financializer news A weblog highlighting financial topics making news in the international media.

funds rate: CONFIDENCE IN ECONOMY The moderate economic expansion, continued strengthening of labor market and the improvement in inflation condition supported the central bank to raise interest rate after nearly a one-year pause, according to the statement, according to Global Times China. Our decision to raise rates is - certainly be understood as a reflection of the confidence we have in the progress the economy has made and our judgment that that progress will continue and the economy has proven to be remarkably resilient, said Fed chair Janet Yellen at a press conference on Wednesday. In view of realized and expected labor market conditions and inflation, the Federal Open Market Committee decided to raise the target range for the federal funds rate to 1/2 to 3/4 percent said the Fed in a statement after concluding a two-day policy meeting. The US economy expanded at an annual rate of 3.2 percent in the third quarter of this year, higher than the second quarter growth of 1.4 percent, driven by strong consumer spending; the job market continued strengthening and the unemployment rate fell to 4.6 percent in November, the lowest level since 2007; and the inflation has increased since earlier this year, with core inflation rate rising to 1.7 percent in October. In December last year, the US central bank increased the interest rate for the first time in nearly a decade. According to economic projections released on Wednesday, Fed officials expected the US economy to grow 1.9 percent this year and 2.1 percent next year, both up one percentage point from their September s forecasts. (news.financializer.com). As reported in the news.

industry: My holiday wish list is filled with ideas that most industry insiders scoff at, right up to the point when performance lags or there an industry scandal, at which point they get re-packaged as mutual fund reform, according to Market Watch. Yet I expect that one day, most of these fund wishes will come true 1. Which is why I wish the fund industry would treat investors better. Electronic documents as the default choice for shareholders Recently I proposed personalized prospectuses where investors could choose the presentation order for the items they consider most important something much better than the current traditional or summary prospectus because it can include items those documents bury. Sadly, studies show that shareholders barely read fund documents; regulators should let fund companies save paper and expenses and make electronic delivery the default. Fund companies already deliver documents electronically, but consumers have to opt-in to get it. (news.financializer.com). As reported in the news.

market environment: This matches other recent forecasts, according to Market Watch. Earlier this month, Candace Browning, the head of B.of A. Merrill Lynch Global Research, wrote that 2017 could be the year of the active investor. According to a survey by Natixis Global Asset Management released this week, a majority of institutional investors said they favored active management over passive in the current environment, with 73% saying the market environment would likely be favorable to the strategy. There is a greater potential for active management to perform better in times of volatility or market stress, as managers have the freedom to find bargains, chase gains, or hedge against risk, while passive funds can t deviate from their benchmarks. That was an anomaly, however; in the second quarter of 2016, only 34% beat their benchmark. Recent market action has supported the case for active According to J.P. Morgan data, 53% of active managers outperformed their benchmark in the third quarter, helped by the volatility that resulted from Britain unexpected vote to leave the European Union in late June, and ahead of the early-November U.S. election. (news.financializer.com). As reported in the news.

growth: Just like a year ago, the Federal Reserve December meeting forecast things were looking better and it was time to gradually keep pushing interest rates back to more normal levels, according to Australian Broadcasting Corporation. The market had priced in a further four hikes through 2016 as inflation, employment and growth were expected to climb off the mat. AP Gerald Herbert Map Australia This time last year the Federal Reserve flicked the switch to lift-off, raising interest rates for the first time since 2006. However, lift-off pretty well stalled on the launch pad, as a China-inspired anxiety attack showed that the world was still a dangerous place. The Fed December 2016 re-ignition bares some similarities to last year version but at a slightly lower trajectory, with three increases priced in. January and February were hit by a here-we-go-again panic on the markets, as speculation about a hard landing in China became an article of faith. (news.financializer.com). As reported in the news.

investors: Chief executive Alain Bellemare told investors Thursday that the request made a year ago for 1 billion U.S. in funding would add financial flexibility to manage unexpected risks or to develop its next aircraft program, according to The Toronto Star. Obviously things have changed a lot over the past 12 months so the discussions are taking a different path, he said during an investor day in New York. Mark Blinch / REUTERS FILE PHOTO By Ross Marowitz The Canadian Press Thu., Dec. 15, 2016 MONTREAL Bombardier says it still looking for federal financial assistance despite having enough cash to achieve its turnaround plan. Bombardier CSeries jet entered commercial service this year after years of delays and cost overruns. Article Continued Below Meanwhile, he said the company is not expecting any negative impact on its British operations from Brexit and is optimistic about the election of Donald Trump. With the focus on ramping up CSeries production, Bellemare said the company has not yet decided if its next aircraft program will be to develop a new business jet or a commercial aircraft. (news.financializer.com). As reported in the news.

