Money market funds fall by $10.68 bln in latest week-ICI - Reuters Money market funds fall by $10.68 bln in latest week-ICI - Reuters

Thursday, June 14, 2012

Money market funds fall by $10.68 bln in latest week-ICI - Reuters

Money market funds fall by $10.68 bln in latest week-ICI - Reuters

June 14 | Thu Jun 14, 2012 3:50pm EDT

June 14 (Reuters) - The Investment Company Institute on Thursday issued the following money market mutual fund assets report:

"Total money market mutual fund assets decreased by $10.68 billion to $2.554 trillion for the week ended Wednesday, June 13, the Investment Company Institute reported today. Taxable government funds increased by $2.63 billion, taxable non-government funds decreased by $11.16 billion, and tax-exempt funds decreased by $2.16 billion.

Retail: Assets of retail money market funds decreased by $550 million to $890.20 billion. Taxable government money market fund assets in the retail category increased by $390 million to $188.05 billion, taxable non-government money market fund assets decreased by $440 million to $515.52 billion, and tax-exempt fund assets decreased by $500 million to $186.63 billion.

Institutional: Assets of institutional money market funds decreased by $10.13 billion to $1.664 trillion. Among institutional funds, taxable government money market fund assets increased by $2.24 billion to $683.77 billion, taxable non-government money market fund assets decreased by $10.71 billion to $895.35 billion, and tax-exempt fund assets decreased by $1.66 billion to $84.77 billion.

ICI reports money market fund assets to the Federal Reserve each week. Revisions are due to data adjustments, reclassifications, and changes in the number of funds reporting. Historical weekly money market data back to January 2008 are available on the ICI website."

NOTE: ICI's Web site is

Money managers reap crop insurance harvest - Financial Times

June 14, 2012 9:30 pm

Iain Duncan Smith: poverty is not solved by just more money - Daily Telegraph

Figures to be published today are expected to show that the Government failed to meet its statutory target to halve the problem by 2010 – despite the huge amount of taxpayers’ money spent on tackling it.

Mr Duncan Smith will unveil a new analysis which will show that hundreds of thousands of children will be lifted out of poverty if at least one of their parents works 35 hours a week earning the minimum wage.

The introduction of the universal credit, under the Government’s welfare reforms, will mean that people returning to work from benefits will continue to receive some state support.

Any child living in a household which earns less than 60 per cent of the typical income is defined as living in poverty. This is likely to be changed so that children living in workless households or those with drug-dependent parents are highlighted.

Mr Duncan Smith will also set out plans to change the definition of child poverty so that a more sophisticated analysis is used.

Speaking ahead of his speech at the Abbey Community Centre in London, Mr Duncan Smith told BBC Radio 4's Today programme: "What I'm talking about is getting away from a system that got so trapped in the idea of meeting a relative income target so narrowly that more and more money was spent on welfare but keeping people out of the work process.

"What we need to do is make sure we tackle poverty but tackle it in the process of trying to move them on (to work).

"If you just measure relative income levels you know nothing about what's happening to the family."

In his speech, he will accuse Labour of “pouring vast amounts of money” into increased benefit payments to tackle poverty. He is expected to say that the strategy has failed and parents need to be helped back to work rather than simply subsidised by the state.

He will say: “Getting a family into work, supporting strong relationships, getting parents off drugs and out of debt — all this can do more for a child’s wellbeing than any amount of money in out-of-work benefits.

“With the right support, a child growing up in a dysfunctional household, who was destined for a lifetime on benefits could be put on an entirely different track — one which sees them move into fulfilling and sustainable work. In doing so, they will pull themselves out of poverty.”

He will add: “Our latest analysis suggests that universal credit will ensure the vast majority of children will be lifted out of poverty if at least one parent works 35 hours a week at the minimum wage — or 24 hours if they are a lone parent.

“For those who are able to work, work has to be seen as the best route out of poverty. For work is not just about more money — it is transformative. It’s about taking responsibility for yourself and your family.”

Mr Duncan Smith will indicate that Labour wasted large amounts of public funds as it failed to halve child poverty. “The last Government spoke about the need to tackle poverty, and poured vast amounts of money into the pursuit of this ambition — £150 billion was spent on tax credits alone between 2004 and 2010.

“Overall, the welfare bill increased by some 40 per cent in real terms, even in a decade of rising growth and rising employment,” he will say.

