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Remarks of Chairman Gary Gensler, OTC Derivatives Reform, European Parliament
March16, 2010--Good morning Chairwoman Bowles and members of the Economic and Monetary Affairs Committee. I thank you for inviting me to speak today on regulatory reform of over-the-counter (OTC) derivatives, or swaps. I would also like to introduce my two daughters, Lee and Isabel, who are here with me today, enjoying their Spring break from school.
The 2008 financial crisis was global in nature. The financial system failed the test. The financial regulatory system failed the test. So many people in Europe and in the United States who never had any connection to derivatives or exotic financial contracts had their lives hurt by the risks taken by financial actors.
OTC derivatives were at the center of the 2008 financial crisis. They added leverage to the financial system with more risk being backed up by less capital. U.S. taxpayers bailed out AIG with $180 billion when that company’s ineffectively regulated $2 trillion derivatives portfolio, managed from London and cancerously interconnected to other financial institutions, nearly brought down the financial system. As we later learned, much of the bailout money flowed through AIG to U.S. and European banks. These events demonstrate how over-the-counter derivatives – initially developed to help manage and lower risk – can actually concentrate and heighten risk in the economy and to the public.
As capital and risk know no geographical boundaries, the nature of today’s marketplace demands a coordinated, international approach. We’re going to need to work closely together to reform and repair the regulatory system.
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Source: CFTC.gov
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
March 16, 2010--Standard & Poor's Canadian Index Operations announces the following index changes:
The 5.75% Cumulative Redeemable Series 3 Preferred Shares of ATCO Ltd. (TSX:ACO.PR.A) have been called for redemption on Tuesday, March 23, 2010, at $25.50 per share.
The shares will be removed from the S&P/TSX Preferred Share Index after the close of Tuesday, March 23, 2010.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard& Poors
Statements by the Federal Open Market Committee
March 16, 2010--Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing. Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly
However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
In light of improved functioning of financial markets, the Federal Reserve has been closing the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities and on March 31 for loans backed by all other types of collateral.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.
Source: Federal Open Market Committee
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
March 16, 2010-Standard & Poor's Canadian Index Operations announces the following index changes:
The shareholders of Exeter Resource Corporation (AMEX:XRA) have approved the statutory plan of arrangement whereby they will, on a 1-for-1 basis, receive shares of Extorre Gold Mines Limited (TSX:XG) following a distribution.
Extorre Gold Mines Limited will be added to the S&P/TSX Global Gold and Global Mining indices effective after the close of Tuesday, March 23, 2010.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poors
Joint Statement of Timothy F. Geithner, Peter R. Orszag, and Christina D. RomerBefore the Committee on the Appropriations, U.S. House of Representatives
March 16, 2010--Chairman Obey, Ranking Member Lewis, and Members of the Committee, thank you for inviting us to testify this afternoon about the Troika forecast, the outlook for the American economy, and the Administration's economic agenda.
We come before you after a trying year for the Nation. A little more than one year ago, the economy seemed on the verge of a second Great Depression. Together with the Congress, the President worked aggressively to stabilize the financial system and bring the economy back from the brink. The worst now appears to be behind us. However, the country faces significant and ongoing challenges: high unemployment, the need to build a new and stable foundation for prosperity in the years and decades ahead, and a medium- and long-term fiscal situation that could ultimately undermine future job creation and economic growth. The big problems we face today were all years in the making, and it is our responsibility to address them without delay.
I. Rescuing the American Economy from the Great Recession
Responding to a Historic Crisis
In the months before President Obama took office, the American economy faced disruptions even larger than those that triggered the Great Depression. The disturbances to credit markets, the decline in wealth, and the rise in uncertainty were all much larger than those that hit the economy in late 1929 and early 1930. The result of these shocks was a terrible deterioration in economic conditions in late 2008 and early 2009. Real GDP declined at an annual rate of over 5 percent in the fourth quarter of 2008 and over 6 percent in the first quarter of 2009, and job losses averaged 650,000 per month in the fourth quarter of 2008 and 750,000 per month in the first quarter of 2009. The threat of a second Great Depression was frighteningly real.
