Americas ETP News Older Than 1 year-If your looking for specific news, using the search function will narrow down the results
Feinberg Testimony before the House Financial Services Committee
February 25, 2010--I thank you for the opportunity to testify today. The subject of executive compensation continues to concern the American people and the international business community, so I welcome your invitation and look forward to participating in this hearing.
As you know, in June of 2009 I was asked to serve as the Special Master for TARP Executive Compensation by Secretary Geithner. In that capacity, under the relevant statutory[1] and regulatory[2] authority, I have a number of responsibilities related to the oversight and review of financial industry compensation.
Bloom and Millstein before the Congressional Oversight Panel
February 25, 2010--Good morning.
Chair Warren, and members of the Congressional Oversight Panel, thank you for the opportunity to testify before you today. We are here to report on the state of the capital markets for financing the purchases of cars and light trucks by dealers and consumers, and in particular the relationship between one of the nation's largest sources of such financing – GMAC[1] – and the Treasury's investments in General Motors and Chrysler.
Background on Auto Industry Investments
Over the past year, the Obama Administration has been working to manage an historic crisis in the American automobile industry. President Obama inherited a situation in which the industry had lost 50% of its sales volume and over 400,000 jobs in the year before he took office. GM and Chrysler had received substantial loans from the prior Administration and were requesting additional assistance. Without such assistance, both companies faced almost certain liquidations, which would have caused an enormous disruption to the entire American automotive industry and posed a significant risk to the overall economy. GM and Chrysler's outright failure would have resulted in the loss of hundreds of thousands of jobs across multiple industries and further damage to the financial system, as auto financing accounts for a material portion of overall financial activity.
Working with their stakeholders and the President's Auto Task Force, both GM and Chrysler underwent fair and open bankruptcies and have emerged as stronger global companies. This process required deep and painful sacrifices from all stakeholders – including workers, retirees, suppliers, dealers, creditors, and the countless communities that rely on a vibrant American auto industry. Anytime a company as large and interconnected as GM or Chrysler becomes insolvent, the collateral damage is enormous. However, the steps that the President took not only avoided a potentially catastrophic collapse and brought needed stability to the entire auto industry, they also kept hundreds of thousands of Americans working and gave GM and Chrysler a chance to become viable, competitive American businesses.
Background on Auto Finance Market
A viable auto industry requires financing for both dealers and consumers. The vast majority of automobile purchases in the U.S. are financed, including an estimated 80%-90% of consumer purchases and substantially all dealer inventory purchases.
Both this Administration and the prior Administration have recognized that preventing a collapse of the auto industry required stabilizing the auto finance industry as well. Therefore, from the early days of this Administration, Treasury identified addressing the problems in this market as a priority of our financial stability plan.
For the last 80 years, the auto industry has largely relied upon dedicated financing providers. Most dealer inventories have historically been financed by the captive finance companies (e.g., Ford Motor Credit financed 77% of their U.S. dealer inventories in 2008).[2] Captives have also been the largest source of financing for consumers, financing approximately 47% of consumer units between 2006 and 2008 (30% through loans and 17% through leases). Banks, third-party finance companies, and credit unions financed an additional 30%-40% of consumer purchases.[3] Since at least the 1970s, these financing options supported consumer demand by helping to dramatically lower the total cost of owning a car, from an average monthly payment of 9.1% of household income in the 1970s to 5.7% recently.[4] The improvement in the affordability of owning an automobile coincided with an increase in cars per driver from 0.93 in the 1970s to 1.16 in the 2000s, and likewise supported increases in the size and quality of cars purchased.[5]
Specialized automotive finance companies have unique resources, infrastructure, and long term experience underwriting automotive credit, and for the foreseeable future they will continue to be the largest sources of credit for both consumers and dealers.
