Most Clicked CFA Institute Financial NewsBrief Stories
1. Lehman sues Barclays to get back asset "windfall"
CFA Institute Financial NewsBrief | Nov 17, 2009
The estate of Lehman Brothers and a trustee for the bank's brokerage filed a lawsuit against Barclays in an attempt to claw back as much as $10 billion. The U.S. bank claims the U.K. bank received billions of dollars in assets after the collapse of Lehman. "The sale transaction was secretly structured from the outset to give Barclays an immediate and enormous windfall profit," lawyers for Lehman said. Financial Times (tiered subscription model) (17 Nov.) Bloomberg (17 Nov.)
2. Asian leaders reject Obama's push for stronger Chinese currency
CFA Institute Financial NewsBrief | Nov 16, 2009
Despite a visit from U.S. President Barack Obama, the Asia-Pacific Economic Cooperation ignored efforts to present a united front to support a strengthened Chinese yuan. A closing statement at the group's meeting avoids mentioning the impact of exchange rates on trade. "The challenge Obama is facing is that the influence of the U.S. is rapidly waning and that he has little credibility" on trade issues, said Marc Faber, a fund manager at Marc Faber in Hong Kong. "Obama talked about free trade, but recently the U.S. slapped tariffs on Chinese-made tire imports." BusinessWeek (15 Nov.) Bloomberg (15 Nov.)
3. Collapsing dollar puts pressure on Obama during visit to China
CFA Institute Financial NewsBrief | Nov 13, 2009
Finance ministers and business executives across Asia are joining U.S. congressional leaders, unions and trade lobbyists in alarm regarding how the weakness of China's yuan is crippling economic recovery. This comes as U.S. President Barack Obama arrives in the region. China's currency is pegged to the dollar, which has lost 14% of its value against the currencies of six major trading partners during the past year. Although China's central bank sent signals that it is ready to be more flexible on the yuan's value, that might not be enough to defuse the issue. Bloomberg (13 Nov.)
4. Obama administration poised to extend TARP, sources say
CFA Institute Financial NewsBrief | Nov 19, 2009
U.S. government sources said the Obama administration is interested in extending the $700 billion Troubled Asset Relief Program, but it is struggling with how to announce such an initiative. The plan is to use about $200 billion in leftover funds to pay down the national debt, the sources said. Officials are concerned that lawmakers will try to use that money to fund their projects. Washington Post, The (19 Nov.) Hill, The (18 Nov.)
5. Analysis: Dozens of banks in trouble despite TARP aid
CFA Institute Financial NewsBrief | Nov 17, 2009
Despite receiving capital injections from the U.S. government's Troubled Asset Relief Program, at least 27 banks have either been seized or threatened by regulators. Government officials knew some of the lenders were on the verge of collapse when they awarded them TARP funds. The situation raises questions about how the $700 billion TARP is being managed. Treasury officials defend the agency's management of the program. Wall Street Journal, The (17 Nov.)
6. Analysis: Bernanke faces risk of economy slumping again
CFA Institute Financial NewsBrief | Nov 13, 2009
As Federal Reserve Chairman Ben Bernanke starts to withdraw stimulus efforts, he faces the risk that the U.S. economy will stumble. The Fed would then need to decide whether to reinstate some measures, such as asset purchases, or stand firm. Neither is a great option for the central bank because each could create other issues. Wall Street Journal, The (13 Nov.)
7. TARP inspector general: AIG bailout spared Goldman big losses
CFA Institute Financial NewsBrief | Nov 18, 2009
Goldman Sachs argued for more than a year that it would not have taken significant losses if the U.S. government had allowed American International Group, one of Goldman's major trading partners, to go bankrupt. An audit by the inspector general for the Troubled Asset Relief Program comes to a different conclusion. According to the report, collateralized debt obligations to protect Goldman from losses on AIG would have done little good given market conditions of the time. "It is far from certain that the underlying CDOs could have been easily liquidated, even at the discounted price of $4.3 billion," the report says. Wall Street Journal, The (17 Nov.)
8. China greets Obama's call for rising yuan with polite silence
CFA Institute Financial NewsBrief | Nov 18, 2009
U.S. President Barack Obama urged China to follow through on its assurance that it is shifting toward a more flexible exchange-rate policy, possibly resulting in the yuan rising against other currencies. His comment came at the end of formal meetings with Chinese President Hu Jintao. "I was pleased to note the Chinese commitment, made in past statements, to move toward a more market-oriented exchange rate over time," Obama said. "Doing so based on economic fundamentals would make an essential contribution to the global rebalancing effort." Meanwhile, Hu said nothing about the yuan or its peg to the plummeting U.S. dollar. Reuters (18 Nov.) Financial Times (tiered subscription model) (17 Nov.) Bloomberg (17 Nov.)
9. Bankers, investors say CoCo is only start of new ideas
CFA Institute Financial NewsBrief | Nov 19, 2009
Bankers and investors said contingent-convertible bonds, also known as CoCos, are likely only the first of several new forms of bank capital as banks seek to shore up balance sheets. "CoCos are not the only structures, and banks are bouncing a lot of different ideas off us," said financial analyst Richard Thomson of Henderson Global Investors' Credit Alpha team. "There is a lot of interest in write-down features." CoCos were designed to meet concerns raised by regulators, resulting in much interest in the hybrid bonds. Financial Times (tiered subscription model) (18 Nov.)
10. Moody's: Corporate defaults to peak this month, then ease off
CFA Institute Financial NewsBrief | Nov 16, 2009
Moody's Investors Service is becoming a bit more optimistic on the subject of corporate-debt defaults. Moody's warned in January that as much as 16.4% of U.S. companies carrying junk ratings could default during the next 12 months. The credit rating agency upgraded its prediction, expecting defaults to peak at 13.6% this month, then decline to 4.4% a year from now. Wall Street Journal, The (16 Nov.)
