Jan. 2 (Bloomberg) -- U.S. regulators working to untangle Bernard Madoff's alleged $50 billion Ponzi scheme are probing other money managers suspected of using similar tactics, two people with knowledge of the inquiries said. The U.S. Securities and Exchange Commission is pursuing at least one case in which investors may have been cheated out of as much as $1 billion, according to one person, who declined to name the manager and asked not to be identified because the probe isn't public. Regulators may discover additional Ponzi arrangements as declining stock markets prompt investors to withdraw their cash and they question how their money is being managed. This week, the SEC said it halted what the agency described as a $23 million scam targeting Haitian-Americans, and said the Florida- based operators had tried as recently as last month to bring in more investors.
Jan. 2 (Bloomberg) -- U.S. regulators working to untangle Bernard Madoff's alleged $50 billion Ponzi scheme are probing other money managers suspected of using similar tactics, two people with knowledge of the inquiries said.
The U.S. Securities and Exchange Commission is pursuing at least one case in which investors may have been cheated out of as much as $1 billion, according to one person, who declined to name the manager and asked not to be identified because the probe isn't public.
Regulators may discover additional Ponzi arrangements as declining stock markets prompt investors to withdraw their cash and they question how their money is being managed. This week, the SEC said it halted what the agency described as a $23 million scam targeting Haitian-Americans, and said the Florida- based operators had tried as recently as last month to bring in more investors.
Regulators may will discover additional Ponzi arrangements
How many of these carnival barkers have been offering returns of 10%, year after year?
World stock markets have started the year on a positive note, gaining ground after shares saw record falls in 2008. In London, the FTSE 100 index was up by 2.88% at close and in France and Germany the major indexes had risen by 4.09% and 3.39% respectively. On Wall Street, the Dow Jones was 1.60% ahead at midday in New York. However, analysts said gains might not be sustainable, with many market participants still on holiday and low trading volumes.
World stock markets have started the year on a positive note, gaining ground after shares saw record falls in 2008.
In London, the FTSE 100 index was up by 2.88% at close and in France and Germany the major indexes had risen by 4.09% and 3.39% respectively.
On Wall Street, the Dow Jones was 1.60% ahead at midday in New York.
However, analysts said gains might not be sustainable, with many market participants still on holiday and low trading volumes.
US manufacturing activity contracted at its sharpest pace for nearly 30 years in December, a closely watched survey suggested on Friday, underscoring the downward momentum in the economy at the turn of the year.The Institute for Supply Managers survey index declined in November from 36.2 to 32.4, much worse than expected, while new orders and production measures hit their lowest level since the survey began in 1948.It coincided with manufacturing data that highlighted the sharp synchronised decline in economic activity around the world, with manufacturing suffering severe pain. JPMorgan's global purchasing managers index on Friday showed manufacturing activity falling to its lowest level since the survey began 11 years ago. A PMI survey compiled by broker CLSA showed China's manufacturing activity contracting for a fifth successive month while the South Korean government said exports slid 17.4 per cent in December after a revised fall of 19 per cent in November. The revised version of a closely-followed eurozone survey showed manufacturing activity hitting a new low of 33.9 in December - the lowest since the PMI was created a decade ago.
The Institute for Supply Managers survey index declined in November from 36.2 to 32.4, much worse than expected, while new orders and production measures hit their lowest level since the survey began in 1948.
It coincided with manufacturing data that highlighted the sharp synchronised decline in economic activity around the world, with manufacturing suffering severe pain.
JPMorgan's global purchasing managers index on Friday showed manufacturing activity falling to its lowest level since the survey began 11 years ago.
A PMI survey compiled by broker CLSA showed China's manufacturing activity contracting for a fifth successive month while the South Korean government said exports slid 17.4 per cent in December after a revised fall of 19 per cent in November.
The revised version of a closely-followed eurozone survey showed manufacturing activity hitting a new low of 33.9 in December - the lowest since the PMI was created a decade ago.
France is to step up efforts to instil moral values in the global market economy by urging policymakers to consider fresh ways of combating financial short-termism.Nicolas Sarkozy, France's president, and Tony Blair, the former UK prime minister, will jointly host a conference in Paris next week of political leaders and Nobel prize-winning economists to discuss ways of strengthening the ethical foundations of the capitalist system after the financial crisis."There is no system of wealth creation without a system of values and this value system has been badly shaken," said Eric Besson, the French minister for policy planning, who is organising the conference. "People are prepared to accept others getting high pay and enjoying different lifestyles, but only if they have the feeling that the system is fair and that the law is the same for everybody." Mr Besson criticised complex securitisation of debt, excessive financial leverage, short-selling and demands for unrealistic returns on investment, saying they pointed to a pervasive "failure to value the long term" across all sectors of the economy for the past 20 years. "Nobody wants to ban the stock market," he said, even though it had become a "casino". "But how can we return to certain fundamental values where the stock exchange is the place businesses come to for the long-term capital they need?"