GMAC
Founded as GM's captive finance subsidiary in 1919, GMAC has been the primary source of financing for GM's dealers and consumers for over 90 years. At the time of Treasury's initial investment in GMAC, in December 2008, GMAC provided: wholesale financing for 75% of GM's dealers representing 85% of total dealer inventories; "in-transit" [6] financing for 95% of the GM dealers financed by GMAC; and consumer financing for 25% of GM's retail sales. In turn, GM represented 96% of GMAC's wholesale financing volumes and 84% of new vehicle retail financing volumes in 2008.
Distress in Credit Markets. As a result of the financial crisis, particularly the events of September 2008 including the collapse of Lehman Brothers, credit availability to auto dealers and consumers became severely impaired. The impact of the contraction of credit was dramatic: loan approval rates dropped, interest rates increased, and financing terms tightened. This was especially true for GM and Chrysler, as uncertainty about the future of the companies impaired the ability of GMAC and Chrysler Financial to access the capital markets. Consumers were immediately impacted: loan approval rates to prime borrowers dropped from the mid-80% to approximately 60%, loan-to-value ratios dropped from 95% to 85%, and interest rates increased from approximately 5.0% to over 8.0%.[7] In addition, GMAC and Chrysler Financial cancelled their vehicle leasing programs and reduced lending to lower income borrowers considerably. Some estimates suggest that the contraction in the auto finance market reduced auto sales by 1.5 – 2.5 million cars per year. [8]
The Morningstar Box Score Report First Half 2009
February 24, 2010-After accounting for risk, size, and style, only 37% of active funds beat the respective Morningstar Style Index over the past three years3
Top-performing funds have been less risky over the past three years than their underachieving peers3
Over the past three years, active funds holding more cash outperform their more fully invested counterparts
view report
Emerging Global Shares to Launch BRXX - Brazil Infrastructure
February 24, 2010--Emerging Global Shares (EG Shares), the first dedicated
emerging markets sector ETF provider, today launched the Brazil Infrastructure Index Exchange-Traded Fund (NYSE: BRXX), the first ETF focused solely on the infrastructure sector in Brazil. The Fund invests in 30 of the largest publicly traded companies dedicated to the infrastructure industry in that country, and is designed to track the performance of the INDXX Brazil Infrastructure Index.
“Like China, Brazil has a rapidly growing middle class that demands the foundation of a
functional and modern economy of a developed nation,” said Robert Holderith, President and
CEO of EG Shares. "Further, given the nation’s large population and urbanization trends, Brazil
is greatly behind in its timeline to build out major infrastructure projects, all of which further
emphasizes the need to expand their internal infrastructure system.”
The Brazil Infrastructure Index has an average market capitalization of $11.7 billion and the Fund charges a net expense ratio of 0.85%* (gross expense ratio: 1.10%). The top five industry weightings of the Index, as of 12/31/09, are Metals & Mining (14.25%), Diversified Telecommunications (14.18%), Electric Utilities (12.25%), Independent Power Producers (11.27%) and Transportation Infrastructure (8.15%), followed by Wireless Telecommunication Services, Machinery, Water Utilities, Aerospace & Defense, and Media.
According to Richard Kang, CIO and Director of Research at Emerging Global Advisors, “The opportunity in Brazil is about more than the upcoming World Cup and Olympic games. The Brazilian government has resources to their infrastructure expansion, and it’s in the interest of the government, the country’s growing corporate sector and the average citizen that this build out happen, and happen fast.”
The Emerging Global Shares Brazil Infrastructure Index Fund is the sixth ETF to be introduced by Emerging Global Shares. Other funds include the Emerging Global Shares China Infrastructure Fund (CHXX), Emerging Global Shares Emerging Markets Metals & Mining Fund (EMT), Emerging Global Shares Emerging Markets Energy Fund (EEO), Emerging Global Shares Emerging Markets Financials Fund (EFN) and the Emerging Global Shares Emerging Markets Titans Composite Index Fund (EEG).
