Corporate Goverance (Bloomberg interview)

Bloomberg interview with Gary Wilson, Former Northwest Airlines Chairman and Current Yahoo Board Member, on corporate goverance issues.

Dr. Krause on WISN-TV 12 last week commenting about the Geithner bailout plan

U.S. Treasury Secretary Timothy Geithner unveiled a plan aimed at persuading private investors to help rid banks up to $1 trillion in toxic assets that that are seen as a roadblock to economic recovery. While some economists, such as Princeton's Paul Krugman, believe the Treasury's bailout program is going to fail, others are more optimistic.

Dr. David Krause, AIM Director, said on WISN-TV 12 recently that he thinks private investors, such as PIMCO, will support the plan. "The Geithner plan is such a good deal for investors that they will likely support it. The plan essentially offers a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. I think that Bill Gross and other investors will find the terms too attractive to ignore."

To see the interview with Dr. Krause go to:
http://www.wisconsinmediaservices.com/marquette/mu_toxic.wmv

Marquette’s Applied Investment Management students earn top honors at RISE Forum

To see the recent Marquette press release on the AIM students award at RISE go to:
http://www.marquette.edu/omc/newscenter/recent.php?subaction=showfull&id=1238509722&archive=&start_from=&ucat=1&

Obama's Auto Play (Kudlow on CNBC tonight)

Discussing President Obama's ultimatum to struggling automakers, with Holman Jenkins, WSJ; Steve Moore, "The End of Prosperity"; and CNBC's Phil LeBeau & Larry Kudlow.

Harvard Business School Article Published Today: Professional Networks in China and America

I found the following HBS article about networking to be quite interesting. Most AIM students understand at some level the wisdom of the adage, "It's not what you know; it's who you know." And at some level we all realize that building the right professional relationships are critical for business success. Although this article focuses more on Chinese business relationships, it contains valuable lessons for students about to enter the workforce.

Professional Networks in China and America

While American managers prefer to separate work and personal relationships, Chinese counterparts are much more likely to intermingle the two. One result: Doing business in China takes lots of time, says HBS professor Roy Y.J. Chua. Key concepts include:

- It generally takes much longer to build trusting business relationships in China than in the United States.

- When cultivating business relationships in China, American managers may want to know as many people in the Chinese counterpart's network as possible.

To read the rest of the article, go to:
http://hbswk.hbs.edu/item/6129.html

Ed McIlveen: Inflation Seen as a Coming Threat

Ed McIlveen was highlighted in today's Journal Sentinel: Among the many worries investors are grappling with, one looms large for Ed McIlveen. "Higher-than-expected inflation is a real threat that may require some serious defense," said McIlveen, director of performance analytics and research at Francis Investment Counsel in Pewaukee. The federal government's huge stimulus plans are likely to spur inflation. Yet the international financial crisis has blurred market expectations about inflation.

"The market is implying inflation will be 1.3 percent or so. But we believe it will be higher over the next 10 years and that it could return to more historically normal levels of 2.5 percent to 3 percent on an annualized basis - or even higher," McIlveen said.

Read the rest of the article at:
http://www.jsonline.com/business/42031812.html

Winning Portfolio Managers Announced at RISE Forum

Finance students who managed investment portfolios during 2008 will never forget the lessons they learned while watching the historic movements of the stock markets and global economy. Eight student-managed portfolios were honored as part of the R.I.S.E. IX Global Student Investment Forum at the University of Dayton. The Marquette AIM team won the fixed income performance competition. The news release can be found at:
http://news.udayton.edu/News_Article/?contentId=23050

Seeking Alpha is an excellent source of free transcripts for companies' earnings calls and investor presentations.

http://seekingalpha.com/tag/transcripts

The site above provides access to thousands of quarterly conference call transcripts. It is possible to use the Seeking Alpha site to access transcripts via ticker, company name, or sector. The Seeking Alpha site is also highlighted on the right side of this blog - along with other timely investment blogs and links.

