.
http://jlne.ws/gKdKjB
Citigroup's alternative Christmas carols
eFinancial News
Citigroup has cut it finer than usual with the release of its 2010 Christmas carols. But here they are, just in time and worth the wait.
http://jlne.ws/hpOe0L
Bailed-Out Banks Slip Toward Failure
By MICHAEL RAPOPORT - WSJ
Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing. The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.
http://jlne.ws/fndOSi
House Republicans plan to target regulatory overhaul, but repeal is unlikely
Macomb Daily
WASHINGTON - As the GOP prepares to seize control of the House in January, its members on the Financial Services Committee are vowing to reexamine the wide-ranging financial regulatory legislation passed earlier this year.
http://jlne.ws/fx9XNX
GE sells mortgage business to Santander
By Alan Rappeport in New York - Financial Times
GE Capital, the finance arm of General Electric, will sell its $2bn Mexican mortgage business to Santander Mexico for $162m as it continues to shed non-core assets.
http://jlne.ws/hjFxY8
Goldman Sachs ties bonuses to long-term profits
The Oregonian
Goldman has been a lightning rod for public criticism of Wall Street since the financial crisis that peaked in late 2008.
http://jlne.ws/gNSZ3R
UBS To Lift Swiss Staff Salaries By 2% Up To Middle ManagementBy Katharina Bart, Dow Jones Newswires
UBS AG (UBS) said Thursday it will increase salaries of staff in Switzerland up to middle managers by 2%, effective March 1, compared with a 1.2% hike last year.
http://jlne.ws/eq6EFF
Russia Adds 13 Banks to Advise on $59 Billion Asset Sales Plan
BusinessWeek
Russia has expanded the list of investment banks that will advise it on its planned $59 billion state asset sale program over the next five years.
http://jlne.ws/enQUbc
HSBC Names Keir as Global Head of Commercial Banking
BusinessWeek
HSBC Holdings Plc, Europe's biggest bank, named Alan Keir as global head of commercial banking in a further management reshuffle following the appointment of Stuart Gulliver as chief executive officer.
http://jlne.ws/dXmEfa
Desjardins to Buy Western Financial for $439 Million
BusinessWeek
Desjardins Financial Group, Canada's largest credit union, agreed to acquire Western Financial Group Inc. for C$443 million ($439 million) to expand in British Columbia and Alberta.
http://jlne.ws/eAHmzb
MarketNews.com
The European Central Bank significantly increased its purchases of sovereign EMU debt last week, the ECB announced Monday. The bank purchased E1.121 billion bonds through last Friday, December 24, it said. The figure was nearly double the E603 million in purchases made the week prior, which was the lowest amount settled since October, during which time the central bank made only E9 million in bond buys.
http://jlne.ws/h3N7ru
Citadel Founder Offers Thanks and Apologies on Anniversary - NY Times.com
By Azam Ahmed, DealBook
Kenneth C. Griffin, founder of the Citadel Investment Group, offered investors some thanks, apologies and wisdom on the 20th anniversary of his firm. In his year-end letter to clients, obtained by DealBook, he took the opportunity to outline the four main lessons gleaned over that period
http://jlne.ws/fm2FGt
AIG Gets $4.3 Billion of Credit as Insurer Seeks to Exit Bailout
By Noah Buhayar and Hugh Son, Bloomberg
American International Group Inc., the insurer bailed out by the U.S., garnered $4.3 billion in bank credit lines in another step toward repaying taxpayers and gaining independence.
http://jlne.ws/dPvd5Y
ICE Trust Withdraws Credit Default Swaps-Clearing Application
By Katy Burne, Dow Jones Newswires
A unit of IntercontinentalExchange Inc. (ICE) dedicated to clearing credit derivatives has withdrawn an application it had filed with the Commodity Futures Trading Commission to be a clearinghouse under the post Dodd-Frank financial regulatory regime.
http://jlne.ws/hEm5aJ
H&R Block Says '11th-Hour' U.S. Bar Ends HSBC Refund-Loan Deal
BusinessWeek
H&R Block Inc. said an "11th-hour" decision by U.S. regulators prevents a lending partner from offering tax-refund loans and that it'll be hard to fully roll out alternative products in time for the 2011 season.
http://jlne.ws/gKdKjB
Citigroup's alternative Christmas carols
eFinancial News
Citigroup has cut it finer than usual with the release of its 2010 Christmas carols. But here they are, just in time and worth the wait.
http://jlne.ws/hpOe0L
Bailed-Out Banks Slip Toward Failure
By MICHAEL RAPOPORT - WSJ
Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing. The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.
http://jlne.ws/fndOSi
House Republicans plan to target regulatory overhaul, but repeal is unlikely
Macomb Daily
WASHINGTON - As the GOP prepares to seize control of the House in January, its members on the Financial Services Committee are vowing to reexamine the wide-ranging financial regulatory legislation passed earlier this year.
http://jlne.ws/fx9XNX
GE sells mortgage business to Santander
By Alan Rappeport in New York - Financial Times
GE Capital, the finance arm of General Electric, will sell its $2bn Mexican mortgage business to Santander Mexico for $162m as it continues to shed non-core assets.
http://jlne.ws/hjFxY8
Goldman Sachs ties bonuses to long-term profits
The Oregonian
Goldman has been a lightning rod for public criticism of Wall Street since the financial crisis that peaked in late 2008.
http://jlne.ws/gNSZ3R
UBS To Lift Swiss Staff Salaries By 2% Up To Middle ManagementBy Katharina Bart, Dow Jones Newswires
UBS AG (UBS) said Thursday it will increase salaries of staff in Switzerland up to middle managers by 2%, effective March 1, compared with a 1.2% hike last year.
http://jlne.ws/eq6EFF
Russia Adds 13 Banks to Advise on $59 Billion Asset Sales Plan
BusinessWeek
Russia has expanded the list of investment banks that will advise it on its planned $59 billion state asset sale program over the next five years.
http://jlne.ws/enQUbc
HSBC Names Keir as Global Head of Commercial Banking
BusinessWeek
HSBC Holdings Plc, Europe's biggest bank, named Alan Keir as global head of commercial banking in a further management reshuffle following the appointment of Stuart Gulliver as chief executive officer.
http://jlne.ws/dXmEfa
Desjardins to Buy Western Financial for $439 Million
BusinessWeek
Desjardins Financial Group, Canada's largest credit union, agreed to acquire Western Financial Group Inc. for C$443 million ($439 million) to expand in British Columbia and Alberta.
http://jlne.ws/eAHmzb
Rabu, 22 Desember 2010
December 22, 2010: Holiday Shopping Trends Could Bring Cheer to Fed [NEWSLETTER]
Conversation Starter - Looking Ahead
Outrageous Predictions - Saxo Bank
This is a “Black Swan Exercise,” inspired by Nassim Nicholas Taleb, the Lebanese philosophical essayist, produced each year as a forward-looking thought piece for Saxo Bank’s clients. In the book, The Black Swan: The Impact of the Highly Improbable, Taleb stresses that a Black Swan event is a highly improbable event with three principal characteristics: It is unpredictable; it carries massive impact; and, after the fact, an explanation is discussed that makes it appear less random, and more predictable, than it was. Saxo Bank’s 10 Outrageous Predictions might be useful to stress test a portfolio or to think about a far out-of-the-money option. Readers should also note that this is not an entirely scientific exercise, and the predictions are not designed to be anything of the sort. In past years, Saxo Bank has been right four out of 10 times.
See the entire Saxo Bank report here.
***An interesting little factoid here, Kim Fournais, who founded Saxo Bank along with Lars Christensen, owns the Danish island of Vejroe.
Lead Stories
Holiday Shopping Trends Could Bring Cheer to Fed
By Kathleen Madigan, WSJ.com
Much has been made of how the better holiday sales are lifting U.S. economic growth. Retail trends, however, are also playing a role in inflation for this quarter — possibly helping the Federal Reserve achieve its policy goals.
http://jlne.ws/herduu
Federal Reserve Places 70% Per-Security Limit on Treasury Debt Holdings
By Liz Capo McCormick, Bloomberg
The Federal Reserve said it will limit its purchases to 70 percent of any single Treasury security as part of its plan to expand its balance sheet that’s known as quantitative easing.
http://jlne.ws/dYszcc
Roubini, others call for U.S. mortgage standards
By Corbett B. Daly, Reuters
A group of investors and prominent academics on Tuesday urged the creation of national standards for U.S. residential mortgages to help borrowers who are having trouble getting home loans.
http://jlne.ws/dV9zaH
Bloomberg Sues ECB to Force Disclosure of How Greece's Swaps Hid Deficit
By Elisa Martinuzzi and Alan Katz, Bloomberg
Bloomberg News filed a lawsuit against the European Central Bank, seeking the disclosure of documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis.
http://jlne.ws/i1xxKy
**CN: As a side note, Bloomberg was the first to get the scoop on this one.
Americans now use debit cards for more noncash payments than any other means
Press Release - Board of Governors, Federal Reserve System
The Federal Reserve's 2010 study of noncash payments released today revealed that in 2009 more than three-quarters of all U.S. noncash payments were made electronically, a 9.3 percent annual increase since the Federal Reserve's last study in 2007. This growth and other statistics in the study emphasize consumers' increasing adoption of electronic alternatives for payments in the United States. The 2007 study revealed that in 2006 roughly two-thirds of the payments were made electronically.
http://jlne.ws/h0bbt2
Bond Market Rejects Fed's Unconditional Love: Caroline Baum
By Caroline Baum, Bloomberg
How’s that QE2 working out for you? To answer the question, we first have to establish the goals of a second round of quantitative easing as laid out by Federal Reserve Chairman Ben Bernanke. The Fed’s purchases of U.S. Treasuries “affect the economy primarily by lowering interest rates on securities of longer maturities,” Bernanke explained in a Nov. 19 speech in Frankfurt. Lower rates equate to more “accommodative financial conditions,” he said.
http://jlne.ws/gppYua
How investment banks shape up after crisis
By Megan Murphy, Justin Baer, Francesco Guerrera, Patrick Jenkins, Jeremy Grant, Martin Arnold and Sam Jones -
Financial Times
In the past decade the investment banking world was hit by a virus. Known as "Goldman envy", it prompted the likes of Morgan Stanley, Merrill Lynch and UBS - and the now-defunct Lehman Brothers and Bear Stearns - to ratchet up risks to try to replicate Goldman Sachs' strong profit growth.
http://jlne.ws/h8gtxm
Meredith Whitney On 60 Minutes: Muni Bond Troubles Ahead
By Scott Rubin, Benzinga
Noted Wall Street analyst Meredith Whitney appeared on 60 Minutes on Sunday night and voiced an ominous outlook for the municipal bond market. She said that states' fiscal problems may cause a "spate" of defaults among
municipalities.
http://jlne.ws/fkwV08
Ernst And Young Said to Face Fraud Lawsuit Over Lehman Audits
By Karen Freifeld and Linda Sandler, Bloomberg
Ernst And Young LLP will be sued for fraud by New York Attorney General Andrew Cuomo for allegedly helping Lehman Brothers Holdings Inc. mislead investors, according to a person familiar with the matter.
http://jlne.ws/gTXYiT
U.S. Treasury Department Statement On House Passage Of Tax Cut, Unemployment Insurance Package
Press Release
The U.S. Department of the Treasury today released the following statement from Treasury Secretary Tim Geithner regarding the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 by the House of Representatives...
http://jlne.ws/cxgbC7
New York Fed purchases $1.619 billion in TIPS: New York Fed purchases $1.619 billion in TIPS
Federal Reserve Bank of New York. The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://bit.ly/dU6jwB
Events
Introduction to Treasury Futures: Factoring the Risks, New York
When: January 13, 2011
Where: New York
Who: Institute for Financial Markets
Full Info: www.theifm.org
Details: Treasury futures are one of the most popular futures contracts for both hedging and speculating. Some of the factors that influence value in the treasury complex include: interest rate risk, inflation risk, and the willingness of investors to continue buying Treasury debt. These factors lead to volatility in the underlying value of debt instruments as interest rates move up or down. If your business borrows money, you can mitigate the effects of higher or lower interest rates by trading the treasury future complex. Moreover, with treasury interest rate levels at multi-generational lows, a robust case can be made for hedging the threat of higher interest rates in the future now -before interest rates return to 'normal' levels. This IFM short course provides the foundation to understand how the cash and futures markets are connected, and how to guard against interest rate volatility.
The 36th Annual International Futures Industry Conference
When: March 15-18, 2011
Who: FIA
Where: Boca Raton Resort & Club
Full info: http://campaign.r20.constantcontact.com/render?llr=fwgtyucab&v=001WeBrwlP3VB1EJrvzuxUwxDg8fsg1Z8ZYjylTYIAfiEPOHumaM4PToYW-FxqnOsfyAaSlhRYAWrgj0P8-SYrVuEM53baCN9cyh3I5I-IOKZ3QwiUb2qUbyhwPmrOiHmw_Gt-oUr577qg%3D
Details: As one of FIA's premier events, the 36th Annual International Futures Industry Conference is host to an influential audience of 800 senior-level futures industry professionals, brokerage executives, technology and operations officers, exchange officials, money managers, and public policy leaders. Delegates from more than 30 countries attend this annual event.
SIFMA 2nd Annual Private Client Conference
When: Apr. 7 and 8, 2011
Who: SIFMA
Where: New York City
Full Info: Full info: http://www.sifma.org/events/event.aspx?id=22289
Details: On April 7 and 8, the SIFMA 2nd Annual Private Client Conference, "Client First: Delivering the Vision," will build on the success of the inaugural Private Client Conference during the spring. This two-day event combines the strengths of SIFMA's former Sales & Marketing, Small Firms and Independent Firms conferences, producing North America's premier conference for private client groups at all levels. This conference is designed for senior managers in private client groups at global, regional, independent contractor and small broker-dealers, including national sales managers, regional directors, branch managers, wealth-management specialists, marketing specialists, and individual financial advisers and investment consultants.
Economic News
Third-quarter GDP raised, home sales bounce back
Reuters
Sales of previously owned U.S. homes rose in November, offering the latest sign the economy was ending the year on a more solid footing after a sluggish third-quarter performance.
http://jlne.ws/fyL0nl
Raising GDP growth estimates for 2011 on tax agreement, now forecast 3.1% in Q1
Reuters
JPMorgan (JPM.N) took a hit in its equity capital markets business in 2010 even though its dominance in debt markets allowed it to cling on to the global top spot for investment banking fees.
http://ht.ly/3sadW
Exchanges, Clearing Houses & MTFs
ELX to SEC: new rules unfairly benefit NYSE
By Ann Saphir, Reuters
ELX Futures LP told regulators late Wednesday that a proposed rule would give NYSE Euronext's U.S. futures exchange an unfair advantage against ELX in competing against CME Group Inc, and should be rejected. ELX Futures, whose own attempt to challenge CME Group 's dominance in the lucrative market for Treasury futures trading has met with limited success, said that the proposed rule will enshrine NYSE Euronext 's co-owned New York Portfolio Clearing as
a "monopolist."
http://jlne.ws/gzDj6u
Firms & Banks
Deutsche Bank to pay $550 million in tax shelter case
By Blake Ellis, CNNMoney
Deutsche Bank AG agreed Tuesday to pay more than $550 million for taking part in fraudulent federal tax shelters, according to federal regulators.
http://jlne.ws/i0kegp
JPMorgan tops fee pool, equity business takes hit
By Sarah White, Reuters
JPMorgan (JPM.N) took a hit in its equity capital markets business in 2010 even though its dominance in debt markets allowed it to cling on to the global top spot for investment banking fees.
http://jlne.ws/flz4NU
Bottom line on bonuses: Banks not that profitable
The Globe and Mail
The average return on equity for U.S. and European banks is barely 5 per cent
http://jlne.ws/hDQKGZ
Bankers face new year uncertainty
Investors Chronicle
The global financial crisis, followed quickly by a deep recession, has already meant plenty of change for the UK's beleaguered banks. Indeed, two of them - Royal Bank of Scotland (RBS) and Lloyds - are now heavily state owned after the government took big stakes in order to recapitalise the pair.
http://jlne.ws/eRJfZl
Goldman Sachs Strategy: 'Be Goldman in More Places'
Wall Street Journal Blogs
Nomura analyst Glenn Schorr -- who was bearish on Goldman Sachs last week -- today said he's feeling a bit better about the investment bank's outlook for 2011.
http://jlne.ws/gySUoR
Goldman Sachs's Blankfein Is `Reasonably Bullish,' Nomura's Schorr Says
Bloomberg
Goldman Sachs Group Inc. 's top executives view investment banking as having the best prospects next year and expect fixed-income to pick up as well, according to Nomura Holdings Inc.