macquarie: Macquarie SCT Pty Ltd, an entity of Macquarie Bank, put forward a takeover proposal in November, for 17.5 cents a share, according to Australian Broadcasting Corporation. Central Petroleum managing director Richard Cottee said the offer was rejected by the board, however due diligence was granted. Supplied Central Petroleum Related Story NT gas giant wants second pipeline to eastern states Related Story Northern Gas Pipeline on track despite awaiting approvals Map Alice Springs 0870 The managing director of domestic Australian gas supplier Central Petroleum expects investment bank Macquarie will make another offer to buy the company. Weve rejected the offer, therefore it no longer on the table. Macquarie is an Australian company, and obviously it would not be as capital starved as we are, as well. We have granted Macquarie due diligence, and there are other parties that may be interested. (news.financializer.com). As reported in the news.

months: While employment did rise in November, it been a mediocre performance over the past six months, according to Nine News Australia. The new figures come just a week after data showed the economy suffered its worst performance since the 2008-2009 global financial crisis. The Australian jobless rate unexpectedly ticked up to a four-month high of 5.7 per cent, ending a steady decline since January. No wonder the Australian people do not believe Malcolm Turnbull when he talks about jobs and growth, opposition employment spokesman Brendan OConnor told reporters in Sydney on Thursday. Australians are out there, they are encouraged by the economy and putting their hands up and saying We are prepared to look for jobs, she told reporters in Perth. Employment Minister Michaelia Cash latched on to the 39,100 rise in the number of people employed and an increase in the participation rate, which indicates more people are looking for work. (news.financializer.com). As reported in the news.

no-contest settlement: The bank will also pay 2.1 million to the Ontario Securities Commission toward its mandate of protecting investors, while a further payment of 90,000 will go to cover the costs of the investigation, according to The Toronto Star. The OSC approved the no-contest settlement with BMO Nesbitt Burns Inc., BMO Private Investment Counsel Inc., BMO Investments Inc. and BMO Investor Line Inc. after the bank agreed to the deal without admitting or denying the conclusions of the OSC staff. Vince Talotta / Toronto Star By The Canadian Press Thu., Dec. 15, 2016 The Bank of Montreal has agreed to compensate clients a total of 49.9 million after collecting excess fees on certain mutual funds and investment products over eight years. The provincial regulator alleged that inadequacies with the systems and controls at BMO resulted in some customers paying excess fees that were not detected or corrected in a timely manner.BMO settlement follows a similar OSC settlement with CIBC in October in which some of the bank clients were compensated a total of 73.3 million after collecting excess fees over 14 years. The Morning Headlines Newsletter Delivered daily to your inbox. Article Continued Below In July, Scotiabank reached a no-contest settlement with the OSC for 19.9 million after collecting excess fees from some clients. (news.financializer.com). As reported in the news.

percent: That attitude has resisted the BOJ unprecedented monetary easing program, currently running at 80 trillion a year, which was designed to lift prices, encourage consumption, and get the economy moving after decades of deflation and stagnation, according to The Japan Times. The program has failed to achieve its goals, but the central bank still wants to persuade savers to put their cash in more productive investments, such as stocks, which should provide better pension prospects for a population where 30 percent will be over 65 in 2020. More than half of Japan 1,746 trillion 15.2 trillion in financial assets are held in cash or deposits, compared with 15 percent for the United States, and even in elementary school, nearly two-thirds of children save their pocket money rather than spend it, according to a survey. But even with returns on cash at zero, households cut their stock holdings by 16.6 percent in June from a year earlier. Now it is trying to chip away at that reticence by organizing free financial seminars and encouraging other institutions to improve the nation financial understanding. This year the bank conducted a comprehensive survey on financial literacy targeting 25,000 households nationwide, and the results showed less than a third had ever invested in stocks, and 80 percent would not risk investing in assets with potential for significant returns. (news.financializer.com). As reported in the news.