Seeking Alpha provides opinionated, interesting and useful content about stocks, companies and industries from the best writers in the financial world. Its Transcript Center (http://seekingalpha.com/tag/transcripts) is unique as it is the only free, online source providing quarterly earnings conference call transcripts from more than 3,000 companies, including all of the Russell 3000 Index. The center also includes full transcripts of corporate presentations. All transcripts are fully searchable and available online within hours of the actual call, making them invaluable to the financial community, the media and individual investors.

Bear Market Graph from Doug Short - Financial Advisor

Doug Short has an interesting web site that tracks the current bear market versus others in the past. As he states (and can be seen in the chart below), "The S&P 500 has risen well above its low of March 9th. Is this a bona fide bull market or just another bear rally? We continue to be fascinated with the saga of the Four Bad Bears. In nominal terms, the latest rally puts the S&P 500 just slightly higher than Dow Crash of 1929 over the equivalent time frame."

Dallas Fed Governor, Richard Fisher, Calls Economic Challenge 'Monstrous' at RISE Forum

The president of the Fed's Dallas bank, Richard Fisher, talked to the students at the RISE investment forum at the University of Dayton.

Turning around the economy, which likely continued to shrink during the first quarter, presents a "monstrous" challenge for central bankers, policymakers and those in business, a Federal Reserve Board official said Thursday, March 26.

But the nation's central bank has acted aggressively to reverse the downturn and, if necessary, it will take further actions to get the economy on solid footing, said Richard Fisher, president and chief executive of the Federal Reserve Bank of Dallas.

Fisher made his remarks during RISE IX, a three-day global investment forum that kicked off with a day of panel discussions at the University of Dayton Arena. "We might call this the Godzilla economy: It presents a monstrous challenge," Fisher said.

He said the Fed has responded to the crisis by taking several steps, including buying commercial paper, paying interest on bank reserves and establishing programs to increase small business and consumer loans.

Despite the downturn, Fisher urged the audience to remain optimistic and look for opportunities as the market recovers. Further, Fisher, who has worked as a trade negotiator, said the United States and foreign governments should avoid adopting protectionist trade policies in response to the current financial crisis.

Also Thursday, Edward Kerschner, chief investment strategist for Citi Global Wealth Management, said he wants to see more of the government's fiscal stimulus money channeled into infrastructure projects. Kerschner also called for such changes as basing deposit insurance premiums on a bank's health and the creation of a single regulatory agency for the financial system.

Jeffrey Kleintop, chief market strategist for LPL Financial Services, said bubbles have cropped up in financial markets since at least the 1970s, when gold prices inflated, followed by big appetites for Japanese stocks in the 1980s, dot-com shares in the 1990s and Chinese stocks, oil and housing in the current decade. With people seeking safe refuge in Treasury bills and cash, those instruments stand the greatest chance of growing into the next bubble, according to Kleintop.

The RISE Student-Management Investment Forum

The students from Marquette University's AIM Class of 2009 are back safe and sound (although a bit sleep deprived) from the RISE Forum in Dayton, Ohio. "Like the previous visits to RISE, this was a great experience for the AIM students," said Dr. David Krause.

Characterized by a non-scripted panel discussion format, RISE offers students the unique opportunity to lead discussions, ask questions, and participate in conversation that involves them in real world issues and practices that shape the world's economic future. Over the last eight years RISE has hosted students from more than 467 colleges and universities from all 50 states and 83 countries, making it the largest student investment forum in the world.

"The speakers who come to RISE each year are the very people whose thoughts and opinions are shaping our world right now. And yet here they are answering a tough, three-part question from a 19-year-old college student. It's a remarkable thing to be a part of," said Dr. Bob Froehlich, Chairman of the Investor Strategy Committee for Deutsche Asset Management and moderator for all RISE panel discussions.

