SEC rule mandates oil, gas firms to report all reserves

A rule from the Securities and Exchange Commission that is supported by the energy industry directs oil and gas companies to report probable and possible reserves, in addition to proven reserves that are already reported in securities filings. The change also orders companies to calculate the value of reserves based on average price for the previous 12 months, rather than the price at the end of the year.

more at http://www.reuters.com/article/ousiv/idUSTRE4BS4W620081229

2008 -- one of the worst years since 1900

2008: The year in markets U.S. indexes   Dow Jones Industrial Average -35%   S&P 500 -39%   Nasdaq -42%   Dow Jones Financials -55%   Amex Oil Index -38% International indexes   Germany DAX -40%   FTSE 100 -31%   Japan Nikkei 225 -42%   China Shanghai Composite -65%   Mexico IPC -24%   Brazil Bovespa -41% Currencies/commodities   Gold +4%   Crude -64%   Dollar index +5%   Pound vs. dollar -27%   Dollar vs. yen -19%

TARP Bank Capital Infusion List

After the Treasury Department announced that it has provided an additional $4.7 billion to 92 banks as part of the government’s $700 billion rescue of the financial system the list of the banks receiving this aid has lengthened substantially.

The Treasury Department created the Capital Purchase Program, a part of the Troubled Asset Relief Program, to help to stabilize and strengthen the U.S. financial system. Treasury allocated $250 billion under TARP’s Capital Purchase Program to invest in U.S. financial institutions. The fund was established and the investments in these banks were made as part of the government’s effort to buy stock in banks, to strengthen their balance sheets and stimulate the banks to increase lending in effort to unfreeze credit markets and provide further deterioration in the U.S economy.

On the most recent list of banks receiving TARP funds released Tuesday were 14 banks that are not publicly traded. These are the first banks that are not publicly traded to receive government funds. The complete lists of the banks that have received government finds is as follows:
(see Artremis for the full list of TARP Bank Capital Infusion)

