Vacation month no holiday for Central Bank of Europe
Things must be really scary on the Continent.
The European Central Bank held its August meeting in Frankfurt on Thursday. In prior years, including 2007, the ECB has typically met via conference call during the region’s prime vacation month. In 2000, then- President Willem Duisenberg acknowledged that August “is an awkward date to have a meeting.”
“How noble,” High Frequency Economics economist Carl Weinberg writes in a note, tongue planted in cheek. “Tough times make for tough central bankers, eh?” The ECB voted Thursday to keep interest rates steady amid inflation pressures and slower growth.
Hedge funds see cash dry up.
In the second quarter, cash flows into hedge funds fell to the lowest level since the fourth quarter of 2005. Investors put $29 billion into the funds in the first half, compared with $118 billion in the prior-year period, according to Hedge Fund Research. Hedge funds lost 2.4 percent in July, while the Standard & Poor’s 500 index lost just 1 percent. It was the fourth time in the past 12 months the hedge fund index dropped more than 2 percent; the biggest decline was January’s 2.7 percent fall. The biggest losers in July were funds focused on energy and basic materials.
Funds focused on “spread trades” involving asset-backed securities, gained 1.2 percent.
Companies rated on likelihood of being sued.
When looking at companies, analysts try to predict everything from profits to merger partners to future chief executives.
But the Corporate Library, a research firm specializing in corporate governance, takes it a step further: It estimates which companies are likely to get sued, assigning ratings based on a company’s odds of being named in a securities class action. How accurate is the assessment? Of the 71 such suits filed in the first half of 2008, 44 — or 62 percent — hit companies that had high or very high risk ratings. Three hit companies with low risk ratings.
Vanguard reopens two funds.
Vanguard reopened two of its funds to new shareholders Thursday: its Health Care fund (VGHCX) and Explorer fund (VEXPX), which focuses on small-cap growth stocks. The Health Care fund had been closed since March 2005. During that year, its 15.4 percent return, including dividends, trounced the S&P 500 by 10.5 percentage points, according to Morningstar. But the fund is down 4.8 percent this year through Wednesday. The Explorer fund, closed since February 2006, is also down for 2008, though ahead of its category.
Stan Choe, Ji Qi The Associated Press