http://jlne.ws/eOTDT0
Morgan Stanley's CEO James Gorman Explains Why They're Getting All The Government's Business
Business Insider
James Gorman talked to CNBC about whats next for Morgan Stanley and why it's the government's bank of choice. He is a bundle of positivity about the market, and his bank.
http://jlne.ws/dUKPqt
Wells Fargo hires Deutsche Bank executive
San Francisco Chronicle
Wells Fargo & Co., the fourth-largest U.S. lender by assets, hired John Fowler, who has led European health care at Deutsche Bank AG, and five managing directors to expand its investment-banking division. Fowler will be...
http://jlne.ws/hRUrVt
How Deutsche kept a pension scandal firm afloat
CNN Money
A Dallas-based private equity investor will be sentenced early next year for his role in New York's public pensionkickback scandal. What won't be mentioned, however, is how a major Wall Street bank may have helped keep him in business.
http://jlne.ws/hqd3IJ
Wells Fargo Securities Hires Six Senior Investment Bankers
Business Wire
Wells Fargo Securities, part of Wells Fargo & Company, today announced that six senior investment bankers are joining its Investment Banking and Capital Markets division.
http://jlne.ws/guHRXV
Arizona sues Bank of America over mortgage servicing
Reuters
The state of Arizona has sued Bank of America Corp (BAC.N), alleging that the bank has consistently misled consumersabout its home loan modification process, a source familiar with the situation said.
http://jlne.ws/gCAJtT
RBS Sells $6.1 Billion of Assets to Mitsubishi UFJ
BusinessWeek
Royal Bank of Scotland Group Plc sold about 3.9 billion pounds ($6.1 billion) of project finance assets to Bank of Tokyo-Mitsubishi UFJ Ltd.
http://jlne.ws/f8UUve
Goldman Deal Pushes Commercial Mortgage Bond Sales Past $11 Billion Mark
Bloomberg
Goldman Sachs Group Inc. and Citigroup Inc. sold $876.45 million of bonds linked to U.S. commercial real estate, pushing 2010 sales to $11.5 billion as strategists forecast next year's offerings will quadruple.
http://jlne.ws/g7Wxjj
Citigroup Opens High Tech Branch in Union Square
NYConvergence
In an effort to spruce up its consumer facing operations, Citigroup Inc. is opening a flashy new branch in Union Square today at the location of the Virgin Megastore that closed down mid 2009. The branch, apparently the first in a string of planned 'flagship' branches in major US and international cities, features laptops and [...]
http://jlne.ws/eO7Kn9
Morgan Stanley CEO: I will escort out any bonus leakers
New York Post
Talk about going off script. Morgan Stanley Chief Executive James Gorman raised some eyebrows during a routine conference this week when he threatened to "personally escort" [out] anyone found leaking any details of the firm's compensation levels to the media, The Post has learned. Gorman, who has been pushing...
http://jlne.ws/e8PsRK
Morgan Stanley on track to top Europe's M And A rankings
eFinancial News
Morgan Stanley is on track to top the coveted mergers and acquisitions league tables for Europe for a second year in a row, in what turned out to be another dismal 12 months for deal-making in the region.
http://jlne.ws/fGkk3n
Diamond to Become Barclays CEO Three Months Earlier
By Jon Menon and Gavin Finch, Bloomberg
Barclays Plc, Britain's third- biggest bank, said Robert Diamond will take over as chief executive officer three
months earlier than planned.
http://jlne.ws/i6KKAx
Bank of America appeals $595 million Lehman ruling
Reuters
Bank of America (BAC.N) has appealed a bankruptcy court order that it must pay Lehman Brothers Holding Inc
(LEHMQ.PK) about $595 million, according to court documents.
http://jlne.ws/erh4xv
Regulators
Board Chairmen Selected for Richmond Fed Branch Offices
Federal Reserve Bank of Richmond
The boards of directors of the Federal Reserve Bank of Richmond's Baltimore and Charlotte branch offices elected the following to serve one-year terms as chairmen, effective Jan. 1, 2011...
http://jlne.ws/dGkJxs
CFTC Swap Plan May Save Billions in Bank Revenue
By Matthew Leising - Bloomberg
A revised proposal by the Commodity Futures Trading Commission for how private swaps can be traded will prevent dealers from losing billions of dollars in revenue, according to Moody's Investors Service analyst Alexander
Yavorsky.
http://jlne.ws/eQZ5fx
Basel eyes rules to push use of central counterparties
Reuters
Global banking regulators proposed on Monday that banks should only have to set aside small amounts of capital when dealing with supervised central counterparties, in a consultative paper aimed at further stabilising the financial system. Transactions carried out via central counterparties are seen as more transparent than those made in the over-the-counter deals. There is also greater liquidity in centrally cleared markets.
http://jlne.ws/i8a9xJ
FINRA had busy year in 2010
Press Release
The Financial Industry Regulatory Authority (FINRA) significantly expanded and enhanced its investor protection and market regulation capabilities in 2010 in each of the areas central to its investor protection mission, including: market and firm regulation, transparency, registration and disclosure, dispute resolution and investor education. FINRA's work progressed amid continuing changes sweeping financial markets, ongoing economic challenges and the implementation of a new industry regulatory framework.
http://jlne.ws/fgxSqg
ECB Warns Ireland on Legislation
BY Brian Blackstone, WSJ.com
The European Central Bank warned Ireland that proposed legislation revamping the country's financial system could threaten some of the ECB's operations, and pressed Irish officials for assurances that the central bank's collateral rights will be protected.
http://jlne.ws/eh8aXV
OTC
Derivatives clearing creates new battleground
By Jeremy Grant - Financial Times
Three months ago, the oldest bank in the world took a very 21st-century financial instrument and produced something new in global finance. Italy's Banca Monte dei Paschi di Siena, founded in 1472, arranged for interest rate swaps - a type of derivative used to insure against rate fluctuations - to be processed through a London clearing house. The move sounds arcane. But pushing derivatives into clearing houses is an important part of reforms initiated by the Group of 20 leading nations and now being implemented to help safeguard the system against another Lehman Brothers-style default.
http://jlne.ws/dG37Mt
House Republicans Urge Regulators to Exempt Manufacturers From Swaps Rules
Bloomberg
Two U.S. lawmakers who will take leadership roles in the next Congress said regulators must ensure manufacturers and
commercial end-users are exempt from margin requirements for the $583 trillion swaps market.
http://jlne.ws/eqp0Td
Commentary: The Role of SWAPs In The Financial Panic of 2008
Traders Magazine
There were many causes of the Financial Panic of 2008.
http://jlne.ws/e6Jwxr
Global News
Brazil Inflation Report Signals Rate Hike In January
by Win Thin, Credit Writedowns
Brazil central bank’s quarterly inflation report was quite hawkish, and caught the market off-guard after the
decidedly more dovish minutes from the December 7/8 COPOM meeting were reported last week. In those minutes, the
central bank put a lot of weight on its decision to hike reserve requirements December 3, calling it a “fast and
powerful” tool to contain domestic demand pressures. Some took this as a dovish slant with regards to less need for
SELIC rate hikes, but we disagreed then.
http://jlne.ws
German business boosted by easier credit
By Ralph Atkins Daniel Schäfer, FT.com
German companies’ access to credit is better than at any time since the global financial crisis first erupted, with
favourable financing conditions fuelling a boom in domestic demand in Europe’s largest economy, research shows.
http://jlne.ws/eJTySf
Swiss govt to tighten big bank rules, scrap bond tax
Reuters
The Swiss government on Wednesday kicked off the legal process to tighten regulation of its biggest banks, UBS
(UBSN.VX) and Credit Suisse (CSGN.VX), in order to prevent a bank failure crippling the country.
http://jlne.ws/ecpwRF
IMF PFM Blog: Korean Institute of Public Finance Hosts International Fiscal Experts Forum
Korea Hosts International Workshop on Fiscal Policy Issues
Against the backdrop of a severe fiscal crisis in some European countries, the Korean Institute of Public Finance
(KIPF) hosted an International Fiscal Experts Forum in early December 2010. A major aim was to promote an exchange
of views on fiscal policy issues, countries’ responses to the crisis, and relevant issues for Korea. The workshop
brought together a number of prominent speakers, scholars, and practitioners from various countries. The topics
covered included: fiscal policies after the crisis, budget performance management, accrual accounting, the impact of
the crisis on subnational governments, and recent issues in legal frameworks for budget systems.
http://bit.ly/h9exyB
Banks to overhaul global pay structures
By Patrick Jenkins in London - Financial Times
The world's biggest investment banks are to overhaul their pay structures to differentiate between bankers based in
Europe and those who work elsewhere, after European regulators' clampdown on bonuses. Many US and Swiss banks are
considering paying higher salaries and lower bonuses to top bankers based in the European Union, mostly in London,
to ensure they comply with new instructions from the Committee of European Banking Supervisors (CEBS), the pan-EU
regulator, limiting cash pay-outs.
http://jlne.ws/hYS8oQ
Irish Banks' Credit Slashed Again
TheStreet.com
Five of Ireland's remaining banks had their credit rating downgraded on Monday. Allied Irish Banks , Bank of
Ireland, EBS Building Society, Irish Life & Permanent, ICS Building Society and Irish Nationwide Building
Society each had their credit rating lowered several notches by Moody's Investor Services. The downgrades were
applied to several layers of the banks' ratable ...
http://jlne.ws/fXuGbt
U.K. Could Have Sought $3 Billion More for Insuring RBS Assets, NAO Finds
Bloomberg
An "exit fee" of as much as 4.4 billion pounds for the early termination of the taxpayer-funded Asset Protection
Scheme could be justified, the NAO said in a report published today. Instead, RBS last year agreed to pay 2.5
billion pounds were it to exit the program.
http://jlne.ws/eHABH4
Banks told must restrain bonus payments
Reuters Finance News (EU) via Yahoo! UK & Ireland Finance
British politicians and the Bank of England stepped up pressure on banks on Friday to rein in bonuses, as a new code
on bonus curbs from the country's financial regulator said some ...
http://jlne.ws/g7FJva
Banks face an extra L80bn of bad debts
Daily Telegraph
Britain's four largest lenders are facing losses on loans to consumers of up to L80bn over their own forecasts, the
central bank has warned in its latest Financial Stability Report.
http://jlne.ws/fEfLYk
Moody's cuts Irish bank ratings
The Globe And Mail
Ratings agency Moody's on Monday downgraded four Irish banks and an insurer, including some of the liabilities
guaranteed by the government – a reminder of the financial mess the country faces at it begins to draw on an
international rescue loan.
http://jlne.ws/gBU3FO
Outrageous Predictions - Saxo Bank
This is a “Black Swan Exercise,” inspired by Nassim Nicholas Taleb, the Lebanese philosophical essayist, produced each year as a forward-looking thought piece for Saxo Bank’s clients. In the book, The Black Swan: The Impact of the Highly Improbable, Taleb stresses that a Black Swan event is a highly improbable event with three principal characteristics: It is unpredictable; it carries massive impact; and, after the fact, an explanation is discussed that makes it appear less random, and more predictable, than it was. Saxo Bank’s 10 Outrageous Predictions might be useful to stress test a portfolio or to think about a far out-of-the-money option. Readers should also note that this is not an entirely scientific exercise, and the predictions are not designed to be anything of the sort. In past years, Saxo Bank has been right four out of 10 times.
See the entire Saxo Bank report here.
***An interesting little factoid here, Kim Fournais, who founded Saxo Bank along with Lars Christensen, owns the Danish island of Vejroe.
Lead Stories
Holiday Shopping Trends Could Bring Cheer to Fed
By Kathleen Madigan, WSJ.com
Much has been made of how the better holiday sales are lifting U.S. economic growth. Retail trends, however, are also playing a role in inflation for this quarter — possibly helping the Federal Reserve achieve its policy goals.
http://jlne.ws/herduu
Federal Reserve Places 70% Per-Security Limit on Treasury Debt Holdings
By Liz Capo McCormick, Bloomberg
The Federal Reserve said it will limit its purchases to 70 percent of any single Treasury security as part of its plan to expand its balance sheet that’s known as quantitative easing.
http://jlne.ws/dYszcc
Roubini, others call for U.S. mortgage standards
By Corbett B. Daly, Reuters
A group of investors and prominent academics on Tuesday urged the creation of national standards for U.S. residential mortgages to help borrowers who are having trouble getting home loans.
http://jlne.ws/dV9zaH
Bloomberg Sues ECB to Force Disclosure of How Greece's Swaps Hid Deficit
By Elisa Martinuzzi and Alan Katz, Bloomberg
Bloomberg News filed a lawsuit against the European Central Bank, seeking the disclosure of documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis.
http://jlne.ws/i1xxKy
**CN: As a side note, Bloomberg was the first to get the scoop on this one.
Americans now use debit cards for more noncash payments than any other means
Press Release - Board of Governors, Federal Reserve System
The Federal Reserve's 2010 study of noncash payments released today revealed that in 2009 more than three-quarters of all U.S. noncash payments were made electronically, a 9.3 percent annual increase since the Federal Reserve's last study in 2007. This growth and other statistics in the study emphasize consumers' increasing adoption of electronic alternatives for payments in the United States. The 2007 study revealed that in 2006 roughly two-thirds of the payments were made electronically.
http://jlne.ws/h0bbt2
Bond Market Rejects Fed's Unconditional Love: Caroline Baum
By Caroline Baum, Bloomberg
How’s that QE2 working out for you? To answer the question, we first have to establish the goals of a second round of quantitative easing as laid out by Federal Reserve Chairman Ben Bernanke. The Fed’s purchases of U.S. Treasuries “affect the economy primarily by lowering interest rates on securities of longer maturities,” Bernanke explained in a Nov. 19 speech in Frankfurt. Lower rates equate to more “accommodative financial conditions,” he said.
http://jlne.ws/gppYua
How investment banks shape up after crisis
By Megan Murphy, Justin Baer, Francesco Guerrera, Patrick Jenkins, Jeremy Grant, Martin Arnold and Sam Jones -
Financial Times
In the past decade the investment banking world was hit by a virus. Known as "Goldman envy", it prompted the likes of Morgan Stanley, Merrill Lynch and UBS - and the now-defunct Lehman Brothers and Bear Stearns - to ratchet up risks to try to replicate Goldman Sachs' strong profit growth.
http://jlne.ws/h8gtxm
Meredith Whitney On 60 Minutes: Muni Bond Troubles Ahead
By Scott Rubin, Benzinga
Noted Wall Street analyst Meredith Whitney appeared on 60 Minutes on Sunday night and voiced an ominous outlook for the municipal bond market. She said that states' fiscal problems may cause a "spate" of defaults among
municipalities.
http://jlne.ws/fkwV08
Ernst And Young Said to Face Fraud Lawsuit Over Lehman Audits
By Karen Freifeld and Linda Sandler, Bloomberg
Ernst And Young LLP will be sued for fraud by New York Attorney General Andrew Cuomo for allegedly helping Lehman Brothers Holdings Inc. mislead investors, according to a person familiar with the matter.
http://jlne.ws/gTXYiT
U.S. Treasury Department Statement On House Passage Of Tax Cut, Unemployment Insurance Package
Press Release
The U.S. Department of the Treasury today released the following statement from Treasury Secretary Tim Geithner regarding the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 by the House of Representatives...
http://jlne.ws/cxgbC7
New York Fed purchases $1.619 billion in TIPS: New York Fed purchases $1.619 billion in TIPS
Federal Reserve Bank of New York. The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://bit.ly/dU6jwB
Events
Introduction to Treasury Futures: Factoring the Risks, New York
When: January 13, 2011
Where: New York
Who: Institute for Financial Markets
Full Info: www.theifm.org
Details: Treasury futures are one of the most popular futures contracts for both hedging and speculating. Some of the factors that influence value in the treasury complex include: interest rate risk, inflation risk, and the willingness of investors to continue buying Treasury debt. These factors lead to volatility in the underlying value of debt instruments as interest rates move up or down. If your business borrows money, you can mitigate the effects of higher or lower interest rates by trading the treasury future complex. Moreover, with treasury interest rate levels at multi-generational lows, a robust case can be made for hedging the threat of higher interest rates in the future now -before interest rates return to 'normal' levels. This IFM short course provides the foundation to understand how the cash and futures markets are connected, and how to guard against interest rate volatility.
