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December 12, 2007 Sign up Forward Archive Advertise News on the capital markets, securities and financial industry   Morning Bell    Citigroup names Pandit CEO, Bischoff chairman By tapping Vikram Pandit and Sir Win Bischoff as Citigroup's CEO and chairman, respectively, the banking giant has put two relatively unknown entities into its top positions and the financial world's spotlight. Pandit said he planned to begin reviewing the bank's divisions immediately. "We would not be surprised if following his review, certain businesses were either sold or restructured," John McDonald, a banking analyst at Bank of America, wrote in a report. The Wall Street Journal (tiered subscription model) (12/12), Financial Times (free content) (12/12) PHLX's new World Currency OptionsSM and PBOT's World Currency FuturesSM are easy to understand, easy to trade, easy to manage and are specially designed to work for individual investors. With small-sized trading units and settlements in U.S. dollars, along with fully electronic order entry and execution, they might just meet your trading needs. For more information, contact the PHLX directly at www.phlx.com.   Video View  SIV losses, withdrawals plague Florida fund A battered Florida investment fund for local governments continues to face problems. Local governments have withdrawn $1.9 billion since the fund was reopened after accounts were frozen to stem a wave of rapid withdrawals. The fund has been hit hard on losses in structured investment vehicles. Bloomberg1/ClipSyndicate (12/11), Bloomberg (12/12)   Industry News  With rate cut, Fed shows skepticism of recession Tuesday's smaller-than-expected Federal Reserve interest-rate cut signals the central bank still expects the economy to grow. The quarter-point cut was smaller than what many analysts and investors had hoped for. Bloomberg (12/12) Economists say Fed's rate cut may not be enough While some economists remain cautiously optimistic about the chances that the U.S. will avoid a recession, others say the world's largest economy is headed in that direction despite the Federal Reserve's recent interest-rate cut. In a recent survey, a panel of 16 SIFMA economists predicted that by mid-2008, the Fed will trim the interest rate to 3.5%. The panel also predicted that because of the Fed's moves, the U.S. economy may slow down next year, but not contract. USA TODAY (12/11) Fed considering additional measures for liquidity concerns The lackluster response to Tuesday's interest-rate cut has the Federal Reserve considering all available measures to address liquidity concerns, according to published reports. Action could come as early as today and could include a new liquidity facility that will auction loans to banks. Reuters (12/12) Fed still keeping eye on inflation The quarter-point interest-rate cut announced Tuesday by the Federal Reserve shows that the central bank is still keeping an eye on inflation, the "other" big threat to the economy. Investors had hoped for a half-point cut as a way to stave off a recession. A policy statement accompanying the rate cut said the Fed was hoping to prompt "moderate growth." The Associated Press/ClipSyndicate (12/12), Bloomberg Businessweek (12/11) SuperSIV bailout funding seems less necessary A crisis brought on by structured investment vehicles appears to be shrinking. That makes the need for a bailout plan brokered by the Treasury Department and backed by leading Wall Street banks less urgent. "The longer the SuperSIV takes, the less of a need there will be for it," said Priya Shah, a credit analyst at Dresdner Kleinwort Group Ltd. Bloomberg (12/11) Credit Suisse manages to sidestep disaster For the past couple of decades, Credit Suisse has had a difficult time avoiding market implosions, but it seems the Swiss bank may have escaped relatively unscathed from the subprime-mortgage meltdown. Chief Executive Officer Brady Dougan and the bank's management are being credited with reducing Credit Suisse's exposure to the market. The Wall Street Journal (tiered subscription model) (12/12) Greenspan: Subprime crisis was "accident waiting to happen" A period of unprecedented global growth seduced investors into underpricing risk, making the subprime crisis an "accident waiting to happen," former Federal Reserve Chairman Alan Greenspan writes in a Wall Street Journal commentary. "The root of the current crisis, as I see it, lies back in the aftermath of the Cold War, when ... market capitalism quietly, but rapidly, displaced much of the discredited central planning that was so prevalent in the Third World," Greenspan wrote. The Wall Street Journal (tiered subscription model) (12/12), Reuters (12/12) Asset managers may benefit from active sovereign funds With a number of sovereign-wealth funds acquiring stock and companies at an unprecedented pace, U.S. asset managers are looking to get into the game. "A surge in global asset supply should intensify as markets deepen and greater capital mobility is encouraged," said Alex Patelis of Merrill Lynch. "This also represents incremental revenue for the global asset management industry from a sizable new client base." MarketWatch (12/11) Other News Tutwiler joins Thain, Chai at Merrill Lynch InvestmentNews (free registration) (12/11) BlackRock chief encourages clients to add risk to portfolios Financial News Online (U.K.) (subscription required) (12/12)   Regulatory Roundup  Editorial: SEC needs to take IFRS adoption one step further An editorial in The Wall Street Journal advocates the elimination of Generally Accepted Accounting Principles in favor of International Financial Reporting Standards. Foreign companies can now report using IFRS after a Securities and Exchange Commission decision last month. "The next item in this investor-friendly agenda is to give U.S. companies the option of choosing to report with IFRS, instead of GAAP," the newspaper said. The Wall Street Journal (tiered subscription model) (12/12) Other News SEC could update rules on oil-reserve disclosure The Wall Street Journal (tiered subscription model)/Dow Jones Newswires (12/12)   Legislative Update  House AMT patch would raise hedge fund managers' taxes House Democrats are expected to pass a bill today that would increase taxes on hedge fund managers. The tax increase is designed to pay for a proposed patch to the alternative minimum tax. The Wall Street Journal reports that AMT relief is "all but certain" to be completed this year. The Wall Street Journal (tiered subscription model) (12/12) Bill would let Bankruptcy Court judges alter mortgage terms Bankruptcy Court judges would have more flexibility to alter the terms of certain mortgages under a piece of housing legislation agreed on by several House Judiciary Committee members. States, including Ohio, are also pushing loan relief to stem a tide of expected foreclosures brought on by the meltdown in the subprime-mortgage market. The Wall Street Journal (tiered subscription model)/Dow Jones Newswires (12/12) The Buzz(CORPORATE ANNOUNCEMENTS) Take a closer look at First Clearing. Clear Thinking isn't a catch phrase - it's how we approach business and relationships with clients. We offer a platform of products and services that will enable you to compete on a level playing field with any firm in the business. Call 1-800-727-0304 or visit www.firstclearing.com. Interested in learning more about advertising in SIFMA SmartBrief? Contact Abiy Bekele at 212.450.7919 or abekele@smartbrief.com.     Technology  NYSE Euronext brings technology back in-house System crashes have prompted NYSE Euronext to regain control of its technology from Atos Euronext Market Solutions. "Insourcing our technology gives us greater flexibility and competitive advantage in a fast-moving exchange landscape where technology is key," said Jean-François Théodore, NYSE Euronext deputy chief executive. Financial News Online (U.K.) (subscription required) (12/12) Other News Rise of ABX underlines issue with mortgage-debt markets The Wall Street Journal (tiered subscription model) (12/12)   SIFMA News  Engage China supports Strategic Economic Dialogue Engage China, a coalition of SIFMA and eight other financial-services trade associations, issued a statement Tuesday in support of the U.S.-China Strategic Economic Dialogue (SED), which will hold its third meeting in Beijing today and Thursday. "The Engage China coalition strongly supports the goals of the U.S.-China Strategic Economic Dialogue (SED) and believes continued engagement with China is the best way to remove the barriers that U.S. securities firms, banks, insurance companies, futures brokers and asset managers face in China," said the coalition. Read the full statement. 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