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Charles Schwab lost a big court decision last week in a case that has significance for investors in mutual funds. A federal judge ruled that Schwab violated the law when its YieldPlus (SWYSX) ultra-short bond fund failed to get shareholder approval before loading up on mortgage-backed securities. When the market for those securities collapsed, the fund lost 36% — a nasty surprise for investors who believed that YieldPlus was a safe alternative to cash. Left to decide is the amount of damages the investors should receive; lawyers say California investors alone lost about $170 million, the rest about $800 million....

I just finished reading a 144-page document from the Committee of European on ways to prevent market abuse. The paper discusses myriad ways regulators can browbeat listed companies into following disclosure rules. Basically, it's 144 pages on how to force people to tell the truth. Here's the ultimate truth on market regulation. It can't be done. We have insider-trading rules that require company officials to report their personal buying of stock in the companies they own and run. We want to know if the CEO is driving the stock up, or blowing out his holdings ahead of bad news. This...

Investors withdraw up to €10bn from Greece as government prepares tax crackdown to cut down deficit staggering €8bn-€10bn (£7bn-£8.7bn) may have been taken out of Greece by private investors since it became engulfed by economic turmoil in November. Under pressure from the European Union and international markets to rein in the nation's €300bn debt, socialist prime minister, George Papandreou, announced last week that he would have to enforce tough deficit-cutting measures. But the coming austerity package is leading panicked wealthy Greeks to divert their savings out of the country.

Zero Hedge discussed a month ago the disastrous prospects of what would happen if the new proposal contemplated by the SEC, which would allow the suspension of redemptions from Money Market Funds, were to pass. Well, in a nearly unanimous vote, Money Market Funds now have the ability to suspend redemptions, courtesy of the SEC's just passed 4-1 vote. This explains the negative rate on bills: at this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of Mary Schapiro. As the SEC noted: "We understand...

Do hedge funds have an impact on energy trading? While the answer might seem intuitive, the debate as to whether they actually do has come to resemble the medieval theological dispute about how many angels can dance on the head of the pin. Because, like angels, many trades in energy futures are invisible, and it is often not possible to pinpoint where they take place. And yet, for most of us, including lawmakers on Capitol Hill, it seems obvious that when hedge funds buy and sell billions of dollars worth of oil and gas futures, it must be having an...

For General Electric's investors, yesterday's deal to combine NBC Universal with Comcast was more like a burnt-out light bulb than a bright idea. While shareholders were gratified that GE was finally selling off a business that never quite fit in with the company's industrial bent, the deal's details generated Wall Street's version of a big, fat yawn, with shares in GE falling 7 cents to $16 a share. By comparison, Comcast's stock popped 97 cents to $15.91. GE investors' muted response reflected a few factors, sources said. First, there was a sense among many investors that GE waited too long...

Global markets sank sharply at the end of last week on fears that Dubai World, a subsidiary of the government of Dubai, was on the verge of defaulting on approximately $60 billion of the emirate's $80 billion in total debt held by creditors world-wide. The rush of news stories added to the wildfire of panicky speculation, with headlines ranging from "Dubai Default Risk May be Big US Bank Problem," to "Dubai Shows Limits of Government Rescues." The mini-panic, however, has little to do with Dubai and everything to do with the tenuous psychology of global investors still skittish after the...

A Big, Fat Stock Market Selloff By Eric Fry 10/20/09 Laguna Beach, California – Stocks prices are very, very high… Our contrarian colleagues over at The 5-Minute Forecast continuously lament…which means that the collective anxiety of investors is very, very low. Our colleagues don’t mind that a rising stock market is adding trillions of dollars to the asset side of household balance sheets. That’s good news. But the worrisome part is that a falling stock market could erase those trillions from the ledger just as quickly as they first appeared. And as our colleagues correctly point out, rising share prices,...

Vanguard Cautions Investors On RallyOct. 6, 2009, 4:25 p.m. EDTSam Mamudi, Market WatchDon't be taken in by this year's robust gains, fund firm warns. NEW YORK (MartketWatch) -- Many mutual funds are poised to celebrate stellar returns this year, but one fund firm is going out of its way to warn investors not to get too giddy. Vanguard Group issued a cautionary note on Tuesday, emphasizing that strong third-quarter gains don't mean it's time to go overboard on certain areas of the market. Investors Brace for Earnings SeasonMichael Cuggino of the Permanent Portfolio Funds says the coming parade of quarterly...