• Bank of America Corporation Charlotte NC $15,000,000,000
• Bank of New York Mellon Corporation New York NY $3,000,000,000
• Citigroup Inc. New York NY $25,000,000,000
• The Goldman Sachs Group, Inc. New York NY $10,000,000,000
• JPMorgan Chase & Co. New York NY $25,000,000,000
• Morgan Stanley New York NY $10,000,000,000
• State Street Corporation Boston MA $2,000,000,000
• Wells Fargo & Company San Francisco CA $25,000,000,000
• Merrill Lynch & Co., Inc. New York NY $10,000,000,000
• Bank of Commerce Holdings Redding CA $17,000,000
• 1st FS Corporation Hendersonville NC $16,369,000
• UCBH Holdings, Inc. San Francisco CA $298,737,000
• Northern Trust Corporation Chicago IL Purchase $1,576,000,000
• SunTrust Banks, Inc. Atlanta GA $3,500,000,000
• Broadway Financial Corporation Los Angeles CA $9,000,000
• Washington Federal Inc. Seattle WA $200,000,000
• BB&T Corp. Winston-Salem NC $3,133,640,000
• Provident Bancshares Corp. Baltimore MD $151,500,000
• Umpqua Holdings Corp. Portland OR $214,181,000
• Comerica Inc. Dallas TX $2,250,000,000
• Regions Financial Corp. Birmingham AL $3,500,000,000
• Capital One Financial Corporation McLean VA $3,555,199,000
• First Horizon National Corporation Memphis TN $866,540,000
• Huntington Bancshares Columbus OH $1,398,071,000
• KeyCorp Cleveland OH $2,500,000,000
• Valley National Bancorp Wayne NJ $300,000,000
• Zions Bancorporation Salt Lake City UT $1,400,000,000
• Marshall & Ilsley Corporation Milwaukee WI $1,715,000,000
• U.S. Bancorp Minneapolis MN $6,599,000,000
• TCF Financial Corporation Wayzata MN $361,172,000
• First Niagara Financial Group Lockport NY $184,011,000
• HF Financial Corp. Sioux Falls SD $25,000,000
• Centerstate Banks of Florida Inc. Davenport FL $27,875,000
• City National Corporation Beverly Hills CA $400,000,000
• First Community Bankshares Inc. Bluefield VA $41,500,000
• Western Alliance Bancorporation Las Vegas NV $140,000,000
• Webster Financial Corporation Waterbury CT $400,000,000
• Pacific Capital Bancorp Santa Barbara CA $180,634,000
• Heritage Commerce Corp. San Jose CA $40,000,000
• Ameris Bancorp Moultrie GA $52,000,000
• Porter Bancorp Inc. Louisville KY $35,000,000
• Banner Corporation Walla Walla WA $124,000,000
• Cascade Financial Corporation Everett WA $38,970,000
• Columbia Banking System, Inc. Tacoma WA $76,898,000
• Heritage Financial Corporation Olympia WA $24,000,000
• First PacTrust Bancorp, Inc. Chula Vista CA $19,300,000
• Severn Bancorp, Inc. Annapolis MD $23,393,000
• Boston Private Financial Holdings, Inc. Boston MA $154,000,000
• Associated Banc-Corp Green Bay WI $525,000,000
• Trustmark Corporation Jackson MS $215,000,000
• First Community Corporation Lexington SC $11,350,000
• Taylor Capital Group Rosemont IL $104,823,000
• Nara Bancorp, Inc. Los Angeles CA $67,000,000
• Midwest Banc Holdings, Inc. Melrose Park IL $84,784,000
• MB Financial Inc. Chicago IL $196,000,000
• First Midwest Bancorp, Inc. Itasca IL $193,000,000
• United Community Banks, Inc. Blairsville GA $180,000,000
• Wesbanco Bank Inc. Wheeling WV $75,000,000
• Encore Bancshares Inc. Houston TX $34,000,000
• Manhattan Bancorp El Segundo CA $1,700,000
• Iberiabank Corporation Lafayette LA $90,000,000
• Eagle Bancorp, Inc. Bethesda MD $38,235,000
• Sandy Spring Bancorp, Inc. Olney MD $83,094,000
• Coastal Banking Company, Inc. Fernandina Beach FL $9,950,000
• East West Bancorp Pasadena CA $306,546,000
• South Financial Group, Inc. Greenville SC $347,000,000
• Great Southern Bancorp Springfield MO $58,000,000
• Cathay General Bancorp Los Angeles CA $258,000,000
• Southern Community Financial Corp. Winston-Salem NC $42,750,000
• CVB Financial Corp Ontario CA $130,000,000
• First Defiance Financial Corp. Defiance OH $37,000,000
• First Financial Holdings Inc. Charleston SC $65,000,000
• Superior Bancorp Inc. Birmingham AL $69,000,000
• Southwest Bancorp, Inc. Stillwater OK $70,000,000
• Popular, Inc. San Juan PR $935,000,000
• Blue Valley Ban Corp Overland Park KS $21,750,000
• Central Federal Corporation Fairlawn OH $7,225,000
• Bank of Marin Bancorp Novato CA $28,000,000
• Bank of North Carolina Thomasville NC $31,260,000
• Central Bancorp, Inc. Somerville MA $10,000,000
• Southern Missouri Bancorp, Inc. Poplar Bluff MO $9,550,000
• State Bancorp, Inc. Jericho NY $36,842,000
• TIB Financial Corp Naples FL $37,000,000
• Unity Bancorp, Inc. Clinton NJ $20,649,000
• Old Line Bancshares, Inc. Bowie MD $7,000,000
• FPB Bancorp, Inc. Port St. Lucie FL $5,800,000
• Sterling Financial Corporation Spokane WA $303,000,000
• Oak Valley Bancorp Oakdale CA $13,500,000
• Old National Bancorp Evansville IN $100,000,000
• Capital Bank Corporation Raliegh NC $41,279,000
• Pacific International Bancorp Seattle WA $6,500,000
• SVB Financial Group Santa Clara CA $235,000,000
• LNB Bancorp Inc. Lorain OH $25,223,000
• Wilmington Trust Corporation Wilmington DE $330,000,000
• Susquehanna Bancshares, Inc Lititz PA $300,000,000
• Signature Bank New York NY $120,000,000
• HopFed Bancorp Hopkinsville KY $18,400,000
• Citizens Republic Bancorp, Inc. Flint MI $300,000,000
• Indiana Community Bancorp Columbus IN $21,500,000
• Bank of the Ozarks, Inc. Little Rock AR $75,000,000
• Center Financial Corporation Los Angeles CA $55,000,000
• NewBridge Bancorp Greensboro NC $52,372,000
• Sterling Bancshares, Inc. Houston TX $125,198,000
• The Bancorp, Inc. Wilmington DE $45,220,000
• TowneBank Portsmouth VA $76,458,000
• Wilshire Bancorp, Inc. Los Angeles CA $62,158,000
• Valley Financial Corporation Roanoke VA $16,019,000
• Independent Bank Corporation Ionia MI $72,000,000
• Pinnacle Financial Partners, Inc. Nashville TN $95,000,000
• First Litchfield Financial Corporation Litchfield CT $10,000,000
• National Penn Bancshares, Inc. Boyertown PA $150,000,000
• Northeast Bancorp Lewiston ME $4,227,000
• Citizens South Banking Corporation Gastonia NC $20,500,000
• Virginia Commerce Bancorp Arlington VA $71,000,000
• Fidelity Bancorp, Inc. Pittsburgh PA $7,000,000
• LSB Corporation North Andover MA $15,000,000
• Intermountain Community Bancorp Sandpoint ID $27,000,000
• Community West Bancshares Goleta CA $15,600,000
• Synovus Financial Corp. Columbus GA $967,870,000
• Tennessee Commerce Bancorp, Inc. Franklin TN $30,000,000
• Community Bankers Trust Corporation Glen Allen VA $17,680,000
• BancTrust Financial Group, Inc. Mobile AL $50,000,000
• Enterprise Financial Services Corp. St. Louis MO $35,000,000
• Mid Penn Bancorp, Inc. Millersburg PA $10,000,000
• Summit State Bank Santa Rosa CA Purchase $8,500,000
• VIST Financial Corp. Wyomissing PA Purchase$25,000,000
• Wainwright Bank & Trust Company Boston MA $22,000,000
• Whitney Holding Corporation New Orleans LA $300,000,000
• The Connecticut Bank and Trust Company Hartford CT $5,448,000
• CoBiz Financial Inc. Denver CO $64,450,000
• Santa Lucia Bancorp Atascadero CA $4,000,000
• Seacoast Banking Corporation of Florida Stuart FL $50,000,000
• Horizon Bancorp Michigan City IN $25,000,000
• Fidelity Southern Corporation Atlanta GA $48,200,000
• Community Financial Corporation Staunton VA $12,643,000
• Berkshire Hills Bancorp, Inc. Pittsfield MA $40,000,000
• First California Financial Group, Inc Westlake Village CA $25,000,000
• AmeriServ Financial, Inc Johnstown PA $21,000,000
• Security Federal Corporation Aiken SC $18,000,000
• Wintrust Financial Corporation Lake Forest IL $250,000,000
• Flushing Financial Corporation Lake Success NY $70,000,000
• Monarch Financial Holdings, Inc. Chesapeake VA $14,700,000
• StellarOne Corporation Charlottesville VA $30,000,000
• Union Bankshares Corporation Bowling Green VA $59,000,000
• Tidelands Bancshares, Inc Mt. Pleasant SC $14,448,000
• Bancorp Rhode Island, Inc. Providence RI $30,000,000
• Hawthorn Bancshares, Inc. Lee’s Summit MO $30,255,000
• The Elmira Savings Bank, FSB Elmira NY $9,090,000
• Alliance Financial Corporation Syracuse NY $26,918,000
• Heartland Financial USA, Inc. Dubuque IA $81,698,000
• Citizens First Corporation Bowling Green KY $8,779,000
• FFW Corporation Wabash IN $7,289,000
• Plains Capital Corporation Dallas TX $87,631,000
• Tri-County Financial Corporation Waldorf MD $15,540,000
• OneUnited Bank Boston MA $12,063,000
• Patriot Bancshares, Inc. Houston TX $26,038,000
• Pacific City Finacial Corporation Los Angeles CA $16,200,000
• Marquette National Corporation Chicago IL $35,500,000
• Exchange Bank Santa Rosa CA $43,000,000
• Monadnock Bancorp, Inc. Peterborough NH $1,834,000
• Bridgeview Bancorp, Inc. Bridgeview IL $38,000,000
• Fidelity Financial Corporation Wichita KS $36,282,000
• Patapsco Bancorp, Inc. Dundalk MD $6,000,000
• NCAL Bancorp Los Angeles CA $10,000,000
• FCB Bancorp, Inc. Louisville KY $9,294,000

Euro currency turns 10

Ten years ago, Europe launched its grand experiment with a shared currency - and watched it plunge in value before recovering.

But as the anniversary approaches of the Jan. 1, 1999, arrival of the euro, economists say the new currency is finally fulfilling its promise as a way to lower borrowing costs, ease trade and tourism, boost growth and strengthen the European community.