point distance: Still, the Dow was still about 150 points shy of spanning the 1,000-point distance since it reached 19,000 on Nov. 22 after a rebound on Thursday, according to Market Watch. A close above 20,000 in the next few sessions would mark the fastest such ascent for the gauge in its history. The Dow DJIA, -0.04% sold off on Wednesday as the Federal Open Market Committee raised rates for the first time in 12 months and communicated that future hikes would come at a faster pace than had previously been expected. Check out A live blog of the Fed interest-rate decision and news conference But, is the rise for the Dow really that significant Some critics point out the benchmark only represents a smattering 30 in total of the thousands of stocks that make up the broader equity market. Notably, the surge in shares of Goldman Sachs GS, -1.69% which has benefited from expectations of looser Wall Street regulation and higher interest rates, has contributed about one-third of the Dow recent 1,000 point move since hitting 19,000 back on Nov. 22. Moreover, outsize moves in any one of its components, because the gauge is price weighted, can have a big effect on the Dow. (news.financializer.com). As reported in the news.

points: The blue-chip CSI 300 index fell 1.14 percent to 3,340.43 points, according to Global Times China. The Chi Next Index, which tracks China NASDAQ-style board for high-tech and emerging start-ups, added 0.65 percent to 1,975.85 points. The benchmark Shanghai Composite Index lost 0.73 percent to 3,117.68 points, its lowest since early November, but the Shenzhen Component Index finished 0.23 percent higher at 10,256.11 points. A total of 458.5 billion yuan 66 billion in shares changed hands on the Shanghai and Shenzhen exchanges on Thursday. Hong Kong stocks slumped to a four-month low. Several futures contracts for China government bonds fell to their daily limit, Reuters reported. (news.financializer.com). As reported in the news.

russian control: Yuri Ushakov, an aide to Putin, told media that the two sides agreed to start consultations on conditions of joint economic activities over the four Pacific islands, though stressing that the activities should be conducted under Russian jurisdiction, according to Global Times China. Russia suggested joint economic activities to Japan on the disputed islands in November, but some analysts here have been concerned that if Japan accepts the suggestion, it would mean a big step towards Moscow by recognizing Russian control of the Islands. Abe told reporters after a three-hour summit with Putin that he had a candid and in-depth discussion with Putin and they discussed free visits of Japanese ex-residents to and joint economic activities in four disputed islands in the Pacific. Japan has hoped to open a door for making breakthrough on dispute over the four Pacific islands held by Russia but claimed by Japan through the Abe-Putin summit. Abe also showed his determination to resolve the issue by visiting and praying before his father grave while waiting for Putin arrival which was delayed for over two and a half hours, according to local media reports. Earlier in the day, Abe told reporters before departing for Nagato that he hopes to spend time to negotiate in a quiet atmosphere at night. (news.financializer.com). As reported in the news.

video share: The app enables users to smooth and change the color of their complexions, widen their eyes and slim themselves down, according to Deutsche Welle. Watch video 02 35Share From selfies to stardom Send Facebook Twitter Google Whatsapp if typeof WURFL object if WURFL.is mobile && ! -1 WURFL.is mobile && ! -1 ; Tumblr linkedin stumble Digg reddit Newsvine Permalink selfies to stardom Fed spoiling the party The Meitu listing raised 629 million 599 million euros with the company now having a valuation of roughly 4.6 billion. Boasting 456 million users, Xiamen-based Meitu targets teenagers and young adults, who use the beautifying app to retouch selfie photos for everything from posts on social media to job applications. Market sentiment was dampened, though, by the US Fed decision to hike interest rates. But the profitability of the stock is not foreseeable right now. For a lot of institutional investors, I think they want to follow this stock because it one of a kind in the market, Hong Kong-based analyst Jackson Wong said in a statement. (news.financializer.com). As reported in the news.

