| Global News Coverage for Investment Professionals |  |
- Collapsing dollar puts pressure on Obama during visit to China
Finance ministers and business executives across Asia are joining U.S. congressional leaders, unions and trade lobbyists in alarm regarding how the weakness of China's yuan is crippling economic recovery. This comes as U.S. President Barack Obama arrives in the region. China's currency is pegged to the dollar, which has lost 14% of its value against the currencies of six major trading partners during the past year. Although China's central bank sent signals that it is ready to be more flexible on the yuan's value, that might not be enough to defuse the issue. Bloomberg
(13 Nov.)
- Audit: Taxpayer bailout possible after FHA reserves plunge
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Source: CNBC
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Cash reserves maintained by the U.S. Federal Housing Administration are substantially less than the level required by law, an independent audit found. In the worst-case scenario, the agency's reserves could be wiped out, forcing a taxpayer bailout to cover its obligations, according to the audit by Integrated Financial Engineering. CNBC
(12 Nov.), The Washington Post
(13 Nov.), NYTimes.com
(12 Nov.)
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- Intel to pay $1.25 billion to settle legal battle with AMD
A four-year lawsuit between chip-makers Intel and Advanced Micro Devices is over, with Intel agreeing to pay AMD $1.25 billion and promising to stick with agreed business practices. The firms dropped their patent claims against each other and agreed to cross-license technology for five years. "AMD is going to be perceived as the big winner here, but the bigger winner is Intel," said Hans Mosesmann, an analyst at Raymond James & Associates. "Instead of writing a check for $10 billion over time, they write one for $1 billion. Bloomberg
(12 Nov.), NYTimes.com
(12 Nov.)
- Foreign insurers fight for market share in China
Foreign insurers are struggling to gain market share in China. Life insurance premiums account for 2.2% of China's GDP, compared with 13.6% in Taiwan and 9.9% in Hong Kong. As of June, foreign companies took in 4.7% of all insurance premiums in China. Incumbent insurers appear to have an advantage. "There is clearly an uneven playing field," said Gary Bennett, head of New York Life's Chinese operations. "It's a fact that there is some level of protectionism." Bloomberg Businessweek
(12 Nov.)
- Report: U.S. companies not gaining business in Iraq
A report from Dunia Frontier Consultants shows that U.S. businesses are not getting much business in Iraq, even after the U.S. government spent trillions on reconstructing the country's economy. Although imports doubled from 2007 to 2008, U.S. companies did not increase their share, earning the same $2 billion as before. While the United Arab Emirates invested $31 billion in Iraq, U.S. firms put in only $400 million. NYTimes.com
(12 Nov.)
- AIG remains dependent on U.S. government assistance
American International Group owes $5.8 billion in the Federal Reserve's Commercial Paper Funding Facility, according to a regulatory filing. Other insurers of the same type have reduced their financing with this type of government-backed instrument. As government support of the instrument ends, AIG might be forced to access its credit line from the U.S. Treasury, according to the filing. "AIG remains more dependent on government financing than we would like them to be. It is more money to repay, and I don't know if the taxpayer will be made entirely whole," said Aite Group analyst Clark Troy. Bloomberg
(12 Nov.)
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- German economy grows 0.7% in Q3
The Federal Statistics Office reported that Germany's GDP rose a seasonally adjusted 0.7% in the third quarter compared with the second quarter, when it increased 0.4%. The government is seeing results from its $126 billion stimulus, analysts said. "It's quite a healthy pace of recovery for the German economy," said Giada Giani, an economist at Citigroup. Bloomberg
(13 Nov.)
- French economy sees 0.3% growth in Q3
France's GDP grew 0.3% in the third quarter, Economy Minister Christine Lagarde said. But the economy is expected to see a slight contraction for the full year, Lagarde said. France saw positive growth in the second quarter as well. Reuters
(13 Nov.)
- First-time unemployment claims ease off in U.S.
Initial claims for unemployment benefits in the U.S. declined to a seasonally adjusted 502,000 last week, the Labor Department said. It was a smaller number than economists had forecast and the lowest since the week that ended Jan. 3. Abiel Reinhart, an economist with JPMorgan Chase, said initial claims would have to drop to the high 400,000s to suggest even a weak improvement in the job market. He said the economy should start creating jobs in 2010's first quarter. Google/The Associated Press
(12 Nov.)
| Geopolitical/Regulatory |  |  |
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- EU postpones introduction of changes to accounting rules
A major overhaul of financial institutions' accounting rules, specifically fair-value rules, came into force in much of the world this week, but the European Commission decided to postpone adoption of the rules. Analysts said the changes will disproportionately hit some European banks. Some banks in Europe are upset with the decision because they are concerned they will be at a disadvantage compared with their international counterparts. Financial Times (tiered subscription model)
(12 Nov.)
- Hong Kong official says regulatory revamp will begin next year
Speaking at the Asia Risk Congress, Karen Kemp of the Hong Kong Monetary Authority said officials have been considering a wave of financial regulatory proposals, and next year they will start implementing some of the ideas. "Next year, 2010, will be a key year in determining the appropriate balance of regulation and addressing the weaknesses exposed by the crisis," Kemp said. Risk.net (subscription required)
(12 Nov.)
- Irish balk at plan for "bad bank"
A plan to bail out Ireland's banks provoked anger from people who think they are being asked to pay for bankers' irresponsible management, analysts said. The plan, which was passed by the country's parliament, will shift troubled assets to the National Asset Management Agency, a so-called bad bank. The largest union in the public sector called a 24-hour strike to protest the plan. NYTimes.com/Reuters
(12 Nov.)
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- Junior gold miners ETF from Van Eck debuts on NYSE Arca
Van Eck Global, which has a long track record with gold investment, launched a gold exchange-traded fund -- with a twist -- on the NYSE Arca platform. The Market Vectors Junior Gold Miners ETF invests in shares and depositary receipts of small-cap and mid-cap gold mining and production companies. The ETF is linked to the Market Vectors Junior Gold Miners Index. The rules-based index is a float-adjusted index made up of gold companies with a market capitalization of $150 million or more. The ETF carries a net expense ratio of 0.6%. IndexUniverse.com
(11 Nov.), Reuters
(11 Nov.), TheStreet.com
(11 Nov.)
| Ethics | | |
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- Bear Stearns acquittal extends record of losses
The acquittal of two former hedge fund managers at Bear Stearns on fraud charges extends a long record of failure on the part of government prosecutors to convict Wall Street workers, legal experts said. That record includes a large number of Enron managers, former Credit Suisse banker Frank Quattrone and HealthSouth founder Richard Scrushy. Bloomberg
(12 Nov.)
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