November 3, 2011
JLN Interest Rates - http://www.jlninterestrates.com
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MSRB PUBLISHES NEW QUARTERLY MUNICIPAL MARKET STATISTICS
The Municipal Securities Rulemaking Board (MSRB) has released market statistics for third quarter 2011 trading data and other figures for the $3.7 trillion municipal bond market. The third quarter statistics can be downloaded for review and analysis. Statistics for the first and second quarters of 2011 can be found here.
Among the third quarter 2011 highlights: Par amount traded in the municipal securities market in 2011:Q3 totaled $851,356 million, the highest quarterly volume in 2011; however, this was 8.5% lower than the $930,707 million in the same period one year ago. A revenue anticipation bond from the State of California was the most active in the quarter with $10,819 million in par traded and 6,408 trades. Customer buying activity decreased to an average daily par amount of $6,859.5 million in 2011:Q3, compared to $7,549.6 million in the same period last year. The number of variable rate demand obligations rate resets totaled 221,341 in 2011:Q3, down 11.8% from the 250,929 rate resets in 2010:Q3. The number of continuing disclosure documents received by the MSRB totaled 25,463 in 2011:Q3, up 3% from the 24,727 documents submitted in the same period of 2010.
All quarterly statistical summaries include aggregate market information for different types of municipal issues and trades, and the number of interest rate resets for variable rate demand obligations and auction rate securities. The data also include statistics related to continuing disclosure documents received through the MSRB’s Electronic Municipal Market Access (EMMA) website.
The MSRB’s market information transparency programs promote transparency and access to real-time, municipal market bond information. The MSRB makes this information available free of charge on its EMMA website. Daily and historical summaries of trade data based on security type, size, sector, maturity, source of repayment and coupon type are housed in EMMA’s Market Statistics section.
The MSRB has operated under Congressional mandate with oversight by the Securities and Exchange Commission since 1975.
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Tarps Plus Donates Tarps to Homeless at Thanksgiving Tarp Drive to Generate Film Funding
PR Newswire
LOS ANGELES, Nov. 2, 2011 /PRNewswire/ -- It only seems fitting that a film about a homeless man who sometimes sleeps under tarps will be benefiting the homeless. "The Guitar Player" is a dramatic feature film about a homeless street performer. The writer and director of the film to be, Michael Stein, has come up with a unique way in trying to get the film made. He has been donating tarps across the county to homeless shelters in order to bring more awareness of his project to investors and film companies. The tarps are an essential item for homeless people living in cold climate areas that are in danger of hypothermia.
http://jlne.ws/tNGh6x
**CN: This press release turned up in a word search. Not what we would normally select for the IR newsletter, but it kind of helps to put things into perspective, doesn't it?
-- Christine Nielsen
Lead Stories
Obama: Solving Europe crisis is top G-20 priority
MarketWatch
U.S. President Barack Obama on Thursday said the top priority of the meeting of Group of 20 leaders in Cannes, France, is to come up with a solution to the euro-zone debt crisis. In an appearance with French President Nicolas Sarkozy, Obama said the European Union has taken "important steps toward a comprehensive solution," but said further details are needed regarding how the plan will be implemented.
http://jlne.ws/ukJQWd
ECB Cuts Rates, In Surprise Move
Wall Street Journal Blogs
The ECB just cut rates, a fairly big surprise, and welcome news for the risk-on set.
http://jlne.ws/rOxzIU
Europe Debt Crisis Resolution Critical to Obama Re-Election Bid
BusinessWeek
President Barack Obama's path to re- election may pass through Berlin and Paris.
http://jlne.ws/vA5ZtP
Condoleezza Rice: U.S. Needs to Be 'Engaging, Engaging, Engaging With Europe'
Wall Street Journal Blogs
Former Secretary of State Condoleezza Rice says the U.S. government should be far more active in helping Europe find a solution to its debt crisis.
http://jlne.ws/vVlWje
Confronting U.S.-China Economic Imbalances
Foreign Relations
China has stepped up its purchases of U.S. treasuries in recent years, and in September 2008, it surpassed Japan as the largest holder of U.S. debt.
http://jlne.ws/tiQiKH
Fed forecasts low inflation to 2014
FT Finance News (ext) via Yahoo! Finance
The US Federal Reserve slashed its growth forecasts and forecast low inflation for years to come on Wednesday but made no short-term changes to monetary policy.
http://jlne.ws/rOrTl0
Federal Reserve scales back projections of economy's growth
Los Angeles Times
The Federal Reserve reduces its projections of growth for the U.S. economy, and Chairman Ben Bernanke says he's frustrated by the current situation but has limited options.