*This agreement will remain in effect and will be contractually binding for at least one year from
the date of the Prospectus
First Trust files with the SEC
February 24, 2010--First Trust has filed a registration statement with the SEC for
First Trust Developed International Markets
AlphaDEX(R) Fund and the Prospectus for First Trust Emerging Markets AlphaDEX(R)
Fund.
read more
A New Options Industry Council Study Finds The More Client Focused Advisors
February 24, 2010--The Options Industry Council (OIC) today released the results of the Financial Advisor Engagement Study, conducted by the Diamond Group Ltd., and finds advisors inclined to use options to be more knowledgeable about different investment products with more assets under management than those disinclined. The new study also showed interesting correlations to previous OIC research on options investors.
OIC undertook this research project in the fourth quarter of 2009 in order to refine the OIC Advisor program launched last year. While not the purpose of this study, OIC found differences between financial advisors who advocated options and those who avoided them. Research findings show financial advisors who use options to be more well-rounded and client focused than advisors who avoid options. Additionally, advisors willing to use options favor solutions over products when considering client portfolios.
Key correlations were found when looking at the financial advisor engagement study findings compared with the latest studies of options investors conducted by Harris Interactive Inc. in 1995, 2000, and 2005. OIC did not expect these studies to parallel, as they used different methodologies. However, according to both studies, advisors and investors inclined to use options are more knowledgeable, more affluent or have more assets under management and own a variety of investment instruments.
Findings from this research were designed to inform various OIC programs to help engage advisors. For more information about OIC's financial advisor program please visit OptionsEducation.org/advisor.
SEC Approves Statement on Global Accounting Standards
February 24, 2010--The Securities and Exchange Commission today voted to issue a statement that lays out its position regarding global accounting standards and makes clear that the Commission continues to believe that a single set of high-quality globally accepted accounting standards would benefit U.S investors.
As a step toward achieving the goal of a single set of high-quality global accounting standards, the statement notes that the Commission continues to encourage the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) in order to narrow the differences between the two sets of standards.
"For nearly 30 years, the Commission has promoted a single set of high-quality globally accepted accounting standards, which would advance the dual goals of improving financial reporting within the U.S. and reducing country-by-country disparities in financial reporting," said SEC Chairman Mary L. Schapiro. "But supporting this goal is only the beginning of the discussion, not the end."
read the Commission Statement in Support of Convergence and Global Accounting Standards
SEC Approves Short Selling Restrictions
February 24, 2010--The Securities and Exchange Commission today adopted a new rule to place certain restrictions on short selling when a stock is experiencing significant downward price pressure. The measure is intended to promote market stability and preserve investor confidence.
This alternative uptick rule is designed to restrict short selling from further driving down the price of a stock that has dropped more than 10 percent in one day. It will enable long sellers to stand in the front of the line and sell their shares before any short sellers once the circuit breaker is triggered.
"The rule is designed to preserve investor confidence and promote market efficiency, recognizing short selling can potentially have both a beneficial and a harmful impact on the market," said SEC Chairman Mary L. Schapiro. "It is important for the Commission and the markets to have in place a measure that creates certainty about how trading restrictions will operate during periods of stress and volatility."
Short selling involves the selling of a security that an investor does not own or has borrowed. When shorting a stock, the investor expects that he or she can buy back the stock at a later date for a lower price than it was sold for. Rather than buying low and selling high, the investor is hoping to sell high and then buy low. Short selling can serve useful market purposes, including providing market liquidity and pricing efficiency. However, it also may be used improperly to drive down the price of a security or to accelerate a declining market in a security.
Remarks of Chairman Gary Gensler, Over-the-Counter Derivatives Reform, Energy Bar Association
February 24, 2010--Good afternoon. Thank you for inviting me to be with you. I’d like to thank Phil Johnson for introducing me this morning.
As former Chairman of the CFTC, Phil worked with former Securities and Exchange Commission Chairman John Shad to create the Shad-Johnson Accord – or as we like to call it at the CFTC, the Johnson-Shad Accord – that clarified jurisdictional issues in the regulated securities and derivatives markets. It’s a pleasure to be with you today, Phil.
