Americas ETP News
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Fannie & Freddie ‘could cost US $363bn’
October 21, 2010--Fannie Mae and Freddie Mac, the government-owned mortgage finance companies, could cost US taxpayers as much as $363bn to the end of 2013, according to their regulator, less than some of the worst-case scenarios circulated by critics of the agencies, but more than projections by the White House.
Since they were rescued by the government in 2008, Fannie Mae and Freddie Mac have drawn $148bn from the US Treasury to stay afloat as losses on bad loans underwritten during the housing boom turned bad at a record pace.
In August, the Congressional Budget Office said Fannie and Freddie would need $390bn in federal subsidies to the end of 2019. The White House’s Office of Management and Budget had in February estimated the cost to be as little as $160bn for the same period, providing the economy continued to strengthen.
read more
Source: FT.com
Transatlantic clearing war set to get hotter
October 21, 2010--A transatlantic battle in the derivatives business is poised to heat up after LCH.Clearnet, the UK-based clearing house, said it would launch clearing of a vast untapped section of the interest rate swaps markets “in the next few weeks”.
The disclosure comes a week after rival CME Group, which owns the Chicago Mercantile Exchange, said it had started clearing interest rate swaps.
It will provide a boost to LCH.Clearnet, which has pinned much of its hopes for growth on cracking the US market for interest rate swaps clearing as it is losing customers in cash equities clearing in Europe.
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Source: FT.com
BM&FBOVESPA posts record financial volume in ETF BOVA11 funds
Financial volume reaches BRL71.67 million in ETF BOVA11, totaling 1,029,790 lots in 1,457 trades at an average price of BRL69.59
October 20, 2010-- BM&FBOVESPA recorded a record financial volume on Wednesday in ETF BOVA11 Exchange Traded Funds for the Ibovespa index, at BRL71 million. The previous record was BRL65.87 million, on January 21.
There were 1,029,790 BOVA11 round lots traded on Wednesday, at an average price of BRL69.59, in 1,457 trades. Trades in PIBB11, SMALL11, MOBI11 and CSMO11 reached financial volumes of BRL1.77 million, BRL1.17 million, BRL1.75 million and BRL 67,780, respectively.
ETFs
ETFs are funds which mirror indexes and their units are traded on the Exchange just like shares. When investors buy the units of any given ETF, they become holders of all the component shares of the index which that ETF replicates without having to buy the shares of each company in the index separately. There are currently seven index funds (ETFs) trading at BM&FBOVESPA: BOVA11, SMAL11, MILA11 PIBB11, BRAX11, CSMO11 and MOBI11.They track the Bovespa, Small Cap, MidLarge Cap and IBrX-50, IBrX-100, Índice de Consumo and Índice Imobiliário, indices respectively.
Source: BM&FBOVESPA
BNY Mellon OnCoresm Service Integrates Middle-Office and Data Management Solutions for Investment Managers
October 20, 2010--BNY Mellon Asset Servicing, the global leader in securities servicing, has recently announced its newly named outsourcing service, BNY Mellon OnCore, which provides an integrated offering for investment managers, combining technology and operations to deliver a sophisticated suite of middle-office and data management solutions.
The OnCore service and platform combines our Asset Servicing capabilities around trade processing, data warehousing, accounting, and performance measurement to provide a comprehensive solution to our clients. Our OnCore offering spans the continuum of investment operations solutions from traditional software installation to ASP hosting models to full business process outsourcing.
For more information, contact +1-203-614-0800 or visit www.argainvest.com.
Source: BNY Mellon
Claymore files with the SEC
October 20, 2010--Guggenheim Funds Investment Advisors, LLC (formerly, Claymore Advisors, LLC) has filed an application for exemptive relief with the SEC.
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Source: SEC.gov
BlackRock dismisses ETF price war concerns
October 20, 2010--BlackRock has felt little impact from the price war currently being fought by US exchange traded fund providers, according to Larry Fink, chief executive of the world’s largest asset manager.
“Fees are a consideration and may be a bigger driver, possibly in the future,” said Mr Fink. “[But] we are not seeing industry-wide pressure at all.”