policy path: Bond markets saw yields on short-term US debt surge to the highest since 2009, sending the dollar to peaks last seen in early 2003, which in turn prompted China central bank to set the yuan at its weakest level against the greenback since 2008, according to Nine News Australia. The Fed anticipated policy path, and expectations US President-elect Donald Trump will get growth motoring, are keeping emerging markets on edge as capital gets sucked from more fragile, export-dependent economies toward dollar-based assets. European shares got off to a solid start with banks up almost 2 per cent, cheered by the prospect of a boost from higher rates to their lending profits, but the main action was elsewhere. The Fed rate rise of 25 basis points to 0.5-0.75 per cent was well flagged but investors were spooked when the dot plots of members projections showed a median of three hikes next year, up from two previously. It wasnt just the move in the dots, it was the language that was used. You had the Fed come in and be a bit more hawkish that many people, including us, were expecting, said TD Securities head of global strategy Richard Kelly. (news.financializer.com). As reported in the news.

steve benen: Photo by Jason Reed/Reuters Elizabeth Warren adds national security to her policy repertoire 12/15/16 09 20 AM Updated 12/15/16 09 35 AM By Steve Benen As a presidential candidate eight years ago, Barack Obama made no secret of his interest in Virginia Tim Kaine as a possible running mate, but the future president saw a hole in his friend resume the then-governor, Obama said, needed a stronger background in foreign policy, according to MSNBC. And so, Kaine did exactly that. Photo by Jason Reed/Reuters Elizabeth Warren, who was then still a candidate for the U.S. Senate in Massachusetts, addresses the Democratic National Convention in Charlotte, N.C., Sept. 5, 2012. The Virginia Democrat ran for the Senate in 2012, and sought out assignments on the Senate Armed Services Committee and Senate Foreign Relations Committee. The combination of Kaine expertise in domestic and foreign policy earned him a place on his party national ticket, and he very nearly became vice president. Soon, he developed a depth of knowledge on these issues that rivals that of anyone in Congress. (news.financializer.com). As reported in the news.

system review: The central bank warned Thursday that the still-climbing levels of debt and the growing proportion of highly indebted households in many cities amid low interest rates have opened up a larger weak spot in Canada financial stability, according to The Toronto Star. In its latest financial system review, the bank says at a national level the proportion of highly indebted borrowers with mortgage-to-income ratios above 450 per cent reached 18 per cent in the third quarter of 2016, up from 13 per cent two years earlier. AFP/GETTY IMAGES FILE PHOTO By Andy Blatchford The Canadian Press Thu., Dec. 15, 2016 OTTAWA The Bank of Canada is expecting new mortgage rules to help ease a continued rise in household indebtedness that it says has left the country increasingly exposed to an economic shock. The report said high home prices have helped fuel growth in the proportion of these highly indebted borrowers in cities like Toronto, where in the last two years it increased to 49 per cent from 32 per cent, and in Vancouver, where it rose to 39 per cent from 31 per cent. Article Continued Below In October, the federal government announced changes aimed at addressing hot housing markets and rising debt loads. But the bank predicted that stricter housing finance rules introduced in recent months by federal, provincial and municipal authorities will help ease household indebtedness and improve the quality of future borrowing. (news.financializer.com). As reported in the news.

trump: There has been a steady rally among US stocks since the presidential election on November 8, because of the prospect of Donald Trump business-friendly proposals stimulating the economy, according to Australian Broadcasting Corporation. Although ANZ analysts sounded a word of caution based on history. Markets at 8 30am AEDT ASX SPI 200 futures 0.3pc to 5,500 73.56 US cents, 59.2 British pence, 86.93 Japanese yen, 70.63 euro cents, NZ1.0447US S&P 500 0.4pc to 2,262, Dow Jones 0.3pc to 19,852, Nasdaq 0.38pc to 5,457Europe Euro Stoxx 1.07pc to 346.50, FTSE 0.72pc to 6,999, DAX 1.08pc to 11,366Commodities Gold -1.42pc to US1,127.86/ounce, Brent crude oil 0.37pc to US54.10/barrel Analysts said investors were now viewing the Fed outlook on rates as a sign of confidence in the economy, ahead of President-elect Donald Trump promised tax cuts and infrastructure spending bonanza. The initial reaction to the December 2015 hike was positive and look what unfolded in late December and January, they warned in a note. That admission prompted concerns that Verizon may scrap a deal to buy Yahoo core internet business. Banking stocks were among the session stand-out performers, while Yahoo shares slumped, after the tech giant revealed a second massive data breach. (news.financializer.com). As reported in the news.