http://jlne.ws/uKwgih
Federal Reserve wraps up policy meeting
Standard-Examiner
The Federal Reserve, after employing a dwindling set of policy options at its last two meetings, may hit the pause button in hopes that the faint signs of the economy's rebound will grow stronger. read more
http://jlne.ws/tm8zf6
Federal Reserve leaves policies intact
UPI
WASHINGTON, Nov. 2 (UPI) -- The U.S. Federal Reserve left monetary policy unchanged Wednesday, saying the economy showed improvement in the third quarter.
http://jlne.ws/uafIAO
The Fed's economic projections, at a glance
AP via Yahoo! News
Federal Reserve policymakers issued sharply lower forecasts for economic growth on Wednesday, compared to previous figures released in June. The update shows that the central bank expects growth to be sluggish and unemployment high through at least 2013.
http://jlne.ws/vXhg1N
Fed Cites 'Downside Risks,' Cuts 2012 Outlook
BusinessWeek
Federal Reserve policymakers said the economy has picked up while "significant downside risks" remain, and they refrained from taking any additional steps to ease monetary policy
http://jlne.ws/rCipuz
Bernanke says Fed not responsible for policing MF Global
Reuters via Yahoo! News
NEW YORK (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank had tried to open the door to smaller firms like MF Global, but it was not the Fed's role to oversee those firms.
http://jlne.ws/vUatIk
Bernanke Ready to Open Lending if He Must
National Journal via Yahoo! News
Ben Bernanke doesn't want to rescue the United States from an escalating European financial crisis, but he says he'll try. That makes the Federal Reserve Board chairman a rare-and possibly unique-policymaker on either side of the Atlantic: one with both the means and the will to beat back the flames of Athens now threatening to burn the global economy back to recession.
http://jlne.ws/sb97ef
Recap: Ben Bernanke's November Press Conference
Wall Street Journal Blogs
Federal Reserve Chairman Ben Bernanke faced reporters today for his third press conference of the year as U.S. growth picks up, but trouble in Europe threatens to restrain the economy.
http://jlne.ws/vijSX3
Bernanke to Occupy Wall Street: 'I get it'
Los Angeles Times
Federal Reserve Chairman Ben S. Bernanke says he has sympathy for the Occupy Wall Street movement's "dissatisfaction" with the economy. But he also said his critics were misguided if they believed that Fed policy has been motivated by a desire...
http://jlne.ws/vPSHKm
Fed signals changes to communication policy
FT Finance News (ext) via Yahoo! Finance
After the drama of its last two meetings, the US Federal Reserve kept things sedate in November - but it signalled that more changes to its communication policy are on the way.
http://jlne.ws/ta6dVV
Treasury Receives $972M TARP Repayment from AIG
Insurance Journal
The U.S. Treasury Department said it received an additional repayment of $972 million from American International Group (AIG). The payment came mostly from the scheduled release of the escrow from AIG's sale of its American Life Insurance to MetLife last …
http://jlne.ws/siD6KQ
Treasury won't shrink bond auctions
The Toledo Blade
WASHINGTON - The U.S. Treasury on Wednesday dropped plans to gradually shrink the size of its bond and note auctions because of uncertainty over fiscal stimulus legislation and deficit reduction moves by a congressional panel.
http://jlne.ws/s8C5hL
SEC Said to Review Possible Insider Trading in MF Bonds
Bloomberg
The U.S. Securities and Exchange Commission is reviewing trades in MF Global Holdings Ltd. (MF) convertible bonds to determine whether some investors sold the debt based on confidential information before the firm’s demise, according to two people with direct knowledge of the matter.
http://jlne.ws/tZEQj1
Pimco's Gross: Separate retail and investment banking, Reuters reports
The Fly On The Wall Finance News via Yahoo! Finance
Pimco bond fund head Bill Gross says U.S. banks have not done enough to ensure they are well capitalized, and getting back to a system where retail and investment banking are separated would be attractive ...
http://jlne.ws/vOKxd4
Freddie Mac reports $6 billion loss for third quarter; asks for $6 billion in federal aid
Washington Post
WASHINGTON - Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter. Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010. Read full article
http://jlne.ws/ryMDZ5
Index providers offer new solutions as sovereign bond issuance soars
FT Finance News (ext) via Yahoo! Finance
Soaring government bond issuance in the developed world following the global financial crisis has prompted a growing interest in fundamentally based investment strategies in fixed income markets.
