Mutual Funds Face Curbs On Using Derivatives In Proposed Regulations

The U.S. Securities and Exchange Commission is poised to take the first step toward writing new regulations on derivatives investments by mutual and exchange traded funds, which hold trillions in assets. U.S. mutual funds had $12.2 trillion in net assets in June, while exchange-traded funds had $1.1 trillion in July. Leveraged and inverse ETFs have received the most scrutiny from regulators for potentially confusing retail investors. The funds use derivatives to increase returns or have the opposite results returned by an index. Derivatives, including swaps, are financial contracts tied to an underlying stock, bond, index or event, such as the default of a company. The SEC may take up two other proposals: an advance proposal governing issuers of asset-backed securities, and a second concept release to seek public comment on the status of companies that acquire mortgages and mortgage-related instruments.

Fixed Mortgages Hit 2011 Record Low – Could Mortgage Rates Go Lower?

Mortgage rates hit an eight-month low and are within striking distance of the lowest rates since World War II. Freddie Mac issued its weekly rates report. It told us that 30-year fixed-rate mortgages (FRMs) averaged 4.39%, down from 4.55% the week before. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.18%. That product was down from 3.25% a week earlier. But, unfortunately, the good news with mortgage loan rates may not offer much practical help. People still need to qualify to refinance, and that requires income. Click To See More Mortgages Info

U.S. Market Is Healthy And We Have No Reason To Change The Rating

Rating agency Fitch has left the United States the highest possible rating of AAA. U.S. economy described as flexible, healthy and well diversified with a flexible exchange rate and interest rates, which enable a country to overcome market shocks. The expected outlook is stable according to the agency. “Our decision reflects the fact that the main pillars of the U.S. ability to meet its financial commitments remain unchanged,” said the agency in its report. Fitch points out that the U.S. remains one of the most productive markets in the world in terms of per capita income levels. This is significantly higher than the middle value in all countries that have the highest rating. Fitch’s assessment focuses on a country’s ability to repay debts, which the U.S. according to the company manages. The agency notes that a significant portion of current debt in the U.S. was during the crisis years, after the U.S. government spent exorbitant sums for the rehabilitation of the domestic economy. The value of the rescue package was nearly two trillion U.S. dollars. In addition to the TARP, which was used to rescue financial groups and threatened car makers , supported by government and insurance company AIG, Citigroup or Bank of America. Currently the U.S. government debt is 14.6 trillion dollars. According to the assumptions the agency this year will represent 94 percent of GDP, the highest value in all countries with first-class rating. The agency also warned the U.S. of course. If you fail to reduce public debt, the United States are worsening rating irresistible. The second of the three major rating companies and did not follow agency Standard & Poor’s assessment that the U.S. in the first week of August dropped to AA +. The move caused concern in the markets from the second bottom of the global crisis and to support panic in equity markets, which last week fluctuated much since 2008. The remaining group of Moody’s to downgrade the U.S. has also resorted, outlook, however, described as negative.

Warren Buffett calls for higher taxes on mega rich people

Investor and billionaire Warren Buffett has called on U.S. lawmakers to raise taxes for the ultra-rich and thus help to reduce the budget deficit. “My friends and I have long been spoiled by Congress, which came to meet us. While the poor and middle class Americans to fight us in Afghanistan and while most Americans struggle with the fact that ever came out, we continue to ultra-rich tax breaks, “he wrote in a commentary for the New York Times, Buffett, whose assets Forbes magazine estimated at 50 billion dollars. Warren Buffett said that last year he personally paid only 17.4% of his income in taxes, whereas many of his workers averaged at 36%. Buffett also argued that a higher tax-rate would not discourage investment.

Energy Stocks Join Broad Market Pullback Crude Oil

Energy stocks fell on Tuesday August 16, 2011, backing down along with the rest of the equities market from the previous session’s strong gains. Meanwhile, crude oil for September delivery was a barrel at $86.82 in New York after data showing a big slowdown in the German economy. Click To See More Energies Info

Gold prices hit record USD 1770 per troy ounce

The uncertainty on the further development of the debt crisis in Europe and the United States along with the sell-off in equity markets are going to the rainbow gold price. For the first time reached the limit of $ 1,770 per troy ounce (31.1 grams). Price nearest futures contract for gold in Asia climbed up to $ 1,774 per ounce than the profits surrendered. On the spot market, where gold is traded for immediate delivery, the price climbed to about $ 1,771 an ounce. From the last 20 trading days the price of the metal climbed to a record twelfth time already. Above the limit of $ 1700 received the gold for the first time on Monday. Since then, its price rose by more more than three percent. Over the last three years while the price of yellow metal as gold is nicknamed, has risen to double over the last decade to more than six times. Fears of escalating debt crisis in the eurozone and the U.S. economy fall into a new recession led investors since last week to sell risky assets such as stocks and commodities. Instead, seek a safer haven, which is particularly gold, Swiss franc, as well as U.S. government bonds. Their attractiveness has not changed even after downgrading the U.S.. Gold price increases also due to the prospect of further easing of monetary policy in most advanced economies, which last week joined Japan. It will be important whether something like this also indicates the Fed and its chief Ben Bernanke. Click To See More Gold Investing Info

Stocks fall as US investors join global sell-off after S&P downgrade

Dow index is down by hundreds points. The U.S. stock market joined a sell-off around the world Monday in the first trading since Standard & Poor’s downgraded American debt. Monday was the first chance for global and american investors to respond to S&P’s announcement late Friday that it was reducing its credit rating for long-term U.S. government debt to AA+. Click To See More Stocks Info