Nicolas Sarkozy, France's president, and Tony Blair, the former UK prime minister, will jointly host a conference in Paris next week of political leaders and Nobel prize-winning economists to discuss ways of strengthening the ethical foundations of the capitalist system after the financial crisis.
"There is no system of wealth creation without a system of values and this value system has been badly shaken," said Eric Besson, the French minister for policy planning, who is organising the conference.
"People are prepared to accept others getting high pay and enjoying different lifestyles, but only if they have the feeling that the system is fair and that the law is the same for everybody."
Mr Besson criticised complex securitisation of debt, excessive financial leverage, short-selling and demands for unrealistic returns on investment, saying they pointed to a pervasive "failure to value the long term" across all sectors of the economy for the past 20 years. "Nobody wants to ban the stock market," he said, even though it had become a "casino".
"But how can we return to certain fundamental values where the stock exchange is the place businesses come to for the long-term capital they need?"
FT.com / US - Paulson says crisis sown by imbalance
Global economic imbalances helped to foster the credit crisis by pushing down global interest rates and driving investors towards riskier assets, outgoing US Treasury Secretary Hank Paulson told the Financial Times.In a valedictory interview, Mr Paulson cast the crisis as partly the result of a collective failure to come to terms with the way the rise of emerging markets was reshaping the global financial system. These imbalances - arising from differences in the inclinations of different nations to save and invest - are reflected in large current account deficits and surpluses around the world.The US Treasury Secretary said that in the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters - at a time of low inflation and booming trade and capital flows - put downward pressure on yields and risk spreads everywhere.This argument - already advanced by a number of economists and largely endorsed by Federal Reserve chairman Ben Bernanke - suggests that the roots of the crisis do not simply lie in failures within the financial system.
In a valedictory interview, Mr Paulson cast the crisis as partly the result of a collective failure to come to terms with the way the rise of emerging markets was reshaping the global financial system. These imbalances - arising from differences in the inclinations of different nations to save and invest - are reflected in large current account deficits and surpluses around the world.
The US Treasury Secretary said that in the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters - at a time of low inflation and booming trade and capital flows - put downward pressure on yields and risk spreads everywhere.
This argument - already advanced by a number of economists and largely endorsed by Federal Reserve chairman Ben Bernanke - suggests that the roots of the crisis do not simply lie in failures within the financial system.
But you know, I still like to visit China. They've built some really fine luxus hotels, and they can really cook."
henry paulson, in the introduction to the new book; "who coulda known?" "Life shrinks or expands in proportion to one's courage." - Anaïs Nin
The US Treasury set out for the first time on Friday a basic framework it uses to evaluate whether a troubled financial institution is systemically important enough to justify emergency aid.The criteria were contained in reports to Congress under the Emergency Economic Stabilisation Act, which created the $700bn bail-out fund. The criteria were disclosed amid pent-up demand from investors for greater transparency and predictability on the approach to financial rescues.
The criteria were contained in reports to Congress under the Emergency Economic Stabilisation Act, which created the $700bn bail-out fund. The criteria were disclosed amid pent-up demand from investors for greater transparency and predictability on the approach to financial rescues.
Western countries should close their markets to sales of Chinese trains because China's domestic market is closing to outside suppliers, says the head of one of the world's largest rolling stock builders. In a Financial Times interview, Philippe Mellier, chief executive of Paris-based Alstom Transport, also claimed that Chinese companies were offering trains for export using technology derived from western suppliers. Such technology is usually supplied on condition it not be used outside China.However, after a period when China signed contracts with several suppliers from other parts of the world to transfer technology to itself, it is gradually insisting new trains be entirely domestically designed and built.Chinese manufacturers are also increasingly seeking orders in the European heartland of Alstom, Bombardier Transportation, the world number one, and Siemens, the number three. One has already won a small order to build trains for the UK market, while another was included in a shortlist of bidders for an order by the UK's Department for Transport on December 22.Mr Mellier said: "We're starting to see Chinese companies answering tenders around the world with Chinese freight locomotives, some of them being based on transferred technology." A similar process was under way with tenders to supply metro cars, he added.
In a Financial Times interview, Philippe Mellier, chief executive of Paris-based Alstom Transport, also claimed that Chinese companies were offering trains for export using technology derived from western suppliers. Such technology is usually supplied on condition it not be used outside China.
However, after a period when China signed contracts with several suppliers from other parts of the world to transfer technology to itself, it is gradually insisting new trains be entirely domestically designed and built.
Chinese manufacturers are also increasingly seeking orders in the European heartland of Alstom, Bombardier Transportation, the world number one, and Siemens, the number three. One has already won a small order to build trains for the UK market, while another was included in a shortlist of bidders for an order by the UK's Department for Transport on December 22.
Mr Mellier said: "We're starting to see Chinese companies answering tenders around the world with Chinese freight locomotives, some of them being based on transferred technology." A similar process was under way with tenders to supply metro cars, he added.
