Tim's Feed
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.

Jun 28, 2014

New York AG Schneiderman finally flexes muscles against Wall Street

NEW YORK (Reuters) – New York Attorney General Eric Schneiderman, long seen as a secondary force in policing Wall Street banks, is taking the lead in what may be the most ambitious case of his career: accusing Barclays Plc (BARC.L: Quote, Profile, Research, Stock Buzz) of favoring its high-frequency trading clients.

By making a case against the bank, Schneiderman has seized a lead role in a contentious dispute about whether high-frequency traders have turned the stock market into a rigged game that hurts regular investors.

Jun 27, 2014

NY AG Schneiderman finally flexes muscles against Wall Street

NEW YORK, June 27 (Reuters) – New York Attorney General Eric
Schneiderman, long seen as a secondary force in policing Wall
Street banks, is taking the lead in what may be the most
ambitious case of his career: accusing Barclays Plc of
favoring its high-frequency trading clients.

By making a case against the bank, Schneiderman has seized a
lead role in a contentious dispute about whether high-frequency
traders have turned the stock market into a rigged game that
hurts regular investors.

Jun 19, 2014

Pimco’s Gross talks hypnosis, Bieber and Gen. Patton at conference

CHICAGO, June 19 (Reuters) – Pimco’s Bill Gross, who runs
the world’s largest bond fund, took the stage at an investment
conference wearing sunglasses and seeming self-conscious about
his image, lacing his speech with references to American World
War Two Gen. George Patton, hypnosis and troubled pop star
Justin Bieber.

Gross’ appearance at Morningstar Inc’s annual
conference comes weeks after a public falling-out with former
heir-apparent Mohamed El-Erian, who shared the co-chief
investment officer title at Pacific Investment Management Co.

Jun 18, 2014

Templeton’s Hasenstab: Japan easy money will bolster global liquidity

CHICAGO (Reuters) – Templeton bond fund manager Michael Hasenstab, an influential voice on emerging market debt, said on Wednesday that Japan’s easy money policy will bolster global liquidity, but he also warned that debt conditions in the Asian economy are worrisome.

Hasenstab, who runs the $72 billion Templeton Global Bond Fund for Franklin Resources Inc (BEN.N: Quote, Profile, Research, Stock Buzz), said he is concerned that the Bank of Japan is on course for “excessively easy monetary policy.” He added that any investors worried about debt levels of the United States “should be petrified about the debt conditions of Japan.”