When it was launched for non-cash purposes in 1999, just 11 countries were on board - Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Notes and coins were added on Jan. 1, 2002, and the original 11 have been joined by Cyprus, Greece, Malta and Slovenia, with Slovakia slated to join on Jan. 1, bringing the total to 16. Now, some people in longtime holdouts such as Sweden and even strongly euro-skeptic Britain are beginning to reconsider the question.

2008 Bank Failure Update

• PFF Bank and Trust, Pomona, CA November 21, 2008
• Downey Savings and Loan, Newport Beach, CA November 21, 2008
• The Community Bank, Loganville, GA November 21, 2008
• Security Pacific Bank, Los Angeles, CA November 7, 2008
• Franklin Bank, SSB, Houston, TX November 7, 2008
• Freedom Bank, Bradenton, FL October 31, 2008
• Alpha Bank & Trust, Alpharetta, GA October 24, 2008
• Meridian Bank, Eldred, IL October 10, 2008
• Main Street Bank, Northville, MI October 10, 2008
• Washington Mutual Bank, Henderson, NV September 25, 2008
• and Washington Mutual Bank FSB, Park City, UT
• Ameribank, Northfork, WV September 19, 2008
• Silver State Bank, Henderson, NV En Español September 5, 2008
• Integrity Bank, Alpharetta, GA August 29, 2008
• The Columbian Bank and Trust, Topeka, KS August 22, 2008
• First Priority Bank, Bradenton, FL August 1, 2008
• First Heritage Bank, NA, Newport Beach, CA July 25, 2008
• First National Bank of Nevada, Reno, NV July 25, 2008
• IndyMac Bank, Pasadena, CA July 11, 2008
• First Integrity Bank, NA, Staples, MN May 30, 2008
• ANB Financial, NA, Bentonville, AR May 9, 2008
• Hume Bank, Hume, MO March 7, 2008
• Douglass National Bank, Kansas City, MO January 25, 2008

Latins Quiet About Madoff Losses

Clients in Latin America Invested Millions Through Banco Santander, Fairfield

Wealthy Latin Americans appear to be among the big losers in the $50 billion Ponzi scheme orchestrated by financier Bernard Madoff, although many in the region are reluctant to step forward due to the private nature of Latin American fortunes, worries about security, and concerns about tipping off local tax authorities.

Some were brought into the Madoff investment fund, which the New York-based financier confessed earlier this month was a Ponzi scheme, through Banco Santander, the Spanish bank, which has major operations through the region.

Other investors appear to have been introduced to the scheme through their friendship with Andrés Piedrahita, a socially prominent, Colombian-born banker living in Madrid and London. Mr. Piedrahita, is a son-in-law of Walter Noel, founder of the Fairfield Greenwich Group, which may have lost $7.5 billion it had invested with Mr. Madoff. In a statement released in Spain, Fairfield Greenwich said it was a victim of fraud and was considering legal action to protect its clients. Mr. Piedrahita couldn't be reached for comment. 

Earlier this month Banco Santander, which operates in Puerto Rico and eight Latin American countries from Mexico to Argentina, admitted losing more than €2.3 billion ($3.22 billion) it had invested in the Madoff fund. 

more at

http://online.wsj.com/article/SB123051003837638329.html

$2bn fraud blamed as Polaroid submits Chapter 11 filing

Polaroid, the company that pioneered instant photography, has filed for Chapter 11 bankruptcy protection, citing an alleged $2 billion fraud at its parent firm, Petters Group Worldwide (PGW) for its problems. 

According to its filing with a US bankruptcy court in Minnesota, the company's financial position has been "compromised" by the "apparent fraudulent acts" of PGW founder Thomas Petters and some of his associates. 

Mr Petters is currently charged with multiple counts of fraud and money laundering after being arrested on suspicion of creaming off group money to pay for a lavish lifestyle. He is also accused of using bogus purchase orders to fraudulently secure investment from hedge funds. 

PWG filed for bankruptcy in October after a court froze its assets. The company has unsecured claims of $213.5 million outstanding against Polaroid, which the camera firm disputes, Bloomberg noted. 

In a statement, Polaroid said there are "ample cash reserves" to cover its Chapter 11 restructuring and it will continue operations while the process is carried out. The company plans to launch a number of new product lines next year. 

Financial services layoffs are continuing

Financial services layoffs are continuing apace, with a wide range of firms making moves this week. They include substantial workforce reductions at Credit Suisse (affecting mostly investment bankers), State Street Corp., the combined Nomura/Lehman Brothers operation in London, and Washington Mutual's former headquarters in Seattle. Also hit: hundreds of commodity traders at Constellation Energy, and recruiting positions at global headhunter Michael Page International.

Credit Suisse says it's eliminating 5,300 investment banking jobs, or about 11 percent of its worldwide headcount, by the middle of next year. However, the bank continues to expand in global private banking and in its Swiss businesses.

Nomura reportedly plans to slash 1,000 London jobs, about 20 percent of its staff there, as it integrates its purchase of Lehman Brothers' European operations. About two-thirds of the casualties are Lehman employees, according to the Financial Times.

State Street Corp. says it's eliminating 1,600 to 1,800 positions - about 6 percent of its global workforce - by March 2009. About two-thirds of the cuts will occur within North America.

JPMorgan executives placed the layoff toll from absorbing Washington Mutual at 9,200 jobs, or about 22 percent of the failed bank's workforce of 42,000.

Constellation Energy Group told employees it's laying off more than 800 people, most from its commodities trading division. That represents 8 percent of Constellation's work force, says the Baltimore Sun.

Michael Page International, the global recruiting firm with many hedge fund clients, is cutting its own staff in response to weak market conditions and a broad slowdown in recruiting activity .

Hedge fund sued over Madoff investments

A hedge fund manager that had $7.5 billion invested with Wall Street broker Bernard Madoff has been sued in a class action lawsuit by clients who allege that it failed to adequately protect their assets. 

The complaint, filed in New York on December 19th, accuses Fairfield Greenwich Group (FGG) and its founding partners - Walter Noel, Andres Piedrahita and Jeffrey Tuucker - of breaching fiduciary duty, negligence and unjust enrichment, Bloomberg reported. 

Brian Fancouer and Amit Vijayvergiya of affiliate firm FG Bermuda are also named in the lawsuit, the news agency added. 

The lawsuit alleges that the defendants failed to carry out "even a minimum level of due diligence" regarding Mr Madoff's investment methods and that they ignored "red flag" warnings that something was wrong, such as Mr Madoff's investments paying out steady gains in a declining market. 

All the while, the plaintiffs argue, FGG collected "millions of dollars" in charges and fees. 

Christopher Lovell, the lawyer representing investors in the action, said: "Investors trust these hedge fund people to do the analysis and use due care to analyse what's going on ... That's not what happened here."