The 36th Annual International Futures Industry Conference
When: March 15-18, 2011
Who: FIA
Where: Boca Raton Resort & Club
Full info: http://campaign.r20.constantcontact.com/render?llr=fwgtyucab&v=001WeBrwlP3VB1EJrvzuxUwxDg8fsg1Z8ZYjylTYIAfiEPOHumaM4PToYW-FxqnOsfyAaSlhRYAWrgj0P8-SYrVuEM53baCN9cyh3I5I-IOKZ3QwiUb2qUbyhwPmrOiHmw_Gt-oUr577qg%3D
Details: As one of FIA's premier events, the 36th Annual International Futures Industry Conference is host to an influential audience of 800 senior-level futures industry professionals, brokerage executives, technology and operations officers, exchange officials, money managers, and public policy leaders. Delegates from more than 30 countries attend this annual event.
SIFMA 2nd Annual Private Client Conference
When: Apr. 7 and 8, 2011
Who: SIFMA
Where: New York City
Full Info: Full info: http://www.sifma.org/events/event.aspx?id=22289
Details: On April 7 and 8, the SIFMA 2nd Annual Private Client Conference, "Client First: Delivering the Vision," will build on the success of the inaugural Private Client Conference during the spring. This two-day event combines the strengths of SIFMA's former Sales & Marketing, Small Firms and Independent Firms conferences, producing North America's premier conference for private client groups at all levels. This conference is designed for senior managers in private client groups at global, regional, independent contractor and small broker-dealers, including national sales managers, regional directors, branch managers, wealth-management specialists, marketing specialists, and individual financial advisers and investment consultants.
Economic News
Third-quarter GDP raised, home sales bounce back
Reuters
Sales of previously owned U.S. homes rose in November, offering the latest sign the economy was ending the year on a more solid footing after a sluggish third-quarter performance.
http://jlne.ws/fyL0nl
Raising GDP growth estimates for 2011 on tax agreement, now forecast 3.1% in Q1
Reuters
JPMorgan (JPM.N) took a hit in its equity capital markets business in 2010 even though its dominance in debt markets allowed it to cling on to the global top spot for investment banking fees.
http://ht.ly/3sadW
Exchanges, Clearing Houses & MTFs
ELX to SEC: new rules unfairly benefit NYSE
By Ann Saphir, Reuters
ELX Futures LP told regulators late Wednesday that a proposed rule would give NYSE Euronext's U.S. futures exchange an unfair advantage against ELX in competing against CME Group Inc, and should be rejected. ELX Futures, whose own attempt to challenge CME Group 's dominance in the lucrative market for Treasury futures trading has met with limited success, said that the proposed rule will enshrine NYSE Euronext 's co-owned New York Portfolio Clearing as
a "monopolist."
http://jlne.ws/gzDj6u
Firms & Banks
Deutsche Bank to pay $550 million in tax shelter case
By Blake Ellis, CNNMoney
Deutsche Bank AG agreed Tuesday to pay more than $550 million for taking part in fraudulent federal tax shelters, according to federal regulators.
http://jlne.ws/i0kegp
JPMorgan tops fee pool, equity business takes hit
By Sarah White, Reuters
JPMorgan (JPM.N) took a hit in its equity capital markets business in 2010 even though its dominance in debt markets allowed it to cling on to the global top spot for investment banking fees.
http://jlne.ws/flz4NU
Bottom line on bonuses: Banks not that profitable
The Globe and Mail
The average return on equity for U.S. and European banks is barely 5 per cent
http://jlne.ws/hDQKGZ
Bankers face new year uncertainty
Investors Chronicle
The global financial crisis, followed quickly by a deep recession, has already meant plenty of change for the UK's beleaguered banks. Indeed, two of them - Royal Bank of Scotland (RBS) and Lloyds - are now heavily state owned after the government took big stakes in order to recapitalise the pair.
http://jlne.ws/eRJfZl
Goldman Sachs Strategy: 'Be Goldman in More Places'
Wall Street Journal Blogs
Nomura analyst Glenn Schorr -- who was bearish on Goldman Sachs last week -- today said he's feeling a bit better about the investment bank's outlook for 2011.
http://jlne.ws/gySUoR
Goldman Sachs's Blankfein Is `Reasonably Bullish,' Nomura's Schorr Says
Bloomberg
Goldman Sachs Group Inc. 's top executives view investment banking as having the best prospects next year and expect fixed-income to pick up as well, according to Nomura Holdings Inc.
http://jlne.ws/eOTDT0
Morgan Stanley's CEO James Gorman Explains Why They're Getting All The Government's Business
Business Insider
James Gorman talked to CNBC about whats next for Morgan Stanley and why it's the government's bank of choice. He is a bundle of positivity about the market, and his bank.
http://jlne.ws/dUKPqt
Wells Fargo hires Deutsche Bank executive
San Francisco Chronicle
Wells Fargo & Co., the fourth-largest U.S. lender by assets, hired John Fowler, who has led European health care at Deutsche Bank AG, and five managing directors to expand its investment-banking division. Fowler will be...
http://jlne.ws/hRUrVt
How Deutsche kept a pension scandal firm afloat
CNN Money
A Dallas-based private equity investor will be sentenced early next year for his role in New York's public pensionkickback scandal. What won't be mentioned, however, is how a major Wall Street bank may have helped keep him in business.
http://jlne.ws/hqd3IJ
Wells Fargo Securities Hires Six Senior Investment Bankers
Business Wire
Wells Fargo Securities, part of Wells Fargo & Company, today announced that six senior investment bankers are joining its Investment Banking and Capital Markets division.
http://jlne.ws/guHRXV
Arizona sues Bank of America over mortgage servicing
Reuters
The state of Arizona has sued Bank of America Corp (BAC.N), alleging that the bank has consistently misled consumersabout its home loan modification process, a source familiar with the situation said.
http://jlne.ws/gCAJtT
RBS Sells $6.1 Billion of Assets to Mitsubishi UFJ
BusinessWeek
Royal Bank of Scotland Group Plc sold about 3.9 billion pounds ($6.1 billion) of project finance assets to Bank of Tokyo-Mitsubishi UFJ Ltd.
http://jlne.ws/f8UUve
Goldman Deal Pushes Commercial Mortgage Bond Sales Past $11 Billion Mark
Bloomberg
Goldman Sachs Group Inc. and Citigroup Inc. sold $876.45 million of bonds linked to U.S. commercial real estate, pushing 2010 sales to $11.5 billion as strategists forecast next year's offerings will quadruple.
http://jlne.ws/g7Wxjj
Citigroup Opens High Tech Branch in Union Square
NYConvergence
In an effort to spruce up its consumer facing operations, Citigroup Inc. is opening a flashy new branch in Union Square today at the location of the Virgin Megastore that closed down mid 2009. The branch, apparently the first in a string of planned 'flagship' branches in major US and international cities, features laptops and [...]
http://jlne.ws/eO7Kn9
Morgan Stanley CEO: I will escort out any bonus leakers
New York Post
Talk about going off script. Morgan Stanley Chief Executive James Gorman raised some eyebrows during a routine conference this week when he threatened to "personally escort" [out] anyone found leaking any details of the firm's compensation levels to the media, The Post has learned. Gorman, who has been pushing...
http://jlne.ws/e8PsRK
Morgan Stanley on track to top Europe's M And A rankings
eFinancial News
Morgan Stanley is on track to top the coveted mergers and acquisitions league tables for Europe for a second year in a row, in what turned out to be another dismal 12 months for deal-making in the region.
http://jlne.ws/fGkk3n
Diamond to Become Barclays CEO Three Months Earlier
By Jon Menon and Gavin Finch, Bloomberg
Barclays Plc, Britain's third- biggest bank, said Robert Diamond will take over as chief executive officer three
months earlier than planned.
http://jlne.ws/i6KKAx
Bank of America appeals $595 million Lehman ruling
Reuters
Bank of America (BAC.N) has appealed a bankruptcy court order that it must pay Lehman Brothers Holding Inc
(LEHMQ.PK) about $595 million, according to court documents.
http://jlne.ws/erh4xv
Regulators
Board Chairmen Selected for Richmond Fed Branch Offices
Federal Reserve Bank of Richmond
The boards of directors of the Federal Reserve Bank of Richmond's Baltimore and Charlotte branch offices elected the following to serve one-year terms as chairmen, effective Jan. 1, 2011...
http://jlne.ws/dGkJxs
CFTC Swap Plan May Save Billions in Bank Revenue
By Matthew Leising - Bloomberg
A revised proposal by the Commodity Futures Trading Commission for how private swaps can be traded will prevent dealers from losing billions of dollars in revenue, according to Moody's Investors Service analyst Alexander
Yavorsky.
http://jlne.ws/eQZ5fx
Basel eyes rules to push use of central counterparties
Reuters
Global banking regulators proposed on Monday that banks should only have to set aside small amounts of capital when dealing with supervised central counterparties, in a consultative paper aimed at further stabilising the financial system. Transactions carried out via central counterparties are seen as more transparent than those made in the over-the-counter deals. There is also greater liquidity in centrally cleared markets.
http://jlne.ws/i8a9xJ
FINRA had busy year in 2010
Press Release
The Financial Industry Regulatory Authority (FINRA) significantly expanded and enhanced its investor protection and market regulation capabilities in 2010 in each of the areas central to its investor protection mission, including: market and firm regulation, transparency, registration and disclosure, dispute resolution and investor education. FINRA's work progressed amid continuing changes sweeping financial markets, ongoing economic challenges and the implementation of a new industry regulatory framework.
http://jlne.ws/fgxSqg
ECB Warns Ireland on Legislation
BY Brian Blackstone, WSJ.com
The European Central Bank warned Ireland that proposed legislation revamping the country's financial system could threaten some of the ECB's operations, and pressed Irish officials for assurances that the central bank's collateral rights will be protected.
http://jlne.ws/eh8aXV
OTC
Derivatives clearing creates new battleground
By Jeremy Grant - Financial Times
Three months ago, the oldest bank in the world took a very 21st-century financial instrument and produced something new in global finance. Italy's Banca Monte dei Paschi di Siena, founded in 1472, arranged for interest rate swaps - a type of derivative used to insure against rate fluctuations - to be processed through a London clearing house. The move sounds arcane. But pushing derivatives into clearing houses is an important part of reforms initiated by the Group of 20 leading nations and now being implemented to help safeguard the system against another Lehman Brothers-style default.
http://jlne.ws/dG37Mt
House Republicans Urge Regulators to Exempt Manufacturers From Swaps Rules
Bloomberg
Two U.S. lawmakers who will take leadership roles in the next Congress said regulators must ensure manufacturers and
commercial end-users are exempt from margin requirements for the $583 trillion swaps market.
http://jlne.ws/eqp0Td
Commentary: The Role of SWAPs In The Financial Panic of 2008
Traders Magazine
There were many causes of the Financial Panic of 2008.
http://jlne.ws/e6Jwxr
Global News
Brazil Inflation Report Signals Rate Hike In January
by Win Thin, Credit Writedowns
Brazil central bank’s quarterly inflation report was quite hawkish, and caught the market off-guard after the
decidedly more dovish minutes from the December 7/8 COPOM meeting were reported last week. In those minutes, the
central bank put a lot of weight on its decision to hike reserve requirements December 3, calling it a “fast and
powerful” tool to contain domestic demand pressures. Some took this as a dovish slant with regards to less need for
SELIC rate hikes, but we disagreed then.
http://jlne.ws
German business boosted by easier credit
By Ralph Atkins Daniel Schäfer, FT.com
German companies’ access to credit is better than at any time since the global financial crisis first erupted, with
favourable financing conditions fuelling a boom in domestic demand in Europe’s largest economy, research shows.
http://jlne.ws/eJTySf
Swiss govt to tighten big bank rules, scrap bond tax
Reuters
The Swiss government on Wednesday kicked off the legal process to tighten regulation of its biggest banks, UBS
(UBSN.VX) and Credit Suisse (CSGN.VX), in order to prevent a bank failure crippling the country.
http://jlne.ws/ecpwRF
IMF PFM Blog: Korean Institute of Public Finance Hosts International Fiscal Experts Forum
Korea Hosts International Workshop on Fiscal Policy Issues
Against the backdrop of a severe fiscal crisis in some European countries, the Korean Institute of Public Finance
(KIPF) hosted an International Fiscal Experts Forum in early December 2010. A major aim was to promote an exchange
of views on fiscal policy issues, countries’ responses to the crisis, and relevant issues for Korea. The workshop
brought together a number of prominent speakers, scholars, and practitioners from various countries. The topics
covered included: fiscal policies after the crisis, budget performance management, accrual accounting, the impact of
the crisis on subnational governments, and recent issues in legal frameworks for budget systems.
http://bit.ly/h9exyB
Banks to overhaul global pay structures
By Patrick Jenkins in London - Financial Times
The world's biggest investment banks are to overhaul their pay structures to differentiate between bankers based in
Europe and those who work elsewhere, after European regulators' clampdown on bonuses. Many US and Swiss banks are
considering paying higher salaries and lower bonuses to top bankers based in the European Union, mostly in London,
to ensure they comply with new instructions from the Committee of European Banking Supervisors (CEBS), the pan-EU
regulator, limiting cash pay-outs.
http://jlne.ws/hYS8oQ
Irish Banks' Credit Slashed Again
TheStreet.com
Five of Ireland's remaining banks had their credit rating downgraded on Monday. Allied Irish Banks , Bank of
Ireland, EBS Building Society, Irish Life & Permanent, ICS Building Society and Irish Nationwide Building
Society each had their credit rating lowered several notches by Moody's Investor Services. The downgrades were
applied to several layers of the banks' ratable ...
http://jlne.ws/fXuGbt
U.K. Could Have Sought $3 Billion More for Insuring RBS Assets, NAO Finds
Bloomberg
An "exit fee" of as much as 4.4 billion pounds for the early termination of the taxpayer-funded Asset Protection
Scheme could be justified, the NAO said in a report published today. Instead, RBS last year agreed to pay 2.5
billion pounds were it to exit the program.
http://jlne.ws/eHABH4
Banks told must restrain bonus payments
Reuters Finance News (EU) via Yahoo! UK & Ireland Finance
British politicians and the Bank of England stepped up pressure on banks on Friday to rein in bonuses, as a new code
on bonus curbs from the country's financial regulator said some ...
http://jlne.ws/g7FJva
Banks face an extra L80bn of bad debts
Daily Telegraph
Britain's four largest lenders are facing losses on loans to consumers of up to L80bn over their own forecasts, the
central bank has warned in its latest Financial Stability Report.
http://jlne.ws/fEfLYk
Moody's cuts Irish bank ratings
The Globe And Mail
Ratings agency Moody's on Monday downgraded four Irish banks and an insurer, including some of the liabilities
guaranteed by the government – a reminder of the financial mess the country faces at it begins to draw on an
international rescue loan.
http://jlne.ws/gBU3FO
Selasa, 21 Desember 2010
Top Interest Rate Headlines 12-21-10: Federal Reserve Places 70% Per-Security Limit on Treasury Debt Holdings
Federal Reserve Places 70% Per-Security Limit on Treasury Debt Holdings
By Liz Capo McCormick, Bloomberg
The Federal Reserve said it will limit its purchases to 70 percent of any single Treasury security as part of its plan to expand its balance sheet that’s known as quantitative easing.
http://jlne.ws/dYszcc
Deutsche Bank to pay $550 million in tax shelter case
By Blake Ellis, CNNMoney
Deutsche Bank AG agreed Tuesday to pay more than $550 million for taking part in fraudulent federal tax shelters, according to federal regulators.
http://jlne.ws/i0kegp
New York Fed purchases $1.619 billion in TIPS: New York Fed purchases $1.619 billion in TIPS
Federal Reserve Bank of New York
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://bit.ly/dU6jwB
Americans now use debit cards for more noncash payments than any other means
Press Release - Board of Governors, Federal Reserve System
The Federal Reserve's 2010 study of noncash payments released today revealed that in 2009 more than three-quarters of all U.S. noncash payments were made electronically, a 9.3 percent annual increase since the Federal Reserve's last study in 2007. This growth and other statistics in the study emphasize consumers' increasing adoption of electronic alternatives for payments in the United States. The 2007 study revealed that in 2006 roughly two-thirds of the payments were made electronically.
http://jlne.ws/h0bbt2
Bond Market Rejects Fed's Unconditional Love: Caroline Baum
By Caroline Baum, Bloomberg
How’s that QE2 working out for you? To answer the question, we first have to establish the goals of a second round of quantitative easing as laid out by Federal Reserve Chairman Ben Bernanke. The Fed’s purchases of U.S. Treasuries “affect the economy primarily by lowering interest rates on securities of longer maturities,” Bernanke explained in a Nov. 19 speech in Frankfurt. Lower rates equate to more “accommodative financial conditions,” he said.