Ministers are drawing up plans to introduce a series of measures to gauge whether families are living in poverty, such as whether parents have drug or alcohol problems or whether they are working.

In today’s speech, the Work and Pensions Secretary is expected to defend the need to change the definition of child poverty. “If a family has less than 60 per cent of the median income it is said to be poor, if it has 60 per cent or more it is not,” he will say.

“By this narrow measure, if you have a family who sits one pound below the poverty line you can do a magical thing. Give them one pound more, say through increased benefit payments, and you can apparently change everything — you are said to have pulled them out of poverty. But increased income from welfare transfers is temporary if nothing changes.”

Mr Duncan Smith’s call for disadvantaged families to return to work may come at an inopportune time with unemployment rising as the double-dip recession has led to a lack of jobs.

William Hague, the Foreign Secretary, caused controversy recently by telling Britons they had to work harder to help the UK escape from recession.

Financial Gurus Bullish On Gold -

Dow 1000 Point Drop, What's Next?

Commodities / Gold and Silver 2012 Jun 14, 2012 - 06:46 AM

By: GoldCore


Best Financial Markets Analysis ArticleToday's AM fix was USD 1,619.00, EUR 1,289.83, and GBP 1,044.65 per ounce.
Yesterday’s AM fix was USD 1,612.75, EUR 1,286.19, and GBP 1,034.94 per ounce.

Silver is trading at $28.86/oz, €22.93/oz and £18.57/oz. Platinum is trading at $1,479.00/oz, palladium at $622.00/oz and rhodium at $1,225/oz.

Gold climbed $7.20 or 0.45% yesterday in New York and closed at $1,618.80/oz. Gold traded sideways in Asia prior to a sudden buying bout which saw gold rise from $1,618/oz to $1,625/oz. Those gains have gradually been given up in European trading where gold is now trading near yesterday’s close.

White – XAU/EUR, Orange – XAU/USD, Yellow – XAU/GBP, Green – XAU/CHF, Red – XAU/NOK – (Bloomberg)

Gold appears to be consolidating after hitting its 4th session of gains, when weak US economic data, in the form of poor retail sales, led to renewed QE chatter.

Gold is likely also being supported by real concern about the outcome of Greece’s elections on Sunday. This has led to one major foreign exchange provider suspending all trading in the hours around the announcement of the results of the Greek election.

Cash gold has gained 1% this week and appears to be reasserting its safe haven status due to the deepening debt crisis and near term risk of contagion.

Spain’s sovereign debt rating was cut 3 notches by Moody’s and market watchers feel they will need a ‘bailout’ soon even though they just received eurozone financing to bail out their troubled banks.

While superficial analysis has recently again questioned whether gold is a safe haven and has suggested it is not due to its recent performance, gold is again acting as a safe haven for those who need a safe haven.

Gold has risen by more than 6.3% in euro terms so far in 2012, while FTSE and CAC are down by 2.4% and 4.9% year to date. While the DAX has risen by 3.3%, most European indices are down sharply.

Therefore, European holders of gold are again being protected from the market and monetary volatility.

Anthony Robbins Bullish On Gold - Faber and Bass His Financial Gurus

Tony Robbins (Anthony Robbins), one of the world's leading performance coaches and motivational speakers has recently warned about the risk of dollar devaluation and spoke about the opportunities in gold which is "exploding" and "is in a bull market".

At Robbins, recent event in London (May 18th to 21st), he spoke about the importance of getting good financial advice from the people who predicted this crisis and have made money for their clients in recent years.

Cross Currency Table – (Bloomberg)

He spoke about investment experts who he respects and specifically mentioned Marc Faber and Kyle Bass.

Robbins is one of most positive and optimistic people in the world. Nevertheless, he recently produced a YouTube video warning of an impending economic collapse.

Faber and Bass are extremely bearish on paper currencies and government debt and are very bullish on gold and silver bullion due to the euro zone debt crisis and looming global debt crisis due to the appalling fiscal state of Japan, the UK and the US.

Dr Marc Faber is a Swiss financier who predicted the Wall Street Crash in 1987. He is the editor and publisher of the “Gloom, Boom & Doom Report,” author of many books including the best selling 'Tomorrow's Gold: Asia's Age of Discovery'.

Faber advised investors to buy gold in 2001 and he is still extremely bullish on gold and silver and believes that gold will rise in all economic circumstances - a global inflationary economic boom, stagflationary environment or even in a global deflationary recession or Depression.