FGG declined to comment. 

Poll: Madoff scandal "common"

Almost three-quarters of Americans believe the alleged investment fraud carried out by Bernard Madoff is "common" on Wall Street - and more want to see the federal government tighten its regulation of the markets, according to a new poll. 

The survey by CNN Money found that 74 per cent of adults believe Mr Madoff's alleged behaviour is commonplace among financial advisors and institutions. 

The broker is currently under house arrest accused by the Securities and Exchange Commission of running a $50 billion Ponzi scheme that hit some of the world's biggest financial firms, charities and individual investors. 

Many of those questioned believe the government should do more to head off such incidents, with 59 per cent saying stock market regulation is currently too lax, up from 50 per cent in September. 

Some 22 per cent said financial regulation is too tight, while 18 per cent judged it about right. 

Last week, the SEC announced an internal investigation into its handling of the Madoff case after revealing that it had received "credible and specific" warnings about the broker as far back as 1999. 

Seven charged over "golden goose" insider trading ring

Seven individuals and two companies have been charged over their roles in an insider trading ring that is thought to have brought in over $4.8 million in illegal profits, it has been announced. 

The complaint filed by the Securities and Exchange Commission(SEC) alleges that one of the defendants - former Lehman Brothers broker Matthew Devlin - traded on non-public information about corporate mergers, tender offers and stock repurchases provided by his wife, who worked for a public relations firm handling the deals. 

He is also accused of passing the information to colleagues and friends who found it so lucrative that they referred to the couple as a "golden goose", the SEC said. 

The watchdog added that Mr Devlin attempted to hide his insider deals by using a third party "tippee" to buy stocks on his behalf. 

Many of the other defendants also tried to conceal their trades by using various accounts not directly linked with Mr Devlin or Lehmans, the investment bank that collapsed in September. 

As a reward for his tip-offs, Mr Devlin is alleged to have received numerous luxury gifts, including a widescreen TV and driving lessons in a Porsche. 

This Day in Wall Street History 1913 : Federal Reserve Act is approved

President Woodrow Wilson's first few years in office were marked by the passage of an array of fiscal reforms and initiatives. December 23, 1913, saw Congress give the nod to one of Wilson's economic initiatives: the Federal Reserve Act, which promised to change the nation's banking system. The act paved the way for the Federal Banking System, a network of twelve regional banks. To help forward this plan, the act also called for all national banks to join the federal system via hefty one-time deposits into a pooled account. In turn, the Federal Reserve banks were charged with serving as resources to aid and stabilize the nation's other banks. The resulting network of banks was tied together by the Federal Reserve Board, as well as the newly minted Federal Reserve note.  source: www.history.com

Madoff Fund Operator De La Villehuchet Found Dead in New York

Thierry Magon de La Villehuchet, of Access International Advisors, who ran a fund that invested with Bernard Madoff, was found dead at his Madison Avenue office today, a New York City police officer at the scene said. Mr Villehuchet took sleeping pills and slashed his wrists. He was 65 years old.

Mr Villehuchet's feeder fund invested 100% in Madoff's funds, and lost approximately $1.5 billion, including Mr Villehuchet's own money.

Mr Villehuchet "could not cope with the pressure following the outbreak of the scandal," the French business newspaper la Tribune's Web site said, quoting his relatives. "This is a farewell from someone who had done nothing wrong."

Mr Villehuchet is believed to be the second Madoff investor to kill himself. On Dec. 17, 49-year-old HSBC banker Christen Schnor - whose firm may have lost $1 billion in the scam - hanged himself in a London hotel.

more at

http://www.bloomberg.com/apps/news?pid=20601087&sid=aa_2yi6Cq_8A&refer=home

and (French)

http://www.latribune.fr/depeches/associated-press/laffaire-madoff-pourrait-avoir-pousse-un-investisseur-francais-au-suicide.html

(French)

http://www.leparisien.fr/faits-divers/affaire-madoff-un-francais-se-suicide-a-new-york-23-12-2008-352167.php#

Record number of hedge funds collapse in Q3

The number of hedge funds going bust in the third quarter of the year more than tripled in 2008 to hit a record high, a new report has claimed. 

The study by Hedge Fund Research (HFR), reported by CNN Money, said 344 private investment pools went under between July and September, compared to 105 funds in the third quarter of last year. 

It beats the previous quarterly record of 267 closures, which was set in the last three months of 2006. 

Overall, the number of funds closing outstripped the number of new launches for the first time on record. 

HFR said figures for the first nine months of the year show a total of 693 fund closures, up from 409 for the same period in 2007.

If the current pace of closures is maintained over the last three months of the year, 920 funds could close in 2008, beating the previous record of 848 liquidations set in 2005. 

HFR president Kenneth Heinz said: "The hedge fund industry is currently experiencing a structural consolidation that mirrors broader trends across the entire financial industry."

According to data from Eurekahedge, total hedge fund assets fell by $71.5 billion in November. 

SEC approves rules on data tagging

The Securities and Exchange Commission will require public companies to "tag" key data in reports filed with regulators. The requirement is aimed at helping investors compare data among companies within a sector. The new rules also cover mutual funds and require firms to post the reports on the Web.

more at
http://www.forbes.com/reuters/feeds/reuters/2008/12/17/2008-12-17T180750Z_01_N17335851_RTRIDST_0_SEC-XBRL-UPDATE-1.html

Toyota expects first operating loss in 70 years

The president of Toyota Motor, Katsuaki Watanabe.

Toyota Motor announced Monday that it expected its first loss in 70 years in its core vehicle-making business, underscoring the way the pain from the current economic crisis was spreading across the global auto industry.

Analysts said the fact that even Toyota was stumbling pointed to still harder times ahead for other automakers.

On Monday, Toyota said it expected a loss during the current fiscal year of ¥150 billion, or $1.7 billion, from its auto operations. Toyota said that would be its first operating loss since 1938, a year after the company was founded.

A loss this year would also be a huge reversal from the ¥2.3 trillion in operating profit Toyota earned in the past fiscal year.

Toyota, the Japanese auto giant that has been neck and neck with General Motors for the status of world's largest vehicle maker, said it still expected to eke out a narrow net profit for its group, which also includes the automaker Daihatsu and the truck maker Hino.

Investors who left Madoff funds may have to return money

Investors who withdrew their money from Bernard Madoff's investment firm years before his alleged $50 billion fraud came to light may be forced to pay it back under US bankruptcy laws, it has been claimed.

According to Reuters, many of those who "sighed with relief" last week could be pursued to pay back their profits and possibly some of their principal.

