UPDATE 2-After ECB cut, US asset managers tighten fund access - Reuters UK
* JPMorgan aims to protect investor yields
* Demand for funds show lack of options amid low rates (Adds details on asset flows, context, bylines and taglines)
By Ross Kerber and Jessica Toonkel
BOSTON, July 6 (Reuters) - Three big U.S. asset managers have restricted investor access to European money market funds in the wake of the European Central Bank's interest rate cut.
The restrictions came at several of the largest fund operators and show how large institutional investors have few good options left to earn interest on their cash, specialists said.
JPMorgan Chase & Co, BlackRock Inc, which is the world's largest money manager, and Goldman Sachs Group Inc on Friday all confirmed the restrictions.
JPMorgan spokeswoman Kristen Chambers said the New York bank's investment arm temporary closed funds to new investors after the ECB's rate cut on Thursday, "because we think it will help prevent further dilution in yields, which is in the best interest of clients."
A notice to investors shows JPMorgan has limited investments into five funds from new and existing investors, though shareholders can continue to move assets out of the vehicles.
BlackRock has also limited access to a pair of European money funds, a spokeswoman said.
A Goldman Sachs official in London confirmed reports that the firm is not accepting new money in its GS Euro Government Liquid Reserves Fund because it cannot invest at the new rates without substantially diluting the yield for existing shareholders.
SEARCHING FOR YIELD AFTER RATE CUTS
The limits show how institutional customers who buy the funds face few good options after the European Central Bank on Thursday cut its main refinancing rate to a record low of 0.75 percent. The move followed a dire batch of data that showed even Germany, the euro zone's economic powerhouse, entering a modest downturn. The lower rate could send investors looking for new places to put cash to work, such as money funds.
But money fund managers are hardly looking for more cash from investors, as the fund restrictions showed. U.S. fund operators have been squeezed by low interest rates and have slashed fees just to keep clients invested in the cash-management vehicles.
"It's absolutely more difficult to find places to park money," said Greg Zandlo, an adviser with Minneapolis-based North East Asset Management, Inc, which has $75 million in assets under advisement.
Given that money markets have been earning close to zero over the past couple of years, advisers like Zandlo have been turning to alternatives for some time now. Zandlo said he has been relying on certificates of deposit and state-specific municipal bond funds as a proxy to money market funds.
"They provide less liquidity but it amps up the return in lieu of holding cash," he said.
Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama, made a similar point, that investors have few choices. "In terms of yield, there's really nothing there that's attractive," he said. Many funds operate only "as a parking spot for cash," he said.
Operators of equity mutual funds often close the vehicles to new investors when managers have difficulties finding new places to invest cash. Peter Crane, publisher of the cranedata.com website, said money funds have also been temporarily closed in response to low interest rates, such as in 2009 and 2010 at several U.S. Treasury money funds.
Technically, U.S. investors cannot buy the restricted funds. But they are available to multi-nationals including European subsidiaries of U.S. corporations, Crane said.
Crane said he did not expect U.S.-focused funds to follow the European ones, since the former have more room to absorb new cash without reducing yield for current investors.
While the U.S. money funds contain a variety of commercial paper and other short-term debt from corporations, the European money funds mainly hold instruments tied to banks on the continent, he said. European money fund customers will likely see yields decline as the ECB rate cut works its way through the banking system. That could ease demand from outsiders to move money into the funds and lead to an easing of the restrictions.
Crane said he tracks about $108 billion in the European funds. JPMorgan funds account for the largest share of that, $23 billion, followed by $18 billion in BlackRock funds.
Other large U.S. fund firms, including Fidelity Investments and Vanguard Group Inc, do not offer European money funds, spokespeople said.
WELCOME PROBLEM FOR FUNDS
In a way, the European fund restrictions mark a welcome problem for the money funds: too much investor demand. In Washington, U.S. regulators are mulling changes for the funds out of concerns they could face the opposite problem: big institutional investors rushing to pull money out of the funds.
Investors have rushed for the exits before, pressuring dozens of fund companies to provide support to help the funds maintain the $1 per share net asset value that investors have come to expect.
But industry executives argue rule changes in 2010 have made the funds more resilient. Investors have steadily maintained around $2.5 trillion in U.S money funds since last year, something that analysts say partly reflects a lack of alternatives.
RARE DEMAND
The restrictions that followed the ECB move reflect a demand for the funds that would mark a turnaround. European money market funds posted outflows of $15.4 billion between June 28 and July 4, fund-tracking firm EPFR Global said on Friday. Those are the highest outflows from the funds on a record that extends back to the first quarter of 2007, Cameron Brandt, EPFR Global's director of research, said.