Kyle Bass is the erudite Texan investor who saw the financial crisis coming and made a fortune in the sub-prime collapse - first from America's sub-prime mortgage crisis and then from betting that Greece would default. Now he’s positioned and ready for the collapse of entire countries, having bought credit default swaps on Greece, Ireland, Italy, Spain, Portugal and, interestingly, Switzerland.

Robbins shares the concerns of Faber and Bass regarding sovereign defaults and Robbins is very concerned about the risks of a US debt crisis and the risks that it poses to the US dollar.

A recent video 'The National Debt and Federal Budget Deficit Deconstructed' by Robbins is well worth a watch:

Gold and indeed those who own it are often accused of being 'barbaric', 'uncivilised' and 'bugs.'

Indeed, there is often a suggestion that those who own gold are negative ‘doom and gloom merchants’ who hope that the world financial and monetary system will collapse so that their gold holdings will surge in value and they will be 'rich as Croesus.'

Anthony Robbins and indeed most who are positive about and advise owning gold very much contradict this silly view. Indeed, many of them have been warning about these fiscal challenges for years in an effort to protect family, friends, clients and the public.

The majority of people who buy gold are rational economic people who realise that there is macroeconomic, geopolitical, monetary and systemic risk in the world and they buy gold as a store of value.

They buy gold as they simply wish to protect themselves and their families from these risks by owning the financial insurance that is gold.

Robbins has a massive following internationally – especially amongst business owners but also in the sporting, media, music and entertainment industries and his endorsement of the importance of owning gold is significant

For the latest news and commentary on financial markets and gold please follow us on Twitter.


'GoldNomics' can be viewed by clicking on the image above or on our YouTube channel:

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

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Printing money: How to create a currency - BBC News

European officials may not like it, but the prospect of Greece leaving the euro is a serious possibility.

The picture will become clearer after a Greek election on 17 June.

If the winners are hostile to the austerity measures demanded by the European Union and IMF, then Greece might have to look for a new currency.

It would not be a simple case of resurrecting Greece's old currency the drachma.

Changing currency is a complicated process that would take at least six months and probably much longer.

So the new Greek government might want to call Warren Coats.

Over the last 20 years at the International Monetary Fund, he has advised numerous countries on how to create currencies.

His clients have included nations that emerged from the Soviet Union including Kyrgyzstan and Kazakhstan.

Mr Coats has also helped Iraq and Afghanistan and, most recently, Southern Sudan to launch new money.

He says there are three phases to the process.

Currency design and production

"Deciding what and who appears on a nation's currency might sound trivial, but it is highly political," said Mr Coats.

Bosnia-Hercegovina is a good example of how difficult the situation can be.

In the late 1990s after a bloody war for independence the nation had to form a new currency.

But the three groups that make up the population, Bosniaks, Croats and Serbs could not agree on who to put on the notes - even when the choice was limited to literary and artistic figures.

"Usually two would agree one would disagree," said Mr Coats.

"This went on for many months. And in the end there was never an agreement," he said.

The head of the central bank, Peter Nicholl, who was a New Zealander appointed by the IMF, decided what went on the currency.

In Greece's case, the situation is much less fraught. It can draw on the images and figureheads used on its previous currency the drachma.

It may though have to decide on how many denominations of note there will be and what they will be worth.

There is useful rule of thumb to help with that.

Experts say the largest coin should be worth around 2% of the average day's wage and the smallest note should be worth 5% of the average day's wage.

Once those details are sorted out the notes will have to be printed, which is usually done by a specialist printing firm.

It is estimated that for a country the size of Greece that would cost $50-$60m.

There are not many firms that can handle a contract of that size and if they are busy then Greece might have to wait for its new currency.

Analysts say there is no chance of a new currency before the end of this year.

"If this was a serious consideration for 2012 the presses would have to be running already. And there are no credible rumours that that is happening," said Paul Jones an analyst at Panmure Capital.

Preparing rules for exchange

Getting the new currency printed is just the start of the process.

Greek officials would then have to work out how to get that new currency into the system.

The problem for Greece is that the population is unlikely to want to exchange their euros for the new currency.

Rules may have to be put in place to prevent large amounts of euros leaving the country.

There would have to be an information campaign to make sure the population understood how the process would work.

The question of timing also has to be addressed at this stage, ideally banks and other businesses would need enough time to adapt their systems.