Mr Fink said BlackRock’s “experiment” in lowering fees on its gold ETF had led to increased inflows but “only a fraction of what we expected”
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Source: FT.com
U.S. International Reserve Position
October 20, 2010--The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $136,532 million as of the end of that week, compared to $135,631 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets (approximate market value, in US millions)
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October 15, 2010 |
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A. Official reserve assets (in US millions unless otherwise specified) 1 |
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136,532 |
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(1) Foreign currency reserves (in convertible foreign currencies) |
Euro |
Yen |
Total |
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(a) Securities |
9,964 |
15,986 |
25,950 |
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of which: issuer headquartered in reporting country but located abroad |
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0 |
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(b) total currency and deposits with: |
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(i) other national central banks, BIS and IMF |
14,674 |
7,852 |
22,526 |
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ii) banks headquartered in the reporting country |
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0 |
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of which: located abroad |
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0 |
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(iii) banks headquartered outside the reporting country |
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0 |
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of which: located in the reporting country |
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0 |
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(2) IMF reserve position 2 |
13,142 |
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(3) SDRs 2 |
58,720 |
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(4) gold (including gold deposits and, if appropriate, gold swapped) 3 |
11,041 |
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--volume in millions of fine troy ounces |
261.499 |
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(5) other reserve assets (specify) |
5,154 |
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--financial derivatives |
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--loans to nonbank nonresidents |
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--other (foreign currency assets invested through reverse repurchase agreements) |
5,154 |
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B. Other foreign currency assets (specify) |
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--securities not included in official reserve assets |
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--deposits not included in official reserve assets |
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--loans not included in official reserve assets |
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--financial derivatives not included in official reserve assets |
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--gold not included in official reserve assets |
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--other |
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read more
Source: U.S. Department of the Treasury
IMF's Western Hemisphere Regional Economic Outlook Shows Domestic Demand Leading Recovery in Many Latin American Countries; Risk of Overheating Must be Watched
October 19, 2010--Two years after the onslaught of the global financial crisis, some countries in the Western Hemisphere are growing at a pace that is second only to emerging Asia, according to the latest Regional Economic Outlook from the International Monetary Fund (IMF). Growth in many economies appears to be self-sustained and based on robust domestic demand, meaning their near-term prospects are positive even if recovery in advanced economies continues to be sluggish, says the IMF's Western Hemisphere: Heating up in the South, Cooler in the North, which was launched today in Bogotá in a seminar hosted by the Central Bank of Colombia.
Real GDP in the Latin America and Caribbean region is set to expand by 5.7 percent in 2010 and 4 percent in 2011. Within the region, countries are performing at different paces. Most commodity-exporting countries in South America enjoy very favorable external conditions––high international commodity prices and easy access to international finance ––and growth in some countries is projected to exceed 7 percent this year. Central American economies have kept a positive, but more moderate rate of growth (averaging about 3 percent in 2010), reflecting their greater linkages to the slower-growing U.S. economy. For most Caribbean countries, recovery is only beginning and prospects are still limited by high levels of public debt and weak tourism demand from the U.S. and other advanced economies.
"The marked heterogeneity across the region means varied challenges for economic policy formulation," Nicolas Eyzaguirre, Director of the IMF’s Western Hemisphere Department, said. "For most of South America, it is all about the risks of too much of a good thing, to avoid possible excesses of demand and finance. In Central America, governments have to continue to be prudent, to rebuild their defenses and continue pursuing reforms to boost competitiveness. Caribbean countries generally have no space for fiscal stimulus due to their high debts and still have to push ahead with fiscal consolidation plans."
Robust Domestic Demand
One of the most significant findings of the Regional Outlook is how domestic demand has been strengthening in the fastest-growing countries in South America. For such countries, the strength and momentum of domestic demand are likely to dominate their near-term growth prospects, provided advanced economies do not suffer any major setbacks. That is a different reality from the United States, where the recovery so far has been dependent on policy stimulus.
As commodity prices are expected to remain high, the commodity-exporting countries will benefit from strong export earnings. At the same time, those with stronger fundamentals and track records of sound policies will have ample access to foreign financing on easy terms. While those economies stand to benefit from low global interest rates and increased liquidity, policymakers must be alert to the risks of excesses. "Demand needs to moderate in these countries," said Mr. Eyzaguirre, "or they may risk experiencing overheating, inflation and widening current account deficits."
view Regional Economic Outlook: Western Hemisphere
Heating Up in the South, Cooler in the North report
Source: IMF
iShares files with the SEC
Octobe 19, 2010--iShares has filed a registration statement with the SEC for
iShares MSCI Russia Capped Index Fund.
view filing
Source: SEC.gov
Report to the Congress on Risk Retention
October 19, 2010--The Federal Reserve Board on Tuesday issued a report on the potential impact of credit risk retention requirements on securitization markets. The report was required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Act also requires the Federal Reserve and other agencies to jointly implement risk retention requirements for securitizers or originators of assets securitized through the issuance of asset-backed securities.
The report highlights the significant differences in market practices and performance across securitizations backed by different types of assets. The report recommends that the agencies take these differences into account when developing risk retention requirements in order to achieve the objectives of the Dodd-Frank Act without unnecessarily impeding the availability of credit.
View the Report to the Congress on Risk Retention
October 2010
Source: Board of Governors of The Board the Federal Reserve System