But the ECB rate cut is nothing for the funds to celebrate, said John Stoltzfus, chief market strategist at Oppenheimer and Co.
"Rates are so low that it's not practical to offer these funds to new investors," said Stoltzfus."The difference of covering the cost of running the fund and paying a relatively attractive yield to the shareholders- there's not enough left over," he said. (Reporting By Ross Kerber and Jessica Toonkel. Additional reporting by Sam Forgione, Jed Horowitz, Ashley Lau, Tim McLaughlin; Editing by Kenneth Barry and Leslie Adler)
Warburton added to Team GB after successful appeal - ESPN.co.uk
British 800 metres runner Gareth Warburton has been added to Team GB for London 2012 after an appeal against his non-selection was successful.
Warburton was one of four athletes to be added to the squad for the forthcoming Olympic Games - but the only one of the 11 track & field individuals who lodged appeals against their original non-selection.
The likes of Jenny Simpson, Marilyn Okoro and Richard Kilty were all disappointed to be overlooked when the track and field selection was announced on Tuesday - but UK Athletics could only judge appeals against non-selection on the basis of whether due process was followed and all evidence was taken into consideration, measures by which only Warburton was successful.
He will now join Andrew Osagie and Michael Rimmer as the three Team GB athletes for the 800m.
"We appreciate that this is a difficult time for athletes who were not selected to Team GB," UKA chairman and appeals panel head Ed Warner said. "Appeals are heard on a matter of process and facts and not opinion and the panel considered 11 appeals today of which only Gareth's was successful.
"We ensure that the original selection committee has followed the selection criteria appropriately and have made their decisions based on full and correct facts.
"In the case of Gareth Warburton and in light of independent legal advice, the appeals panel decided that the combination of Warburton's current 'A' and current 'B' standards made him selectable under the UKA selection policy and he has been added to the team."
400m runner Simpson was enraged to be overlooked for the event in favour of UK Trials winner Lynsey Sharp, despite having achieved the Olympic 'A' qualifying standard compared to Sharp's 'B' effort. However, she accepted the decision of the appeals panel.
"My appeal was unsuccessful but at least I tried," Simpson said on Twitter. "Good luck to Gareth Warburton who fully deserves his place on the team after his appeal."
The other three athletes to be belatedly confirmed for the Olympics are Abigail Edmonds (women's K2 500m canoe sprint), John Garcia Thompson and Steve Grotowski (both men's volleyball).
A total of 542 athletes have now been selected for the Team GB squad for the Games.
Team GB chef de mission Andy Hunt said: "With the final athlete selections announced today we are now all set for the Delegation Registration Meeting on Monday, which is an important milestone and moment as that is when we officially enter the athletes and support staff selected to represent Team GB on home soil."
© ESPN EMEA Ltd
WRAPUP 2-Rate rigging probe escalates in UK and Germany - Reuters UK
(Adds details)
* Deutsche Bank probed by German regulator BaFin -sources
* UK's Serious Fraud Office could yield criminal prosecutions
By Jonathan Gould and Kirstin Ridley
LONDON/FRANKFURT, July 6 (Reuters) - A global investigation into manipulation of interbank lending rates widened on Friday with Britain's fraud squad taking up the case and sources telling Reuters that Germany's markets regulator had launched a probe into Deutsche Bank.
Authorities in the United States, Europe, Japan and Canada are examining more than a dozen big banks over suspected rigging of the London Interbank Offered Rate (Libor). Britain's Barclays has so far been the only bank to admit wrongdoing, agreeing last week to pay a fine of more than $450 million.
The rate-fixing scandal has exploded into the front ranks of politics, especially in Britain, where politicians say the bankers responsible should end up in jail.
Barclays CEO Bob Diamond was forced to resign this week and told a parliamentary committee that some of his firm's former staff could face criminal charges.
The Libor rates, compiled from estimates by large banks of how much they believe they have to pay to borrow from each other, are used to determine interest rates on trillions of dollars worth of contracts around the world.
Germany's BaFin regulator has initiated a "special investigation" into Deutsche Bank, a process which is more severe than a routine investigation initiated by a third party, two sources said on Friday. The sources included a banker and a regulator, both of whom spoke on condition of anonymity.
In Britain, the lack of criminal prosecutions of the rate fixing has been one of the issues infuriating politicians, after e-mails were published showing bankers boasting of fiddling figures and congratulating each other with offers of champagne.
