Frugal News
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| Wall Street's laughing all the way to the bank |
| 07/24/08 9:40 AM EST | Markets |
| "The credit crisis really puts the free in free market. The freest market is supposed to be the United States, and the evidence in favour of that argument is mounting. It's just not what you think. Free, in this case, means a free ride for a select group of people. Wall Street never looked so good, or bad, depending on your perspective." |
| More Markets: Are P-E's past their prime? |
| SEC retrenches on new short-selling rules |
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| Why no outrage? |
| 07/21/08 8:31 AM EST | Grant |
| "Through history, outrageous financial behavior has been met with outrage. But today Wall Street's damaging recklessness has been met with near-silence, from a too-tolerant populace, argues James Grant" |
| More Grant: Value's day once more |
| Bet the house |
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| SEC retrenches on new short-selling rules |
| 07/18/08 11:14 PM EST | Markets |
| "Under the new rule, the SEC will require short-sellers to secure borrowed shares before putting on their short sales, preventing "naked" short-selling, in which a trader doesn't properly locate shares to borrow. Naked short-selling can add extra downward momentum on a stock because without being forced to borrow the shares first, traders can short a limitless amount of stock. But the emergency rule, which is in effect for 30 days, only applied to those 19 companies among Wall Street's biggest. They are companies whose shares are not typically hard to locate or scarce for shorting, a fact that angered many earlier in the week. The American Bankers Association wants the SEC to include shares of regional banks under the requirements, and no doubt hundreds of small company chief executives would also like to be covered." |
| More Markets: S&P500 dividend yield highest since June 1995 |
| Seeing bad loans |
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| Curbing short-selling abuse |
| 07/15/08 7:02 PM EST | Markets |
| "The naked short regulations promise to have more teeth than last weekend's announcement that the SEC would police rumors on Wall Street. That was widely interpreted as a weak attempt to herd cats. Traders now won't be able to skirt borrowing rules to short shares of a rival firm. Up until now, traders were merely required to "locate" shares they'd be borrowing to short. As in: "Yeah, my cousin Vinny in Hoboken has them." The location requirement is a weaker standard that leaves plenty of room for "interpretation" if not outright abuse. Pre-borrowing is a much firmer commitment and eliminates the probability that a stock lender will lend out the same shares to several different traders." |
| More Markets: SEC to limit short sales |
| Paulson seeks authority to shore up Fannie, Freddie |
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| SEC to limit short sales |
| 07/15/08 2:28 PM EST | Markets |
| "The requirement would prohibit the practice known as naked short selling, in which traders avoid the financial burden of borrowing shares when betting they'll fall." [A long overdue move.] |
| More Markets: Paulson seeks authority to shore up Fannie, Freddie |
| Mortgage giants face pressure |
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| European recession looms |
| 07/15/08 2:24 PM EST | World |
| "The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency." |
| More World: How Canada stole the American Dream |
| The hidden costs of fuel subsidies |
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| Scotiabank to buy E*TRADE Canada |
| 07/14/08 8:51 PM EST | Brokers |
| "Scotiabank will purchase E(*)TRADE Canada for USD$442 million (approximately C$444 million), subject to regulatory approvals. The completion of today's announcement will double Scotiabank's footprint in the Canadian online investing market." [There goes another independent broker.] |
| More Brokers: London 'cityboy' unmasks world of analysts |
| Fee-only must mean just that |
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| Paulson seeks authority to shore up Fannie, Freddie |
| 07/14/08 12:01 AM EST | Markets |
| "Treasury Secretary Henry Paulson put the weight of the federal government behind Fannie Mae and Freddie Mac, the beleaguered companies that buy or finance almost half of the $12 trillion of U.S. mortgages. Paulson, speaking on the steps of the Treasury facing the White House, asked Congress for authority to buy unlimited stakes in and lend to the companies, aiming to stem a collapse in confidence. The Federal Reserve separately authorized the firms to borrow directly from the central bank." |
