By Kitco News, Contributor (Kitco News) – Analysts have warned for some time that the large build-up of short, or bearish positions, in gold among speculators meant potential for short covering—and that’s just what showed up in the most recent weekly data from the Commodity Futures Trading Commission. …read more
Source: FULL ARTICLE at Forbes Latest
By Michael Bobelian, Contributor
“Why did market participants go out of their way to create a huge political backlash,” Columbia Law School Professor Kathryn Judge asks her students, referring to Wall Street’s response to the Commodity Future Trading Commission’s (CFTC) attempt to regulate derivatives in 1998.
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, in February 2012, the Securities And Exchange Commission (“SEC“) and the Commodity Futures Trading Commission (“CFTC“) jointly proposed rules requiring certain regulated entities to adopt and administer identity-theft red flags programs. These proposals largely mirrored provisions in effect at federal agencies as mandated in 2003 under the Fair Credit Reporting Act (“FCRA”), which Congress amended in order to transfer identity theft rulemaking responsibility and enforcement authority from the Federal Trade Commission (“FTC”) to the SEC and CFTC for entities they the latter two commissions regulate
By The Huffington Post News Editors
WASHINGTON, April 10 (Reuters) – U.S. law enforcement officials have reversed a decision to wind down an investigation into how news agencies handle the release of economic data to investors, concerned some sensitive information may have leaked into financial markets, a person familiar with the probe said on Wednesday.
The Wall Street Journal reported earlier on Wednesday that Thomson Reuters Corp, the parent of Reuters News, Bloomberg LP and Dow Jones & Co., a unit of News Corp, were among the media companies under investigation.
The source who spoke to Reuters declined to provide details.
Reuters and the Wall Street Journal reported in January that law enforcement authorities had conducted an investigation into whether media companies facilitated insider trading by prematurely releasing market-sensitive data, but decided not to bring charges.
Media organizations are provided sensitive economic data during “lockups” in which they are not supposed to transmit any information until a set embargo time has lifted.
The Wall Street Journal reported on Wednesday that the FBI had been frustrated the Commodity Futures Trading Commission had not provided data sought by investigators. Citing officials familiar with the probe, it said the CFTC had since agreed to provide trading data and analysis to help the investigation.
“We are not aware of a current investigation nor any embargo violations,” said Ty Trippet, a spokesman for Bloomberg LP. A spokeswoman for Dow Jones, Paul Keve, said the government had not contacted Dow Jones about any criminal investigation. Thomson Reuters spokesman David Girardin declined to comment.
The FBI and CFTC did not immediately respond to requests for comment, while the SEC declined to comment.
Source: FULL ARTICLE at Huffington Post
By John Maxfield, The Motley Fool
Filed under: Investing
There’s never an absence of news impacting financial stocks, but weeding through all of it can be a chore in and of itself. To that end, here are five of today’s biggest finance-related stories.
1. Fannie Mae’s record profit
In September of 2008, the U.S. government had to step in and seize the then-ostensibly private mortgage giants Fannie Mae and Freddie Mac. The plan at the time was to prevent their failure, stabilize the mortgage market, and to then gradually wind the entities down. As The Wall Street Journal noted at the time, “[Treasury Secretary Henry] Paulson’s weekend announcement represented one of the most sweeping interventions in financial markets since the Depression, essentially putting the government in charge of helping finance American mortgages.”
The question of what to do with at least Fannie Mae became slightly more complicated today, after the now-government controlled entity reported its largest annual net income in its history — click here to see the press release. For the fiscal year 2012, it earned $17.2 billion — $7.6 billion of which came in the fourth quarter alone. “Solid business fundamentals such as improving performance of our book of business and improvements in the housing market led us to report the largest annual and quarterly net income in the company’s history,” said Susan McFarland, executive vice president and chief financial officer. “We expect to remain profitable for the foreseeable future and return significant value to taxpayers.”
2. Bank of America exercises its Fed-given rights
That didn’t take long. Less than three weeks ago, the nation’s largest banks learned whether or not they’d be allowed to return more capital to shareholders following the Federal Reserve‘s comprehensive capital analysis and review. For its part, as I discussed here, Bank of America got the go ahead to repurchase $5 billion in common stock and $5.5 billion in preferred shares. And as promised, it notified investors yesterday in this press release that it had submitted redemption notices for the latter. The move contributes to B of A’s efforts to simplify and boost its capital base in the face of the Basel III requirements.