KEYNOTE SPEAKERS

-- Steven G. DeSanctis, CFA, Chief Small Cap Strategist, Merrill Lynch
-- C. B. Bhave, Securities and Exchange Board of India
-- Patrick Dorsey, CFA, Director of Equity Research, Morningstar, Inc.
-- Dr. Roger W. Ferguson, Jr., President & CEO,TIAA-CREF
-- Richard W. Fisher, President & CEO, Federal Reserve Bank of Dallas
-- Dr. Bob Froehlich, Chairman, Investor Strategy Committee, Deutsche Bank
-- Thomas D. Gallagher, CFA, Senior Managing Director & Chief Political
Strategist, International Strategy and Investment Group, Inc.
-- Dr. Andreas Hofert, Chief Global Economist, UBS Wealth Management
Research
-- Dr. Roger G. Ibbotson, Chairman & CIO, Zebra Capital Management, LLC
-- Georg Kell, Executive Head, United Nations Global Compact
-- Edward M. Kerschner, CFA, Chief Investment Strategist, Citigroup
-- Jeffrey Kleintop, CFA Chief Market Strategist, LPL Financial Services
-- Steve Liesman, Senior Economics Reporter, CNBC
-- Dr. Robert D. McTeer, Jr., Distinguished Fellow, National Center for
Policy Analysis (NCPA)
-- Dr. Russell Read, CFA, Founder and CEO for C Change Investments
-- John P. Surma, Chairman & CEO, United States Steel Corporation
-- Gary Thayer, Senior Economist, Wachovia Securities
-- Durmus Yilmaz, Governor, Central Bank of the Republic of Turkey
-- Dr. Lawrence Yun, National Association of REALTORS


In addition to the keynote presentations RISE included specialized breakout sessions focusing on a range of investment, career strategies and academic program development related issues; security analysis and portfolio management workshops; and a portfolio competition.

Dr. David Krause, AIM Program Director, said, "RISE was again a very useful part of the AIM Program. Our students participated in the portfolio competitions, made presentations, served on panels, displayed two AIM posters, and asked numerous questions of the keynote speakers during the event. They also interacted with students from universities across the globe. I especially liked the student-managed portfolio and presentation challenges - I am certain that we scored well in the various competitions. All-in-all it was again a successful trip to Dayton for the RISE Forum. We'll do it again next year."

Marquette's AIM Team Wins RISE Fixed Income Student-Managed Portfolio Competition

The Redefining Investment Strategy Education (RISE), the Ninth Annual Global Student Investment Forum was held from March 26 - March 28, 2009 at the University of Dayton. RISE is a forum that brings students, faculty and Wall Street together in an interactive learning environment to discuss a range of pertinent issues facing investment professionals. RISE drew over 2600 participants representing 271 colleges and universities from over 70 countries.

R.I.S.E. IX included keynote presentations by nationally renowned industry professionals; specialized breakout sessions focusing on a range of investment, career strategies and academic program development related issues; security analysis and portfolio management workshops, and a portfolio competition.

Universities with student-managed portfolios were invited to showcase their success in the areas of growth, value, blend, alternative and fixed income styles of management. Twelve month risk-adjusted returns were be used to identify the top portfolio team in each investment category at both the graduate and undergraduate levels. On Friday, March 27, Marquette's AIM team was announced as the winner in the undergraduate fixed income category.

Geithner-Bernanke Testimony Before Congress: Grilled Over AIG Bonuses

AIG was the main topic on Capitol Hill Tuesday as Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke addressed the critical question: What did you know about the AIG bonuses and when did you know it?

Bloomberg video on Obama's News Conference

U.S. President Barack Obama used a news conference to defend his proposed $3.6 trillion budget. He defended the budget against criticism from lawmakers, saying it is needed to help end the financial crisis. Obama also used the conference to strike a tone of reassurance that earlier efforts to help the economy are working.