| More Markets: Mortgage giants face pressure |
| The $5 trillion mess |
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| The prescient are few |
| 07/13/08 11:50 PM EST | Indexing |
| "The researchers found a marked decline over the last two decades in the number of fund managers able to pass the False Discovery Rate test. If they had focused only on managers running funds in 1990 and their records through that year, for example, the researchers would have concluded that 14.4 percent of managers had genuine stock-picking ability. But when analyzing their entire fund sample, with records through 2006, this proportion was just 0.6 percent - statistically indistinguishable from zero, according to the researchers." |
| More Indexing: Equal weight indexing: five years later |
| Do-it-yourself ETF may not be worth your time |
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| Mexicans and machines |
| 07/13/08 11:22 AM EST | Economics |
| "'No job is safe from the robot threat!' warns Carey. Of course, the warning is more than a little tongue-in-cheek. There.s no need to take a sledgehammer to a robot, because, although technology shakes up the labor market, it ends up giving us higher living standards as well as more and better job opportunities." [Warning: Video contains scenes of violence and humour.] |
| More Economics: Unintended consequences |
| Gifts in the age of $2,000-a-pound chocolate |
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| Welcome to the nanny state nation |
| 07/13/08 11:21 AM EST | Fun |
| "Even if we don't particularly like something we should be wary of banning it because every ban is backed up by the force of law. Plus, would you want to live in a nation that bans everything that offends someone?" |
| More Fun: How your taxes turn into manure |
| The Long Johns: Subprime |
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| IndyMac seized by U.S. regulators |
| 07/12/08 10:46 AM EST | Stocks |
| "IndyMac Bancorp Inc. became the second- biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash." |
| More Stocks: Bank failures to surge in coming years |
| The Texas ratio and Canada's big banks |
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| Mortgage giants face pressure |
| 07/11/08 4:21 PM EST | Markets |
| "One possible scenario if Fannie and Freddie's financial position worsens: Under existing law, if either company were severely low on capital, it could fall under the control of their government regulator, which would then be responsible for the firm. That step -- known as placing it in a conservatorship -- would allow the mortgage company to continue operating, but the extent of its abilities in such a distressed situation remains unclear." |
| More Markets: The $5 trillion mess |
| Fannie Mae, Freddie losses make them 'insolvent' |
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| The $5 trillion mess |
| 07/11/08 12:27 PM EST | Markets |
| "They own or guarantee $5 trillion worth of mortgages- nearly half of all the country's outstanding home loan debt - and they're crashing. Big time. If Fannie Mae and Freddie Mac go under, it will wreak yet more havoc on an already wrecked housing market - making loans tougher to come by and possibly pushing hundreds of billions of dollars in cost on to U.S. taxpayers." |
| More Markets: Fannie Mae, Freddie losses make them 'insolvent' |
| Bear market freak out |
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| Your post-subprime portfolio |
| 07/10/08 4:13 PM EST | Retirement |
| "Saving for retirement has never been easy, but the past year has made a complicated task all but overwhelming. The ongoing collapse of the credit markets, sparked initially by problems in subprime mortgages, has challenged some of investors' most cherished and reliable investment beliefs and strategies. Auction-rate securities sold as "cash equivalents" ended up sticking investors with huge losses, supposedly low-risk bond funds blew up, and for those who thought they'd pay for retirement by selling the house.well, need we say more?" |
| More Retirement: Study finds pension-plan returns top 401(k)s |
| Defined benefit vs. 401(k) plans |
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| Fannie Mae, Freddie losses make them 'insolvent' |
| 07/10/08 12:52 AM EST | Markets |
| "While leading the St. Louis Fed, Poole roiled markets in 2003 when he said the government should consider severing its implied backing of Fannie Mae and Freddie Mac and said the companies lack the capital to weather financial market disruptions. In 2006 and 2007 he called for lawmakers to strip Fannie Mae and Freddie Mac of their charters." |
| More Markets: Bear market freak out |
| Roses among the wallflowers |
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