The notes would have to be distributed to banks and a launch date set.

Legal issues

Notes and coins are just pieces of paper and bits of metal until they have the status of legal tender.

That requires laws which define and control the use of a currency.

When swapping a currency these have to be adapted and laws will have to be approved in Parliament.

Business will have to look closely at the new legislation to see if contracts priced in the old currency are still valid or need renegotiation.

So should Greece embark on such a lengthy and expensive process?

Mr Coats has this final thought: "The majority of Greeks want to keep the euro because they don't trust their government and central bank to do better with a new currency of their own than they did with the old one."

Financial crisis: new book offers a brief and jargon-free guide - The Guardian

There are hundreds of books analysing the financial crisis. There are many more arguing about what British and continental politicians must do to get indebted countries back on their feet.

These publications, however, are rarely a quick summary of the many features of the crash and the debates over where to go next. They tend fit into two groups - the highly academic, densely argued analysis; and the polemical discourse that hammers home "the 10 things that must be done to solve everything". In each case they are, for the non-financially literate reader, intimidatingly long and usually plagued by jargon.

My book, The Financial Crisis - How Did We Get Here, is a brief and hopefully jargon-free guide to how it all started and where the main economic thinkers believe we are now. It is an attempt to provide some analysis to show how the debates over what happened in the crash have developed and how the current political gridlock is no accident. It talks about the way a rightwing ideology built round an appreciation of financial markets still dominates economic thinking, despite the failure of these markets in recent times.

In this sense it echoes books like those of Michael Sandel, whose new work What Money Can't Buy: The Moral Limits of Markets documents the spread of markets into almost every aspect of life .

It also highlights some of the deeper themes that are often missing from the economic debate, especially the rise and rise of the baby boomer, which in countries where the birthrate has collapsed can be said to have brought about sclerotic, gerontocratic political and social culture. It's at the heart of Italy's problems and stifles progress in the UK.

Never before have the old been so prevelant as they are across Europe, the US and Japan. Even China is only four years from the point in time where the proportion of retired workers begins to grow relative to those of working age.

Why is it important? Because too many of the over-55s will do anything to protect their gains from the boom years. The obvious fact that many of these gains were made from an out-of-control property boom and a stock market that levitated on a warm cushion of ultra-cheap bank credit, is ignored.

Today, older workers and wealthy pensioners own most of the property and pension assets. From company bosses to NHS managers, they demand their savings be protected. They refuse to support government policies that favour higher investment for fear it may increase inflation and debt levels. Then long-term benefits to the young are ignored.

This issue is discussed in more depth along with many others, such as how markets work, why fears of inflation are misplaced and why 1980s monetarist economics still have so much influence.

While the eurozone crisis may be developing every day, the underlying forces that dictate events remain and are unlikely to go away.

Canadian Financial System Robust But Highly Susceptible to Euro Crisis - DailyFx

THE TAKEAWAY: [Bank of Canada’s Financial System Review released] > [High risks to Canadian economy if euro crisis worsens] > [USDCAD little changed]

In its semi-annual Financial System Review released today, the Bank of Canada (BoC) cited continued robustness of Canada’s financial system and relative stability in domestic credit markets despite the fragile global environment. However, the Bank warned of high dangers to the Canadian economy if the European sovereign debt crisis worsens, emphasizing that worsening conditions in the euro zone could cause “major shock” to Canada.

The sources of major risks to the stability of Canada’s financial system remain broadly the same as those reported in the December 2011 Review, as outlined below:

  • Further escalation of the euro-area sovereign debt crisis;
  • An economic slowdown in other advanced economies;
  • Financial stress in the Canadian household sector;
  • A disorderly resolution of global current account imbalances; and
  • Excessive risk-taking associated with a prolonged period of low interest rates.

Should the euro debt crisis continue to intensify, further weakening in global economic would fuel sovereign fiscal strains and heighten risk aversion. This would exacerbate pressures on bank balance sheets and ensuing tightening of lending conditions would further dampen global economic growth. Diminished growth prospects would foster expectations of continued low interest rates, possibly eroding the financial positions of life insurance companies and pension plans while boosting household borrowing in Canada.