I also want to thank the CFTC staff who is participating on panels and hopefully providing some good insight into what we are working on at the agency. The 2008 financial crisis left us with many lessons and many challenges to tackle. Though there were certainly many causes of the crisis, I will focus my remarks today on the need to regulate over-the-counter derivatives. CFTC Regulatory Regime
I recognize that many of the attorneys in this room have familiarity with the CFTC, but for those who don’t, I will take a moment to discuss the CFTC’s current oversight of the futures markets. Futures have traded since the Civil War, when grain merchants came together to hedge the risk of changes in the price of corn, wheat and other grains on a central exchange. It took nearly 60 years until Congress first brought Federal regulation to the futures markets, and it wasn’t until the 1930s that the Commodity Exchange Act, which created the CFTC’s predecessor, became law.
DB Index Research -- Weekly ETF Market Review -- US - Revamped
February 23, 2010--Highlights:
New Listings and Delistings
There were 3 new listings in the last week . Van Eck Funds listed 1 product tracking Egypt and Emerging Global Shares issued a new China ETF focusing on infrastructure. PowerShares launched an ETF tracking closed-end funds. All the new ETPs are listed in NYSE Arca.
Net Cashflows
This week, $5.80 bn flowed into ETPs. Equity, Fixed Income and Currency ETPs had inflows of $5.09 bn, $779 mm and $146 mm, respectively, while Commodity ETPs had outflows of $212 mm.
In the equity asset class, Large Cap ETPs had the largest inflows of $5.1 bn followed by Emerging Market ETPs, while US Sector ETPs experienced the largest outflows of $671 mm, followed by Leveraged ETPs.
Corporates and Sovereign contributed the most to the positive cash flows into Fixed Income ETPs
Within Commodity ETPs, those tracking Oil saw the largest outflows followed by those tracking Natural Gas. Meanwhile, Platinum and Gold ETPs experienced the largest inflows.
Turnover
ETP turnover remained at about the same level during last week and totaled $81 bn.
Turnover decreased slightly on most of Equity ETPs and increased significantly in Leveraged Short Strategy ETPs .
For Fixed Income ETPs, turnover in the Corporates space increased the most, while others remained almost flat .
Commodity ETP turnover increase was mainly driven by Gold and Oil
Assets Under Management (AUM)
US ETPs AUM rose by 2.9% totaling $766 bn at the end of last week. Equity ETPs had the lion’s share with $570 bn and 74% of market share, followed by Fixed Income funds with $116 bn and 15% of market share (Figure 7).
To request a copy of the report
Morgan Stanley Report:Exchange-Traded Funds Quarterly Report: Over $750 Billion in 856 ETFs
February 23, 2010--Assets under management in US ETFs are currently
just under $760 billion. While much of the asset gain from year-end 2008 is the result of higher asset prices,
ETFs also attracted net cash inflows of $120 billion last year. Assets remain highly concentrated with the
largest 50 ETFs accounting for the vast majority of volume and assets.
Markets accessible through ETFs
include US and international equities, commodities, and currencies, while fixed income has recently seen the greatest increase in new offerings.
ETFs provide access to our favorite markets. Morgan Stanley¡¯s global equity strategists believe that most developed equity markets are trading close to fair value, but continue to see upside in the emerging markets, particularly the ¡°BRICs¡±. In addition, many of our analysts¡¯ favored industries þu including Agriculture, US Banks, Oil Equipment and Services þu can be accessed with ETFs.
Morgan Stanley-Exchange-Traded Funds International Equity: EM Allocation Update
February 23, 2010--Morgan Stanley’s Global Emerging Market (EM)
Strategy team, led by Jonathan Garner, maintains
an EM-based country allocation model. The model is
adjusted monthly and seeks to outperform the MSCI
Country Index on a 6- to 12-month time horizon.