http://jlne.ws/gppYua
IMF PFM Blog: Korean Institute of Public Finance Hosts International Fiscal Experts Forum
Korea Hosts International Workshop on Fiscal Policy Issues
Against the backdrop of a severe fiscal crisis in some European countries, the Korean Institute of Public Finance (KIPF) hosted an International Fiscal Experts Forum in early December 2010. A major aim was to promote an exchange of views on fiscal policy issues, countries’ responses to the crisis, and relevant issues for Korea. The workshop brought together a number of prominent speakers, scholars, and practitioners from various countries. The topics covered included: fiscal policies after the crisis, budget performance management, accrual accounting, the impact of the crisis on subnational governments, and recent issues in legal frameworks for budget systems.
http://bit.ly/h9exyB
Banks to overhaul global pay structures
By Patrick Jenkins in London - Financial Times
The world's biggest investment banks are to overhaul their pay structures to differentiate between bankers based in Europe and those who work elsewhere, after European regulators' clampdown on bonuses. Many US and Swiss banks are considering paying higher salaries and lower bonuses to top bankers based in the European Union, mostly in London, to ensure they comply with new instructions from the Committee of European Banking Supervisors (CEBS), the pan-EU regulator, limiting cash pay-outs.
http://jlne.ws/hYS8oQ
CFTC Swap Plan May Save Billions in Bank Revenue
By Matthew Leising - Bloomberg
A revised proposal by the Commodity Futures Trading Commission for how private swaps can be traded will prevent dealers from losing billions of dollars in revenue, according to Moody's Investors Service analyst Alexander Yavorsky.
http://jlne.ws/eQZ5fx
Derivatives clearing creates new battleground
By Jeremy Grant - Financial Times
Three months ago, the oldest bank in the world took a very 21st-century financial instrument and produced something new in global finance. Italy's Banca Monte dei Paschi di Siena, founded in 1472, arranged for interest rate swaps - a type of derivative used to insure against rate fluctuations - to be processed through a London clearing house. The move sounds arcane. But pushing derivatives into clearing houses is an important part of reforms initiated by the Group of 20 leading nations and now being implemented to help safeguard the system against another Lehman Brothers-style default.
http://jlne.ws/dG37Mt
How investment banks shape up after crisis
By Megan Murphy, Justin Baer, Francesco Guerrera, Patrick Jenkins, Jeremy Grant, Martin Arnold and Sam Jones - Financial Times
In the past decade the investment banking world was hit by a virus. Known as "Goldman envy", it prompted the likes of Morgan Stanley, Merrill Lynch and UBS - and the now-defunct Lehman Brothers and Bear Stearns - to ratchet up risks to try to replicate Goldman Sachs' strong profit growth.
http://jlne.ws/h8gtxm
Irish Banks' Credit Slashed Again
TheStreet.com
Five of Ireland's remaining banks had their credit rating downgraded on Monday. Allied Irish Banks , Bank of Ireland, EBS Building Society, Irish Life & Permanent, ICS Building Society and Irish Nationwide Building Society each had their credit rating lowered several notches by Moody's Investor Services. The downgrades were applied to several layers of the banks' ratable ...
http://jlne.ws/fXuGbt
Bottom line on bonuses: Banks not that profitable
The Globe and Mail
The average return on equity for U.S. and European banks is barely 5 per cent
http://jlne.ws/hDQKGZ
U.K. Could Have Sought $3 Billion More for Insuring RBS Assets, NAO Finds
Bloomberg
An "exit fee" of as much as 4.4 billion pounds for the early termination of the taxpayer-funded Asset Protection Scheme could be justified, the NAO said in a report published today. Instead, RBS last year agreed to pay 2.5 billion pounds were it to exit the program.
http://jlne.ws/eHABH4
Bankers face new year uncertainty
Investors Chronicle
The global financial crisis, followed quickly by a deep recession, has already meant plenty of change for the UK's beleaguered banks. Indeed, two of them - Royal Bank of Scotland (RBS) and Lloyds - are now heavily state owned after the government took big stakes in order to recapitalise the pair.
http://jlne.ws/eRJfZl
Goldman Sachs Strategy: 'Be Goldman in More Places'
Wall Street Journal Blogs
Nomura analyst Glenn Schorr -- who was bearish on Goldman Sachs last week -- today said he's feeling a bit better about the investment bank's outlook for 2011.
http://jlne.ws/gySUoR
Goldman Sachs's Blankfein Is `Reasonably Bullish,' Nomura's Schorr Says
Bloomberg
Goldman Sachs Group Inc. 's top executives view investment banking as having the best prospects next year and expect fixed-income to pick up as well, according to Nomura Holdings Inc.
http://jlne.ws/eOTDT0
Morgan Stanley's CEO James Gorman Explains Why They're Getting All The Government's Business
Business Insider
James Gorman talked to CNBC about whats next for Morgan Stanley and why it's the government's bank of choice. He is a bundle of positivity about the market, and his bank.
http://jlne.ws/dUKPqt
Wells Fargo hires Deutsche Bank executive
San Francisco Chronicle
Wells Fargo & Co., the fourth-largest U.S. lender by assets, hired John Fowler, who has led European health care at Deutsche Bank AG, and five managing directors to expand its investment-banking division. Fowler will be...
http://jlne.ws/hRUrVt
How Deutsche kept a pension scandal firm afloat
CNN Money
A Dallas-based private equity investor will be sentenced early next year for his role in New York's public pension kickback scandal. What won't be mentioned, however, is how a major Wall Street bank may have helped keep him in business.
http://jlne.ws/hqd3IJ
Wells Fargo Securities Hires Six Senior Investment Bankers
Business Wire
Wells Fargo Securities, part of Wells Fargo & Company, today announced that six senior investment bankers are joining its Investment Banking and Capital Markets division.
http://jlne.ws/guHRXV
By Liz Capo McCormick, Bloomberg
The Federal Reserve said it will limit its purchases to 70 percent of any single Treasury security as part of its plan to expand its balance sheet that’s known as quantitative easing.
http://jlne.ws/dYszcc
Deutsche Bank to pay $550 million in tax shelter case
By Blake Ellis, CNNMoney
Deutsche Bank AG agreed Tuesday to pay more than $550 million for taking part in fraudulent federal tax shelters, according to federal regulators.
http://jlne.ws/i0kegp
New York Fed purchases $1.619 billion in TIPS: New York Fed purchases $1.619 billion in TIPS
Federal Reserve Bank of New York
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://bit.ly/dU6jwB
Americans now use debit cards for more noncash payments than any other means
Press Release - Board of Governors, Federal Reserve System
The Federal Reserve's 2010 study of noncash payments released today revealed that in 2009 more than three-quarters of all U.S. noncash payments were made electronically, a 9.3 percent annual increase since the Federal Reserve's last study in 2007. This growth and other statistics in the study emphasize consumers' increasing adoption of electronic alternatives for payments in the United States. The 2007 study revealed that in 2006 roughly two-thirds of the payments were made electronically.
http://jlne.ws/h0bbt2
Bond Market Rejects Fed's Unconditional Love: Caroline Baum
By Caroline Baum, Bloomberg
How’s that QE2 working out for you? To answer the question, we first have to establish the goals of a second round of quantitative easing as laid out by Federal Reserve Chairman Ben Bernanke. The Fed’s purchases of U.S. Treasuries “affect the economy primarily by lowering interest rates on securities of longer maturities,” Bernanke explained in a Nov. 19 speech in Frankfurt. Lower rates equate to more “accommodative financial conditions,” he said.
http://jlne.ws/gppYua
IMF PFM Blog: Korean Institute of Public Finance Hosts International Fiscal Experts Forum
Korea Hosts International Workshop on Fiscal Policy Issues
Against the backdrop of a severe fiscal crisis in some European countries, the Korean Institute of Public Finance (KIPF) hosted an International Fiscal Experts Forum in early December 2010. A major aim was to promote an exchange of views on fiscal policy issues, countries’ responses to the crisis, and relevant issues for Korea. The workshop brought together a number of prominent speakers, scholars, and practitioners from various countries. The topics covered included: fiscal policies after the crisis, budget performance management, accrual accounting, the impact of the crisis on subnational governments, and recent issues in legal frameworks for budget systems.
http://bit.ly/h9exyB
Banks to overhaul global pay structures
By Patrick Jenkins in London - Financial Times
The world's biggest investment banks are to overhaul their pay structures to differentiate between bankers based in Europe and those who work elsewhere, after European regulators' clampdown on bonuses. Many US and Swiss banks are considering paying higher salaries and lower bonuses to top bankers based in the European Union, mostly in London, to ensure they comply with new instructions from the Committee of European Banking Supervisors (CEBS), the pan-EU regulator, limiting cash pay-outs.
http://jlne.ws/hYS8oQ
CFTC Swap Plan May Save Billions in Bank Revenue
By Matthew Leising - Bloomberg
A revised proposal by the Commodity Futures Trading Commission for how private swaps can be traded will prevent dealers from losing billions of dollars in revenue, according to Moody's Investors Service analyst Alexander Yavorsky.
http://jlne.ws/eQZ5fx
Derivatives clearing creates new battleground
By Jeremy Grant - Financial Times
Three months ago, the oldest bank in the world took a very 21st-century financial instrument and produced something new in global finance. Italy's Banca Monte dei Paschi di Siena, founded in 1472, arranged for interest rate swaps - a type of derivative used to insure against rate fluctuations - to be processed through a London clearing house. The move sounds arcane. But pushing derivatives into clearing houses is an important part of reforms initiated by the Group of 20 leading nations and now being implemented to help safeguard the system against another Lehman Brothers-style default.
http://jlne.ws/dG37Mt
How investment banks shape up after crisis
By Megan Murphy, Justin Baer, Francesco Guerrera, Patrick Jenkins, Jeremy Grant, Martin Arnold and Sam Jones - Financial Times
In the past decade the investment banking world was hit by a virus. Known as "Goldman envy", it prompted the likes of Morgan Stanley, Merrill Lynch and UBS - and the now-defunct Lehman Brothers and Bear Stearns - to ratchet up risks to try to replicate Goldman Sachs' strong profit growth.
http://jlne.ws/h8gtxm
Irish Banks' Credit Slashed Again
TheStreet.com
Five of Ireland's remaining banks had their credit rating downgraded on Monday. Allied Irish Banks , Bank of Ireland, EBS Building Society, Irish Life & Permanent, ICS Building Society and Irish Nationwide Building Society each had their credit rating lowered several notches by Moody's Investor Services. The downgrades were applied to several layers of the banks' ratable ...
http://jlne.ws/fXuGbt
Bottom line on bonuses: Banks not that profitable
The Globe and Mail
The average return on equity for U.S. and European banks is barely 5 per cent
http://jlne.ws/hDQKGZ
U.K. Could Have Sought $3 Billion More for Insuring RBS Assets, NAO Finds
Bloomberg
An "exit fee" of as much as 4.4 billion pounds for the early termination of the taxpayer-funded Asset Protection Scheme could be justified, the NAO said in a report published today. Instead, RBS last year agreed to pay 2.5 billion pounds were it to exit the program.
http://jlne.ws/eHABH4
Bankers face new year uncertainty
Investors Chronicle
The global financial crisis, followed quickly by a deep recession, has already meant plenty of change for the UK's beleaguered banks. Indeed, two of them - Royal Bank of Scotland (RBS) and Lloyds - are now heavily state owned after the government took big stakes in order to recapitalise the pair.
http://jlne.ws/eRJfZl
Goldman Sachs Strategy: 'Be Goldman in More Places'
Wall Street Journal Blogs
Nomura analyst Glenn Schorr -- who was bearish on Goldman Sachs last week -- today said he's feeling a bit better about the investment bank's outlook for 2011.
http://jlne.ws/gySUoR
Goldman Sachs's Blankfein Is `Reasonably Bullish,' Nomura's Schorr Says
Bloomberg
Goldman Sachs Group Inc. 's top executives view investment banking as having the best prospects next year and expect fixed-income to pick up as well, according to Nomura Holdings Inc.
http://jlne.ws/eOTDT0
Morgan Stanley's CEO James Gorman Explains Why They're Getting All The Government's Business
Business Insider
James Gorman talked to CNBC about whats next for Morgan Stanley and why it's the government's bank of choice. He is a bundle of positivity about the market, and his bank.
http://jlne.ws/dUKPqt
Wells Fargo hires Deutsche Bank executive
San Francisco Chronicle
Wells Fargo & Co., the fourth-largest U.S. lender by assets, hired John Fowler, who has led European health care at Deutsche Bank AG, and five managing directors to expand its investment-banking division. Fowler will be...
http://jlne.ws/hRUrVt
How Deutsche kept a pension scandal firm afloat
CNN Money
A Dallas-based private equity investor will be sentenced early next year for his role in New York's public pension kickback scandal. What won't be mentioned, however, is how a major Wall Street bank may have helped keep him in business.
http://jlne.ws/hqd3IJ
Wells Fargo Securities Hires Six Senior Investment Bankers
Business Wire
Wells Fargo Securities, part of Wells Fargo & Company, today announced that six senior investment bankers are joining its Investment Banking and Capital Markets division.
http://jlne.ws/guHRXV
Senin, 20 Desember 2010
Top Interest Rate Headlines 12-20-10: Moody's Cuts Irish Bank Ratings
Moody's cuts Irish bank ratings
http://jlne.ws/gBU3FO
Basel eyes rules to push use of central counterparties
http://jlne.ws/i8a9xJ
Meredith Whitney On 60 Minutes: Muni Bond Troubles Ahead
http://jlne.ws/fkwV08
FINRA had busy year in 2010
http://jlne.ws/fgxSqg
Ernst & Young Said to Face Fraud Lawsuit Over Lehman Audits
http://jlne.ws/gTXYiT
ECB Warns Ireland on Legislation
http://jlne.ws/eh8aXV
Outrageous Predictions - Saxo Bank
http://jlne.ws/hYxeam
http://jlne.ws/gBU3FO
Basel eyes rules to push use of central counterparties
http://jlne.ws/i8a9xJ
Meredith Whitney On 60 Minutes: Muni Bond Troubles Ahead
http://jlne.ws/fkwV08
FINRA had busy year in 2010
http://jlne.ws/fgxSqg
Ernst & Young Said to Face Fraud Lawsuit Over Lehman Audits
http://jlne.ws/gTXYiT
ECB Warns Ireland on Legislation
http://jlne.ws/eh8aXV
Outrageous Predictions - Saxo Bank
http://jlne.ws/hYxeam
James P. Marzano Goes From Bonds To System Development
James P. Marzano has been around the interest rate product scene for awhile. By Marzano's account, he made the first bond futures trade on the Chicago Board of Trade bond floor on Aug. 15, 1977. Now he's trying to get a new product for his trading application company - Applied 360 - off the ground.
This month, Marzano is launching Metrixx360, a product which Marzano describes as a real-time trading decision and support application that provides professional traders, hedge fund managers and portfolio risk managers with the calculation tools and market analysis necessary to support trading strategies and complex algorithmic trading applications. Metrixx360 is being launched this month to a select group of large traders that will act as beta test users. The full release of the product is slated for January of 2011.
"Our team has been putting the finishing touches on Metrixx360 as we roll it out with CQG, and in early next year with Trading Technologies," Marzano said during a recent interview with MarketsWiki senior editor/producer Christine Nielsen.
According to Marzano, Metrixx360 calculates all the critical relationships in the derivative markets which are usually rooted in the cash - futures basis in the spreads and intermarket spreads. The philosophy is that a trader needs to understand the impact of interest rates in any market that he or she trades.
"The people who seem to live the longest in the derivatives markets are the spreaders." To be able to do that, you need to understand the cost of money, Marzano says.
Marzano spent over 24 years as a member of the Chicago Board of Trade and the Chicago Mercantile Exchange. Along the way, he was chair of the municipal futures contract, financial instruments executive committee and business conduct committee.
He founded First LaSalle Services, Inc., a clearing member firm of the Chicago Board of Trade and the Chicago Mercantile Exchange. In the mid 1980s Marzano got more involved in system development. He was responsible for the founding and development of the Applied Municipal Network, an early contributor of data and synthetic price algorithms to Bloomberg; the Allport Portfolio System, which was in operation at CNA Insurance for over 20 years; and the development of Insignis, an investment management service in production for over a decade at large institutional investors including the General Motors Investment Management Company, the California Public Employees' Retirement System (CalPERS), JPMorgan Chase, and Indosuez Carr (which is now Newedge).