3. Former SEC chief goes through revolving door
The line between Washington and Wall Street became a little less distinct today, after the former chairwoman of the Securities and Exchange Commission, Mary Schapiro, announced that she will be joining the consulting firm Promontory Financial Group, which has “built a reputation as a shadow regulator by hiring scores of former government officials,” according to The Wall Street Journal.
To say that Shapiro is a prime catch for lobbying firm is an understatement. She’s spent “28 of the last 32 years as a regulator” and is the only person to have led all three of Wall Street‘s biggest regulators: the SEC, the CFTC, and FINRA. But don’t get the wrong idea, “In …read more
Source: FULL ARTICLE at DailyFinance
By Christopher Barker, The Motley Fool
Filed under: Investing
If I had to condense everything I’ve ever sought to convey about gold and silver into one quick article, it would look something like this.
The game is rigged
I have watched the daily dynamics of gold and silver with uninterrupted focus for nearly a decade, and the one overarching conclusion I have personally drawn with the greatest degree of certainty is that the gold and silver markets have been systematically and intentionally manipulated by too-big-to-jail financial interests. CFTC Commissioner Bart Chilton has himself declared that “there have been fraudulent efforts to persuade and deviously control” the price of silver. Now, after dragging its heels for more than four years with its investigation of misconduct in the silver market, the CFTC is reportedly examining whether banks have colluded to manipulate gold prices.
A word to the wise: Don’t hold your breath awaiting some consequential outcome here. In an age when an Assistant Attorney General to these United States can be heard conceding that “the entire banking system would have been destabilized” if the Justice Department had brought criminal charges against HSBC for laundering money for drug cartels and terrorists, we mustn’t remain so naïve as to presume that truth, transparency, or justice will prevail in this deeply compromised financial system of ours. What gold and silver investors can do, meanwhile, is ensure that they do not select investment vehicles for gold or silver where these major banks are the declared “custodians” of reported physical bullion holdings. For the record, HSBC is the custodian for reported gold holdings of the SPDR Gold Trust , while JPMorgan Chase is custodian for the iShares Silver Trust .
Paper is not bullion
Ultimately, I believe that suppression of gold and silver prices will fail, and that one likely mechanism for that failure lies in enhanced demand for physical bullion as opposed to the leveraged financial instruments that are routinely mistaken as bullion equivalents. If a financial professional tried to convince you today that mortgage-backed securities are a viable cash alternative, you’d turn around and walk out the door, right?
But the same ruse persists in the markets for gold and silver, where opaque derivative markets, leveraged as high as 100-to-1 over the available supply of physical collateral, underscores the dangerous house of cards that most investors mistake as the markets for physical gold and silver. The Gold Anti-Trust Action Committee (GATA) has been educating the investment world about this important distinction for years, and for every investor considering a position in gold or silver, this remains a story that must be told. Germany‘s bold move to repatriate a portion of its gold holdings was, I maintain, emblematic of a resurgent distinction between actual gold and gold-related IOUs. CNBC’s Rick Santelli gets it. In this latest classic Santelli rant, he stated this week:
Gold’s been securitized. I don’t even look at gold as gold anymore. Gold is just another piece …read more
Source: FULL ARTICLE at DailyFinance
By Rupert Hargreaves, The Motley Fool
Filed under: Investing
There is no doubt that the U.S. dollar is getting stronger. During the week ending March 5, the CFTC reported that net dollar longs reached a seven-month high of $23.57 billion, the largest value since July 17, 2012. This net long position was significantly above the net long position of $14.39 billion reported the previous week.
In addition, the DXY (the index measuring the U.S. dollar against a basket of currencies) has been in a rising channel since the beginning of 2011 and is on track to surpass its two year high sometime this year.
How does this affect companies?
So how does the strong dollar affect earnings?
Throughout 2012, the U.S. dollar was strong as the euro crisis drove investors into safe haven assets such as U.S. government securities. In addition, investors were looking for safety in currency as the euro was effectively devalued and it looked like the financial system in Europe was going to collapse.
