Fund performance

Federal Reserve Chairman Ben Bernanke said Tuesday that more needs to be done to help troubled homeowners, and suggested a broader effort to writedown the principal on some troubled loans, according to Dow Jones.

The Dow Jones industrials dropped more than 100 point immediately after the opening bell on Friday and continued to fall through out the day, ending down more than 300 points.

Mortgage giant Fannie Mae has posted a $3.55 billion loss for the last quarter of 2007, blaming rising home loan defaults.

The U.S. economy is like a zebra that has stumbled into a spot of quicksand. The more it struggles, the faster it will sink, but if the zebra can be patient, help may come along sooner than it knows.

The Bush Administration and the Congress may bail out the nearly 8.8 million people whose mortgages have ballooned due to the subprime crisis.

restructuring

A pair of senior executives of the U.S. asset management business of Julius Baer, the Swiss wealth business, earned compensation packages worth $120 million in the first nine months of 2007, according to a regulatory filing ahead of the unit's flotation planned for this year.

Morgan Stanley is eliminating 1,000 jobs as it scales back its residential mortgage operations in the U.S. and closes operations in the U.K., Reuters reports, citing Morgan Stanley information. More than 100 other mortgage lenders have cut jobs in the last year as the housing crisis worsens.

On Monday, Fidelity Investments announced total brokerage client assets had reached a record $1.99 trillion in the fourth quarter, a 17% increase from a year ago.

A record 15,594 new equity trade ideas were entered into the Repository and Distribution Centre in January 2008, up 152% from 6,191 ideas entered last January.

Specialist fund groups and niche advisers will trump larger asset managers and consultants in the institutional marketplace of the future, according to the Financial Times.

Fidelity Investments announced that it plans to lay off about 250 employees as part of a restructuring of some of its units.

Weekly reporting municipal bond mutual funds had a net inflow of $468 million during the period ending Jan. 30, AMG Data Services reported. The results were down slightly from a $513 million inflow the previous week, but represent the fourth week of inflows following eight straight weeks of outflows, according to the Arcata, Calif.-based fund tracker. The category represents about 73% of all muni bond funds because it excludes those that report monthly.

Bonds are beginning to replace equities in pension funds in the United Kingdom, according to The Financial Times.

Hit hard by mortgage-related losses, Wall Street is returning to less risky transactions and focusing on tried-and-true practices like selling stocks and bonds to investors, according to the Wall Street Journal.

DALLAS – As the subprime mortgage crisis unfolded in the latter part of 2007 and took its toll on the municipal market – specifically the bond insurance industry – one sector of tax-exempt mutual funds was quietly outperforming all other categories.

Some financial pros say there is a possibility of a panic in the markets as the ongoing selling blitz hammers many sectors of the market.

Shakeouts at State Street Global Advisors and Bank of America's Columbia Management unit may be just the tip of the iceberg, as repercussions from the credit crunch hit mutual fund staffing levels.

Amid the sobering talk of a possible recession, there were two pieces of news last week that are cause for additional consternation. First, bond guru Bill Gross of Pimco warned that the subprime crisis could linger for another two years, wiping out another $250 billion in loan defaults through the end of next year on top of the $900 billion worth of current questionable collateralized debt obligations and subprime loans.

Amid the sobering talk of a possible recession, there were two pieces of news last week that are cause for additional consternation. First, bond guru Bill Gross of Pimco warned that the subprime crisis could linger for another two years, wiping out another $250 billion in loan defaults through the end of next year on top of the $900 billion worth of current questionable collateralized debt obligations and subprime loans.