AIM Students Headed to R.I.S.E. Forum at the University of Dayton

Since its inception in 2005, students in the AIM Program have participated in the R.I.S.E. Forum at the University of Dayton. The University of Dayton and the United Nations Global Compact are the hosts of the Redefining Investment Strategy Education (R.I.S.E.), the Ninth Annual Global Student Investment Forum March 26 - March 28, 2009 at the University of Dayton campus.

R.I.S.E. is the first forum of its kind to bring leading students, faculty and Wall Street together in an interactive learning environment to discuss a range of pertinent issues facing investment professionals.

R.I.S.E. IX will include keynote presentations by nationally renowned industry professionals; specialized breakout sessions focusing on a range of investment, career strategies and academic program development related issues; security analysis and portfolio management workshops, and an optional portfolio competition. R.I.S.E. VIII drew 2400 participants representing 257 colleges and universities from 71 countries.

Marquette's AIM students will be presenting their portfolios, attending breakout sessions, and participating on panels. For more information about R.I.S.E. and to view a video, go to:
http://sbaweb.udayton.edu/rise/index.asp

Paul Krugman on the Economy (ABC interview)

http://abcnews.go.com/video/playerIndex?id=7162646

$10 Trillion and Counting (Frontline)

All of the federal government’s efforts to stem the tide in the financial meltdown that began with the subprime mortgage crisis have added hundreds of billions of dollars to our national debt. FRONTLINE reports on how this debt will constrain and challenge the new Obama administration, and on the growing chorus on both sides of the aisle that without fiscal reform, the United States government may face a debt crisis of its own which makes the current financial situation pale in comparison. Through interviews with leading experts and insiders in government finance, the film investigates the causes and potential outcomes of—and possible solutions to—America’s $10 trillion debt. Watch the promo:

The Ins and Outs of Wall Street

Marquette University
College of Business Administration
Saturday, April 18th

The College of Business Administration’s Finance Department is pleased to announce a special event for ALL Marquette students interested in working in the finance industry.

THE INS AND OUTS OF WALL STREET

We welcome NYC Alumni to campus for this presentation, including financial professionals from organizations like, Bank of America, Citibank, Goldman Sachs, and Morgan Stanley.

Alumni will share their personal experiences, including the best ways to prepare for interviews, write a resume, and grow a career in this competitive environment.

Saturday April 18
8:30 AM – 3:00 pm
Wehr Physics 141
Lunch will be provided

Featuring Marquette Alumni interactive presentations on the following topics:
How to Navigate the Current Job Landscape
Interviewing Tips and Mock Interviews
How to Connect with Marquette Alumni in Finance
Careers in Finance: Investment Banking, Asset Management, Trading

OPEN TO ALL STUDENTS FROM ANY MAJOR. USEFUL FOR ALL STUDENTS INTERESTED IN THE FINANCE INDUSTRY!

Please RSVP by Friday April 3rd to: Amanda.Ames@marquette.edu

Cramer vs. Stewart: The Fallout Continues

A week after Jim Cramer's appearance on The Daily Show with Jon Stewart, the reverberations are still being felt - at least among the punditry. Writing in The Wall Street Journal, Thomas Frank wrote: "Mr. Stewart wasn't rude enough to ask it, but over all his inquiries there hung the obvious question: Why do you still have a job, Mr. Cramer?"

The man best positioned to answer that question, Jeff Zucker, CEO of NBC Universal, stepped into the maw this week. Stewart was "incredibly unfair to CNBC and business media in general," Zucker declared Wednesday at the 2009 Business Week Media Summit.

In the same venue, Zucker defended Cramer in part by citing two of the "Mad Money" host's more famous clips:
- The August 2007 "they know nothing" rant on CNBC, a.k.a. The Giraffe Dress interview.
- His "get out of stocks if you need the money in the next five years" call on The Today show last October.