Britain's Serious Fraud Office said in a brief statement that its Director David Green had decided formally to accept the Libor case for investigation.
CALLING LAWYERS
The SFO will now assemble a case team to pursue an investigation - although it could take years. A spokesman noted that its remit would not be confined to Barclays.
"We don't mention Barclays in our statement, just Libor," the spokesman said.
A source close to the SFO and familiar with its Libor case file said: "A lot of people will be calling around to find lawyers."
The SFO considered launching an investigation into Libor last summer but dropped the plans in September, in part for budgetary reasons, said the source, who spoke on condition he would not be identified.
The SFO has been criticised in the past for failing to achieve convictions in high-profile fraud cases. It gave no further details of how it would conduct its probe.
News of a "special investigation" in Germany also raises the stakes. Deutsche Bank said earlier this year it was cooperating with authorities investigating accusations of manipulation of Libor, the only German bank to make such a disclosure so far.
One of the sources who disclosed the investigation to Reuters said the results were expected in mid July.
The bank declined to comment on Friday but referred to its quarterly report, which said it has received subpoenas and requests for information from U.S. and European authorities in connection with setting interbank rates.
BaFin declined to comment specifically on whether it was probing Deutsche Bank but said it was in looking into suspected manipulation of Libor rates by banks.
"We are making use of our entire spectrum of regulatory instruments, so far as this is necessary," a spokesman said.
Deutsche Bank has disclosed that it is cooperating with the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, and the European Commission on Libor. These inquiries relate to periods between 2005 and 2011.
As the credit crisis intensified between 2006 and 2008, allegations started mounting that Libor no longer reflected the real cost banks were paying for funds. Authorities have been examining whether traders tried to influence the rate to profit on bets on the direction it would go.
The daily Libor poll asks banks at what rate they think they will be able to borrow money from each other in 10 major currencies and for 15 borrowing periods ranging from overnight loans to 12 months.
The rates submitted by banks are compiled by Thomson Reuters , parent company of Reuters, on behalf of the British Bankers' Association. (Reporting by Jonathan Gould, Alexander Huebner, Philipp Halstrick, Myles Neligan, Kirstin Ridley and Steve Slater; Writing by Edward Taylor and Alexander Smith; Editing by Peter Graff)
Rihanna sues former accountants - BBC News
Rihanna is suing her former accountants claiming they lost millions of dollars of her earnings.
The singer is seeking damages against New York-based Berdon LLP and two of its staff, who have left the firm.
She blames them for poor book-keeping, a failure to recommend she cut back on expenses when her tour in 2009 was losing money and an ongoing audit by the US tax authority.
The case was filed under Rihanna's real name Robyn Fenty at a New York court.
The singer, who headlined Radio 1's Hackney Weekend last month, is claiming her former accountancy firm earned large commissions from concert tours that resulted in her losing millions of dollars.
The lawsuit says Berdon LLP took 22% of the Last Girl on Earth tour's total revenues while paying Rihanna 6%.
Rihanna's lawyers also blame the accounting company for an ongoing Internal Revenue Service (IRS) audit of her tax returns and for not making sure she was being paid song royalties properly.
The lawsuit claims that since the 24-year-old fired the accountancy firm, her earnings have increased.
The singer says she hired Berdon LLP in 2005 when she was a 16-year-old from Barbados launching her career.
Ron Storch, a partner at Berdon LLP, said the company could not comment on the court case.
Twitter is the common dude’s RSS reader, new discovery tools show - Venturebeat.com
It’s the worst-kept secret on the Internet today, but Twitter has just announced some new search and discovery tools for its microblogging service (they hate it when we call it that).
On the company blog today, we read that Twitter is adding to its search tools a flurry of new features, including autocomplete, spelling correction, related items, real names and usernames, and results from people you follow.
“We’re constantly working to make Twitter search the simplest way to discover what’s happening in real time,” writes Twitter engineer Frost Li. “These updates make it even easier to immediately get closer to the things you care about.”
The crux of the matter is simple: Around half of Twitter users are using the service as a supersimplified RSS reader, not as a mechanism for broadcasting their own thoughts to an uncaring world. Since the company wants to grow — and wants to continue to grow more mainstream — it’s in its best interests to make Twitter the simplest, best RSS reader anyone could ask for. And today’s announcements about finding and following topics take the product a bit closer to that goal.
Here’s some more info on exactly what the new features bring:
- Autocomplete features that show both people and search terms.
- Automatic spelling corrections, so you see results for the correctly spelled search term.