Jeff Marwil, an attorney who helped the bankrupt Bayou Group of hedge funds recover money from past investors, told the site that the law demands returns if it is judged that investors were aware or should have been aware of problems with a fund.

Investors who exited up to two years before a collapse can be affected, although state statues can extend this to up to six years.

Phillip Bentley of Kramer, Levin, Naftalis & Frankel added that while many investors will have withdrawn for legitimate reasons such as buying a house or funding their child's education, the trustee in charge of liquidating Bernard L Madoff Investment Securities could still pursue them as his job is to "bring in assets any way he can".

"Potentially the numbers are enormous," he warned.

Lack of controls led to $48m fraud at the Washington DC Office of Tax and Revenue (OTR)

A lack of automated controls and insufficient oversight allowed an employee at the Washington DC Office of Tax and Revenue (OTR) to steal over $48 million dollars, a new report has said.

The pro-bono investigation by law firm Wilmer Cutler Pickering Hale and Dorr and audit specialist PricewaterhouseCoopers said Harriette Walters - an employee of the office with 20 years' standing - committed the fraud by issuing bogus reimbursement checks, Business Journal stated.

Ms Walters pleaded guilty to fraud charges stretching back to 1987 in connection with the case in September and contributed to the report's findings.

After examining around 680,000 electronic and hardcopy documents, investigators concluded that she was able to perpetrate the "long-standing fraud" because of a "failure of controls, a dysfunctional work environment and a lack of oversight".

The report recommended the development of "more detailed" procedures and reducing the OTR's reliance on manual transaction processing.

Business Journal noted that since the fraud came to light, a number of personnel and policy changes have been implemented at the office, including the dismissal of its former director.

OTR is responsible to administering tax collection in the District of Columbia.

22 new ComStage ETFs launched on Xetra

Deutsche Börse is further expanding its XTF segment for exchange-traded index funds (ETFs) on the pan-European Xetra® trading platform and has admitted 22 new ETFs issued by ComStage, a Commerzbank subsidiary, to trading.

17 of the 22 new ComStage ETFs are based on the MSCI index family. These equity indices are globally accessible for investing and are segmented by size, type and sector. They are weighted by freefloat market capitalization and track the performance of international equity markets based on total return with net dividends reinvested.

Five of these indices are tradable in Europe for the first time. The MSCI Pacific TRN tracks share performance of five developed equity markets in the Asia-Pacific region: Australia, Hong Kong, Japan, New Zealand and Singapore.
The MSCI Pacific ex Japan TRN tracks the same markets with the exception of Japan.

With the two ComStage ETFs MSCI USA Mid Cap TRN and MSCI Small Cap TRN, investors can invest in US mid-cap and US small-cap companies for the first time. The MSCI USA Mid Cap index tracks 15 percent and the MSCI USA Small Cap index 12 percent of US market capitalization.

Moreover, the MSCI Russia 30% Capped index is now tradable in Europe. This index comprises the components of the Russian standard index MSCI Russia and tracks the performance of Russian companies. An upper limit of 30 percent on the basis of closing prices each trading day applies for the weighting of its components.

In addition to the 17 ETFs on the MSCI indices, ComStage has launched five additional funds and had them listed on Xetra. They are based on the Swiss blue-chip index SMI®, the Tokyo stock exchange’s TOPIX®, the Vienna stock exchange’s ATX® as well as the Dow Jones EURO STOXX 50® Short and Dow Jones EURO STOXX 50® Leveraged indices.

The product offering on Xetra in the XTF segment currently comprises a total of 399 exchange-traded index funds, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of over €10 billion, makes Deutsche Börse’s XTF segment Europe’s leading trading venue for ETFs.

Government Cracks Down on Unfair Credit Card Practices

The Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration approved rules that would limit certain practices by credit card issuers. Under the rules, banks, credit unions and savings associations are banned from raising interest rates on existing balances and charging late fees if the borrower was given less than 21 days to pay. The rules are considered one of the biggest overhauls for the industry in decades. 

more at

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/18/AR2008121801883.html

Dollar Decline Deepens

The U.S. currency continues to get pummeled versus the yen, and is set to post its biggest weekly decline against the euro ever. It’s not a good sign for U.S. equities.
The yen strengthened, heading for a seventh weekly gain against the dollar, as stocks fell and investors bet any attempt by the Bank of Japan to rein in the currency will have limited success.

The dollar was also poised for its biggest weekly loss against the euro since the 15-nation currency’s 1999 debut as the Federal Reserve cut its rate to a record low, reducing the appeal of U.S. assets. The yen, which reached a 13-year high against the dollar this week, rose even after the Bank of Japan lowered its benchmark rate to 0.1 percent from 0.3 percent and said it would buy commercial paper to boost corporate lending.

“There’s still a flight to liquid, safe currencies and it would take a significant amount of intervention to stop that trend,” said Geoff Kendrick, a senior foreign-exchange strategist at UBS AG in London. “Stocks gave back gains pretty quickly after the rate cut so markets resumed what have been the broader trends this year.”

The dollar fell to 88.62 yen as of 9:16 a.m. in London, from 89.43 yen yesterday in New York, on course for a 2.8 percent decline this week. It dropped to 87.14 yen on Dec. 17, the lowest level since 1995. The dollar traded at $1.4066 versus the euro, from $1.4240 yesterday, when it slumped to an 11-week low of $1.4719. The euro slid to 124.79 yen from 127.44 yen.

more at http://www.bloomberg.com/apps/news?pid=20601087&sid=ak89Uaii6xq8&refer=home

Feeder Fund’s Role Eyed in Madoff Mess

Fairfield Greenwich Group is coming under scrutiny as being one of the participants that extended Madoff’s alleged fraud into Europe. In marketing materials, the investment firm touted Madoff’s seemingly straw-into-gold “algorithmic technology.”

The Securities and Exchange Commission, as part of an investigation into Mr. Madoff's activities, determined in 2006 that the fund, Fairfield Greenwich Group, hadn't properly disclosed that Mr. Madoff oversaw its investment decisions, according to an SEC document, though the agency found no evidence of fraud.

Since then, Fairfield Greenwich has in marketing documents touted its close relationship with Mr. Madoff -- and in the process raised about $1.7 billion from investors in the U.S. and Europe. This marketing effort ultimately broadened the scope of Mr. Madoff's alleged fraud far from his bases in New York and Florida.

There is no suggestion that Fairfield knew of Mr. Madoff's improper activities. A Fairfield spokesman says the firm trusted Mr. Madoff after a 19-year relationship and conducted due diligence of his activities.