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Source: U.S. Department of the Treasury
NASDAQ OMX Appoints Mary McDermott-Holland as of Vice President of Transaction Services Business
March 16, 2010-- The NASDAQ OMX Group, Inc.
(Nasdaq:NDAQ) today announced that Mary McDermott-Holland has been
appointed as Vice President of NASDAQ OMX Transaction Services. Ms.
McDermott-Holland will join NASDAQ OMX effective April 6 and report to
Eric Noll, Executive Vice President of NASDAQ OMX Transaction Services.
Ms. McDermott-Holland will manage the institutional investor
relationships of the U.S. Transaction Services business acting as the
liaison to the Institutional Traders Advisory Council (ITAC) as well as
representing NASDAQ OMX at industry conferences and events.
"Mary is an industry leader and a well-known name amongst institutional traders," said Eric Noll, Executive Vice President of NASDAQ OMX. "We expect Mary to have a near-immediate impact on our thinking around market structure and our larger relationship to the institutional investor community. Working with our traditional broker-dealer client base, Mary can service that community's needs more effectively. We are very pleased to have her on board."
Ms. McDermott-Holland joins NASDAQ OMX from Mellon Capital Management where she served as Director and Trading Manager. Previously, she was Senior Vice President at Franklin Portfolio Associates before its merger with Mellon Capital in January, 2009. During her 28-year career, she was Head of Institutional Trading and focused on execution, transaction costs, process improvement, systems enhancement and client service. She also managed relationships with brokers, vendors and venues.
Mary has served the industry in many capacities including Past Chairman
of the Security Traders Association, President of the Boston Securities
Traders Association, Board Member of the Boston Stock Exchange, Member
of the New York Stock Exchange Institutional Traders Advisory Committee
and Allocation Committee, Co-Chair of NASDAQ's Quality of Markets
Committee, Member of Trader Forum's Advisory Committee, Member of the
Investment Company Institute's Equity Markets Advisory Committee and
was the founding Chairman of NASDAQ's Institutional Traders Advisory
Committee. Mary is a member of the National Organization of Investment
Professionals and currently serves on Fordham University's Business
Advisory Council.
Source: NASDAQ OMX
Emerging Markets Week in Review-3/8/2010 - 3/12/2010
March 15, 2010--The Dow Jones Emerging Markets Composite Index continued its upward march last week, up 1.52%. This is the fifth consecutive weekly increase, the index’s longest streak since last May. Technology continued to lead the market upward, up +2.93% for the week and 8.26% for the year.
All sectors were positive for the week, with Consumer Goods and Utilities gaining the least, up 0.91% and 0.82% respectively. Year to date. sector returns have been mixed with Technology and Consumer Services, two of the more cyclical sectors, up the most for the year, while Energy and Financials providing the worst returns, down 1.96% and 1.69% respectively.
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Source: Emerging Global Advisors
Citi Establishes Investor Services Team Specializing in Exchange Traded Funds
March 15, 2010--Citigroup today announced the appointment of Jeffrey McCarthy as Global ETF Product Head in its Securities and Fund Services business (SFS), to accelerate efforts in Exchange-Traded Funds and related product services globally.
He will be responsible for product innovation and market development and will coordinate the delivery of end-to-end servicing solutions across trading, distribution and administration for the global ETF market. Mr. McCarthy joins Citi from Brown Brothers Harriman, where he was the Global ETF Product Manager.
“With its global network and reach, Citi is uniquely positioned to help promote ETF product innovation and distribution in domestic and international markets," said Neeraj Sahai, Global Head of Citi’s Securities and Fund Services. “Jeff’s extensive market experience and product expertise will complement Citi’s emerging market capabilities and help enable our asset manager clients launch new ETF products on a comprehensive basis.”
