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Thursday, November 12, 2009


*Its just amazing what a day brings.
Asian markets fall on economic concerns
Asian-Pacific markets mostly dropped Thursday as traders worried about the economy. Japan's Nikkei 225 fell 0.7%, Australia's S&P/ASX 200 slipped 0.2% and South Korea's Kospi Composite lost 1.4%. Hong Kong's Hang Seng Index decreased 1%, Taiwan's Taiex closed flat and China's Shanghai Composite inched down 0.1%. Meanwhile, New Zealand's NZX 50 gained 0.3%. The Wall Street Journal (12 Nov.)

*is this guy some big fat blowhard or what? The board should have let him go.
AIG's Benmosche says he's "totally committed" to company
American International Group CEO Robert Benmosche denied rumors that he plans to leave the company. In an open letter to employees, he said he is "totally committed to leading AIG through its challenges." Benmosche said the biggest challenge is to work out a compensation plan for employees. Any such plan would be scrutinized by White House pay czar Kenneth Feinberg. The New York Times (11 Nov.)

Fannie Mae, Freddie Mac say more losses are possible
The U.S. Treasury has injected $112 billion into Fannie Mae and Freddie Mac since the government took over last year, but the companies said it could have been more. Fannie and Freddie collected billions on claims from mortgage-insurance companies, but those companies are struggling with deteriorating conditions. A filing with the Securities and Exchange Commission shows Fannie set aside $1 billion, while Freddie has not set aside anything to cover the possibility that the insurance firms will not be able to pay. The Wall Street Journal (12 Nov.)

PwC says governments could take years to sell bank stakes
PricewaterhouseCoopers said it is a long shot that governments will be able to quickly sell their stakes in financial institutions rescued during the financial crisis and instead might take as many as seven years to exit. "It could easily take two to three years to sell major stakes, but up to five to seven years before governments are able to fully divest of their stakes and related guarantees," said Jon Sibson, a partner at PwC. Reuters (12 Nov.)

*you'll be sorry....
Retail investors pour record amount into muni mutual funds
The Investment Company Institute released data showing that investors put $55 billion this year into municipal bond mutual funds to take advantage of record returns. For the first nine months of this year, returns on state and local municipal bonds reached 16%, the best in 20 years, according to the Merrill Lynch Municipal Master Index. Retail investors poured more than $2 billion per week into muni mutual funds in August and September. Bloomberg (12 Nov.)

Budget crisis drives U.S. states to desperate measures
California is no longer the only state taking drastic measures to pay bills. Nine other U.S. states also are in financial trouble, a study found. The Pew Center on the States said Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin are in deep distress. Only Wisconsin officials disagreed. Bloomberg (12 Nov.)

U.S. foreclosure filings slip 3% from September to October
October saw 332,292 U.S. homes seized by lenders or listed in default or auction documents, data provider RealtyTrac said. It was the eighth consecutive month that the number was more than 300,000, but there was a 3% decline from September. "The fundamental forces driving foreclosure activity in this housing downturn -- high-risk mortgages, negative equity and unemployment -- continue to loom over any nascent recovery," said James Saccacio, RealtyTrac's CEO. "We continued to see foreclosure activity levels that are substantially higher than a year ago in most states." Bloomberg (12 Nov.)

Firms try to prevent reinstatement of Glass-Steagall Act
Former U.S. President Bill Clinton repealed the Glass-Steagall Act, which split investment-banking activities from retail-banking operations, a decade ago. Congress is considering reinstating the measure, and financial firms are scrambling to prevent the change. "We're playing with live ammo," said Sam Geduldig, a lobbyist at Clark Lytle & Geduldig who represents financial-services companies. "The banking community is rightfully concerned." Bloomberg (12 Nov.)

Fed's activist response to crisis prompts political fallout
The Federal Reserve has long held its independence as key to its ability to focus on its mandate and guide the economy. Political fallout from the Fed's role in and response to the finance crisis will make it difficult for the central bank to do its job, former Fed officials said. U.S. Sen. Christopher Dodd said his proposal to overhaul financial regulation would help the Fed focus on interest rate and monetary-policy decisions by removing its responsibility to oversee banks. The Obama administration disagrees. The contrasting views could hinder approval of legislation to revamp financial regulation. The Washington Post (12 Nov.)

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