The spotlight on Fairfield comes as prosecutors and regulators attempt to unravel Mr. Madoff's alleged fraud; he has told investigators he conducted a $50 billion Ponzi scheme in which he paid investors returns from subsequent client money he raised.

more at http://online.wsj.com/article/SB122964625164020213.html?mod=testMod

Dreier firm in chaos after arrest

The New York law firm of Marc S Dreier is in "chaos" following his arrest for hedge fund fraud, with millions of dollars worth of assets missing, defaulting health insurance and the vast majority of its 250 attorneys facing unemployment, it has been reported.

According to the New York Times, lawyers at the company that was almost singularly controlled by Mr Dreier say bills have not been paid for months and it is unable to pay $2.6 million in wages that were due December 15th.

Mr Dreier is currently being held without bail, charged with what the Securities and Exchange Commission called an "elaborate" deception to sell fake promissory notes to a number of investors. He faces similar charges in Canada.

The newspaper said Mr Dreier had a jet-set lifestyle complete with a luxury Manhattan apartment, several sports cars and a 120-foot yacht with its own Jacuzzi and ten-man crew.

His law firm's headquarters on Park Avenue was adorned with between $30 and $40 million dollars worth of artwork, including pieces by Picasso and Andy Warhol.

Since Mr Dreier's arrest, the publication said someone "not affiliated with the firm" has removed several items and their whereabouts are currently unknown.

Siemans agrees record settlement over international bribery scheme

Technology manufacturer Siemens has agreed an $800 million settlement with the Securities and Exchange Commission (SEC) over charges that it engaged in "systematic" bribery of foreign government officials in order to win business.

Announcing the deal, the SEC said the company had violated the Foreign Corrupt Practices Act (FCPA) by using an elaborate series of payments to conceal $1.4 billion worth of bribes paid to officials as far afield as Venezuela, Bangladesh, China, Iraq and Russia.

These bribes were used to secure business ranging from setting up mobile phone networks to the development of medical devices, identity card schemes and the design and construction of new transit systems.

Siemans earned around $1.1 billion from the projects, the SEC said.

Under the terms of the settlement - the biggest ever agreed in the history of the FCPA - the company will pay $350 million to settle the SEC's charges, as well as a $450 million fine to settle criminal charges brought by the US Department of Justice.

SEC chairman Christopher Cox said: "Siemans paid staggering amounts of money to circumvent the rules and gain business."

Siemens was founded in Berlin in 1847.

This Day in Wall Street History 1878: Gold Exchange shuts down

By 1878, the rise of the silver movement and rampant currency deflation had taken their toll on gold. The premium on the precious metal had virtually vanished, leaving gold traders with little work to do. So, rather than twiddle their thumbs and wait for a turnaround, leaders of the nation's Gold Exchange decided to close shop on December 17. However, the dawn of 1879 saw a reversal of gold's fortunes and the Exchange re-opened its doors for business.

source: www.history.com

Former Rezko partner files for protection from creditors

Developer Daniel Mahru, a former business partner of Antoin Rezko, has filed for personal protection from creditors, saying he has assets of $50,000 or less and debts of more than $10 million. 

Mr. Mahru was CEO of Chicago-based Rezmar Corp., a development company he co-owned with Mr. Rezko, between 1989 and 2005. Mr. Rezko, who was Rezmar’s chairman and a former fundraiser for Gov. Rod Blagojevich, is awaiting sentencing on federal fraud charges.

more at

http://www.chicagorealestatedaily.com/cgi-bin/news.pl?id=32277

Florida Investors Among Victims of Bernard Madoff

A Weston investment management firm, a foundation that has donated millions to Palm Beach County arts and some of the world's biggest banks are among hundreds of organizations whose fortunes changed with the arrest of veteran money manager Bernard Madoff. With losses estimated at $50 billion, regulators are now calling it one of Wall Street's biggest-ever pyramid schemes. In addition to Miami car dealer Norman Braman, Jewish charitable organizations were particularly hard hit, including MorseLife Community, a senior center in West Palm Beach. 

more at 

http://www.miamiherald.com/457/story/814537.html

Investors face losses as hedge funds 'block the exits'

Hedge fund investors could lose up to 15 per cent of their original outlay trying to redeem their money from the investment pools as fund managers attempt to block damaging withdrawals, a new academic paper has claimed.

The study, reported by Reuters, said hedge funds have traditionally applied restrictions on when investors can take their money out but in the face of the deepening financial crisis and spiralling redemptions, many are now trying to slam the exits completely.

Previously, hedge funds had been wary about refusing to sanction withdrawals as it could be seen as a sign of impending failure but with $40 billion pulled from the global industry in October alone, managers are becoming less apprehensive about trying to apply the brakes.

In an interview with the news service, the paper's co-author Professor Nicolas Bollen of Vanderbilt University in Nashville, Tennessee said the invocation of a fund manager's right to block withdrawal requests "generates an implied cost of between 5 percent and 15 percent of the initial investment".

With the commitment threshold for many hedge funds standing at $1 million, this could cost investors up to $150,000, Reuters noted.

"Houdini" attorney denied bail over hedge fund fraud

A New York lawyer accused of a hedge fund fraud that has allegedly incurred losses of more than $380 million has been denied bail after federal prosecutors described him as a "Houdini" who poses a serious flight risk.

Marc Dreier was charged earlier this week by the Securities and Exchange Commission in connection with what it called a "stunning" deception that involved the sale of falsified promissory notes to a number of investment funds.

The SEC's complaint says Mr Dreier used faked financial statements and audit opinion letters, as well as a cast of associates masquerading as legitimate investment advisers, to pull off the fraud.

Speaking in court, prosecutor Jonathan Streeter told US magistrate judge Douglas Eaton that the losses from the scheme are now thought to have more than tripled since the charges were announced on Monday (December 8th).

He added: "Mr. Dreier is in a desperate situation and the only way for him out of the desperate situation is for him to flee."

Judge Eaton denied bail on the potential for flight risk.

Mr Dreier also faces charges in Toronto, Canada in connection with the alleged attempted sale of fake notes to a hedge fund.

NYSE Euronext debuts Universal Trading Platform

Stock exchange group NYSE Euronext (NYX) has debuted its Universal Trading Platform (UTP) for bond products traded on European markets.

In a statement, the company said it has successfully migrated 2,889 fixed-income instruments from the Nouveau Systeme de Cotation (NSE) platform to the UTP. Around 120 NYX customers were involved in the move.

NYX said the new platform uses "state-of-the-art technology" to improve latency times and trading capacity. UTP offers a 150-400 microsecond round-trip for transactions compared to NSC's end-to-end time of 1.5 milliseconds.

This should treble capacity, allowing the UTP to handle approximately 30,000 orders a second.

