Will derivatives be eventually regulated? At the moment, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are drafting legal language to submit to Congress on the details of regulating the derivatives markets. Just which agency will take the lead in overseeing these markets is not clear at this writing. The SEC is the older of the two agencies.

There had been some talk about merging the two agencies, but political pressure has all but ruled this out. It now looks like they will share the oversight responsibilities.

Continue reading Will the derivatives markets ever be regulated?

Will the derivatives markets ever be regulated? originally appeared on BloggingStocks on Thu, 11 Jun 2009 15:10:00 EST. Please see our terms for use of feeds.

The Wall Street Journal [subscription required] reports that $4.26 billion in funds is leaving bank-loan mutual funds -- marking the 18th straight week in this cash exodus. This means that any hope for a revival in the private equity-driven M&A market that fueled stocks through the first half of 2007 is in even deeper trouble than many thought.

In so doing, the spreading credit contagion is forcing me to learn yet another acronym resulting from the securitization industry. This time, the new acronym is Collateralized Loan Obligations (CLOs), which are bundles of so-called leveraged loans -- themselves high-risk corporate loans used for leveraged buyouts whose average price fell to a record low of 86.28 cents on the dollar at the end of last week. There are an estimated $300 billion worth of CLOs on the market.

Why should you care? Well, over the weekend, the G7 -- a meeting of seven leading countries' finance ministers -- decided that the biggest issue in the global capital markets was the $400 billion in losses that the world's banks will need to take to clear their books of Collateralized Debt Obligations (CDOs) built from subprime mortgages. Along with that little problem is the need to recapitalize those banks once they take their hits.

Continue reading $4.3 billion leaving leveraged loans as credit contagion spreads

$4.3 billion leaving leveraged loans as credit contagion spreads originally appeared on BloggingStocks on Mon, 11 Feb 2008 09:00:00 EST. Please see our terms for use of feeds.

This is an update through April 30, 2007 after many companies have reported their first quarter earnings and the Dow Jones Industrial Average (DJAI) passed the 13,000 watermark and set new record highs. We are still in the midst of earnings season. This is my fourth follow-up report. Not enough time to prove much but plenty of time to make or lose some money. If you want to refer to the original article from December 28, 2006 see: You don't have to be 007 to find the best picks for 2007!

This month an interesting trend took hold. Even with the indices reaching new highs and many stocks doing so as well, it seems there must be some caution in the wind. This is the first month that my value approach lead the pack and Cramer's approach, whatever it is, took a back seat. Not only is Cramer lagging each of the indices, but four of his six speculative and growth picks were down while all three of his value picks were up. Google seems to be dead in the water for now, having reported tremendous growth and beating analyst's guestimates again by a wide margin, it still has not gained any traction even in an up market.

Continue reading Chasing down 007 picks: Index beats Cramer - value trumps growth

Chasing down 007 picks: Index beats Cramer - value trumps growth originally appeared on BloggingStocks on Fri, 04 May 2007 16:42:00 EST. Please see our terms for use of feeds.