HONG KONG -- Former Alaska Gov. Sarah Palin, in what was billed as her first public-speaking engagement outside North America, blamed the world financial crisis on government excesses and called for a new round of deregulation and tax cuts for U.S. businesses. "We got into this mess because of government interference in the first place," the former Republican U.S. vice presidential candidate said Wednesday at a conference sponsored by investment firm CLSA Asia Pacific Markets. "We're not interested in government fixes, we're interested in freedom," she added. On the foreign-policy front, she told the room full of bankers and executives...

"After the collapse of the equity and real estate bubble that has plagued us for the last 10 years, Americans have absorbed a tremendous blow to their wealth. We all know housing is down about 30% from its peak. But I’d like to concentrate on what the equity market has done since December of 1999 in both nominal, dollar and gold terms. In nominal terms the S&P500 is down “just” 28.6% since the decade began. But when you ask questions like what how much of my purchasing power have I lost vs. gold and other currencies, the data become even...

Barrick Gold has been hedging its gold production by selling futures contracts, thus locking in the price a year or more in advance of the physical gold being mined. This is a great strategy when gold is falling in price. It makes no sense when gold is in a bull market. Gold has been in a bull market for close to 10 years. It has climbed from a low of $255.10 an ounce to over $1,000 an ounce. Thus, Barrick Gold executives look pretty much like idiots. What were they thinking say back in 2003, when all the key players...

What's interesting is that Connecticut, a state that has for the past three years failed to have passed legislation providing greater transparency in government finances is now calling for more transparency in the private sector.

ORLANDO, Fla. -- The Cleveland Cavaliers have agreed to allow an investment group from China to become a minority owner of the basketball franchise and its arena. The group, which includes JianHua Huang, a Chinese businessman who has brokered sponsorship deals with the New York Yankees and other sports franchises in the U.S., could acquire as much as 15% of Cavaliers Operating Co., the entity that owns the team and operates Quicken Loans Arena in Cleveland.

Remember the Chrysler "hedge fund investors" that President Obama berated on national TV? Among these people labeled as "no goodniks" by the President were organizations such as the the Indiana State Teachers’ Retirement Fund, and the Police retirement fund. The President of the United States was trying to intimidate retired teaches from exercising their rights as primary investors. That's the politics of change, screw a bunch of retired teachers to reward the UAW for helping you get elected. Now that GM is nearing its bankruptcy a new group of investors are about to get the Presidential screw. Unlike the Chrysler...

'I'm saying that when the president does it that means it's not illegal," shouts Frank Langella's Richard Nixon at Michael Sheen's David Frost in "Frost/ Nixon." He was wrong, and so was President Obama when he said last week that he'd override the contractual and legal rights of Chrysler's senior lenders and carve up the company between the government and the United Auto Workers. Typically, lenders who make money available to a company in return for a first claim on the company's as- O's deal will make investors sit on their assets. sets get about 80 cents back for every...

Citigroup posted a smaller-than-expected loss thanks to cost-cutting and improved investment banking. Still there were missing details and the report left questions open like when will Citi be ready to repay its bailout funds to the government and are its taxpayer supported profits from this quarter sustainable? (See "Citi Profits, For Now.") Wall Street was unimpressed with Citigroup and the stock fell 1.5%, or 6 cents, to $3.94, in midday trading. The past 12 months have been unkind to the New York-based firm, whose seen its market value sink no less than 84.3%. Meanwhile, General Electric ( GE - news...

NEW YORK – Investors doused a two-week-old stock rally Thursday as concerns emerged that the Federal Reserve's new bond-buying campaign could wind up hurting the dollar and causing inflation. ... The retreat came a day after stocks surged in reaction to the Fed's aggressive plans to pump more than $1 trillion into the financial system by buying Treasury bonds and stepping up its purchases of other debt securities. The aim is to lower borrowing rates and stimulate lending. On Thursday, investors began to digest the possible downsides of the Fed's program such as a potentially weaker dollar. That can lead...

JOINT BASE BALAD — Coalition forces and members of the Balad Provincial Reconstruction Team (PRT) recently hosted Iraqi business investors, future entrepreneurs and local government leaders for the first Iraqi Banking and Finance Conference in this area. Soldiers from 3rd Sustainment Command (Expeditionary) and the 3rd Squadron, 4th Cavalry Regiment worked with the PRT to provide a safe environment for approximately 80 economic leaders, including city managers from Yathrib, Ishaki and Dubuiya, to network together and discuss future business opportunities. Amir Abdul-Hadi, the Mayor of Balad district, said to the group there are many profitable projects in the Balad district...

Seventy-five percent (75%) of investors now say the economy is getting worse. That’s an increase from 58% since Lehman Brothers collapsed last September to begin the financial industry meltdown. On the day that President Obama was inaugurated, 63% of investors thought the economy was getting worse.