Mutual funds

Ubiquitous market commentator Jim “Mad Money” Cramer of TheStreet.com observes in a Rocky Mountain News column this morning how irrationally the market is behaving of late, in light of rumblings of the bear market and a pronounced recession.

As the stock market continues to close as high as 300 points higher or lower in recent weeks, mutual fund portfolio managers are increasingly hoarding cash or liquid cash-equivalent investments. Even bellwether Oracle of Omaha Warren Buffet has 13% of his portfolio in cash.

subprime crisis

Looking at the current economic landscape, we know the challenges our industry faces today may be like storms we have weathered in the past. Challenges often become catalysts for important changes in regulation, technology and business practices.

Whistleblowing Rules Don't Apply To Privately Held Funds

No sooner does the mutual fund industry come up with an innovative solution to the retirement income problem than the financial media has to tear it down.

Securities and Exchange Commissioner Paul Atkins has announced he will leave the agency when his term expires in June to return to the private sector.

Alliance to Pay $12 Million In Timing Defamation Suit

Hancock Names Carlin Independent Chairman

NEW YORK - Cautious investors will be watching 130/30 funds over the next few years to see how the new products perform.

WASHINGTON - The mutual fund industry will need to overhaul its online service and security capabilities as U.S. investors increasingly turn to the Internet, instant messaging and other mobile devices to manage their personal finances, investment decisions and transactions.

WASHINGTON - As regulatory burdens increase, mutual fund boards of directors' attention to the real business at hand-sound asset management and fiduciary responsibility to the end investor-is conversely being depleted, industry heavyweights attested, speaking at the Investment Company Institute's 50th Annual General Membership Meeting here last Thursday.

The harder the hedge fund managers’ fall - the more money they lose, the bigger the fat cats - the easier it is for them to raise additional seed capital for another hedge fund idea. So reports The Wall Street Journal this morning in “Rebounds by Hedge-Fund Stars Prove ‘It’s a Mulligan Industry.’”

WASHINGTON - The credit crisis is 75% to 85% unwound in terms of the financial markets, but the economy may still be on shaky ground, Jamie Dimon, chairman and CEO of JPMorgan Chase told the 1,500 delegates assembled here for the Investment Company Institute’s 50th GMM.“I would say this thing has largely already worked its way through. It probably won’t get worse at this point. Increased capital requirements will take about six months longer” to bring markets and counter-party risk tolerance back to normalcy, Dimon said.However, he was quick to add: “The recession, I don’t know. To paraphrase Yogi Berra, it’s tough to make predictions, especially about the future.”Markets perform in cycles, Dimon reminded executives, listing the 2001 technology bubble, Long Term Capital Management’s overleveraged exposure to Russia in 1997, the real estate and savings and loan crisis of 1990, overvalued earnings in 1987 and the subsequent stock market crash, the recession of 1982 and the oil shortages in 1974.
“The difference in this one is it’s a housing crisis,” said Dimon, who included among those to blame for the subprime crisis those mortgage bankers who failed to properly verify borrowers’ income or appraisers’ real estate assessments.Dimon also praised the government for its swift action in bailing out Bear Stearns and a cadre of more than 1,000 investment bankers at his own firm who, after he got “the Thursday telephone call” about whether or not to purchase the ailing firm, spent the entire weekend performing due diligence on the deal.In answer to a question from an audience member, Dimon exhorted mutual fund executives to continue to bring innovative products to market but to be extremely cautious when doing so.As an example, Dimon said, collateralized debt obligations, CDO warehouses and structured investment vehicles that invested in subprime mortgages are so complex that to try to assess the price in one such instrument, JPMorgan ran a Monte Carlo simulation on one of its mainframe computers for seven hours.Questionable mark-to-market policies also factored into the subprime troubles, he added. But that said, Dimon said he is tired of being “vilified” by the media for bailing out Bear Stearns or operating a bank that itself sold subprime mortgages and products derived from them. And as to banks’ role in making credit and loans too available to the American public, Dimon stressed that the consumers of subprime CDOs and other structured products over the past two years, have largely been institutional and not retail investors.The ICI booked Dimon’s appearance many months ahead of JPMorgan’s recent preeminent role in partnering with the government on the Bear Stearns deal, noted Edward Bernard, chairman of the ICI’s General Membership Meeting Planning Committee, and vice chairman of T. Rowe Price Group.“We thank Mr. Dimon for honoring his commitment” at this exceptionally busy time, Bernard said.

WASHINGTON - Regulators, employers and the financial services industry must work together to expand the use of 401(k) plans and increase worker participation, the Investment Company Institute's President and CEO Paul Schott Stevens said Wednesday at the institute's 50th annual general membership meeting.

Fidelity Brokerage Services has renewed its 8,629-square-foot lease at 61 Broadway in lower Manhattan for another 10 years.

The Millstein Center for Corporate Governance and Performance at Yale University and the Mutual Fund Directors Forum have formed the Conference of Fund Leaders aimed at independent board chairmen and lead directors.

Legg Mason, citing $206 million in charges tied to supporting money market funds with subprime and other illiquid fixed-income exposure, posted a net loss of $256 million in the first quarter, down from profits of $173 million in the year-ago period.

Former AllianceBernstein mutual fund sales manager John Carl won a $12 million arbitration lawsuit for having been dismissed from the company on the pretext of his role in the market-timing scandal.

Securities and Exchange Commissioner Paul Atkins has announced he will leave the agency when his term expires in June to return to the private sector.