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sOURCE: Yahoo News
ISE Announces First Trust Advisors to Launch Two New ETFs Based on ISE Proprietary Indexes
March 15, 2010--– The International Securities Exchange (ISE) today announced that First Trust
Advisors L.P. has launched two new exchange traded funds (ETFs) based on ISE’s newest proprietary sector
indexes, the ISE Global CopperTM Index (Ticker: ISC) and the ISE Global PlatinumTM Index (Ticker: ORE). The
ISE Global Copper Index and the ISE Global Platinum Index provide benchmarks for investors interested in
tracking public companies that are active in the copper mining industry or the platinum group metals mining
industry, respectively.
“Commodity exposure has taken on an increasingly important role in investors’ allocation decisions, and First
Trust has established itself as a leader by creating targeted equity-based investment products in this area,” said
Kris Monaco, Director of New Product Development at ISE. “Demand for copper and platinum group metals is
increasing as new and innovative uses for these natural resources are developed and as investors consider
alternatives for inflation hedges. We are very excited to once again partner with First Trust to create the first
equity-based investment vehicles that allow investors to participate in both event-driven news and the long-term
trends in these sectors.”
“Investors might be surprised to learn how vital both copper and platinum are to our economy,” said Robert F. Carey, Chief Investment Officer of First Trust Advisors. “Copper is essential for industrial, technological and economic uses. In fact, it is used in every major industry, and demand is at an all-time high due to economic growth both in the U.S. and emerging countries,” he stated. “Platinum is typically thought of by investors mostly for its use in high-end jewelry, but it is mainly used for industrial and consumer product applications,” Mr. Carey continued. “Once again we are pleased to collaborate with ISE to create these timely new ETFs which give investors the opportunity to invest in companies that produce these vital metals,” Mr. Carey concluded.
First Trust has received the necessary approvals from the Securities and Exchange Commission and the two new ETFs were listed on Nasdaq on March 12, 2010. Additional details regarding each ETF are below:
First Trust ISE Global Copper Index Fund (Nasdaq: CU) – The Fund will normally invest at least 90% of total assets in common stocks that comprise the ISE Global Copper Index, which currently contains 27 companies that provide a benchmark for investors interested in tracking public companies that are active in the copper mining industry based on analysis of revenue derived from the sale of copper. Component securities must be actively engaged in some aspect of the industry, including copper mining, refining or exploration.
First Trust ISE Global Platinum Index Fund (Nasdaq: PLTM) – The Fund will normally invest at least 90% of total assets in common stocks that comprise the ISE Global Platinum Index, which currently contains 25 companies that provide a benchmark for investors interested in tracking public companies that are active in Platinum Group Metals mining based on revenue analysis of those companies. Platinum group metals include Platinum, Palladium, Osmium, Iridium, Ruthenium and Rhodium. Component securities must be actively engaged in some aspect of the industry such as mining, refining or exploration.
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Source: International Securities Exchange (ISE)
Regulatory Approval for Eurex in Québec (Canada)
Eurex will expand direct access to its products in a key North American market
March 15, 2010--Eurex, the international derivatives exchange, today announced that it has received regulatory exemption from the Autorité des marchés financiers (AMF) in Québec to offer its full suite of products in the province of Québec, Canada. Eurex is the first-ever foreign derivatives exchange to receive such an exemption by AMF.
“For the first time, Eurex’s entire product range will be available in a key North American market. This is an exciting opportunity to admit customers as new members in Quebec and introduce to them our diverse, highly liquid futures and options products,” said Michael Peters, member of the Eurex Executive Board.
Customers from Québec now have direct access to trading on Eurex and to leading Eurex products including benchmark index futures based on indices like EURO STOXX 50®, DAX® and SMI®, as well as Europe’s most important interest rate derivatives Bund, Bobl and Schatz.
Source: Eurex