The man who calls himself "The Bishop" and who has sent six threatening letters and two dud pipe bombs over the past 18 months is expected to strike again, the Associated Press reports. One of the pipe bombs was sent to American Century on Jan. 31. Then, on Feb. 1, a similar explosive was found in a Chicago office building.
But next time, given that "The Bishop's" letters have become increasingly menacing, the bombs could be real, warns Stratefor counterterrorism expert Fred Burton.
"He's progressing," Burton said. "He's taking his thoughts, which in his mind are reality. He's heading down a garden path of violence. It's almost impossible to be able to tell when he will mail his next devices-but he will."
Even though the post office, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives and local law enforcement are involved and have released a sketch of a suspect in his mid-30s, catching the offender is going to be hard and will probably require the help of the public, Burton said. Postal inspectors are offering a reward of up to $100,000 for information.
As to who the person is, Burton believes he is mentally ill, highly intelligent and a loner, although he might have a family.
Analysts Catering to Hedge Funds at Mutuals' Expense
Analysts at investment banks are giving less time to mutual fund portfolio managers who call them looking for stock insight and more time to hedge funds, Bloomberg reports. The reason is because hedge funds are more lucrative clients, given their needs for prime brokerage, securities loans and complex trades, and managers at investment banks are instructing their analysts to cater to these preferred clients.
According to Greenwich Associates, the average hedge fund pays $33 million a year in commissions, while the average mutual fund pays $16 million, or less than half.
Steven Roukis, for instance, director of research for Matrix Asset Advisors, used to spend half an hour on the phone with analysts five years ago. Today, he said, he's lucky if he even gets five minutes.
"You have to call at off-peak hours, like early in the morning," Roukis said. Michael Gambardella, a well-regarded steel analyst with JPMorgan, confirms that he used to give his time freely to asset managers, even those who weren't clients, but today screens his calls and spends more than half the day speaking to hedge funds.
Ross Miller, a finance professor at the State University of New York at Albany, worries that less research could affect the performance of mutual funds, particularly small fund shops. "Smaller mutual fund managers, who are strongly dependent on sell-side research, will get burned," Miller said. "They'll either get gobbled up, go out of business or become hedge funds."
PowerShares DWA ETF Tracks Peers, Patterns
A new exchange-traded fund from PowerShares and Dorsey Wright & Associates promises to be truly technical, tracking 100 stocks on peer-performance and patterns, rather than executive interviews and financial statements, according to MarketWatch.
"When people hear technical analysis, they think of black magic or something," said Tom Dorsey, president of Dorsey Wright. "But our method is really about measuring supply and demand in the marketplace and quantifying those trends. Our process is very long-term in nature."
If the ETF had been open from 2001, its method would have beaten the S&P 500 8.76% per year on average between 2001 and 2006. Expenses have been capped at 0.60%, and are rebalanced quarterly.
"It's another in the line of ETFs to take a known active strategy and put it into the form of a quantitative index to capture most of that process," said Jim Wiandt, editor of the Journal of Indexes. "It's a trend that's driving the industry."
Dorsey said the fund is not highly correlated to the overall market, and will perform best when markets are either clearly rising or falling, but will do little in a stagnant market. "It's a tool to use in a well-diversified portfolio to manage trends. This isn't designed as a one-stop type of fund," he said.
Sun Life Financial Debuts Income ON Demand'
Sun Life Financial is hoping to reach out to Boomers scared off by the "use it, or lose it" nature of guaranteed annuity income with a new program that allows investors to "store" their income, tax-deferred.
The pioneering "Income ON Demand" program allows investors to store income they earn from annuities, or stop and start payments as they see fit. Designed with Baby Boomers' changing income needs in mind, the program allows clients to suspend payments, for example, for a decade, and then take that income as a lump sum to pay for a home. Also, payment amounts are guaranteed so that if the contract value drops in the first 10 years, and the client has suspended payment during that time, when they eventually withdraw, they are paid the initial amount.
Income ON Demand is offered only through the U.S. division of Sun Life. Starting at age 55, clients can begin storing their guaranteed income, and can begin taking payments after age 59-1/2. The goal is to better accommodate the changing needs of retirees.
