Continue reading Managed Account Allocations to Surge in 2010

Managed Account Allocations to Surge in 2010 originally appeared on BloggingStocks on Wed, 10 Feb 2010 14:45:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: General Electric CFO speaks out

Chasing Value: General Electric CFO speaks out originally appeared on BloggingStocks on Thu, 05 Mar 2009 13:40:00 EST. Please see our terms for use of feeds.

Now at last we will have some transparency in the CDS (credit default swaps) markets. Regulators approved a joint venture between the CME (Chicago Mercantile Exchange) and Citadel, a hedge fund to clear swaps trades that will begin operations within 30 days. The size of this market is mind boggling at 54,000 billion dollars.

One of the underlying factors in our current credit crisis has been the lack of supervision in the CDS markets. Very often it was difficult and nearly impossible to figure out who the players were. You had the original parties to the CDS and then you had speculators who gambled on the credit worthiness of the underlying bond.

While this move to clear CDS trades is a good thing, it does not eliminate the speculation and risk taking by traders in the swaps market. That may never go away but at least it will be easier for trading managers to monitor their trader's actions more closely.

Do we have full transparency in the CDS markets? originally appeared on BloggingStocks on Thu, 01 Jan 2009 12:00:00 EST. Please see our terms for use of feeds.

CDOs have been one big factor in the credit crisis we are now facing. Not only AIG, but major banks as well are still holding CDOs "off the books." A big step forward toward more transparency would be for banks to disclose these CDO holdings and put them "on the books."

There is no way of knowing the total amount of these CDOs until there is full disclosure. These obligations are "hidden" from investors and it is difficult if not impossible to determine the share value of a given bank.

What are your thougts on this matter?

Why are CDOs so important? originally appeared on BloggingStocks on Wed, 31 Dec 2008 17:00:00 EST. Please see our terms for use of feeds.

There has been much fear mongering in Washington over the last year as the financial crisis has built to a boil. But despite the most recent efforts to scare Congress and the American people into action, there has been very little light shed on some basic questions.

And I believe that before another penny of American taxpayers money is spent, our leaders need to spend more time explaining what is going on and why change is required. What we are facing is a crisis of confidence -- we are witnessing the erosion of trust in our leaders and our financial system.

People no longer believe our leaders have our best interests at heart. In the wake of the Auction Rate Securities scandal, people doubt the basic fairness of our system. People do not know the details of their accounts -- for instance few people have read the prospectus of their money market funds. And there is a lack of powerful ideas to sustain people's belief in the system.

Continue reading 100 Year Crash: How did we get here? What should we do now? What about the future?

100 Year Crash: How did we get here? What should we do now? What about the future? originally appeared on BloggingStocks on Sun, 28 Sep 2008 22:19:00 EST. Please see our terms for use of feeds.

Tragically, America's publicly-traded companies are hardly bastions of transparency and good corporate governance, but the problem is even worse in China.

A study by RateFinancials reported in Barron's (subscription required) found that on measures like quality of earnings, accounting, and corporate governance, Chinese companies are lacking.

Many Chinese companies listed on U.S. exchanges are tightly-held and have complex structures -- two serious red flags. They also don't have to file proxy statements, and often have the roles of chairman and CEO are filled by one person. There are also questions about the independence of the boards, related-party transactions, and so on.

What can investors do? Few would dispute that most people should have some exposure to foreign companies, and your best is to either buy an index fund or hand your money to a reputable mutual fund manager who has the resources to kick the tires on prospective investments in faraway lands.

If you think you have access to enough information/knowledge to perform proper due diligence on a company like LDK Solar (NYSE: LDK), I think you're kidding yourself.

Governance and transparency problems dog Chinese stocks originally appeared on BloggingStocks on Sat, 26 Jan 2008 10:10:00 EST. Please see our terms for use of feeds.

An end to quarterly guidance? originally appeared on BloggingStocks on Mon, 18 Jun 2007 16:15:00 EST. Please see our terms for use of feeds.