Following on from the European bond migration, NYX now plans to roll-out the UTP to the rest of its European and American markets.

Commenting on the platform's debut, the company's executive director and head of the UTP program Anthony Attia said: "This important first step will facilitate the migration of European cash equities and ETFs onto the Universal Trading Platform, planned for early 2009."

NYX's group of exchanges include the New York Stock Exchange, NYSE Arca and NYSE Alternext US, formerly the American Stock Exchange.

Citadel freezes redemptions from flagship funds

Kenneth Griffin, founder 

Citadel Investment Group LLC, Chicago’s biggest hedge fund, told investors Friday they won’t be able to withdraw money from its flagship funds until at least the spring. The funds have lost almost 50% in value so far this year.

more at

http://www.chicagobusiness.com/cgi-bin/news.pl?id=32228

Greenberg laments demise of investment banking model

Alan "Ace" Greenberg, formerly CEO of Bear Stearns, said the makeup of Wall Street had changed "forever" because the investment banking model was no longer viable. "There's no more Wall Street," he said. "That model just doesn't work because it's at the mercy of rumors." Greenberg, who has spent more than six decades on Wall Street, said he had "never seen anything close" to the turmoil in financial markets and the ensuing economic decline.

more at http://www.bloomberg.com/apps/news?pid=20601208&sid=ajT..qRXfNN0&refer=finance

This Day in Wall Street History 1805: Wells Fargo founder is born

December 12, 1805, brought the birth of Henry Wells, one of the fathers of speed-conscious delivery and banking services. Born in Thetford, Vermont, Wells cut his teeth working as an agent for HardenÝs Express in upstate New York. Clearly taken with the express transport business, Wells set up his own shop, Livingston Wells and PomeroyÝs Express, which ferried "goods, valuables, and specie" between Buffalo and Albany. By 1844, Wells sensed that it was time to push his business west of Buffalo, and he joined forces with William Fargo and Daniel Dunning to start Wells and Company, which would service terrain beyond the upper reaches of New York. While this was all fairly ambitious maneuvering, the 1850s saw Wells make an even stronger move to conquer the express market. First, in 1850, ever ambitious, he merged his two concerns into the American Express Company, which initially covered California and the Eastern seaboard (it later stretched to serve Latin America). Then, in 1852, he linked up with Fargo again to form Wells, Fargo and Company, a joint-stock venture that served as a holding company for the Wells Fargo Bank. Along with bankrolling business ventures, Wells used his ever-swelling fortune to aid the plight of chronic stutters, as well as to establish Wells Seminary (now Wells College) for women.  source: www.history.com

Bernard Madoff arrested by FBI

Bernard Madoff was arrested by the FBI on Thursday and charged with criminal securities fraud, the Wall Street Journal reported. Criminal complaint against Madoff alleges he told senior employees that firm was giant ponzi scheme.

Madoff faces as much as 20 years in prison and a $5 million fine if convicted. His New York-based firm was the 23rd largest market maker on Nasdaq in October, handling a daily average of about 50 million shares a day, exchange data show. It specialized in handling orders from online brokers in some of the largest U.S. companies, including General Electric Co. and Citigroup Inc.


A partial list of victims:

• Access International Advisers, New York-based investment firm may have lost $1.4 billion in assets, according to Bloomberg.
• Banco Santander (largest euro-zone bank, by market cap) – Spanish bank reported yesterday that clients of one of its Swiss subsidiaries have lost $3 billion.
• Banque Bénédict Hentsch – $47.5 million worth of client assets at risk.
• Basically everyone at the Palm Beach Country Club – Madoff has belonged since 1996. "I’m taking care of my sick mother-in-law," one member, Richard Spring, 73, told the Times. "My wife has cancer. I just can’t deal with it. I’m cooked."
• Benbassat & Cie Swiss bank has 1.1 billion francs, or $935 million, at stake, according to la France via Reuters.
• BNP Paribas (largest French bank) – Did not invest directly in the Madoff funds but has 350 million euros, or about $500 million, at risk through trades and loans to hedge funds.
• Bramdean Alternatives – British asset manager lost $19 million, or 9 percent of the company, according to a statement. The female CEO is being pilloried in the press: "I am an ordinary person who manages pension funds for pensioners. If I was a male fund manager this would not happen. Someone has to take a stand. If women are persecuted in this way you won't have any female fund managers. This could destroy me," she told the Evening Standard.
• Carl & Ruth Shapiro Family Foundation – 99-year-old Boston philanthropist Carl Shapiro's foundation lost $145 million, almost half its money, according to the Boston Globe
• Chais Family Foundation – Gives out some $12.5 million each year to Jewish causes in Israel, the former Soviet Union, and Eastern Europe; announced yesterday that it had closed after losing all of its money through investments with Madoff.
• Elie Wiesel Foundation for Humanity – Invested money with Madoff — its losses are thus far unknown.
• EIM Group – European investment manager has $230 million exposed.
• Fairfield, Conn. – $42 million, or 15 percent of the town's retiree pension fund.
• Fix Asset Management $400 million.
• Madoff employees – "Generations of employees had worked for Madoff and invested their savings there."
• Fred Wilpon – New York Mets owner, unknown.
• Harel Insurance – Israeli investment service, $14.2 million.
• HSBC – $1 billion at risk.
• Avram and Carol. Goldberg – The Boston-based founder of the Stop & Shop supermarket chain and his wife lost $29 million, according to reports.
• J. Ezra Merkin – The GMAC LLC chairman's Ascot Partners lost most of its $1.8 billion, according to the Journal.
• Jewish Community Foundation of Los Angeles – $18 million of the Foundation's Common Investment Pool (currently valued at 11 percent of its assets) was invested with Madoff.
• The JEHTFoundation As commenter Sleater noted below, the JEHT Foundation, a nonprofit in downtown New York that promoted reform of the criminal and juvenile justice systems, has been felled by Madoff and will close, according to its web site, at the end of January 2009. According to the Web site: "The funds of the donors to the Foundation, Jeanne Levy-Church and Kenneth Levy-Church, were managed by Bernard L. Madoff, a prominent financial advisor who was arrested last week for defrauding investors out of billions of dollars."
• Julian J. Levitt Foundation – Texas-based Jewish charity, lost about $6 million.
• Kingate Management Ltd. – $3.5 billion at risk, according to Bloomberg.
• Korea Life Insurance Co – $50 million.
• Korea Teachers pension – Has $9.1 million indirectly invested.
• The Madoff Family Foundation – Madoff's own charity gave to the Memorial Sloan Kettering Hospital, Leukemia and Lymphoma Society, Lincoln Center, Robin Hood Foundation, and others. Its $19 million is gone, obviously.
• Man Group PLC – The world's largest publicly traded hedge-fund manager, $360 million.
• Maxam Capital Management – Darien-based hedge fund helmed by Sandra "Jerry Maguire of hedge funds" Manzke lost $280 million. "I'm wiped out," Manzke told the Journal.
• M&B Capital Advisors – Spanish hedge funds had $578 million invested.
• Mort Zuckerman, Daily News owner – "Significant exposure through a fund that invested substantially all of its assets with Mr. Madoff," according to the Journal.
• New Jersey Senator Frank Lautenberg – "One of the wealthiest members of the Senate, entrusted his family's charitable foundation to Madoff. Lautenberg's attorney, Michael Griffinger, said they weren't yet sure the extent of the foundation's losses, but that the bulk of its investments had been handled by Madoff."
• Nomura Holdings Inc. – Tokyo investment firm; said today it had $302 million in exposure.
• Norman Braman – Former Philadelphia Eagles owner, unknown.
• The North Shore-Long Island Jewish Health System – $5 million.
• Neue Privat Bank – Acknowledged being at risk.
• Pioneer Alternative Investments – Irish hedge fund invested all of its $280 million in assets with Madoff — gone.
• Robert I. Lappin Charitable Foundation – The Boston-based charity, which financed trips for Jewish youth to Israel, announced last week: "The money needed to fund the programs of the Lappin Foundation is gone. The foundation staff has been terminated today."
• Royal Bank of Scotland – $600 million exposed.
• Societe Generale – The French bank lost less than $13.46 million dollars, which it called a "negligible" amount.
• Walter M. Noel Jr. and the Fairfield Greenwich Group – The Fairfield Greenwich Group invested billions of dollars with Madoff over twenty years, and has lost approximately $7.5 billion. “[Noel] was a person of superb ethics, and this has to cut him to the quick,” George L. Ball, a colleague of the founder, told the Times.
• The Wunderkinder Foundation – Steven Spielberg's charity. "In 2006, the Madoff firm accounted for roughly 70% of the foundation's interest and dividend income, according to regulatory filings."
• Reichmuth's Reichmuth Matterhorn fund – 385 million Swiss francs, or $327 million, in potential losses.
• Yeshiva University – "Sources close to Yeshiva University, where Madoff served as treasurer of the board of trustees and chairman of the board of Y.U.’s Sy Syms School of Business until he resigned last week, said that the school has lost tens of millions of dollars, if not more," according to Jewish and Israel News.
• The JEHT Foundation, whose funds were entirely managed by Madoff is closing its doors immediately, terminating payments on existing grants: http://www.jehtfoundation.org/news/