These same points get raised in the accompanying video by James Altucher, managing partner of Formula Capital and author of The Forever Portfolio. Altucher is also president and founder of Stockpickr LLC, which is a wholly owned subsidiary of TheStreet.com, where Cramer is chairman, co-founder and the largest shareholder.

Audiocast of this weekend's Economist magazine

To listen to the audiocast - click here --> March 21st 2009
How China Sees the World

Obama Defends Geithner on CBS' 60 Minutes

The US president has defended his Treasury Secretary Timothy Geithner, under fire over millions of dollars of bonuses paid by bailed-out insurer AIG.

Fundacao Getulio Vargas University of Sao Paulo, Brazil Wins Americas' 2009 CFA Challenge

Congratulations to Fundacao Getulio Vargas University of Sao Paulo (Brazil). They are with winners of the 2009 Americas' CFA Global Investment Research Challenge.

The Marquette University AIM team did a marvelous job with their presentation of Badger Meter; however, the competition was stiff and the team for FGV rang the bell to open the NYSE on Friday, March 20.

Thanks to the Milwaukee and Madison CFA Societies for sponsoring the Wisconsin Regional Investment Research Challenge - and thanks to the CFA Institute for a wonderful event in New York City.

The AIM students met and mingled with all of the other students from the 15 universities at the competition -- and partied with the Brazilians following their victory! It was an excellent experience and we look forward to competing again next year.

Americas' CFA Institute Global Investment Research Challenge Underway in New York

How the CFA Institute Global Investment Research Challenge Works.

Winners of the local CFA societies' Investment Research Challenge from North and South America are currently in New York competing for the opportunity to advance to the Global finals. Universities assemble teams of 3-5 finance students who work directly with a company in researching and preparing a company analysis. The team’s final presentations are locally evaluated by high-profile panels of heads of research, portfolio managers, and chief investment officers from the world’s top firms. The local champions advance to regional competitions in the Americas, Asia, and Europe and then to the global finale which this year is being held on 2 April 2009 in London, UK. The results will be posted at:
http://www.cfainstitute.org/society/challenge/participants.html

Santelli's CNBC "Rant of the Year"

This is the CNBC clip that launched the debate that has now bubbled over to Jim Cramer and John Stewart. See the five minute clip here:

Bernanke Discusses Recession, Financial Rescues And Recovery in 60 Minutes Interview

Aside from the president he's the most powerful man working to save the economy, but he rarely gives an interview. Ben Bernanke is the chairman of the Board of Governors of the Federal Reserve System, better known as the Fed. The words of any Fed chairman cause fortunes to rise and fall and so, by tradition, chairmen of the Fed do not do interviews; however, last night he went on 60 Minutes. Go to CBS News at:

http://www.cbsnews.com/video/watch/?id=4866969n

Geithner's opening remarks at the G20 meeting

G20 finance ministers pledge to make a "sustained effort" to pull the world economy out of recession. US Treasury Secretary Tim Geithner told reporters that "we have a very broad consensus globally on the need to act aggressively to restore growth to the global economy". Link to video from BBC:
http://news.bbc.co.uk/1/hi/business/7943965.stm

Thursday night's "Daily Show," where host Jon Stewart skewered CNBC's financial commentator and "Mad Money" host Jim Cramer.

Jon Stewart's complete interview with Jim Cramer is embedded below, in three parts. Please note that this version of the interview is unedited and uncensored and contains explicit language.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Mark-to-Market Accounting Discussion Begins in Congress Today

U.S. accounting rulemakers and regulators are pushing ahead with new guidance on mark-to-market accounting that has forced banks to write down billions of dollars in assets in the financial crisis. Aimed at giving an accurate view of financial companies' books, the rules have led to huge writedowns of mortgage-related securities and other instruments at a time when markets are thin or nonexistent for some assets.

