It's a cliche that dates back to Monopoly: A bank error in your favor leaves you with an unexpected windfall. But for Parijat Saha, an Indian schoolteacher, the Community Chest card came to life in a big way when he discovered that his bank account suddenly held $9.8 billion.
Wednesday, January 25, 2012
Commodity Mutual-Fund Runaround And The IRS
U.S. tax authorities should stop a private rulemaking process that has encouraged speculation in oil and agricultural markets by letting mutual funds exceed limits on commodity investments, Senator Carl Levin said. The Internal Revenue Service’s so-called private letter rulings, which let funds use foreign corporations and other strategies to escape the tax implications of boosting commodity holdings above 10 percent of assets, are a “runaround” of the law that reflects a “tortured reading,” Levin said at a news conference yesterday.
Spain Has 23% Unemployment
It was only yesterday that we noted that Spain (and its 23% unemployment) had tipped its cards to expose its utter desperation, when its PM basically begged for a Euroepan bailout.
Hedge Funds Unloading Greek Debt
LONDON — So much for that big fat Greek payday. Hedge funds that loaded up on Greek bonds in the last month — betting on a quick gain — are now scrambling to sell those holdings, fearful that European policy makers will force them to take a deep and binding haircut on the debt. But walking away from the trade may not be that easy. While the money managers had little problem snapping up the bonds from European banks eager to sell, the pool of potential buyers is drying up. Hedge funds have few options. Although talks between Greece and its bondholders have stalled, European officials are pressing for a deal by the end of this month. Under the proposed debt restructuring plan, hedge funds and other private sector creditors would have to incur losses of 50 percent or more — whether or not the bondholders agreed.
Futures Industry Tries To Shape The Regulatory Landscape
Earlier this month, in a ninth-floor conference room of the Northern Trust bank in Chicago, an unlikely assembly of futures industry executives, regulators and customers discussed the fallout from MF Global’s collapse. The closed-door meeting illustrated a fundamental shift under way in the futures industry: financial firms, ordinarily loath to accept regulation, are now spearheading efforts for new oversight as they try to heal the black eye left by MF Global and the disappearance of $1.2 billion in its customers’ money.
Mitt Romney's Dirty Little Secret - Carried Interest
But a big chunk of Romney's income doesn't come from stocks that he personally holds. In 2010, he made $7.4 million from carried interest. You haven't heard of carried interest? Basically, it's a share of investment income that goes to the private equity manager who oversaw the investment. Romney's carried interest income doesn't come from dividends on stock he owns, nor from the sale of stock that he once owned. The money wasn't generated from income that he had already paid tax on. Think of it as being sort of like a tip skimmed off the top of all the money that his company makes for its investors.
"Market as undervalued today as in 1990" Really???
CHAPEL HILL, N.C. (MarketWatch) — The stock market represents better value today than at any time in the last 20 years? That certainly is not something you’ve been reading recently in this column. For example, I’ve argued that, from a very short-term point of view, there is too much complacency out there — which is bearish from a contrarian point of view. ( Read my Jan. 18 column, entitled “Worrisome complacency.” )
US GAS: Nothing cures low prices like low prices
NEW YORK (Dow Jones)--Natural gas futures settled 6.9% higher Wednesday, as a rally spurred by output cuts by natural gas producers continued to lift prices from 10-year lows hit last week. Prices have gained 16% since Monday, when Chesapeake Energy, the second-biggest U.S. gas producer, said it would immediately curtail 0.5 billion cubic feet a day of gas production, or about 8% of its total output, adding that it could cut an additional 0.5 bcf a day.
Rates likely to stay near zero; and this is surprising why . . .?
The Federal Reserve said Wednesday that it would keep interest rates near zero through 2014 or longer to help boost the economy and for the first time set an explicit inflation target of 2 percent, signaling that the central bank is frustrated with the weak pace of growth.
Treasuries rally most in three months
NEW YORK (MarketWatch) — Treasury prices jumped on Wednesday, pushing yields on some securities down by the most in three months, after the Federal Reserve said it would keep interest rates at exceptionally low levels through late 2014 – more than a year longer than it has previously stated. “Now that the Fed has put it in black and white, it’s more of a certainty,” said Michael Cheah, senior fixed-income portfolio manager at SunAmerica Asset Management. “It’s the difference between proposing and accepting the ring.”
Gold back above $1,700
NEW YORK (Dow Jones)--Gold futures settled above $1,700 Wednesday for the first time in six weeks as news that the Federal Reserve expects short-term interest rates to stay near zero eclipsed worries about Europe's sovereign-debt crisis.
Black swans events waiting in crude?
The volatility that marked energy markets over the past year is almost guaranteed to continue in 2012. Geopolitical factors, such as Europe’s financial crisis and conflicts with Iran and other regions, make long-range forecasts hard to pin down. “The black swans are flocking together,” says Phil Flynn, senior energy analyst at PFGBest. “There are so many black swans out there, they’ve become the new white swans. That’s the problem going into 2012 — we’re going to need a new term. There are so many issues that really could have an impact on oil prices.”
Connecticut Resident Charged With Fraud By CFTC
Washington, DC - The Commodity Futures Trading Commission (CFTC) today announced that it filed and simultaneously settled charges against Timothy Michael Murphy of Redding, Conn., and his New York-based company, Centurion Global Capital Management LLC (CGCM), for fraudulently soliciting at least 40 customers to participate in a commodity pool.
Bernanke Live Press Conference
Watch the live press conference with the Chairman of the FOMC, Ben S. Bernanke, scheduled to begin at 2:15 p.m. EST, January 25, 2012.
FOMC statement--January 25, 2012
Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.
OIL FUTURES: Nymex Crude Turns Positive On Inventory Report | Fox Business
Oil prices bounced off lows after the Energy Information Administration reported that U.S. crude inventories rose by 3.6 million barrels last week. The build was much smaller than the 7.3-million-barrel increase the American Petroleum Institute reported in separate data late Tuesday.
Gold Less Volatile? Seriously?
Gold provided the best returns of all commodities in the past five years when adjusted for volatility, and Goldman Sachs Group Inc. says the rally will continue as options traders signal no change in the metal’s relatively low risk.
CFTC Commitment of Traders Post Mortem
Hedge funds and large investors maintained their exposure of nominal USD 80 billion in the 24 US traded commodities that we track. This number however hides some major changes between the different sectors. The total net long position of futures and options contracts actually fell by 5 percent due to a massive long liquidation in the grain sector, where the nominal contract size is relatively small, while all other sectors, especially metals, saw an increase.
Currency hedging takes center stage
(Reuters) - International firms are spending more time at the highest levels discussing how to hedge currency risk, particularly euro-denominated earnings and transactions, in readiness for a worst case scenario of a euro zone breakup.Companies are scrutinizing the inbuilt protections in their hedge contracts and robustness of the settlement process if the euro were to collapse, bankers and executives said in interviews leading up to and during the World Economic Forum in Davos.
Longview Extended Commodity Index Outperforms
Price gyrations in the commodities markets last year have highlighted important differences between familiar commodity indices and the benchmark for the Arrow Commodity Strategy Fund CSFFX +0.11% (A-Shares). Arrow Funds today credited the unique methodology of its benchmark, the Longview Extended Commodity Index (LEX), for the strong performance relative to other broad-based commodities funds in 2011. For the one-year period ending 12/31/2011, the Arrow Commodity Strategy Fund's total return outperformed the Morningstar Commodities Broad Basket Category average by 3.06%, ranking in the 29th percentile among 117 funds (Past performance does not guarantee future returns).
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