http://jlne.ws/tCQ8H6
Bill Gates to tout Robin Hood tax to G20
CBS News
Billionaire philanthropist tries to sell 20 leading economies on small tax for stock, bond trades despite U.S., U.K. opposition
http://jlne.ws/tvLoK6
Debit-Fee 'Flop' Leaves Banks Seeking $8 Billion in Revenue
BusinessWeek
Bank of America Corp. and its U.S. rivals may struggle to replace the $8 billion in revenue lost because of federal debit-card rules after abandoning plans to extract more fees from customers.
http://jlne.ws/vZMFqi
Jamie Dimon Talks with Reporters About 'Occupy' Movement
ThirdAge
Jamie Dimon of JPMorgan Chase & Co. joins executives from the financial institutions who received TARP funds testifying ... Read More before the House Financial Services Committee about how the Troubled Asset Relief Program (TARP) funds were used on Capitol Hill in Washington on February 11, 2009.
http://jlne.ws/thJPwZ
SIFMA Opposes Latest Financial Transaction Tax Legislation
Press Release
SIFMA today released the following statement from Kenneth E. Bentsen, Jr., executive vice president, public policy and advocacy in response to legislation introduced by Senator Tom Harkin and Representative Peter DeFazio to impose a tax on trades of stocks, bonds and derivatives contracts.
http://jlne.ws/vsCeXC
Events
International Banking Conference 2011
November 10 - November 11, 2011
Banking conference with a global focus
http://jlne.ws/ow1CVU
Fourteenth Annual International Banking Conference
November 29 - December 1, 2011
Federal Reserve Bank of Chicago holds 14th International Banking Conference
http://jlne.ws/nTDrKO
7th Annual FIA Asia Derivatives Conference
November 29 - December 1, 2011
FIA looks at the futures and options industry in Asia
http://www.futuresindustry.org/asia-2011.asp
Exchanges, Clearing Houses & MTFs
CME says MF Global moved funds after audit, rang up $633-mil. shortfall
Crain's Chicago Business
(Crain's) - The futures exchange operator says MF Global ran an 11.6% shortfall in customer funds, due to improperly moving money to its own accounts.
http://jlne.ws/rvc2Jc
MF Global's fall puts spotlight on CME Group
FT Finance News (ext) via Yahoo! Finance
The case of the missing customer funds at MF Global is putting a spotlight on the failed broker's de facto supervisor, CME Group.
http://jlne.ws/vqx5w2
Firms & Banks
$600 million missing at MF Global
CNN Money
A government regulator said in court Wednesday that roughly $600 million is missing from the books of bankrupt brokerage MF Global. The firm, headed by former New Jersey governor and Goldman Sachs CEO Jon Corzine, filed for Chapter 11 protection on Monday following a panic from investors over its holdings of risky European debt.
http://jlne.ws/uZfdGu
MF Clients May Wait Years for Cash If Bankrupt Broker Sued
BusinessWeek
MF Global Holdings Ltd. customers may have to wait years to get their money back if the futures broker is sued, according to Frederick Grede, the liquidation trustee overseeing the bankruptcy of Sentinel Management Group Inc.
http://jlne.ws/rXOqpi
MF Global hole shrinks but still hundreds of millions
Reuters via Yahoo! News
WASHINGTON (Reuters) - U.S. regulators' estimate of the shortfall in MF Global's accounts has declined but it is still at several hundred million dollars, a source told Reuters on Wednesday.
http://jlne.ws/stBs7o
MF Global's Jon Corzine Runs Out of Luck
Business Week Finance Next (ext) via Yahoo! Finance
The company's bankruptcy may well mark the end of a political and investing career distinguished by aggressive risk-taking
http://jlne.ws/tZnLDs
Many Alarms Rang Before MF Global Crashed
New York Times
For four months, regulators issued warnings that MF Global needed to raise more capital, but the firm's chief executive, Jon S. Corzine, resisted.
http://jlne.ws/vVq6PQ
FBI joins the probe on MF Global as it enters the spotlight
GlobalPost
MF Global, headed by ex-New Jersey governor and Goldman Sachs chairman Jon Corzine, filed for bankruptcy Oct. 31 after bad investments in European sovereign debt. Once news of the bankruptcy was widespread, MF Global informed the CFTC and SEC there were "possible deficinieces in customer futures segregated accounts held at the firm." read more
http://jlne.ws/vTtkdO
Corzine Lived Up to Risk-Taking Reputation at MF Global Before Bankruptcy
Bloomberg
In his 24-year career at Goldman Sachs Group Inc. (GS) , Jon Corzine made a name for himself as an intrepid trader who pushed the limits of risk. So it makes sense that when Corzine, after almost a decade as a U.S. senator and governor, was named chairman and chief executive officer of MF Global Holdings Ltd. (MF) in March, 2010, his plan for expanding the futures and commodities trader involved ...