The SEC and FASB oppose suspension or elimination of the rule, saying this would hurt the quality and transparency of financial reporting and further diminish investor confidence in the markets. Federal Reserve Chairman Ben Bernanke said on Tuesday he was against suspension but called for improvements, saying the rule tended to reinforce the highs and lows of the financial system.

Testimony before a Congressional committee will be heard today and it is widely expected that the Obama administration believes it is inappropriate to suspend the mark-to-market accounting rules.

Shanghai Composite up over 15% YTD

China and the Markets: A short video blog from John Authers of the Financial Times. He discusses China's recently released import and export figures and why China continues to be an interesting investment play in 2009. View the short video at:
http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=12437024

Charlie Rose's Interview with Tim Geithner

Charlie Rose - Timothy Geithner, U.S. Treasury 56:01 - Mar 10, 2009

Great Post from 52 Wall Street Blog: Highlights from Berkshire’s 2008 Letter to Shareholders -- Buffett Makes Some Macro Calls

The link to the 52 Wall Street Blog is provided below. The site's managing director offers some very interesting comments on Buffett's 2008 Letter to Berkshire shareholders. The author focuses on some of Buffett’s macro views (market calls) in the letter. His interest on focusing on this area is because "Buffett's macro views were more prevalent than usual in this year’s Letter." The author also highlights some interesting ways to potentially play these views with ETFs.

52 Wall Street is a well-written posting - you should make it a part of your regular read. The link can be found at:
http://52wallst.wordpress.com/2009/03/01/highlights-from-berkshires-2008-letter-to-shareholders-buffett-makes-some-macro-calls/

Fed Chairman Bernanke on Systemic Risk on CNBC

Federal Reserve chairman Ben Bernanke says the Treasury and Fed will take any necessary steps to ensure banks have enough capital and liquidity. Bernanke also argued that regulators should identify the weak parts of controversial mark-to- market accounting rules, which require daily revaluing of assets, and try to make some improvements.

"We all acknowledge that in periods like this when some markets don't exist or are highly illiquid that the numbers that come out can be misleading or not informative," Bernanke said at a Council on Foreign Relations event in New York. "We need to provide more guidance to financial institutions about what are reasonable ways to address the valuation of assets that are traded at all in highly problematic markets."

Also known as "fair value" rules, mark-to-market is an accounting methodology that requires banks and other corporations to assign a value to a financial product, such as a mortgage security, based on the current market price for the product or similar product. However, the market for troubled mortgages securities and other illiquid assets owned by banks have frozen up, making valuation of these securities more difficult.

The Economist: Business This Week

The Economist: Business This Week. Profits fell for AIG, Citigroup and HSBC as GE CEO Jeffrey Immelt declares capitalism will be reset by the financial crisis. See the short video from The Economist by going to: March 7th 2009

Jim Bianco's 3/6/09 Interview on Bloomberg TV on the Payroll Report

On Friday morning Jim Bianco was on Bloomberg discussing the banking system, AIG and the payroll report.

Bianco reported that regarding the US payroll report, on which data began to be collected in February 1939, the following are the five worst monthly declines ever recorded:

- September 1945 = -1.966 million (WW2 war production shuts after Japan surrendered)

- October 1949 = -834 thousand (31 day nationwide strike by 500,000 steelworkers and 400,000 coalminers started on Oct 1)

- December 2008 = -681 thousand

- January 2009 = -655 thousand

- February 2009 = -651 thousand

The last three months have seen job losses of 1.987 million jobs. This is the most over any three-month period since data began in 1939. See the interview at:
http://www.bloomberg.com/avp/avp.htm?N=tvtoday&clipSRC=http%3A%2F%2Fvideo-static.clipsyndicate.com%2Fcs-video%2Fvol2%2F2009%2F3%2F6%2F58%2F351%2Fcc3cbb44-1b31-419b-ba89-d6536badc39e.flv

Bernanke: Mad as Hell About AIG, But Supports Bailouts to Avert 'Disaster'

"This is the most animated I've ever seen Ben Bernake," said Dr. David Krause, Director of Marquette University's AIM Program. "He was clearly upset about having to bailout AIG again."