trump: Photo by Mindaugas Kulbis/AP Officials Putin was directly involved with hack that helped Trump 12/15/16 08 00 AM By Steve Benen There still some debate among officials about why Russians intervened in the American presidential election the CIA believes it was intended to help put Donald Trump in the White House but as things stand 17 U.S. intelligence agencies agree that Vladimir Putin government was responsible for the cyber-attacks, according to MSNBC. Close video The Rachel Maddow Show, 12/14/16, 9 00 PM ET Putin directly involved in US election hacking NBC News Michael McFaul, former U.S. ambassador to Russia, talks with Joy-Ann Reid about the new revelations reported by NBC News that Vladimir Putin was personally involved in the hacking of the U.S. election. share tweet email save Embed But what about Putin himself NBC News had this striking report last night U.S. intelligence officials now believe with a high level of confidence that Russian President Vladimir Putin became personally involved in the covert Russian campaign to interfere in the U.S. presidential election, senior U.S. intelligence officials told NBC News. Photo by Mindaugas Kulbis/AP A child walks past a graffiti depicting Russian President Vladimir Putin and Republican presidential candidate Donald Trump on the walls of a bar in the old town in Vilnius, Lithuania, May 14, 2016. Two senior officials with direct access to the information say new intelligence shows that Putin personally directed how hacked material from Democrats was leaked and otherwise used. Their use of the term high confidence implies that the intelligence is nearly incontrovertible. The intelligence came from diplomatic sources and spies working for U.S. allies, the officials said . T he U.S. has solid information tying Putin to the operation, the intelligence officials say. (news.financializer.com). As reported in the news.

americans vote: Photo by Joe Raedle/Getty Why some Americans vote against their own health care interests 12/14/16 02 57 PM By Steve Benen A couple of weeks ago, we talked about those Americans who like and rely on the Affordable Care Act, but who nevertheless voted for Donald Trump who vowed to scrap the Affordable Care Act, according to MSNBC. To get a better sense of these voters motivations, Vox Sarah Kliff and Byrd Pinkerton traveled last week to Corbin, Kentucky, where Obamacare has had great success in lowering the uninsured rate, but where the clear majority of local voters backed Trump. Photo by Joe Raedle/Getty A man holds a sign directing people to an insurance company where they can sign up for the Affordable Care Act, also known as Obamacare in Miami, Fla in 2015. The question was straightforward Why would people vote for a presidential candidate who campaigned on taking away their health insurance Vox reports on this are well worth your time, but there was one exchange that stood out for me between Kliff and a local woman named Debbie Mills, a 53-year-old woman whose husband has a serious medical condition. Do you think if the ACA does go away, you ll regret your vote in any way Thinking, I voted for this person who took away my health insurance. Mills, who cast her ballot for Trump, explained that it been great to have health insurance, because I couldn t imagine what it would be like to not have it. (news.financializer.com). As reported in the news.

asian stocks: Asian stocks outside Japan eked out just a 0.1 per cent gain, while benchmark indices in Japan and China dithered either side of flat with investors reluctant to push shares much higher before the Fed meeting, according to Nine News Australia. The Fed is widely tipped to lift rates 25 basis points to 0.50-0.75 per cent when it concludes a two-day policy meeting on Wednesday. European shares lost 0.3 per cent in early trade, while US stock futures were also a tad weaker, suggesting a cautious start to trade after Tuesday stock market rally to new all-time highs. Its rate announcement is due at 1900 GMT, followed by Chair Janet Yellen news conference 30 minutes later. With a rise fully priced in by markets, eyes are on the Fed economic and rate dot plots for a sense of how policymakers think President-elect Donald Trump policies will impact growth and inflation. It would be the Fed first interest rate hike in a year and its second since the financial crisis. (news.financializer.com). As reported in the news.