According to the DXY index, the dollar was almost 10% stronger in 2012 than in 2011, so how did this affect earnings?
Philip Morris International (NYSE: PM)
| Revenue | 2012 | 2011 | Change Including Currency Translation |
Change Excluding Currency Translation |
|---|---|---|---|---|
| EU | $8,526 | $9,212 | -7.40% | 0.30% |
| EEMA | $8,332 | $7,881 | 5.70% | 11.60% |
| Asia | $11,198 | $10,705 | 4.60% | 5.70% |
| Latin America and Canada | $3,321 | $3,299 | 0.70% | 6.60% |
| Total | $31,377 | $31,097 | 0.90% | 5.70% |
Figures in millions
Philip Morris has no revenue from inside the U.S., so it has been hit the hardest by a strong dollar. As shown above, the weakness in the euro during 2012 forced the company’s European revenue to contract 7.4%.
Without the weak euro, revenues would have grown 0.3%. Furthermore, revenues in Asia took a hit, growing only 5.7% after the effect of the strong dollar. Excluding the latter, revenues would have grown 11.6%. Overall, the strong dollar removed 4.8% of Philip Morris‘ organic revenue growth and $0.23 from Philip Morris‘ 2012 EPS.
A continuation of dollar strength is going to hit Philip Morris hard, ruling out almost all of its potential revenue growth.
McDonald’s (NYSE: MCD)
| 2012 | 2011 |
Change Including |
Change Excluding Currency Translation |
|
|---|---|---|---|---|
| Revenues | $27,567 | $27,006 | 2% | 5% |
| Operating income | $8,604 | $8,529 | 1% | 4% |
| Net income | $5,464 | $5,503 | -1% | 3% |
| Earnings per share – diluted | $5.36 | $5.27 | 2% | 5% |
Figures in millions
McDonald’s did suffer from the strong U.S. dollar but not to the same extent that Philip Morris did. Excluding currency translation, revenues were up 5% for 2012. However, after the inclusion of the currency translation, revenues only gained 2%.
Unfortunately, although net income rose 3% year over year excluding the effects of currency, McDonald’s net income actually fell after translation into U.S. dollar. The strong dollar wiped 4% from McDonald’s net income growth for 2012.
All in all, foreign currency translation had a negative impact of $0.01 and $0.17, respectively, on …read more
Source: FULL ARTICLE at DailyFinance
By Business Wirevia The Motley Fool
Filed under: Investing
Mary Schapiro Nominated to GE Board of Directors
FAIRFIELD, Conn.–(BUSINESS WIRE)– The Board of Directors of General Electric Company [NYSE: GE] has nominated Mary Schapiro, former chairman of the U.S. Securities and Exchange Commission (SEC), as a GE director. Schapiro will stand for election at GE‘s annual meeting of shareowners on April 24, 2013.
“Mary Schapiro will bring valuable expertise to GE, particularly with her experience overseeing U.S. financial markets,” said GE Chairman and CEO Jeff Immelt. “Her understanding of corporate governance and financial regulation will be of great benefit to GE and its shareowners. I am pleased that we have nominated Mary to our board.”
Schapiro served as chairman of the SEC from January 2009 through December 2012. Prior to becoming SEC chairman, Schapiro served as chief executive officer of the Financial Industry Regulatory Authority (FINRA) from 2007 through 2008. She joined FINRA in 1996, serving as president of the National Association of Securities Dealers (NASD) Regulation from 1996 to 2002 and as vice chairman from 2002 to 2006, when she was named chairman.
Schapiro served as a commissioner of the SEC from December 1988 to October 1994, and left the SEC when appointed chairman of the CFTC, where she served until 1996.
Prior to her 2009 SEC appointment, Schapiro also served as a director and chair of the audit committee at Duke Energy, and as lead director and chair of the nominating and governance committee at Kraft Foods.
Schapiro is a graduate of Franklin & Marshall College and earned a law degree from George Washington University Law School.
About GE
GE (NYS: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company’s website at www.ge.com.
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Seth Martin
646-682-5602 (office)
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seth.martin@ge.com
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The article Mary Schapiro Nominated to GE Board of Directors originally appeared on Fool.com.
Try any of …read more
Source: FULL ARTICLE at DailyFinance