Marzano calls Metrixx360 a "culmination of what I've done in clearing, financing, arbitrage" of the experiences in these markets. Metrixx360 is available to subscribers of CQG and is expected to be available through other trading service providers in the future. Further, the company's "endgame is to use this technology to price OTC swaps," Marzano says.
This month, Marzano is launching Metrixx360, a product which Marzano describes as a real-time trading decision and support application that provides professional traders, hedge fund managers and portfolio risk managers with the calculation tools and market analysis necessary to support trading strategies and complex algorithmic trading applications. Metrixx360 is being launched this month to a select group of large traders that will act as beta test users. The full release of the product is slated for January of 2011.
"Our team has been putting the finishing touches on Metrixx360 as we roll it out with CQG, and in early next year with Trading Technologies," Marzano said during a recent interview with MarketsWiki senior editor/producer Christine Nielsen.
According to Marzano, Metrixx360 calculates all the critical relationships in the derivative markets which are usually rooted in the cash - futures basis in the spreads and intermarket spreads. The philosophy is that a trader needs to understand the impact of interest rates in any market that he or she trades.
"The people who seem to live the longest in the derivatives markets are the spreaders." To be able to do that, you need to understand the cost of money, Marzano says.
Marzano spent over 24 years as a member of the Chicago Board of Trade and the Chicago Mercantile Exchange. Along the way, he was chair of the municipal futures contract, financial instruments executive committee and business conduct committee.
He founded First LaSalle Services, Inc., a clearing member firm of the Chicago Board of Trade and the Chicago Mercantile Exchange. In the mid 1980s Marzano got more involved in system development. He was responsible for the founding and development of the Applied Municipal Network, an early contributor of data and synthetic price algorithms to Bloomberg; the Allport Portfolio System, which was in operation at CNA Insurance for over 20 years; and the development of Insignis, an investment management service in production for over a decade at large institutional investors including the General Motors Investment Management Company, the California Public Employees' Retirement System (CalPERS), JPMorgan Chase, and Indosuez Carr (which is now Newedge).
Marzano calls Metrixx360 a "culmination of what I've done in clearing, financing, arbitrage" of the experiences in these markets. Metrixx360 is available to subscribers of CQG and is expected to be available through other trading service providers in the future. Further, the company's "endgame is to use this technology to price OTC swaps," Marzano says.
Jumat, 17 Desember 2010
Top Interest Rate Headlines 12-17-10: Arizona sues Bank of America over mortgage servicing
Arizona sues Bank of America over mortgage servicing
http://jlne.ws/gCAJtT
Financial rescue cheap vs past crises: Geithner
By David Lawder, Reuters
The price of corporate bailouts in 2008 and 2009 looks cheap compared to past crises, U.S. Treasury Secretary Timothy Geithner said on Thursday, while urging more drastic action from housing finance giants Fannie Mae and Freddie Mac to help homeowners.
http://jlne.ws/eXah9X
ELX to SEC: new rules unfairly benefit NYSE
By Ann Saphir, Reuters
ELX Futures LP told regulators late Wednesday that a proposed rule would give NYSE Euronext's U.S. futures exchange an unfair advantage against ELX in competing against CME Group Inc, and should be rejected. ELX Futures, whose own attempt to challenge CME Group 's dominance in the lucrative market for Treasury futures trading has met with limited success, said that the proposed rule will enshrine NYSE Euronext 's co-owned New York Portfolio Clearing as a "monopolist."
http://jlne.ws/gzDj6u
House Republicans Urge Regulators to Exempt Manufacturers From Swaps Rules
Bloomberg
Two U.S. lawmakers who will take leadership roles in the next Congress said regulators must ensure manufacturers and commercial end-users are exempt from margin requirements for the $583 trillion swaps market.
http://jlne.ws/eqp0Td
U.S. Treasury Department Statement On House Passage Of Tax Cut, Unemployment Insurance Package
Press Release
The U.S. Department of the Treasury today released the following statement from Treasury Secretary Tim Geithner regarding the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 by the House of Representatives:
http://jlne.ws/cxgbC7
Commentary: The Role of SWAPs In The Financial Panic of 2008
Traders Magazine
There were many causes of the Financial Panic of 2008.
http://jlne.ws/e6Jwxr
Banks told must restrain bonus payments
Reuters Finance News (EU) via Yahoo! UK & Ireland Finance
LONDON (Reuters) - British politicians and the Bank of England stepped up pressure on banks on Friday to rein in bonuses, as a new code on bonus curbs from the country's financial regulator said some ...
http://jlne.ws/g7FJva
Banks face an extra L80bn of bad debts
Daily Telegraph
Britain's four largest lenders are facing losses on loans to consumers of up to L80bn over their own forecasts, the central bank has warned in its latest Financial Stability Report.
http://jlne.ws/fEfLYk
Goldman Deal Pushes Commercial Mortgage Bond Sales Past $11 Billion Mark
Bloomberg
Goldman Sachs Group Inc. and Citigroup Inc. sold $876.45 million of bonds linked to U.S. commercial real estate, pushing 2010 sales to $11.5 billion as strategists forecast next year's offerings will quadruple.
http://jlne.ws/g7Wxjj
RBS Sells $6.1 Billion of Assets to Mitsubishi UFJ
BusinessWeek
Royal Bank of Scotland Group Plc sold about 3.9 billion pounds ($6.1 billion) of project finance assets to Bank of Tokyo-Mitsubishi UFJ Ltd.
http://jlne.ws/f8UUve
Citigroup Opens High Tech Branch in Union Square
NYConvergence
In an effort to spruce up its consumer facing operations, Citigroup Inc. is opening a flashy new branch in Union Square today at the location of the Virgin Megastore that closed down mid 2009. The branch, apparently the first in a string of planned 'flagship' branches in major US and international cities, features laptops and [...]
http://jlne.ws/eO7Kn9
Morgan Stanley CEO: I will escort out any bonu$ leakers
New York Post
Talk about going off script. Morgan Stanley Chief Executive James Gorman raised some eyebrows during a routine conference this week when he threatened to "personally escort" [out] anyone found leaking any details of the firm's compensation levels to the media, The Post has learned. Gorman, who has been pushing...
http://jlne.ws/e8PsRK
Morgan Stanley on track to top Europe's M&A rankings
eFinancial News
Morgan Stanley is on track to top the coveted mergers and acquisitions league tables for Europe for a second year in a row, in what turned out to be another dismal 12 months for deal-making in the region.
http://jlne.ws/fGkk3n
Diamond to Become Barclays CEO Three Months Earlier
By Jon Menon and Gavin Finch
Barclays Plc, Britain's third- biggest bank, said Robert Diamond will take over as chief executive officer three months earlier than planned.
Bloomberg
http://jlne.ws/i6KKAx
Bank of America appeals $595 million Lehman ruling
Reuters
WILMINGTON, Delaware (Reuters) - Bank of America (BAC.N) has appealed a bankruptcy court order that it must pay Lehman Brothers Holding Inc (LEHMQ.PK) about $595 million, according to court documents.
http://jlne.ws/erh4xv
http://jlne.ws/gCAJtT
Financial rescue cheap vs past crises: Geithner
By David Lawder, Reuters
The price of corporate bailouts in 2008 and 2009 looks cheap compared to past crises, U.S. Treasury Secretary Timothy Geithner said on Thursday, while urging more drastic action from housing finance giants Fannie Mae and Freddie Mac to help homeowners.
http://jlne.ws/eXah9X
ELX to SEC: new rules unfairly benefit NYSE
By Ann Saphir, Reuters
ELX Futures LP told regulators late Wednesday that a proposed rule would give NYSE Euronext's U.S. futures exchange an unfair advantage against ELX in competing against CME Group Inc, and should be rejected. ELX Futures, whose own attempt to challenge CME Group 's dominance in the lucrative market for Treasury futures trading has met with limited success, said that the proposed rule will enshrine NYSE Euronext 's co-owned New York Portfolio Clearing as a "monopolist."
http://jlne.ws/gzDj6u
House Republicans Urge Regulators to Exempt Manufacturers From Swaps Rules
Bloomberg
Two U.S. lawmakers who will take leadership roles in the next Congress said regulators must ensure manufacturers and commercial end-users are exempt from margin requirements for the $583 trillion swaps market.
http://jlne.ws/eqp0Td
U.S. Treasury Department Statement On House Passage Of Tax Cut, Unemployment Insurance Package
Press Release
The U.S. Department of the Treasury today released the following statement from Treasury Secretary Tim Geithner regarding the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 by the House of Representatives:
http://jlne.ws/cxgbC7
Commentary: The Role of SWAPs In The Financial Panic of 2008
Traders Magazine
There were many causes of the Financial Panic of 2008.
http://jlne.ws/e6Jwxr
Banks told must restrain bonus payments
Reuters Finance News (EU) via Yahoo! UK & Ireland Finance
LONDON (Reuters) - British politicians and the Bank of England stepped up pressure on banks on Friday to rein in bonuses, as a new code on bonus curbs from the country's financial regulator said some ...
http://jlne.ws/g7FJva
Banks face an extra L80bn of bad debts
Daily Telegraph
Britain's four largest lenders are facing losses on loans to consumers of up to L80bn over their own forecasts, the central bank has warned in its latest Financial Stability Report.
http://jlne.ws/fEfLYk
Goldman Deal Pushes Commercial Mortgage Bond Sales Past $11 Billion Mark
Bloomberg
Goldman Sachs Group Inc. and Citigroup Inc. sold $876.45 million of bonds linked to U.S. commercial real estate, pushing 2010 sales to $11.5 billion as strategists forecast next year's offerings will quadruple.
http://jlne.ws/g7Wxjj
RBS Sells $6.1 Billion of Assets to Mitsubishi UFJ
BusinessWeek
Royal Bank of Scotland Group Plc sold about 3.9 billion pounds ($6.1 billion) of project finance assets to Bank of Tokyo-Mitsubishi UFJ Ltd.
http://jlne.ws/f8UUve
Citigroup Opens High Tech Branch in Union Square
NYConvergence
In an effort to spruce up its consumer facing operations, Citigroup Inc. is opening a flashy new branch in Union Square today at the location of the Virgin Megastore that closed down mid 2009. The branch, apparently the first in a string of planned 'flagship' branches in major US and international cities, features laptops and [...]
http://jlne.ws/eO7Kn9
Morgan Stanley CEO: I will escort out any bonu$ leakers
New York Post
Talk about going off script. Morgan Stanley Chief Executive James Gorman raised some eyebrows during a routine conference this week when he threatened to "personally escort" [out] anyone found leaking any details of the firm's compensation levels to the media, The Post has learned. Gorman, who has been pushing...
http://jlne.ws/e8PsRK
Morgan Stanley on track to top Europe's M&A rankings
eFinancial News
Morgan Stanley is on track to top the coveted mergers and acquisitions league tables for Europe for a second year in a row, in what turned out to be another dismal 12 months for deal-making in the region.
http://jlne.ws/fGkk3n
Diamond to Become Barclays CEO Three Months Earlier
By Jon Menon and Gavin Finch
Barclays Plc, Britain's third- biggest bank, said Robert Diamond will take over as chief executive officer three months earlier than planned.
Bloomberg
http://jlne.ws/i6KKAx
Bank of America appeals $595 million Lehman ruling
Reuters
WILMINGTON, Delaware (Reuters) - Bank of America (BAC.N) has appealed a bankruptcy court order that it must pay Lehman Brothers Holding Inc (LEHMQ.PK) about $595 million, according to court documents.
http://jlne.ws/erh4xv
Kamis, 16 Desember 2010
December 16, 2010: Basel Group Seeks to Curb Banks' Risk From Rogue Traders, Fraud [NEWSLETTER]
Conversation Starter
The Bank For International Settlements (BIS) has released the Basel Committee on Banking Supervision report "Basel III: A global regulatory framework for more resilient banks and banking systems." See click on the item below to view the report in its entirity.
Other Regulation-Related Articles
Basel Group Seeks to Curb Banks' Risk From Rogue Traders, Fraud
Bloomberg
Banks should improve their defenses against losses caused by rogue traders, client fraud and other so-called
operational risks, global regulators said.
http://jlne.ws/i8Cso7
Bank regulators back new capital plan
By Dave Clarke
Bank holding companies would not be allowed to dip below the strict capital standards of their federally insured
bank units, under a proposal issued by U.S. bank regulators on Tuesday.
http://jlne.ws/dIAcOB
Fed Leaves Policy Unchanged
BY LUCA DI LEO, JON HILSENRATH AND JEFFREY SPARSHOTT, WSJ.com
Federal Reserve officials stuck to their easy-money policy of buying U.S. Treasury bonds and keeping short-term
interest rates near zero amid new signs that the recovery is gathering some steam.
http://jlne.ws/hjpqy6
FOMC statement - December 14, 2010
Press Release
Information received since the Federal Open Market Committee met in November confirms that the economic recovery is
continuing, though at a rate that has been insufficient to bring down unemployment. Household spending is increasing
at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and
tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year,
while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls.
The housing sector continues to be depressed. Longer-term inflation expectations have remained stable, but measures
of underlying inflation have continued to trend downward.
http://jlne.ws/g1hn1y
Bernanke Options May Be Limited Amid Republican Scrutiny
By Caroline Salas, Bloomberg
Federal Reserve Chairman Ben S. Bernanke may find his options for reducing unemployment near a 26-year high are
constrained after Republicans take control of the House of Representatives next month.
http://jlne.ws/gLhyrv
FDIC Plans to Sell $1 Billion of Bonds Tied to Real Estate
By Jody Shenn, Bloomberg
The Federal Deposit Insurance Corp. plans to sell almost $1 billion of securities tied to residential and commercial
real-estate debt once held by failed banks, according to a person familiar with the transaction.
http://jlne.ws/gzu2f8
What are small banks afraid of? When it comes to WEB and TEL payments, numbers don’t back their fears
Federal Reserve Bank of Atlanta
Recently, I got word that many banks, particularly small banks, may be bypassing the opportunity to market certain
ACH origination services to their corporate customers because they are concerned about the underlying potential for
fraud. In particular, banks may be holding back on offering debit origination services to companies selling services
or accepting bill payments over the web or telephone. These are recognized as WEB or TEL entries in the parlance of
ACH.
http://ow.ly/3osKS
Southwest Economy: Restructured loans small part of average Eleventh District bank's balance sheet
Federal Reserve Bank of Dallas
Banks in the Eleventh Federal Reserve District are performing better than their peers.[1] However, signs of strain
are still evident—with loan delinquencies a prime example—following the recession and financial market crisis. Some
banks that restructure troubled loans by granting borrowers easier terms subsequently find the loans delinquent
again.
http://ow.ly/3opbi
FRB announces first webcast of board meeting
Release Date: December 10, 2010
For immediate release
The Federal Reserve Board announced on Friday that a live webcast of its December 16 open meeting will be available
on the Board's website. At the meeting, which is scheduled to begin at 2:30 p.m. EST, the Board will discuss
proposed rules governing debit card interchange fees and routing. This will be the first time the Board has webcast
one of its meetings. The Board has previously webcast other public events such as Chairman Bernanke's town hall
meeting with educators Leaving the Board and a conference on addressing issues facing small businesses Leaving the
Board.
http://jlne.ws/dQKddj
Regulators Close to Gaining New Funding for Dodd-Frank Efforts
By Joshua Gallu and Phil Mattingly, Bloomberg
U.S. financial regulators, working to secure funding needed to implement new responsibilities mandated by the
Dodd-Frank Act, are in line to be among the few agencies to benefit from the year's final congressional spending
measure. The Securities and Exchange Commission and Commodity Futures Trading Commission, two agencies writing a
bulk of the rules required by the new law, took a first step yesterday toward locking in more funding for next year,
even as lawmakers moved to freeze spending for most agencies at 2010 levels.
http://jlne.ws/haU0Xy
Dodd-Frank Financial Reform May Pressure Bonuses
Reuters
Wall Street bonuses could face pressure from an unexpected source this year: the Dodd-Frank financial reform law.
http://jlne.ws/hchKQ4
Ron Paul, Author of 'End the Fed,' to Chair Monetary Subcommittee
By HUGH COLLINS, DailyFinance
Rep. Ron Paul, author of the best-selling book End the Fed, will head the House subcommittee overseeing the Federal
Reserve.
http://jlne.ws/gBdFjo
**CN: Ironic.
Lead Stories
IMF supports ECB decision to boost capital
Reuters
A decision by the European Central Bank to boost its capital by five billion euros is a step toward establishing a
stronger European plan for dealing with economic strains, an International Monetary Fund spokeswoman said on
Thursday.
http://jlne.ws/gLwoWP
Geithner: TARP cost will be a 'fraction' of original price
By Ben Rooney, CNN money.com
Treasury Secretary Tim Geithner outlined the benefits of the government's bailout of the financial system Thursday, saying that the overall cost will be a "fraction" of the original estimate.
http://jlne.ws/gZh2JL
Pimco Total Return May Buy Equity-Linked Securities
By Sree Vidya Bhaktavatsalam, Bloomberg
Bill Gross’s Pimco Total Return Fund, the world’s largest mutual fund, is expanding its policy to allow investments
in equity-linked securities for the first time since 2003. Pimco Total Return may put as much as 10 percent of
assets in securities including preferred stock and convertible bonds as early as the second quarter of next year,
according to a filing today with the U.S. Securities and Exchange Commission. The fund won’t invest in common stock,
the Newport Beach, California-based firm said.
http://jlne.ws/dL1k3T
**CN: The firm everyone loves to watch.
Federal Debt and Interest Costs
Congressional Budget Office - Director's Blog
Recently, the federal government has been recording the largest budget deficits, as a share of gross domestic
product (GDP), since the end of World War II. As a result of those deficits, the amount of federal debt held by the
public has soared—surpassing $9.0 trillion at the end of fiscal year 2010 and equal to 62 percent of GDP. The
interest the government pays on that debt is currently low by historical standards as a percentage of GDP but is
expected to grow rapidly over the next several years as interest rates rise. In response to a request from the
Senate Budget Committee, CBO prepared a study providing background material on federal debt and interest costs.
http://jlne.ws/e09XuL
Fed holds rate target, bond-buy plan steady
By Greg Robb, MarketWatch
The Federal Reserve Tuesday left its key interest rate and the size of its bond purchase program unchanged, as
widely expected. The central bank's rate-setting Open Market Committee maintained the target range for the federal
funds rate at its all-time low range of 0 to 0.25%, where it has stood since December 2008. It kept its bond
purchase program, nicknamed QE2, at $600 billion. In its statement, the Fed said that the economy recovery is
continuing "though at a rate that has been insufficient to bring down unemployment." Thomas Hoenig, the president of
the Kansas City Fed, dissented again, warning that the large stimulus could cause inflation expectations to rise and
choke off a recovery.
http://jlne.ws/gEzprz
Why are government bond yields rising?