bellamy: Shares in Bellamy fell by more than 40 per cent on the December 2, following news that new Chinese regulations were crimping sales and depressing prices, according to Australian Broadcasting Corporation. Steve Johnson, from investment group Forager Funds, said there was a lesson to be learned for the broader market and companies wishing to export to China, a market renowned for booms and busts. Bellamys Map Melbourne 3000 Investment group Forager Funds says Bellamy is a strong example of the big peaks and troughs new businesses can face in the Chinese market. if typeof inline Audio Data undefined var inline Audio Data new Array ; inline Audio Data.push url content Type audio/mp3, codec MPEG-1 Audio layer 3, bitrate 64, file Size 1700400 ; Audio Steve Johnson, from investment group Forager Funds discusses Bellamy and exporting to China ABC News Five things to know about the baby-formula company going sour The Tasmanian dairy company announced to the ASX that it would remain off the stock exchange until December 21, or until concludes a review into its finances. The huge issue here was just the expectation built into the share price, he said. This company was doing 30 million a year in sales just a few years ago, and it did 250 in the last year. It is still an amazing success story. (news.financializer.com). As reported in the news.

head: And entrepreneurs are developing disruptive technologies that will create and destroy value, according to The Guardian. Michael Bloomberg to head global taskforce on climate change Read more The challenge is that investors currently don t have the information they need to respond to these developments. Citizens, consumers, businesses, governments, and international organisations are all taking action. This must change if financial markets are going to do what they do best allocate capital to manage risks and seize new opportunities. Public policy, consumer demand and technological innovation are driving a shift towards a low-carbon economy. Without the necessary information, market adjustments to climate change will be incomplete, late and potentially destabilising. (news.financializer.com). As reported in the news.

corbyn: The first is Rafael Behr on Labour leader Jeremy Corbyn, according to The Guardian. He argues that Corbyn may be unassailable, but he is not leading the party. We d like to begin today with two quite different articles. He says as Labour languishes in the polls, even his allies see that he lacks the ability to move their project forward. Instead, Britain main opposition party resembles a dilapidated warehouse storing heaps of votes behind rusted gates, guarded by a drowsy night watchman. Behr writes Jeremy Corbyn leadership campaigns promised to create a dynamic social movement, shoring up traditional support while mobilising battalions of eager converts. (news.financializer.com). As reported in the news.

china currency: If just 13 million people, or about 1 percent of the total population, each use up their maximum exchange it would set off a rush of capital outflow, according to Global Times China. Although China currency is likely to remain stable in the long run based on its solid economic fundamentals, a large-scale capital outflow would bring short-term depreciation pressure to the yuan by impacting the foreign exchange market. Chinese residents are permitted to exchange up to 50,000 worth of yuan a year and some people are reportedly planning to use up their annual quota as soon as 2017 arrives. The government should not allow a sharp depreciation even though a weaker currency would be likely to bump up exports. Despite a string of recent economic indicators showing signs of improvement, confidence toward the domestic economy among the public and entrepreneurs has weakened, with continuous depreciation one of the main reasons. The depreciation of the yuan has become far more than just an economic phenomenon, it also shakes confidence in the Chinese economy. (news.financializer.com). As reported in the news.

chinese bank: Bank clients just stopped buying at the levels where State banks emerged to sell dollars, said a Shanghai-based trader at a Chinese bank, according to Global Times China. The trader also noted the market would keep testing fresh lows, piling pressure on the yuan to depreciate, unless State banks stepped back in. Dollar demand by companies was strong in the morning. The People Bank of China set the midpoint rate at 6.9028 per dollar prior to market open, weaker than the previous fix 6.8934. The US Federal Reserve is all but certain to raise its short-term interest rate target by 0.25 percentage point to 0.50-0.75 percent, which would be just the second rate hike since the financial crisis in 2007-08. The spot market opened at 6.9049 per dollar and was changing hands at 6.9049 at midday, 0.03 percent softer than the midpoint. (news.financializer.com). As reported in the news.

drone delivery: Read Here why Americans are giving more than ever to charity That uptick is being fueled by assumptions about what a Trump administration will do, according to Market Watch. With Trump being elected, there more certainty that tax rates will be lower in the years ahead, Stark says. We ve seen an uptick in charitable giving using appreciated stock, says Paul Stark, a wealth and estate-planning strategist at Sun Trust Banks Inc. That means investors who donate appreciated stock before the end of December will be able to deduct their gift value from a 2016 tax bill that could be higher than their 2017 tax bill. A complete version of this article is available at WSJ. Popular on WSJAmazon makes first commercial drone delivery What parents of early-teen boys need to know Toyota new car is for people who don t like Toyotas (news.financializer.com). As reported in the news.