Many other clients are in a panic that their wealth may be gone.

more at http://www.nytimes.com/2008/12/12/business/12scheme.html


Madoff Securities Company Description
Founded in 1960, Bernard L. Madoff Investment Securities is a top market maker in US stocks, including all of the S&P 500 and more than 350 Nasdaq stocks, as well as bonds and other instruments. It is also a member of the London Stock Exchange. The firm moves large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. Clients include brokerages, banks, and other financial institutions. The firm, which is controlled by founder Bernard Madoff and his family, also performs clearing and settlement services.
website http://madoff.com/

Commodities could recover in 12 to 18 months

A rebound in commodities prices could be as many as two years away, but some market insiders still believe there is a chance for another bubble. Grains, oil and industrial-metals producers will be forced to cut output, and some may go out of business, before commodities recover. "When growth recovers, which will take 12 to 18 months, prices will head back up," said Ian Morley, a director at fund manager Quantum.

more at http://www.reuters.com/article/ousiv/idUSTRE4B92Z320081210

Traders: Resurrecting "uptick rule" may not help markets

Brokers who trade about a quarter of U.S. stocks said reviving the restriction on short sellers likely would not curb market volatility or bets against equities. Many market participants as well as lawmakers blame a 2007 decision by the Securities and Exchange Commission to forgo the regulation as a contributing factor in the dismal year for stocks. Others blame short sellers for driving down share prices by spreading rumors.

more at http://www.bloomberg.com/apps/news?pid=20601087&sid=ayGeAzo2nSsU&refer=home

Who are the villains?

A failure to prosecute those responsible for the financial crisis will leave the U.S. without the moral compass to avert future crises, says pioneer hedge fund manager Michael Steinhardt.

more at http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4B95KP20081210

Canada cuts benchmark rate to 50-year low

A day after announcing that Canada is in recession, the Bank of Canada slashed its benchmark interest rate by three-quarters of a percentage point to 1.5%. It is the most aggressive rate cut since the days after the Sept. 11, 2001, attacks on the U.S. and brings the interest rate to a level that Canada has not experienced since 1958.

more at http://business.theglobeandmail.com/servlet/story/RTGAM.20081209.wrates1209/BNStory/Business/home#

Law should mandate derivative clearing, top executives say

Testifying before the Congress, executives from four major exchanges said the clearing of credit default swap trades should be required by law. IntercontinentalExchange, CME Group, NYSE Euronext's Liffe and the Eurex derivative division of Deutsche Borse are striving to process the credit derivative as regulators increase pressure for reform of the over-the-counter market. Don Thompson, co-head of the derivatives legal practice group at JPMorgan, said existing regulation should be strengthened, but he noted that the perception that the CDS market operates outside of regulatory oversight was "inaccurate and misleading."

Organized crime 'major threat' to Canadian markets

Organized crime gangs are increasingly using investment professionals with varying degrees of complicity to tap into and illegally manipulate Canada's stock exchanges and capital markets, a new report from the Royal Canadian Mounted Police (RCMP) has claimed.

The report, published by the police force's Integrated Market Enforcement Teams (Imets), says the gangs' activities now pose a "significant threat" to Canadian markets, the Canadian Press stated.

It added that professionals' knowledge of the illegal nature of the schemes they facilitate ranges from "wilful blindness" to "direct fraudulent participation".

"Organized crime groups are constantly innovating their money laundering and fraud techniques in the attempt to remain one step ahead of law enforcement," the report also warned.

Established in 2003 as a response to US market scandals including Enron and WorldCom, Imets comprise specialist RCMP investigators, forensic accountants and securities regulators, who work together to untangle and prosecute highly-complex financial crimes.

There are nine teams in all, based in Toronto, Vancouver, Montreal and Calgary.

Need for safe haven drives Treasury bills close to 0%

As investors' flight to safety continues, buyers of U.S. Treasury bills snapped up three-month securities at a discount rate of 0.005%. The interest rate is the lowest for three-month bills in the Federal Reserve's records, which go back to 1934.

more at http://www.ft.com/cms/s/0/fe71a61e-c585-11dd-b516-000077b07658.html