The Economist
This week, government bond yields have risen around the world, on the debt of troubled European countries but also
for relative safe havens like Germany and the US. Why have yields risen? Are different factors at work in different
countries? Will there be additional sovereign debt crises in 2011? And will an American crisis be among them?
http://jlne.ws/hhjKzd
Two U.S. banks reveal TARP repayment plans
By Maria Aspan and Joe Rauch, Reuters
Two regional U.S. banks plan to repay their government bailout loans, a sign of health that could put pressure on
other lenders to shed government aid.
http://jlne.ws/gSmatR
Lenders Extend Credit to Risky Borrowers Again
By ERIC DASH, The New York Times
Credit card offers are surging again after a three-year slowdown, as banks seek to revive a business that brought
them huge profits before the financial crisis wrecked the credit scores of so many Americans.
http://jlne.ws/goqX4l
Buttonwood: Getting real
The Economist
NEWS bulletins feature the stockmarket’s daily movements or the rise and fall of European government-bond yields.
But they very rarely mention an important economic measure; the very low level of real interest rates (ie, after
allowing for inflation). In October America even managed to issue an inflation-linked bond with a negative real
yield.
http://jlne.ws/hpZggS
QE2 fragmenting global markets: Stiglitz
By Alonso Soto and Moises Avila, Reuters
Smaller developing countries should prepare measures to be able to cope with inflows of cash as investors look for
bigger returns outside sluggish developed economies, Nobel Prize winning economist Joseph Stiglitz said on Friday.
http://jlne.ws/hZqwSZ
Events
The 36th Annual International Futures Industry Conference
When: March 15-18, 2011
Who: FIA
Full info: http://campaign.r20.constantcontact.com/render?llr=fwgtyucab&v=001WeBrwlP3VB1EJrvzuxUwxDg8fsg1Z8ZYjylTYIAfiEPOHumaM4PToYW-FxqnOsfyAaSlhRYAWrgj0P8-SYrVuEM53baCN9cyh3I5I-IOKZ3QwiUb2qUbyhwPmrOiHmw_Gt-oUr577qg%3D
Where: Boca Raton Resort & Club
Boca Raton, Florida
Details: As one of FIA's premier events, the 36th Annual International Futures Industry Conference is host to an influential audience of 800 senior-level futures industry professionals, brokerage executives, technology and operations officers, exchange officials, money managers, and public policy leaders. Delegates from more than 30 countries attend this annual event.
SIFMA 2nd Annual Private Client Conference
When: Apr. 7 and 8, 2011
Who: SIFMA
Where: New York City
Details: On April 7 and 8, the SIFMA 2nd Annual Private Client Conference, "Client First: Delivering the Vision," will build on the success of the inaugural Private Client Conference during the spring. This two-day event combines the strengths of SIFMA's former Sales & Marketing, Small Firms and Independent Firms conferences, producing North America's premier conference for private client groups at all levels. This conference is designed for senior managers in private client groups at global, regional, independent contractor and small broker-dealers, including national sales managers, regional directors, branch managers, wealth-management specialists, marketing specialists, and individual financial advisers and investment consultants. Mark your calendar for April 7 and 8 or, better yet, REGISTER TODAY.
Economic News
NAHB Housing Index Holds at 16 in December
By Gary Siegel, The Bond Buyer
Builders’ confidence in the market for new single-family homes was steady, as the National Association of Home
Builders' housing market index - a monthly gauge of builder sentiment – remained 16 in December from an unrevised 16
in November.
http://jlne.ws/haPh1O
Inventories at U.S. Companies Increase 0.7%, Less Than Forecast
By Bob Willis, Bloomberg
Inventories in the U.S. rose less than forecast in October, restrained by the biggest drop in retail stockpiles in
more than a year as merchants had trouble keeping up with surging demand.
http://jlne.ws/eDJ4pe
Retail Sales, Producer Prices Increase
By JEFF BATER And LUCA DI LEO, WSJ.com
U.S. holiday shoppers streamed into malls and cyberspace in November, giving the economy a kick as merchants
reported better-than-expected sales. Retail sales increased by 0.8% last month, the Commerce Department said
Tuesday. The gain was better than the 0.5% increase that economists surveyed by Dow Jones Newswires had projected.
http://jlne.ws/gs5doI
Fewer Homes `Underwater' Last Quarter as Foreclosures Rose
By John Gittelsoh, Bloomberg
The number of U.S. homes worth less than the debt owed on them dropped in the third quarter, largely because of
mounting foreclosures rather than a rise in property values, according to CoreLogic Inc.
http://jlne.ws/gINP75
US econ growth gauge at highest point since May- ECRI
Reuters
A measure of future U.S. economic growth rose to a 29-week high in the latest week, while the index's annualized
growth rate rose to a 27-week high, a research group said on Friday.
http://jlne.ws/gmleXY
Exchanges, Clearing Houses & MTFs
Advantage Futures Partners With ELXfutures to Offer FCM Services
Press Release
ELX Futures, L.P. (ELX), a leading electronic futures exchange offering a faster, more efficient global alternative
to trade U.S. Treasuries and Eurodollar futures contracts, announced today that Advantage Futures LLC, a premier
technology-focused futures brokerage firm, will become an authorized Participant and offer Futures Commission
Merchant (FCM) services for ELX.
http://jlne.ws/hDteEv
SunGard Supports CME Group Cleared Interest Rate Swaps
Press Release
SunGard has enhanced its Stream GMI post-trade listed derivatives solution to provide processing and accounting
support for CME Group cleared interest rate swaps, which it began clearing in October 2010.
http://jlne.ws/hzHNFj
Firms & Banks
RBS 'blocks FSA publication of bank investigation'
BBC
The Financial Services Authority (FSA) has pledged to publish a limited report on its findings of what went wrong at
Royal Bank of Scotland (RBS).
http://jlne.ws/idkJw1
What did banks do? It's not clear. What do they pay? They can't say. Why did they fail? It's a secret
Guardian Unlimited
The banking collapse is a tale of opacity and confusion. Now even the public report into RBS's collapse is
confidential. We need transparency in banking, and we need it now Fred the Shred could be at liberty to drive
another bank into oblivion. Sir Fred Goodwin, the former boss of Royal Bank of Scotland, has escaped any regulatory
penalty over the near collapse of the once mighty Caledonian ...
http://jlne.ws/ijhfMN
Goldman hires former Fed official as regulatory chief
By Aline van Duyn in New York
FT.com / Financials
Goldman Sachs has hired a former top Federal Reserve Bank of New York regulator as banks look to exert some
influence over the writing of new rules for profitable privately traded swaps markets. Theo Lubke, a former senior
vice president at the Fed who was tasked with cutting risk in the over-the-counter derivatives market, started work
this month at the bank's New York office as chief regulatory reform officer in the securities division, said a
Goldman Sachs official.
http://jlne.ws/gw4vsy
Incoming HSBC UK chairman Sandy Flockhart attacks 'unfair' bail-outs of RBS and Citibank
AFP Telegraph Finance News via Yahoo! UK & Ireland Finance
HSBC's senior UK banker has criticised "unfair" and anti-competitive government bail-outs of rivals such as Royal
Bank of Scotland and Citibank, and said business taxes need to fall if the ...
http://jlne.ws/eE0Z0z
Pimco's Government-Related Holdings Rise In Flagship Fund
WSJ.com
Bond fund giant Pacific Investment Management Co. boosted the U.S. government-related holdings in November in its
flagship bond fund after cutting them for four straight months. The U.S. government-related holding for Pimco's
flagship Total Return Fund, the world's biggest bond fund with $250.2 billion in assets, rose to 30% in November
from 28% in October, according to data available on the company's website Tuesday.
http://jlne.ws/dOIjUC
Outflows at PIMCO Total Return
Morningstar Advisor
Bill Gross' PIMCO Total Return PTTRX, the largest taxable-bond fund in the country with $256 billion in assets, saw
redemptions of $1.9 billion in November according to preliminary Morningstar fund flow data. This was the fund's
first month of net outflows in two years.
http://jlne.ws/ey13zs
Blackstone Names Asia Private-Equity Chief
BY AMY OR, WSJ.com
Blackstone Group LP has named Senior Managing Director Michael Chae as head of private equity in Asia. Mr. Chae also
will be responsible for the firm's limited-partner marketing personnel and coordinate relationships with its most
important limited partners in the region, Blackstone said in a statement Monday.
http://jlne.ws/hU2vxv
RBS to offer house price derivatives
By Claer Barrett, FT.com
The Royal Bank of Scotland is preparing to launch residential derivatives products aimed at retail investors who are
prepared to bet against the odds that house prices will rise.
http://jlne.ws/h2Xd5Z
RBS Harry Potter party: Bank saved by L20bn bailout splashes L250-a-head bash
Daily Mail
As the festive party season enters full swing, the bank stands accused of throwing what sounds like the corporate
bash of the year.
http://jlne.ws/hNP9hd
UBS Americas CEO says he is seen as a "cowboy" within Swiss bank
Shanny Basa, Financial News/Dow Jones
Robert Wolf, chairman and chief executive of UBS Group Americas and president of UBS Investment Bank, said he missed
out on becoming head of the Swiss firm because cultural differences mean management view him as “little more than a
cowboy.”
http://jlne.ws/fu9FVk
Banks Face Political Contribution Ban in Municipal Derivatives Business
Bloomberg
Banks that arrange derivative trades with U.S. states, municipalities and public-pension systems may be barred from
giving to the campaigns of politicians with the power to award them work.
http://jlne.ws/ewlFQA
RBS was a disaster on a massive scale - so was the FSA's 'report'
AFP Telegraph Finance News
Lord Turner's investigation is better late than never, but did it achieve anything?
http://jlne.ws/emtl1B
Citigroup Names Obama's Orszag Vice Chairman of Investment Bank
Bloomberg
Citigroup Inc., the biggest bailout recipient among U.S. banks during the financial crisis, hired former White House
Budget Director Peter Orszag to be vice chairman of its investment-banking division.
http://jlne.ws/hv7HPz
Auctions & Statistics
NY Fed purchases $6.780 bln in Tsy coupons: New York Fed purchases $6.780 bin in Treasury coupons
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking
system.
http://bit.ly/eioSRB
OTC
DTCC Makes Its GCF REPO Index Downloadable To The Public
ISS-MAG
The Depository Trust & Clearing Corporation (DTCC) announced today that, as part of its ongoing effort to bring
greater transparency to the multi-billion-dollar market for General Collateral Finance (GCF) repurchase agreements
(repos), it is now making the full data pack underlying its daily GCF Repo Index downloadable to the public.
http://jlne.ws/gqaKKy
**CN: DTCC makes steps toward greater transparency.
Credit Default Swaps On General Motors Start Trading
By Katy Burne Of DOW JONES NEWSWIRES
Barclays Capital and Goldman Sachs started quoting prices on credit default swaps tied to
senior unsecured General Motors Co. (GM) debt on Tuesday, even though the recently revived GM has not yet issued any
bonds.
http://jlne.ws/eYJKPl
U.S. Credit-Default Swaps Decline in Longest Stretch Since November 2009
By Mary Childs, Bloomberg
The cost of protecting bonds from default in the U.S. fell for a ninth trading day, the longest streak in 13 months,
as Federal Reserve spending to stimulate the economy encourages investors to embrace credit risk.
http://jlne.ws/gLXPTv
Over-the-counter market eyes revolutionary road ahead
eFinancial News
The over-the-counter derivatives industry is set to end 2010 very much as it has spent most of the year: waiting for
the next regulatory pronouncement.
http://jlne.ws/fqKu6e
OTC Regulations Dictate New Valuation Methods
Markets Media Online
As regulators on both sides of the Atlantic implement rules on OTC derivatives, firms need to focus on the
technology and methodology used to value the complex instruments.
http://jlne.ws/hkj7Oa
Record OTC IRS volumes for LCH.Clearnet's SwapClear
Press Release
November saw record volumes for LCH.Clearnet Limited's (LCH.Clearnet) market leading interest rate swap clearing
service, SwapClear. The total number of cleared OTC trades for the month reached 76,650 trade sides, 12% more than
October and a 24% increase on November 2009. The increased figures bring the total outstanding number of IRS
transactions to 1,720,390 trade sides with a notional value of USD248.3 trillion equivalent.
http://jlne.ws/eR0GXO
DTCC Unveils OTC Derivatives Matching Service; G14 Dealers Go Live
By Justin Grant
The Depositary Trust & Clearing Corp. announced the launch of a global over-the-counter equity derivatives cash
flow and netting platform, a service it said is now being used by the 14 largest international dealers.
http://jlne.ws/e2VLSl
Credit-Default Swaps Market Shrinks 50% From '07 Peak, BIS Says
By John Glover, Bloomberg
The credit-default swaps market has shrunk almost 50 percent from its peak in 2007 after traders canceled
overlapping deals and settled contracts through clearinghouses, the Bank for International Settlements said.
http://jlne.ws/fjGBzD
CFTC Delays Vote on Rules For Swap Trading
By SARAH N. LYNCH
WSJ.com
U.S. derivatives regulators unexpectedly tabled a plan to vote on proposed rules designed to make over-the-counter
derivatives prices more transparent, amid dissent within the agency.
http://jlne.ws/fnIGuD
US swap trading reforms face obstacle
By Michael Mackenzie and Aline van Duyn in New York
FT.com / Commodities
Differences have emerged between US regulators over how to police trading in the vast privately-traded swaps
markets, with proposals for new rules delayed by at least a week.
http://jlne.ws/gdrmaF
Quick View: OTC swaps fight brews
By Michael Mackenzie in New York
FT.com / FT Trading Room
The battle has begun. Regulating how the US dollar-denominated over-the-counter swaps market will trade under the
Dodd-Frank Act has sparked its first major fight. Instead of voting on the new rules governing swap execution
facilities, SEFs, Gary Gensler, chairman of the Commodity Futures Trading Commission said at an open meeting on
Thursday, that a planned vote would be delayed until next week, the 16th of December.
http://jlne.ws/dVsNyQ
Goldman CDS trading activities under fire
By Francesco Guerrera, Justin Baer and Telis Demos, FT.com
Goldman Sachs ' trading activities in the credit insurance market in 2007 have come under attack from a US senator
after e-mails revealed a senior trader urged colleagues to "kill" some investors' positions.