The Bank stated that mitigation of risks to the global financial system requires a number of policy actions, with containment measures in the euro area at the forefront of priorities. Mitigation measures abroad include adequately capitalizing euro-area banks, reinforcing financial firewalls, enforcement of structural and product market reforms, and a clearer path for risk mutualization within the European monetary union. Globally, current account imbalances must be addressed to help foster sustainable and balanced global economic growth.

Domestically, “the high indebtedness of the household sector and elevated valuations in the housing market require continued vigilance”. In regards to broader financial reform, Canadian banks plan to implement Basel III capital rules as a key priority, which will help build a resilient market infrastructure in future.

USDCAD 1-minute Chart: June 14, 2012

Canadian_Financial_System_Robust_But_Highly_Susceptible_to_Euro_Crisis__body_Picture_1.png, Canadian Financial System Robust But Highly Susceptible to Euro Crisis

Chart created using Market Scope – Prepared by Tzu-Wen Chen

The loonie remained largely unchanged against the greenback, as few developments have come out since the Bank’s December 2011 Review. At the time of this report, the USDCAD pair was trading at C$1.0246 to the dollar.

--- Written by Tzu-Wen Chen, DailyFX Research

Euro, U.S. stocks jump as cenbanks ready to act - Reuters UK

NEW YORK | Thu Jun 14, 2012 10:05pm BST

NEW YORK (Reuters) - Wall Street stocks rose and the euro strengthened against the U.S. dollar on Thursday after Reuters reported major central banks are ready to coordinate moves to keep markets operating smoothly by providing liquidity in case of turmoil following Sunday's elections in Greece.

Markets have been volatile this week as investors struggled for insights on the likely outcome of the pivotal vote that could determine whether Greece stays in the euro zone.

Central bankers stand ready to act to prevent a credit squeeze if market strains emerge after an unusual confluence of three elections this weekend, with important polls in France and Egypt as well.

U.S. stocks closed just off the session highs hit after the report while the euro extended gains against the greenback.

With the backdrop of coordinated action from central banks, "any reaction to what Wall Street would consider to be an adverse vote (in Greece) would be over fairly quickly," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York.

Manley, however, said rising yields in Spain and Italy will still keep markets under pressure. "I can't imagine it as the start of the big move up because there are still many issues out there."

Spain's 10-year yield was near 6.96 percent after it briefly topped the 7.0 percent mark, the level at which other highly indebted euro zone nations were forced to seek bailouts. Italian yields also rose as investors worried that Spain's financial problems would contaminate Italy as well.

Adding to the market bullishness, Britain and the Bank of England will flood banks with cheap long-term funding to encourage lending to businesses and consumers, and the British central bank will activate an emergency liquidity tool, the Bank governor Mervyn King said in an annual speech to London financiers.

The Dow Jones industrial average gained 155.53 points, or 1.24 percent, to 12,651.91. The Standard & Poor's 500 Index gained 14.22 points, or 1.08 percent, to 1,329.10. The Nasdaq Composite Index gained 17.72 points, or 0.63 percent, to 2,836.33. The MSCI world equity index added 0.35 percent.

The U.S. benchmark 10-year Treasury note was down 12/32 in price, while the yield rose to 1.6386 percent.

Greek banking stocks jumped more than 23 percent amid market talk that secret opinion polls showed a bailout-friendly government was likely to emerge after the election. Greek law forbids the publication of opinion polls in the two weeks ahead of a vote.

U.S. oil futures jumped 2 percent, extending the rally late on the report about central banks' preparedness. Oil rose earlier after the Organization of the Petroleum Exporting Countries agreed to keep its collective oil output ceiling unchanged.

(Reporting by Rodrigo Campos, Editing by Gary Crosse)

Greek Bank Stocks Soar on Pro-Bailout Votes Ahead of Election -

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Over the last two months, market participants raised concerns that there will be a repeat of the same voting pattern as before, especially when another set of secret opinion polls published ahead of a two-week pre-election ban showed that no party was likely to win enough votes Sunday to form a government on its own.

In early May, the Greek bank stock index was down by 19 percent.

If the Greeks vote in an anti-bailout government, the concerns are that the country would most likely default, be pushed out the Euro and subsequently prolong its five-year recession and have serious repercussions across Europe.

"[An] exit would be economically ruinous for Greece (we estimate a decline in GDP of 25-50 percent)," said analysts at Société Générale (SG). "For the Eurozone, any Greek exit would have a negative impact, but more than that, it would dramatically reduce the time available to sort out the shambolic architecture that is threatening the system."

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