The team made two relative changes to the model this month. South Africa moves from an underweight
recommendation to an equal-weight recommendation relative to the MSCI EM Index. At the same time, Mexico
moves from equal-weight to underweight. The team has chosen to add back the beta variable to the model this
month with a 4% weighting as there is more than 25% upside to its year-end 2010 target price for the MSCI EM
Index.
ETFs are available for most countries in Garner’s model. Currently, US-listed ETFs are available for approximately 98% of the market cap of the MSCI EM Index and 99.5% of the recommended Morgan Stanley weights. ETFs may offer an efficient way to access EMs. The costs associated with them may be lower than the costs traditionally associated with other EM investments. Moreover, ETFs trade on exchanges, provide intra-day liquidity, many have options available, and most ETFs can be easily shorted.
BM&FBOVESPA Authorizes Three New Exchange Traded Funds (ETFs) For Trading
February 23, 2010--BM&FBOVESPA authorized, on February 23, 2010, three new Exchange Traded Funds (ETFs) for trading, all of which are managed by BlackRock Brasil Gestora de Investimentos Ltda. and administered by Citibank Distribuidora de Títulos e Valores Mobiliários S.A.
iShares IBrX – Brazil Index (IBrX-100) Fund
ETF Ticker Symbol: BRAX11
Trading Name: iShares BRAX
IOPV Ticker Symbol: BRAX
iShares BM&FBOVESPA Consumer Index
ETF Ticker Symbol: CSMO11
Trading Name: iShares CSMO
IOPV Ticker Symbol: CSMO
iShares BM&FBOVESPA Real Estate Index Fund
ETF Ticker Symbol: MOBI11
Trading Name: iShares MOBI
IOPV Ticker Symbol: MOBI
Pomerantz Law Firm Investigating ProShares Funds on Behalf of Investors
February 23, 2010-- Pomerantz Haudek Grossman & Gross LLP is representing investors of ProShares Funds in several class actions. The Firm is also investigating claims against ProShares Ultra Basic Materials Fund (NYSE:UYM - News), the ProShares UltraShort Russell MidCap Value Fund (NYSE:SJL - News) and the ProShares UltraShort Russell2000 Growth Fund (NYSE:SKK - News), collectively ("the Funds").
The investigation is on behalf of all persons who purchased or otherwise acquired shares in the Funds, exchange-traded funds ("ETF") offered by ProShares Trust ("ProShares"), pursuant or traceable to ProShares' false and misleading Registration Statement, Prospectuses, and Statements of Additional Information issued in connection with the Fund's shares.
Those who invested are advised to contact Teresa Webb at 888-476-6529 or 212-661-1100 or http://www.globenewswire.com/newsroom/ctr?d=184961&l=2&a=tlwebb%40pomlaw.com&u=mailto%3Atlwebb%40pomlaw.com.
Quarterly Banking Profile-FDIC
Industry Reports Fourth Quarter Net Income of $914 Million
Loss Provisions Remain High but Register First Year-Over-Year Decline in More Than Three Years
Full-Year Net Income Totals $12.5 Billion
February 23, 2010--Fourth Quarter Earnings Are Slightly Above Break-Even
The benefits of a recovering economy and stable financial markets in year-over-year comparisons were
evident in the performance of insured depository institutions in the fourth quarter. The small profit reported by
the industry in the quarter essentially represented break-even performance, but it contrasted sharply with the
record quarterly loss posted in the fourth quarter of 2008.
Fourth quarter bank net income for the industry was
$914 million, compared with a $37.8 billion net loss a year earlier. While much of the year-over-year earnings
improvement was concentrated among the largest banks, there was also evidence of a broader improving
trend. For the first time in three years, more than half of insured institutions reported year-over-year
improvement in net income. The percentage of institutions reporting a net loss for the quarter was lower than a
year ago. The average return on assets (ROA) for all four of the asset size groups featured in the Quarterly
Banking Profile was better than a year ago, although only the largest size group—institutions with more than
$10 billion in assets—had a positive average ROA for the quarter.