http://jlne.ws/vrjxLI
Corzine Forgot Lessons of Long-Term Capital: Roger Lowenstein
BusinessWeek
Thirteen years ago, when the hedge fund Long-Term Capital Management was desperately negotiating with Wall Street banks for a bailout, Jon Corzine, the chief executive officer of Goldman Sachs Group Inc., called John Meriwether, LTCM's founder, and read him the riot act.
http://jlne.ws/svlBCW
Deutsche Boerse Completes Wind-Down Of MF Global's UK Arm
By Jacob Bunge Of DOW JONES NEWSWIRES
Deutsche Boerse AG (DB1.XE, DBOEF) told traders Wednesday that its trade-clearing facility has "successfully wound down" positions held under the membership of collapsed broker-dealer MF Global Holdings Ltd. (MF).
http://jlne.ws/vRCfh1
Morgan Stanley Said to Agree to Sell Saxon Capital to Ocwen
BusinessWeek
Morgan Stanley, the sixth-largest U.S. bank by assets, agreed to sell Saxon Capital Inc., a mortgage servicer the firm bought in 2006, to Ocwen Financial Corp., according to a person with knowledge of the talks.
http://jlne.ws/uAaaCO
Deutsche Bank co-chiefs agree on new roles - paper
Reuters Company Finance News via Yahoo! Finance
FRANKFURT, Nov 2 (Reuters) - Deutsche Bank's Juergen Fitschen and Anshu Jain have agreed how t
o divide up their responsibilities as co-chief executives and will gradually assume their responsibilities starting early 2012, German weekly paper Die Zeit said.
http://jlne.ws/vUqmsJ
ING 3Q11 underlying net profit increases to EUR 1,285 million
Thomson Reuters ONE Finance News via Yahoo! Finance
ING Group`s 3Q11 net result was EUR 1,692 million, or EUR 0.45 per share, including divestments, discontinued operations and special items.
http://jlne.ws/sxuhWT
PIMCO Launches Aussie Bond ETF
ETF Database Finance News via Yahoo! Finance
PIMCO , the bond fund giant that has made a push into the ETF space in recent years, rolled out the first international bond ETF in its lineup this week with the debut of the Australia Bond Index Fund ...
http://jlne.ws/vEn9g1
Lloyds Banking May Need New Chief
BusinessWeek
Lloyds Banking Group may have only two months to find a new chief executive officer after Antonio Horta-Osorio was told to take a "temporary leave of absence"
http://jlne.ws/rD07xV
Citigroup Said to Sell Largest Loan CDO of Year for Guggenheim Investment
Bloomberg
Citigroup Inc. (C) sold a $1 billion collateralized loan obligation for Guggenheim Investment Management LLC, the largest such fund of the year, according to people with knowledge of the deal.
http://jlne.ws/urpOhz
Commerzbank sells former Dresdner Bank HQ
Reuters Company Finance News via Yahoo! Finance
FRANKFURT, Nov 2 (Reuters) - Commerzbank has soldthe former headquarters of Dresdner Bank to a consortium led byGerman property group IVG for 400 million euros ($547million), sealing one of this year's ...
http://jlne.ws/u4AP7R
JPMorgan Divides Capital Markets Teams Into Debt, Equity
BusinessWeek
JPMorgan Chase & Co., the biggest U.S. bank, separated responsibility for its capital markets business into two groups, naming new heads for equity and debt.
http://jlne.ws/v1VQNM
RBS says to boost small business lending
Reuters via Yahoo! News
LONDON (Reuters) - Royal Bank of Scotland is not out of the woods yet but will aim to hike lending to small businesses by at least 15 percent over the next three months, the bank said, in an effort to stave off criticism it is not doing enough to support the economy.
http://jlne.ws/uawU7m
Regulators
Draghi's First Move As ECB Boss: Cutting Interest Rates With Greece In Peril
Forbes
Europe's central bank lowers benchmark rate with debt crisis raging.
http://jlne.ws/sOe8ex
Lloyd's McGovern 'Honored' by FIO Committee Appointment
Insurance Journal
Sean McGovern's appointment to the Federal Advisory Committee on Insurance is tacit recognition of the important role Lloyd's plays in the North American market, especially for specialty lines and reinsurance.