http://jlne.ws/g3lRjL
Global News
Spain Pays High Yield on Bonds
BY EMESE BARTHA, WSJ.com
Spain's final foray into the market for long-term bonds this year was an expensive exercise for the government
Thursday, coming a day after Moody's Investors Service Inc. warned that it might downgrade the country's credit
rating because of its mounting debt and funding needs.
http://jlne.ws/gtJW5A
Wen Seeks Increased Trade With India as China Pledges Wider Market Access
By Bibhudatta Pradhan and James Rupert, Bloomberg
China and India vowed to boost their bilateral trade by two-thirds to $100 billion in the next five years, following
talks in New Delhi between prime ministers Wen Jiabao and Manmohan Singh.
http://jlne.ws/gh1xPk
IMF Offl: Team in Portugal Discussing Annual Econ Review
By Heather Scott, iMarketNews
The team from the International Monetary Fund currently in Lisbon is there working on the annual review of the
nation's economy, an IMF spokeswoman said Thursday. Asked if the IMF is discussing a loan program with Portugal,
Caroline Atkinson, director of the IMF External Relations Department, said, "A small technical team is in Lisbon at
the moment - they are coming back soon - related to the Article IV consultation, and the discussion of structural
reforms."
http://jlne.ws/fvMb39
First French Islamic bond seen early 2011
By Shaheen Pasha, Reuters
The first Islamic bond issue out of France could happen early next year, the chief executive of the French Deposits
Guarantee Fund said on Wednesday.
http://jlne.ws/eDxIxR
Moody's Threatens Spain Downgrade
BY WILLIAM MALLARD, KOSAKU NARIOKA AND SANTIAGO PEREZ, WSJ.com
Moody's Investors Service warned it may downgrade its ratings on Spanish government debt, in a further sign that
Europe's debt worries are spreading from small, financially stressed euro-zone members such as Greece to bigger
economies closer to the euro-zone core.
http://jlne.ws/igZgKr
The core aim of UK economic policy – to stop house prices from falling
MoneyWeek
Wondering where your government's priorities lie? Then consider the interim report out from the Office of Tax
Simplification on how they might go about changing the hundreds of tax reliefs on offer at the moment.
http://jlne.ws/i3pGry
Belgium Has SP Outlook on Debt Cut to `Negative' Amid Political Stalemate
By John Martens, Bloomberg
Belgium had the outlook on its debt rating lowered to “negative” from “stable” at Standard & Poor’s Ratings
Services because the country’s political stalemate makes it vulnerable to rising borrowing costs.
http://jlne.ws/hReaK2
Canadians With More Debt Than U.S. Spark Policy Makers' Warning
By Theophilos Argitis and Greg Quinn, Bloomberg
Canada’s top economic officials yesterday urged households to be wary of taking on too much debt after data showed
the indebtedness of Canadians surpassed U.S. levels for the first time in 12 years.
http://jlne.ws/gGUnfJ
IMF Managing Director Dominique Strauss-Kahn Welcomes Mexico's Request to Expand Flexible Credit Line to US$73 Billion
“I welcome the Mexican authorities’ indication, underscored by President Felipe Calderón this morning, that Mexico
is interested in taking advantage of the recent reforms to the Fund’s Flexible Credit Line (FCL) facility to replace
its existing one-year, SDR 31.5 billion (about US$47 billion, equivalent to 1,000 percent of quota) precautionary
FCL arrangement with a two-year precautionary FCL arrangement in the amount of SDR 47 billion (about US$73 billion,
or 1,500 percent of quota)...."
http://jlne.ws/fLhTVM
Japan's Sengoku Deflects Pressure From Bank of Japan
BY YUKA HAYASHI, WSJ.com
The chief spokesman for Japan's government said additional monetary easing, including setting an inflation target,
won't help Japan conquer deflation. He also suggests Tokyo won't press the Bank of Japan for more steps to prop up
the economy anytime soon.
http://jlne.ws/dHmlzN
ECB's Trichet Urges EU to Enhance Bailout Fund
BY GEOFFREY T. SMITH, WSJ.com
European Central Bank President Jean-Claude Trichet called on European Union governments to enhance the financial
rescue vehicle they set up in the wake of the Greek debt crisis.
http://jlne.ws/gmxlRM
Canadian Central Banker Warns of ‘Death Grip’ on U.S. Dollar
By Nirmala Menon, WSJ.com
Canada’s central bank governor, Mark Carney, warned that the “death grip” on the U.S. dollar is “reducing the
prospects for rebalancing global demand.”
http://jlne.ws/dO5Vm8
Japan to Cut Corporate Income Tax Rate
By HIROKO TABUCHI, The New York Times
Japan will cut its corporate income tax rate by 5 percentage points in a bid to shore up its sluggish economy, Prime
Minister Naoto Kan said here Monday evening.
http://jlne.ws/ewDcsO
Myners calls for bank break-ups
The Sun
FORMER City minister calls for break-up of both Royal Bank of Scotland and Lloyds
http://jlne.ws/g1GvFk
Australia Introduces Plan to Increase Competition Within Banking Industry
By Angus Whitley and James Paton, Bloomberg
Australia plans to bolster credit unions and ban fees home owners face in switching mortgage providers, as the
government responds to public pressure to reduce the dominance of the nation's four biggest lenders.
http://jlne.ws/hL1gT3
European Body Stays Tough on Bank-Pay Rules
BY SARAH SCHAEFER MUÑOZ, WSJ.com
A pan-European committee of financial regulators took a tough line on banker pay in its final guidelines issued
Friday, despite heavy lobbying by the banking industry and U.K. officials to water down the rules.
http://jlne.ws/hXedcs
Bankers in Europe Face Cash Bonus Limits After Failing to Alter EU Rules
By Ben Moshinsky, Bloomberg
Bankers will face limits on cash payouts and the size of their bonus relative to salary from the start of next year,
as European Union regulators approved laws to curb incentives for excessive risk-taking.
http://jlne.ws/eJXo9Q
The Bank For International Settlements (BIS) has released the Basel Committee on Banking Supervision report "Basel III: A global regulatory framework for more resilient banks and banking systems." See click on the item below to view the report in its entirity.
Other Regulation-Related Articles
Basel Group Seeks to Curb Banks' Risk From Rogue Traders, Fraud
Bloomberg
Banks should improve their defenses against losses caused by rogue traders, client fraud and other so-called
operational risks, global regulators said.
http://jlne.ws/i8Cso7
Bank regulators back new capital plan
By Dave Clarke
Bank holding companies would not be allowed to dip below the strict capital standards of their federally insured
bank units, under a proposal issued by U.S. bank regulators on Tuesday.
http://jlne.ws/dIAcOB
Fed Leaves Policy Unchanged
BY LUCA DI LEO, JON HILSENRATH AND JEFFREY SPARSHOTT, WSJ.com
Federal Reserve officials stuck to their easy-money policy of buying U.S. Treasury bonds and keeping short-term
interest rates near zero amid new signs that the recovery is gathering some steam.
http://jlne.ws/hjpqy6
FOMC statement - December 14, 2010
Press Release
Information received since the Federal Open Market Committee met in November confirms that the economic recovery is
continuing, though at a rate that has been insufficient to bring down unemployment. Household spending is increasing
at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and
tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year,
while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls.
The housing sector continues to be depressed. Longer-term inflation expectations have remained stable, but measures
of underlying inflation have continued to trend downward.
http://jlne.ws/g1hn1y
Bernanke Options May Be Limited Amid Republican Scrutiny
By Caroline Salas, Bloomberg
Federal Reserve Chairman Ben S. Bernanke may find his options for reducing unemployment near a 26-year high are
constrained after Republicans take control of the House of Representatives next month.
http://jlne.ws/gLhyrv
FDIC Plans to Sell $1 Billion of Bonds Tied to Real Estate
By Jody Shenn, Bloomberg
The Federal Deposit Insurance Corp. plans to sell almost $1 billion of securities tied to residential and commercial
real-estate debt once held by failed banks, according to a person familiar with the transaction.
http://jlne.ws/gzu2f8
What are small banks afraid of? When it comes to WEB and TEL payments, numbers don’t back their fears
Federal Reserve Bank of Atlanta
Recently, I got word that many banks, particularly small banks, may be bypassing the opportunity to market certain
ACH origination services to their corporate customers because they are concerned about the underlying potential for
fraud. In particular, banks may be holding back on offering debit origination services to companies selling services
or accepting bill payments over the web or telephone. These are recognized as WEB or TEL entries in the parlance of
ACH.
http://ow.ly/3osKS
Southwest Economy: Restructured loans small part of average Eleventh District bank's balance sheet
Federal Reserve Bank of Dallas
Banks in the Eleventh Federal Reserve District are performing better than their peers.[1] However, signs of strain
are still evident—with loan delinquencies a prime example—following the recession and financial market crisis. Some
banks that restructure troubled loans by granting borrowers easier terms subsequently find the loans delinquent
again.
http://ow.ly/3opbi
FRB announces first webcast of board meeting
Release Date: December 10, 2010
For immediate release
The Federal Reserve Board announced on Friday that a live webcast of its December 16 open meeting will be available
on the Board's website. At the meeting, which is scheduled to begin at 2:30 p.m. EST, the Board will discuss
proposed rules governing debit card interchange fees and routing. This will be the first time the Board has webcast
one of its meetings. The Board has previously webcast other public events such as Chairman Bernanke's town hall
meeting with educators Leaving the Board and a conference on addressing issues facing small businesses Leaving the
Board.
http://jlne.ws/dQKddj
Regulators Close to Gaining New Funding for Dodd-Frank Efforts
By Joshua Gallu and Phil Mattingly, Bloomberg
U.S. financial regulators, working to secure funding needed to implement new responsibilities mandated by the
Dodd-Frank Act, are in line to be among the few agencies to benefit from the year's final congressional spending
measure. The Securities and Exchange Commission and Commodity Futures Trading Commission, two agencies writing a
bulk of the rules required by the new law, took a first step yesterday toward locking in more funding for next year,
even as lawmakers moved to freeze spending for most agencies at 2010 levels.
http://jlne.ws/haU0Xy
Dodd-Frank Financial Reform May Pressure Bonuses
Reuters
Wall Street bonuses could face pressure from an unexpected source this year: the Dodd-Frank financial reform law.
http://jlne.ws/hchKQ4
Ron Paul, Author of 'End the Fed,' to Chair Monetary Subcommittee
By HUGH COLLINS, DailyFinance
Rep. Ron Paul, author of the best-selling book End the Fed, will head the House subcommittee overseeing the Federal
Reserve.
http://jlne.ws/gBdFjo
**CN: Ironic.
Lead Stories
IMF supports ECB decision to boost capital
Reuters
A decision by the European Central Bank to boost its capital by five billion euros is a step toward establishing a
stronger European plan for dealing with economic strains, an International Monetary Fund spokeswoman said on
Thursday.
http://jlne.ws/gLwoWP
Geithner: TARP cost will be a 'fraction' of original price
By Ben Rooney, CNN money.com
Treasury Secretary Tim Geithner outlined the benefits of the government's bailout of the financial system Thursday, saying that the overall cost will be a "fraction" of the original estimate.
http://jlne.ws/gZh2JL
Pimco Total Return May Buy Equity-Linked Securities
By Sree Vidya Bhaktavatsalam, Bloomberg
Bill Gross’s Pimco Total Return Fund, the world’s largest mutual fund, is expanding its policy to allow investments
in equity-linked securities for the first time since 2003. Pimco Total Return may put as much as 10 percent of
assets in securities including preferred stock and convertible bonds as early as the second quarter of next year,
according to a filing today with the U.S. Securities and Exchange Commission. The fund won’t invest in common stock,
the Newport Beach, California-based firm said.
http://jlne.ws/dL1k3T
**CN: The firm everyone loves to watch.
Federal Debt and Interest Costs
Congressional Budget Office - Director's Blog
Recently, the federal government has been recording the largest budget deficits, as a share of gross domestic
product (GDP), since the end of World War II. As a result of those deficits, the amount of federal debt held by the
public has soared—surpassing $9.0 trillion at the end of fiscal year 2010 and equal to 62 percent of GDP. The
interest the government pays on that debt is currently low by historical standards as a percentage of GDP but is
expected to grow rapidly over the next several years as interest rates rise. In response to a request from the
Senate Budget Committee, CBO prepared a study providing background material on federal debt and interest costs.
http://jlne.ws/e09XuL
Fed holds rate target, bond-buy plan steady
By Greg Robb, MarketWatch
The Federal Reserve Tuesday left its key interest rate and the size of its bond purchase program unchanged, as
widely expected. The central bank's rate-setting Open Market Committee maintained the target range for the federal
funds rate at its all-time low range of 0 to 0.25%, where it has stood since December 2008. It kept its bond
purchase program, nicknamed QE2, at $600 billion. In its statement, the Fed said that the economy recovery is
continuing "though at a rate that has been insufficient to bring down unemployment." Thomas Hoenig, the president of
the Kansas City Fed, dissented again, warning that the large stimulus could cause inflation expectations to rise and
choke off a recovery.
http://jlne.ws/gEzprz
Why are government bond yields rising?
The Economist
This week, government bond yields have risen around the world, on the debt of troubled European countries but also
for relative safe havens like Germany and the US. Why have yields risen? Are different factors at work in different
countries? Will there be additional sovereign debt crises in 2011? And will an American crisis be among them?
http://jlne.ws/hhjKzd
Two U.S. banks reveal TARP repayment plans
By Maria Aspan and Joe Rauch, Reuters
Two regional U.S. banks plan to repay their government bailout loans, a sign of health that could put pressure on
other lenders to shed government aid.
http://jlne.ws/gSmatR
Lenders Extend Credit to Risky Borrowers Again
By ERIC DASH, The New York Times
Credit card offers are surging again after a three-year slowdown, as banks seek to revive a business that brought
them huge profits before the financial crisis wrecked the credit scores of so many Americans.
http://jlne.ws/goqX4l
Buttonwood: Getting real
The Economist
NEWS bulletins feature the stockmarket’s daily movements or the rise and fall of European government-bond yields.
But they very rarely mention an important economic measure; the very low level of real interest rates (ie, after
allowing for inflation). In October America even managed to issue an inflation-linked bond with a negative real
yield.
http://jlne.ws/hpZggS
QE2 fragmenting global markets: Stiglitz
By Alonso Soto and Moises Avila, Reuters
Smaller developing countries should prepare measures to be able to cope with inflows of cash as investors look for
bigger returns outside sluggish developed economies, Nobel Prize winning economist Joseph Stiglitz said on Friday.
http://jlne.ws/hZqwSZ
Events
The 36th Annual International Futures Industry Conference
When: March 15-18, 2011
Who: FIA
Full info: http://campaign.r20.constantcontact.com/render?llr=fwgtyucab&v=001WeBrwlP3VB1EJrvzuxUwxDg8fsg1Z8ZYjylTYIAfiEPOHumaM4PToYW-FxqnOsfyAaSlhRYAWrgj0P8-SYrVuEM53baCN9cyh3I5I-IOKZ3QwiUb2qUbyhwPmrOiHmw_Gt-oUr577qg%3D
Where: Boca Raton Resort & Club
Boca Raton, Florida
Details: As one of FIA's premier events, the 36th Annual International Futures Industry Conference is host to an influential audience of 800 senior-level futures industry professionals, brokerage executives, technology and operations officers, exchange officials, money managers, and public policy leaders. Delegates from more than 30 countries attend this annual event.
SIFMA 2nd Annual Private Client Conference
When: Apr. 7 and 8, 2011
Who: SIFMA
Where: New York City
Details: On April 7 and 8, the SIFMA 2nd Annual Private Client Conference, "Client First: Delivering the Vision," will build on the success of the inaugural Private Client Conference during the spring. This two-day event combines the strengths of SIFMA's former Sales & Marketing, Small Firms and Independent Firms conferences, producing North America's premier conference for private client groups at all levels. This conference is designed for senior managers in private client groups at global, regional, independent contractor and small broker-dealers, including national sales managers, regional directors, branch managers, wealth-management specialists, marketing specialists, and individual financial advisers and investment consultants. Mark your calendar for April 7 and 8 or, better yet, REGISTER TODAY.