- Related suggestions showing topics with similar search terms.
- Results showing real names and usernames.
- Tweets from people you follow, not just the top tweets for your search term.
Search and discovery were among the many major feature overhauls we saw when the “new-new Twitter” launched just six months ago. At that time, the company was promoting its all-new Discover tab as a way to show users the most interesting, popular, and personally relevant stories on the site, based on each’s individual’s usage patterns and behavior.
We’ve known about today’s launch since last night, when Twitter engineering manager Pankaj Gupta tweeted a broad hint about the upgrade and announcement. We’ve been obsessively refreshing the Twitter blog ever since, which made for a sleepless night and a nervewracking morning for some of us in the VentureBeat newsroom.
Search and discovery are both a big part of Twitter’s plan to continue its growth and get normal people to understand and use the service. As of last fall, around half of Twitter’s users didn’t actually tweet. Rather, they used the service in the same way hardcore nerds would use an RSS reader.
For example, before last year’s redesign, folks around the world were hearing about the Middle Eastern and North African revolutions, especially about Twitter’s involvement in the uprisings. “But you had to know to go to Twitter and type in #Jan25,” said Twitter CEO Dick Costolo in a chat about Twitter’s old search tools. “We want to make that a lot easier.”
As Costolo put it in a recent interview, “We connect people everywhere to what’s meaningful. … We want Twitter to be the world in your pocket.” He also noted that the things that make Twitter “the world in your pocket” are unique to Twitter and that the team wanted to build better experiences around those unique aspects — hashtags, asymmetric social following, and so on.
“A year ago, when you signed up for Twitter, the first thing you’d see was the big ‘what’s happening’ box,” Costolo explained. “People didn’t know what to do next. They didn’t have any followers, and they weren’t following anyone. Nothing happened. Now, we get new users to think first about following their interests. Get a timeline and start engaging that way.”
Discovery and search are now supposed to be two of the key ways new users are brought into the Twitter user experience. We’ll see how the real world reacts to today’s changes and, more importantly, what the changes do for the microblogging service’s signup and engagement metrics.
Top image courtesy of Ilse, Flickr
Bridge makes Brighton loan switch - Football
Published: 06 Jul 2012 - 17:47:34
Manchester City's Wayne Bridge has dropped down to the npower Championship and joined Brighton on a season-long loan deal.
The 31-year-old former England left-back moved to the Etihad Stadium from Chelsea in 2009 but has endured a torrid time in recent years, having been frozen out by manager Roberto Mancini.
Seagulls manager Gus Poyet revealed Bridge has been one of his main summer targets and is delighted to be able to bring in the former Southampton defender.
"It's difficult to say how happy I am because it's not easy to get top-class players," Poyet told the club's official website, www.seagulls.co.uk.
"I'm absolutely delighted to have Wayne with us. He's been one of the top three left-backs in this country for many years."
Bridge was farmed out to West Ham and Sunderland over the past two seasons and has now agreed another loan that will see him spend the next campaign at Brighton.
Poyet added: "It was not an easy one to secure, but this is what we want at this club. He's a quality player with lots of international experience.
"Wayne has played at the top of English football for a long time.
"We have all got to learn from him and I'm sure that he will have a very good season with us.
"It's going to be very nice to sit back and watch him on the pitch."
Related Brighton and Hove Albion News
Anti-black money fight: Ramdev holds programme at RSS hq - New Kerala
Lucknow, Jul 6: Yoga guru Baba Ramdev today held a day-long programme at the RSS headquarters here to generate awareness among the people for his indefinite agitation at Ram Lila ground in Delhi from August 9.
Addressing a news conference, Ramdev clarified that the Sangh is not an untouchable and except for one particular political party, all others are supporting his crusade against black money and corruption.
" The statement of Prime Minister Manmohan Singh that there is no corruption in his government is a total lie and it was an effort to cover up the issue," he said while adding that Pranab Mukherjee has been awarded by giving him the highest Presidential post for taking the country into financial backwardness due to corruption.
" I am ashamed on the statement of the PM trying to defend the corruption like 2G, CWG and the recent coal scams," he said while refusing to make any comment on any particular Congress leader.
He also said government should investigate into all the FDI in the country as most of the black money is being invested through these fake companies by Indian people.
Ramdev said that all parties including RSS were with him and were supporting his agitation against black money and corruption.
"If RSS can be active in the JP movement and Congress has identified it as a nationalist party by allowing it to participate in the Republic Day parade after China war, then why so much hue and cry on its association with us," he said. (UNI)
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