http://jlne.ws/uCLbIf
Regulators pushed MF Global on risky bets months ago
Reuters Company Finance News via Yahoo! Finance
* Had lengthy talks with SEC about off-balance-sheet bets* Gross: Wall Street has "lost its way"* ICE says has ample collateral for customer transfers* Risky debt deal accounting raises red flag
http://jlne.ws/sI13U7
SEC expects to file further CDO charges
By Kara Scannell in New York, Financial Times
The Securities and Exchange Commission expects to file charges against more Wall Street firms related to the sale of mortgage-linked securities, with hopes of wrapping up probes from the financial crisis in the near term, according to a senior enforcement official.
http://jlne.ws/sSmqlm
Global News
Crisis mounts around Italy's Berlusconi
Reuters via Yahoo! News
An emergency Italian cabinet meeting called to accelerate budget reforms and calm market turmoil ended late on Wednesday with yet more bickering among coalition partners and little progress on reforms needed to strengthen the economy.
http://jlne.ws/ugfp3z
Czech Lawmakers Endorse Deficit Cut as Cabinet Eyes Crisis Plan
BusinessWeek
Czech lawmakers approved the 2012 state budget draft in the first reading, locking in a 22 percent deficit cut, as the government prepares fiscal changes to minimize the impact of the euro area's debt crisis.
http://jlne.ws/uTxbDL
Crisis Threatens Growth
Bloomberg
The Czech central bank refrained from changing borrowing costs for a 12th meeting as it evaluates the impact of the euro area's debt crisis and the possible need to lower interest rates to support the economy.
http://jlne.ws/uxfEYN
Argentina Moves to Cut Subsidies as Budget Deficit Widens
BusinessWeek
Argentine President Cristina Fernandez de Kirchner is cutting utility subsidies to commercial users in a bid to stem a widening budget deficit in South America's second-biggest economy.
http://jlne.ws/upWTpx
Greek PM Papandreou to call off referendum
Greek Prime Minister George Papandreou has canceled his plan to hold a referendum, according to his speech after exiting an emergency cabinet meeting Thursday.
http://jlne.ws/tEOpYz
Top Chinese banks 'selectively easing': report
Market Watch
Some Chinese banks are beginning to increase lending in a "selective easing," as part of government's efforts to fine-tune its monetary policy, according to a Chinese media report Wednesday. Lending for the year is likely to exceed 7.5 trillion yuan ($1.2 trillion), with banks likely to issue 700 billion yuan in new lending in the final two months of the year ...
http://jlne.ws/sl97tC
Hungary May Have to Bridge IMF Rift as Bond Noose Tightens
BusinessWeek
Hungarian Premier Viktor Orban may have to abandon his policy of shunning the International Monetary Fund as his "unorthodox" measures contribute to the European Union's second-biggest default-risk jump behind Greece.
http://jlne.ws/vYGJae
Libya c.bank looks to IMF amid cash crisis
Reuters via Yahoo! News
TRIPOLI (Reuters) - Libya's acute cash crisis is set to get worse and its banking system requires a complete overhaul that will be guided by the International Monetary Fund and World Bank, the central bank's recently appointed governor said.
http://jlne.ws/s926pY
Bank of Canada's Carney says vigilant on C$ impact on economy
International Business Times
Canada's central bank is particularly "vigilant" in monitoring the effects of currency moves on inflation in times of great volatility, Bank of Canada Governor Mark Carney said on Wednesday.
http://jlne.ws/rExSZD
North Korea's GDP Shrank in 2010, South's Central Bank Says
BusinessWeek
North Korea's economy shrank for two consecutive years as cold weather and rain hurt farming and power and raw material shortages cut industrial output, South Korea's central bank said.
http://jlne.ws/trEYeD
Kenya central bank sets new rules for repo market
Reuters via Yahoo! News
NAIROBI (Reuters) - Kenya's central bank said on Thursday it had set a new minimum interest rate on reverse repo agreements and increased scrutiny of its lending to commercial banks in a fresh effort to stabilise the currency and improve clarity and certainty in the market.
http://jlne.ws/sruVic
Portugal, hit by recession, seeks bailout changes
AP via Yahoo! News
Portugal wants to negotiate more flexible terms for its euro78 billion ($107.5 billion) bailout but has no intention of backsliding on its commitment to lower debt and rewire its uncompetitive economy, the prime minister said.
http://jlne.ws/tpzuac
Disclaimer: The John Lothian, Environmental Markets, JLN Metals, JLN Managed Futures, JLN Interest Rates, JLN Options and JLN FX newsletters and blogs and MarketsWiki are products of John J. Lothian & Company, Inc. The opinions expressed in these publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers.
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