The 2009 budget is a remarkable about-turn for a government that only two months ago was saying, in effect, the land is strong. But politics is as much about perception as it is about substance. So too is economics. The two are most saliently joined in a federal budget, whatever the power of politics over […]
The $50 billion fraud by Bernard Madoff probably spells the end of the fund-of-funds business. While Madoff wasn’t operating a hedge fund, he was using some techniques that hedge fund traders would apply — or at least he said he was. /images/other/h/hedgemaze08_feature.jpg Friends and acquaintances took him at his word. But so too did a […]
BMO Financial Group is expanding its presence in the advisor channel with the acquisition of AIG Life of Canada. The deal adds 300 employees and 400,000 customers to BMO’s insurance operations. It also gives BMO access to 5,000 life brokers across Canada through AIG’s relationships with managing general agents. “This acquisition is a perfect extension […]
Hedge funds have more than a trillion dollars under management and promise an alpha, or excess return over benchmarks, on the order of 5% — or some US$50 billion. Is this plausible? And, in these days of scandal, are such promises overstated by lack of regulation? Douglas Cumming, an associate professor at York University’s Schulich […]
Like other investments, mutual funds have been battered by the financial crisis. And, given the depth of the current chill and the level of consumer debt, it may be a while before consumers allocate existing savings to mutual funds, says a new report. In its annual review of the fund industry, Investor Economics Insight points […]
When markets tank – even though a correction, or even a bear market, was long overdue – investors usually have difficulty staying the course. That’s not news for fi- nancial advisors. Risk tolerance morphs into loss aversion as the enduring fact of market cycles is learned one more time. Are market cycles avoidable? There’s no […]
In a world where short-term interest rates are rapidly approaching zero, with the U.S. Federal Reserve mimicking Japan, and Britain and the European Central Bank expected to follow, the Bank of Canada’s successful approach of inflation targeting has reached a crossroads. Ironically, the BoC, along with other central banks, may be the victim of its […]
Big frauds often start small. Unforgivably, they often start with small omissions. Let’s take Bernard Madoff Investment Securities, whose managed accounts are now out $50 billion. It’s not clear whether that $50 billion was lost or if it was the supposed profits on $17 billion clients’ investments. It is clear that the numbers are big; […]
With Iceland in bankruptcy, Hungary and Ukraine requiring a lending hand from the International Monetary Fund, and dozens of U.S. financial institutions in hock, Canadian financial institutions so far have proven robust. Still, they are not immune to spillover effects, says the Bank of Canada. Indeed, its Financial System Review, released yesterday, paints a picture […]
Mutual fund manufacturers are always in search of sticky assets. Lately they have been hard to find, as record volatility unleashes substantial reductions. That doesn’t mean new money isn’t coming in. But fear keeps a lot of it on the sidelines. Unless you’re working on autopilot. That’s what employer-sponsored plans do: Group RRSPs, defined contribution […]