Economic News
NAHB Housing Index Holds at 16 in December
By Gary Siegel, The Bond Buyer
Builders’ confidence in the market for new single-family homes was steady, as the National Association of Home
Builders' housing market index - a monthly gauge of builder sentiment – remained 16 in December from an unrevised 16
in November.
http://jlne.ws/haPh1O
Inventories at U.S. Companies Increase 0.7%, Less Than Forecast
By Bob Willis, Bloomberg
Inventories in the U.S. rose less than forecast in October, restrained by the biggest drop in retail stockpiles in
more than a year as merchants had trouble keeping up with surging demand.
http://jlne.ws/eDJ4pe
Retail Sales, Producer Prices Increase
By JEFF BATER And LUCA DI LEO, WSJ.com
U.S. holiday shoppers streamed into malls and cyberspace in November, giving the economy a kick as merchants
reported better-than-expected sales. Retail sales increased by 0.8% last month, the Commerce Department said
Tuesday. The gain was better than the 0.5% increase that economists surveyed by Dow Jones Newswires had projected.
http://jlne.ws/gs5doI
Fewer Homes `Underwater' Last Quarter as Foreclosures Rose
By John Gittelsoh, Bloomberg
The number of U.S. homes worth less than the debt owed on them dropped in the third quarter, largely because of
mounting foreclosures rather than a rise in property values, according to CoreLogic Inc.
http://jlne.ws/gINP75
US econ growth gauge at highest point since May- ECRI
Reuters
A measure of future U.S. economic growth rose to a 29-week high in the latest week, while the index's annualized
growth rate rose to a 27-week high, a research group said on Friday.
http://jlne.ws/gmleXY
Exchanges, Clearing Houses & MTFs
Advantage Futures Partners With ELXfutures to Offer FCM Services
Press Release
ELX Futures, L.P. (ELX), a leading electronic futures exchange offering a faster, more efficient global alternative
to trade U.S. Treasuries and Eurodollar futures contracts, announced today that Advantage Futures LLC, a premier
technology-focused futures brokerage firm, will become an authorized Participant and offer Futures Commission
Merchant (FCM) services for ELX.
http://jlne.ws/hDteEv
SunGard Supports CME Group Cleared Interest Rate Swaps
Press Release
SunGard has enhanced its Stream GMI post-trade listed derivatives solution to provide processing and accounting
support for CME Group cleared interest rate swaps, which it began clearing in October 2010.
http://jlne.ws/hzHNFj
Firms & Banks
RBS 'blocks FSA publication of bank investigation'
BBC
The Financial Services Authority (FSA) has pledged to publish a limited report on its findings of what went wrong at
Royal Bank of Scotland (RBS).
http://jlne.ws/idkJw1
What did banks do? It's not clear. What do they pay? They can't say. Why did they fail? It's a secret
Guardian Unlimited
The banking collapse is a tale of opacity and confusion. Now even the public report into RBS's collapse is
confidential. We need transparency in banking, and we need it now Fred the Shred could be at liberty to drive
another bank into oblivion. Sir Fred Goodwin, the former boss of Royal Bank of Scotland, has escaped any regulatory
penalty over the near collapse of the once mighty Caledonian ...
http://jlne.ws/ijhfMN
Goldman hires former Fed official as regulatory chief
By Aline van Duyn in New York
FT.com / Financials
Goldman Sachs has hired a former top Federal Reserve Bank of New York regulator as banks look to exert some
influence over the writing of new rules for profitable privately traded swaps markets. Theo Lubke, a former senior
vice president at the Fed who was tasked with cutting risk in the over-the-counter derivatives market, started work
this month at the bank's New York office as chief regulatory reform officer in the securities division, said a
Goldman Sachs official.
http://jlne.ws/gw4vsy
Incoming HSBC UK chairman Sandy Flockhart attacks 'unfair' bail-outs of RBS and Citibank
AFP Telegraph Finance News via Yahoo! UK & Ireland Finance
HSBC's senior UK banker has criticised "unfair" and anti-competitive government bail-outs of rivals such as Royal
Bank of Scotland and Citibank, and said business taxes need to fall if the ...
http://jlne.ws/eE0Z0z
Pimco's Government-Related Holdings Rise In Flagship Fund
WSJ.com
Bond fund giant Pacific Investment Management Co. boosted the U.S. government-related holdings in November in its
flagship bond fund after cutting them for four straight months. The U.S. government-related holding for Pimco's
flagship Total Return Fund, the world's biggest bond fund with $250.2 billion in assets, rose to 30% in November
from 28% in October, according to data available on the company's website Tuesday.
http://jlne.ws/dOIjUC
Outflows at PIMCO Total Return
Morningstar Advisor
Bill Gross' PIMCO Total Return PTTRX, the largest taxable-bond fund in the country with $256 billion in assets, saw
redemptions of $1.9 billion in November according to preliminary Morningstar fund flow data. This was the fund's
first month of net outflows in two years.
http://jlne.ws/ey13zs
Blackstone Names Asia Private-Equity Chief
BY AMY OR, WSJ.com
Blackstone Group LP has named Senior Managing Director Michael Chae as head of private equity in Asia. Mr. Chae also
will be responsible for the firm's limited-partner marketing personnel and coordinate relationships with its most
important limited partners in the region, Blackstone said in a statement Monday.
http://jlne.ws/hU2vxv
RBS to offer house price derivatives
By Claer Barrett, FT.com
The Royal Bank of Scotland is preparing to launch residential derivatives products aimed at retail investors who are
prepared to bet against the odds that house prices will rise.
http://jlne.ws/h2Xd5Z
RBS Harry Potter party: Bank saved by L20bn bailout splashes L250-a-head bash
Daily Mail
As the festive party season enters full swing, the bank stands accused of throwing what sounds like the corporate
bash of the year.
http://jlne.ws/hNP9hd
UBS Americas CEO says he is seen as a "cowboy" within Swiss bank
Shanny Basa, Financial News/Dow Jones
Robert Wolf, chairman and chief executive of UBS Group Americas and president of UBS Investment Bank, said he missed
out on becoming head of the Swiss firm because cultural differences mean management view him as “little more than a
cowboy.”
http://jlne.ws/fu9FVk
Banks Face Political Contribution Ban in Municipal Derivatives Business
Bloomberg
Banks that arrange derivative trades with U.S. states, municipalities and public-pension systems may be barred from
giving to the campaigns of politicians with the power to award them work.
http://jlne.ws/ewlFQA
RBS was a disaster on a massive scale - so was the FSA's 'report'
AFP Telegraph Finance News
Lord Turner's investigation is better late than never, but did it achieve anything?
http://jlne.ws/emtl1B
Citigroup Names Obama's Orszag Vice Chairman of Investment Bank
Bloomberg
Citigroup Inc., the biggest bailout recipient among U.S. banks during the financial crisis, hired former White House
Budget Director Peter Orszag to be vice chairman of its investment-banking division.
http://jlne.ws/hv7HPz
Auctions & Statistics
NY Fed purchases $6.780 bln in Tsy coupons: New York Fed purchases $6.780 bin in Treasury coupons
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking
system.
http://bit.ly/eioSRB
OTC
DTCC Makes Its GCF REPO Index Downloadable To The Public
ISS-MAG
The Depository Trust & Clearing Corporation (DTCC) announced today that, as part of its ongoing effort to bring
greater transparency to the multi-billion-dollar market for General Collateral Finance (GCF) repurchase agreements
(repos), it is now making the full data pack underlying its daily GCF Repo Index downloadable to the public.
http://jlne.ws/gqaKKy
**CN: DTCC makes steps toward greater transparency.
Credit Default Swaps On General Motors Start Trading
By Katy Burne Of DOW JONES NEWSWIRES
Barclays Capital and Goldman Sachs started quoting prices on credit default swaps tied to
senior unsecured General Motors Co. (GM) debt on Tuesday, even though the recently revived GM has not yet issued any
bonds.
http://jlne.ws/eYJKPl
U.S. Credit-Default Swaps Decline in Longest Stretch Since November 2009
By Mary Childs, Bloomberg
The cost of protecting bonds from default in the U.S. fell for a ninth trading day, the longest streak in 13 months,
as Federal Reserve spending to stimulate the economy encourages investors to embrace credit risk.
http://jlne.ws/gLXPTv
Over-the-counter market eyes revolutionary road ahead
eFinancial News
The over-the-counter derivatives industry is set to end 2010 very much as it has spent most of the year: waiting for
the next regulatory pronouncement.
http://jlne.ws/fqKu6e
OTC Regulations Dictate New Valuation Methods
Markets Media Online
As regulators on both sides of the Atlantic implement rules on OTC derivatives, firms need to focus on the
technology and methodology used to value the complex instruments.
http://jlne.ws/hkj7Oa
Record OTC IRS volumes for LCH.Clearnet's SwapClear
Press Release
November saw record volumes for LCH.Clearnet Limited's (LCH.Clearnet) market leading interest rate swap clearing
service, SwapClear. The total number of cleared OTC trades for the month reached 76,650 trade sides, 12% more than
October and a 24% increase on November 2009. The increased figures bring the total outstanding number of IRS
transactions to 1,720,390 trade sides with a notional value of USD248.3 trillion equivalent.
http://jlne.ws/eR0GXO
DTCC Unveils OTC Derivatives Matching Service; G14 Dealers Go Live
By Justin Grant
The Depositary Trust & Clearing Corp. announced the launch of a global over-the-counter equity derivatives cash
flow and netting platform, a service it said is now being used by the 14 largest international dealers.
http://jlne.ws/e2VLSl
Credit-Default Swaps Market Shrinks 50% From '07 Peak, BIS Says
By John Glover, Bloomberg
The credit-default swaps market has shrunk almost 50 percent from its peak in 2007 after traders canceled
overlapping deals and settled contracts through clearinghouses, the Bank for International Settlements said.
http://jlne.ws/fjGBzD
CFTC Delays Vote on Rules For Swap Trading
By SARAH N. LYNCH
WSJ.com
U.S. derivatives regulators unexpectedly tabled a plan to vote on proposed rules designed to make over-the-counter
derivatives prices more transparent, amid dissent within the agency.
http://jlne.ws/fnIGuD
US swap trading reforms face obstacle
By Michael Mackenzie and Aline van Duyn in New York
FT.com / Commodities
Differences have emerged between US regulators over how to police trading in the vast privately-traded swaps
markets, with proposals for new rules delayed by at least a week.
http://jlne.ws/gdrmaF
Quick View: OTC swaps fight brews
By Michael Mackenzie in New York
FT.com / FT Trading Room
The battle has begun. Regulating how the US dollar-denominated over-the-counter swaps market will trade under the
Dodd-Frank Act has sparked its first major fight. Instead of voting on the new rules governing swap execution
facilities, SEFs, Gary Gensler, chairman of the Commodity Futures Trading Commission said at an open meeting on
Thursday, that a planned vote would be delayed until next week, the 16th of December.
http://jlne.ws/dVsNyQ
Goldman CDS trading activities under fire
By Francesco Guerrera, Justin Baer and Telis Demos, FT.com
Goldman Sachs ' trading activities in the credit insurance market in 2007 have come under attack from a US senator
after e-mails revealed a senior trader urged colleagues to "kill" some investors' positions.
http://jlne.ws/g3lRjL
Global News
Spain Pays High Yield on Bonds
BY EMESE BARTHA, WSJ.com
Spain's final foray into the market for long-term bonds this year was an expensive exercise for the government
Thursday, coming a day after Moody's Investors Service Inc. warned that it might downgrade the country's credit
rating because of its mounting debt and funding needs.
http://jlne.ws/gtJW5A
Wen Seeks Increased Trade With India as China Pledges Wider Market Access
By Bibhudatta Pradhan and James Rupert, Bloomberg
China and India vowed to boost their bilateral trade by two-thirds to $100 billion in the next five years, following
talks in New Delhi between prime ministers Wen Jiabao and Manmohan Singh.
http://jlne.ws/gh1xPk
IMF Offl: Team in Portugal Discussing Annual Econ Review
By Heather Scott, iMarketNews
The team from the International Monetary Fund currently in Lisbon is there working on the annual review of the
nation's economy, an IMF spokeswoman said Thursday. Asked if the IMF is discussing a loan program with Portugal,
Caroline Atkinson, director of the IMF External Relations Department, said, "A small technical team is in Lisbon at
the moment - they are coming back soon - related to the Article IV consultation, and the discussion of structural
reforms."
http://jlne.ws/fvMb39
First French Islamic bond seen early 2011
By Shaheen Pasha, Reuters
The first Islamic bond issue out of France could happen early next year, the chief executive of the French Deposits
Guarantee Fund said on Wednesday.
http://jlne.ws/eDxIxR
Moody's Threatens Spain Downgrade
BY WILLIAM MALLARD, KOSAKU NARIOKA AND SANTIAGO PEREZ, WSJ.com
Moody's Investors Service warned it may downgrade its ratings on Spanish government debt, in a further sign that
Europe's debt worries are spreading from small, financially stressed euro-zone members such as Greece to bigger
economies closer to the euro-zone core.
http://jlne.ws/igZgKr
The core aim of UK economic policy – to stop house prices from falling
MoneyWeek
Wondering where your government's priorities lie? Then consider the interim report out from the Office of Tax
Simplification on how they might go about changing the hundreds of tax reliefs on offer at the moment.
http://jlne.ws/i3pGry
Belgium Has SP Outlook on Debt Cut to `Negative' Amid Political Stalemate
By John Martens, Bloomberg
Belgium had the outlook on its debt rating lowered to “negative” from “stable” at Standard & Poor’s Ratings
Services because the country’s political stalemate makes it vulnerable to rising borrowing costs.
http://jlne.ws/hReaK2
Canadians With More Debt Than U.S. Spark Policy Makers' Warning
By Theophilos Argitis and Greg Quinn, Bloomberg
Canada’s top economic officials yesterday urged households to be wary of taking on too much debt after data showed
the indebtedness of Canadians surpassed U.S. levels for the first time in 12 years.
http://jlne.ws/gGUnfJ
IMF Managing Director Dominique Strauss-Kahn Welcomes Mexico's Request to Expand Flexible Credit Line to US$73 Billion
“I welcome the Mexican authorities’ indication, underscored by President Felipe Calderón this morning, that Mexico
is interested in taking advantage of the recent reforms to the Fund’s Flexible Credit Line (FCL) facility to replace
its existing one-year, SDR 31.5 billion (about US$47 billion, equivalent to 1,000 percent of quota) precautionary
FCL arrangement with a two-year precautionary FCL arrangement in the amount of SDR 47 billion (about US$73 billion,
or 1,500 percent of quota)...."
http://jlne.ws/fLhTVM
Japan's Sengoku Deflects Pressure From Bank of Japan
BY YUKA HAYASHI, WSJ.com
The chief spokesman for Japan's government said additional monetary easing, including setting an inflation target,
won't help Japan conquer deflation. He also suggests Tokyo won't press the Bank of Japan for more steps to prop up
the economy anytime soon.
http://jlne.ws/dHmlzN
ECB's Trichet Urges EU to Enhance Bailout Fund
BY GEOFFREY T. SMITH, WSJ.com
European Central Bank President Jean-Claude Trichet called on European Union governments to enhance the financial
rescue vehicle they set up in the wake of the Greek debt crisis.
http://jlne.ws/gmxlRM
Canadian Central Banker Warns of ‘Death Grip’ on U.S. Dollar
By Nirmala Menon, WSJ.com
Canada’s central bank governor, Mark Carney, warned that the “death grip” on the U.S. dollar is “reducing the
prospects for rebalancing global demand.”
http://jlne.ws/dO5Vm8
Japan to Cut Corporate Income Tax Rate
By HIROKO TABUCHI, The New York Times
Japan will cut its corporate income tax rate by 5 percentage points in a bid to shore up its sluggish economy, Prime
Minister Naoto Kan said here Monday evening.
http://jlne.ws/ewDcsO
Myners calls for bank break-ups
The Sun
FORMER City minister calls for break-up of both Royal Bank of Scotland and Lloyds
http://jlne.ws/g1GvFk
Australia Introduces Plan to Increase Competition Within Banking Industry
By Angus Whitley and James Paton, Bloomberg
Australia plans to bolster credit unions and ban fees home owners face in switching mortgage providers, as the
government responds to public pressure to reduce the dominance of the nation's four biggest lenders.
http://jlne.ws/hL1gT3
European Body Stays Tough on Bank-Pay Rules
BY SARAH SCHAEFER MUÑOZ, WSJ.com
A pan-European committee of financial regulators took a tough line on banker pay in its final guidelines issued
Friday, despite heavy lobbying by the banking industry and U.K. officials to water down the rules.
http://jlne.ws/hXedcs
Bankers in Europe Face Cash Bonus Limits After Failing to Alter EU Rules
By Ben Moshinsky, Bloomberg
Bankers will face limits on cash payouts and the size of their bonus relative to salary from the start of next year,
as European Union regulators approved laws to curb incentives for excessive risk-taking.
http://jlne.ws/eJXo9Q
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