Tim's Feed
Aug 22, 2014

Exclusive: Amid Ferguson rage, council’s lone black member keeps low profile

FERGUSON Missouri (Reuters) – In many ways Dwayne James is a beacon of hope in Ferguson, which has been torn apart by racially charged riots. The only black councilman in a predominantly black town, James is widely respected even by political opponents and talked of as a candidate for mayor.

    However, he has surprised some by maintaining a public silence for two weeks as Ferguson was rocked by riots over the killing of a black teenager by a white police officer.

Aug 12, 2014

Panicky U.S. junk bond investors flee funds despite good returns

BOSTON (Reuters) – Investors fleeing the U.S. junk bond market at a record pace this summer are punishing some of the sector’s best-performing funds, while some middle-of-the-pack peers are unscathed.

Net withdrawals from U.S. junk bond mutual funds totaled a record $5.8 billion during the first week of August, according to Lipper Inc, a unit of Thomson Reuters. The sell-off followed the withdrawal in July of an estimated $6.8 billion from junk bond mutual funds, whose main holdings of corporate junk bonds are being treated as overvalued.

Aug 6, 2014

Top Fidelity fund managers frowned on Valeant amid Botox bid

BOSTON (Reuters) – Two of Fidelity Investments’ top stockpickers unloaded most of their holdings in Valeant Pharmaceuticals Inc after the drugmaker in April unveiled its bid for Botox maker Allergan Inc in what is one of 2014′s most contentious takeovers.

William Danoff, who runs the $106 billion Fidelity Contrafund, a staple in U.S. 401(k) plans, slashed his Valeant position by 83 percent to about 462,000 shares during a two-month period that ended June 30, fund disclosures show.

Aug 5, 2014

Unlikely booster for money market funds: beat-up Puerto Rico bonds

BOSTON, Aug 5 (Reuters) – Money market funds run by Fidelity
and American Beacon are relying on an unlikely source to juice
up their returns: beat-up bonds issued by cash-strapped Puerto
Rico.

The funds have accepted the U.S. territory’s debt as
collateral on their short-term loans to Wall Street banks, and
in exchange for that added risk are receiving a higher interest
rate, according to public filings.

Jul 25, 2014

Passive to a point: ETFs stray from index to sell Puerto Rico debt

NEW YORK (Reuters) – Puerto Rico’s worsening debt crisis is pushing the managers of some municipal junk bond exchange-traded funds to ditch their mandate for passive management. Instead, they are straying far and wide from benchmark indexes as they try to avoid taking a hit on the island’s bonds.

At least two passive ETFs, offered by Van Eck Global and State Street Global Advisors (SSgA), already have made moves to cut their exposure to Puerto Rico bonds to avoid being caught with debt that could be impaired or restructured, portfolio managers said.

Jul 23, 2014

Money fund rule changes offer new reality to U.S. retail investors

BOSTON, July 23 (Reuters) – New rules announced on Wednesday
will likely drive safety-oriented retail investors away from
some money market funds because they highlight risks and make it
harder to pull cash out when market turmoil strikes.

The U.S. Securities and Exchange Commission’s reform will
force institutional “prime” money market funds to float their
share price, a major change from the current convention that
allows them to maintain a stable $1 per share net asset value.
The new rules also would allow money funds to impose fees and
restrictions on withdrawals during times of extreme market
stress.

Jul 16, 2014

Without a net: Oppenheimer has $4 bln in uninsured Puerto Rico debt

BOSTON, July 16 (Reuters) – OppenheimerFunds’ municipal bond
portfolios hold $4 billion in uninsured Puerto Rico debt,
leaving them open to bigger potential losses than rivals as the
Caribbean island’s fiscal problems escalate.

Rival U.S. municipal fund managers began selling uninsured
Puerto Rico debt several months ago, at prices not far below
insurance-backed bonds. But OppenheimerFunds’ management team
has kept in place one of the mutual fund industry’s biggest
bets, on the cash-strapped island’s turnaround, fund portfolios
show.

Jun 30, 2014

Puerto Rico worries deepen on lawsuits, bond selloff

By Tim McLaughlin and Lisa Lambert

(Reuters) – Puerto Rico’s troubles continued to worsen on Monday after mutual funds holding about $1.7 billion in its debt sued the commonwealth while other investors sold the bonds on concerns the island’s finances could deteriorate further.

The flashpoint for the lawsuit brought by two large institutional holders is a law passed last week that allows Puerto Rico’s public corporations – primarily its troubled electric power authority known as PREPA – to restructure their debt. It sparked a sharp selloff in these agency bonds that extended on Monday.

Jun 30, 2014

Activist Peltz builds up $1 billion stake in BNY Mellon

June 30 (Reuters) – Activist investor Nelson Peltz has built
up a $1 billion stake in BNY Mellon Corp in what could
lead to a shakeup over lagging stock performance and rising
operating expenses at the world’s largest custody bank.

Shares of BNY rose more than 2 percent.

Peltz’s Trian Fund Management LP “has recently contacted the
Bank of New York Mellon to express its interest in discussing
Trian’s ideas and initiatives to drive long-term growth and
enhance shareholder value with the company’s management and its
board,” according to a person familiar with Trian’s thinking.

Jun 30, 2014

U.S. bond funds sue Puerto Rico, worried about bankruptcy threat

By Tim McLaughlin

(Reuters) – U.S. mutual funds holding about $1.7 billion in Puerto Rico debt have sued the cash-strapped commonwealth, accusing the Caribbean island of passing an act modeled after the U.S. bankruptcy code in what could be a potential threat to American investors.

Passage of the act has spooked the $3.7 trillion U.S. municipal bond market, sending down prices of revenue bonds issued by Puerto Rico’s electric authority. U.S. municipal bonds funds are the largest holders of the island’s debt because it is tax-exempt in every state.