A day after the U.S. government unveiled the fourth AIG bailout, the insurance giant's failure was a major topic of conversation during Q&A after Ben Bernanke's testimony before the Senate Budget Committee. "I share your concern, I share your anger," the Fed Chairman said in response to a question from Sen. Wyden (D-Oregon) about AIG.

Bernanke was particularly peeved that AIG "exploited a huge gap in regulatory oversight" to essentially operate a hedge fund on top of its core insurance business. As a result, he said an AIG failure would be a "disaster," affecting both the insurance industry and Wall Street firms that are counterparties on derivatives trades with AIG.

"It's a terrible situation, but we're not doing this to bail out AIG or their shareholders," Bernanke declared. "We're doing this to protect our financial system and to avoid a much more severe crisis in our global economy."

CNBC Video: Inside the new TALF

Today the Federal Reserve and Treasury launched a program to aid consumer lending. In the video below CNBC's Steve Liesman discusses the basics of the new TALF program.

"This might finally be something to get the securitization market going again," said Dr. David Krause, Director of Marquette University's Applied Investment Management Program. Knowing that the Federal Reserve is ready to plow up to $1 trillion in cheap funding into the asset-backed securitization market has driven down spreads on ABS (pooled credit-card and auto loans). Despite the bad news lately, Krause said, "This is a positive sign that investors might be ready to buy into the Fed and Treasury's latest liquidity program."

Spreads on 3-year credit-card securitizations have fallen to about 400 basis points from 650 basis points over swap rates at the end of last year, according to Barclays Capital. Spreads on 3-year prime fixed auto loans have fallen to about 350 from 600 at year's end and 850 at the end of November. Lower spreads indicate investors are demanding a lower yield compared with a commonly used rate benchmark to hold this debt, which uses revenue streams from credit-card and auto-loan payments to pay interest to the bond holder.

The seizing up of the ABS market prompted the Fed in late November to unveil yet one more liquidity program aimed at a frozen pocket of the credit markets. It worried that lenders that couldn't use the capital markets to fund new loans would further curtail originations, exacerbating the credit crunch. Last month it said it might expand the program to as much as $1 trillion and broaden it to encompass other collateral, such as commercial mortgage-backed securities. The launch, originally expected for February, was delayed.

Today it appears that it is finally on track. The Fed said that it expects issuers and investors in the private sector to begin arranging and marketing new securitizations of recently generated loans. The program will hold monthly fundings through year's end "or longer," the Fed added. The program will try to encourage investors to buy more consumer asset-backed securities by lending money to investors at below-market rates, using new ABS as collateral.

The opportunity to buy ABS using Fed-supplied leverage should entice more hedge funds and other institutional investors that have been big past buyers of these securities, using leverage to drive profits from these stable but historically low-yielding securities. Krause said, "This is a program that might begin to thaw out the securitization market."

Video: Did Mutual Funds Serve Shareholders Well?

The case for mutual funds - how did they serve investors in 2008?

Forget about Inflation—Deflation is the Real Concern According to German Economics Professor

Hans-Werner Sinn, a professor of economics and finance at the University of Munich and President of the Ifo Institute, wrote today in Financial Week that the downward price spiral will actually boost the cost of capital for companies globally. Fears that the flood of cash pouring into the global economy might touch off a destructive round of inflation are unfounded, writes Hans-Werner Sinn. He says liquidity is expanding because the private sector is hoarding the money instead of spending it. Deflation is the larger threat, Sinn wrote today. http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090302/REG/902279982

CNBC Video: Stanford Whistleblower Speaks Out

Alex Dalmady, the Stanford whistleblower speaks out on CNBC. Dalmady, a financial analyst, discusses during this interview the red flags that were waved in the alleged Stanford financial fraud scandal.