"Indications and early evidence suggests this healthier, more vibrant retirement Boomer generation will spend significantly more money earlier in retirement as they enjoy their newfound freedom," said Kevin Hart, president of Sun Life Financial Distributors.
"This puts the client, not the contract, in control of the income stream," said Mary Fay, senior vice president and general manager of Sun Life Financial's annuities division.
Rydex Investments Offers Managed Futures Fund
Rydex Investments has launched a managed futures mutual fund and plans to offer more alternative investment offerings.
"We are committed at Rydex to bringing innovative and value-added investment strategies and platforms to the marketplace," said Edward Egilinsky, Rydex's managing director of alternative investments.
The benchmark for the Rydex Managed Futures Fund is the S&P DTI, half of which is tied to financial futures and half tied to commodity futures.
"The S&P DTI methodology is rules-based and relies on trends to capture profits," Egilinsky said. "The S&P DTI also offers benefits from a diversification standpoint. It has historically shown a very low or slightly negative correlation to traditional investments such as fixed income and equities, and at the same time exhibits an attractive risk/return ratio."
Retirement Plans Embrace Alternative Investments
In an attempt to distinguish themselves in order to win customers, asset management firms are increasingly offering institutional-quality investment choices in retirement plans, MarketWatch reports. They are now populating 401(k) plans with hedge-like funds, commodities, real estate and other alternative investments.
"We're seeing a lot of companies that used to focus almost solely on mutual funds start to make more moves into the institutional side of the market," said Karen Remmele, a senior analyst at Cerulli Associates.
"They're starting to fill the gap between traditional mutual-funds and hedge-funds," said Meredith Jones, managing director of PerTrac Financial Solutions. "If they haven't already, most mutual fund companies will be moving increasingly to offering at least some hedged products and alternative investments for their institutional customers."
Chinese Fill Quota for New Fund on First Day
Chinese investors' enthusiasm for stocks and mutual funds continues unabated despite recent market volatility, the Xinhua News Agency reports. On the first trading day that First State Cinda Fund Management introduced a new mutual fund, the fund took in its full sales quota of 9 billion yuan, or $1.1 billion.
It is one of five new funds that Chinese authorities are launching this year, which are expected to take in $6.5 billion in assets. There are an additional 30 funds awaiting approval.
SEC Announces Regional CCOutreach Seminars
The Securities and Exchange Commission has announced the dates and locations of its regional CCOutreach seminars. Taking place between April and June, they will be held in: Atlanta; Baltimore; Boston; Charlotte, N.C.; Chicago; Cleveland; Denver; Hartford, Conn.; Los Angeles; Memphis, Tenn.; Miami; New York; Portland, Ore.; Richmond, Va.; San Francisco; Seattle and Wilmington, Del.
Topics to be covered include: the examination and risk assessment process; books, records, disclosures and filings; brokerage arrangements, best execution, trade allocation and soft dollars; portfolio management and performance; and marketing, advertising and distribution.
"We believe that by focusing our CCOutreach regional programs on the key compliance issues that are of most interest to CCOs, we will further our goal of assisting CCOs in developing and enhancing effective fund and advisor compliance programs for the benefit of investors," said Lori Richards, director of the SEC's office of compliance inspections and examinations.
Further information is available at the SEC's website, and registration is now open.
Critics Assail SEC Chair For Being Pro Business
After criticism that regulators over-corrected after the age of Enron, some observers say they see the Securities and Exchange Commission slowly slipping away from its fervently investor-oriented positions toward a more business-friendly orientation, according to the International Herald Tribune.
"You look at a parade of items and it begins to look to me like this Ccommission is starting to take an historic shift away from investor interests," said James Cox, a professor of law at Duke University.
Cox refuted such suggestions. "The United States government has an agency that services businesses and it is the Department of Commerce," Cox said. "I wan to make sure that every company knows understands that so long as they treat their investors well, the SEC will be friendly to them. [But] if they attempt to drive a wedge between the interests of investors and the interests of management, we will be their relentless enemy."
The SEC agenda for the upcoming year affirms the SEC's commitment to investor protection, including more transparent 401(k) fees, Cox noted.
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