CMHC warns on household debt | Personal Finance | Financial Post

CMHC warns on household debt | Personal Finance | Financial Post:

Canada Mortgage and Housing Corp. cautioned that Canadians need to be “vigilant” about growing levels of household debt, noting ramped-up use of personal lines of credit and increasing debt-to-disposable income ratios.

“Household financial vulnerability remains a serious issue that merits close attention going forward,” the CMHC said in its annual Housing Observer report published Thursday.

Personal lines of credit have been increasing at double-digit annual rates since 1986, growing at a faster rate than any other sub-component of household debt, the report said, and represented slightly more than 25% of household debt held by chartered banks in 2010, up from about 3% in 1986.

“It is important that consumers and stakeholders continue to be vigilant in monitoring both the magnitude as well as the composition of household debt and take appropriate action,” said the CMHC, the government-owned provider of mortgage insurance.

But Benjamin Tal, deputy chief economist at CIBC World Markets, said when it comes to debt Canadians have actually done fairly well, especially when it comes to holding back on consumer credit, pointing to “some sort of debt fatigue in this country.”

“We’ve been accumulating a lot of debt but the quality of the debt is still okay,” he said.

Mr. Tal said the real challenge for households lies ahead: “The big test will be the next 12 to 18 months. Can we resist the temptation when interest rates are so low?”

The CMHC report found residential mortgages continue to account for the largest chunk of Canadians’ total household debt, representing 68% in 2010, compared with a low of 63% in 1971 and a high of 75% in 1993.

Over the 2001-to-2010 period, mortgage debt has fluctuated between 69.0% and 67.7%, the CMHC said.

The report noted that most Canadians could handle some level of economic adversity owing to “the high quality of mortgage credit in Canada, the substantial equity position of most Canadian homeowners with a mortgage, and households’ ability to adapt their discretionary spending.”

Ottawa has intervened to tighten mortgage rules three times in recent years and the report noted the latest changes “will further reinforce the stability of the Canadian housing market.”

However, the CMHC cautioned that major challenges to Canadians’ ability to pay their mortgages could come through job losses, another recession or rising interest rates.

Yet, Mr. Tal noted that a significant increase in the unemployment rate is unlikely to come hand-in-hand with rising interest rates, as the Bank of Canada increases rates when the economy is improving and joblessness is falling.

“That’s why I’m not talking about a crash or a time bomb,” he said.

Meanwhile, the report also highlighted the increasing ratio of debt-to-disposable income as a point of concern about levels of indebtedness.

Compared to annual disposable income, household debt stood at 150.6% in the second quarter of 2011, a record high at the time, the CMHC noted. The ratio was even higher at 152.98% in the third quarter, according to Statistics Canada.

The report pegged the low-interest rate environment and rising income and net worth — allowing Canadians to borrow larger amounts — as factors in this trend.

Mr. Tal admitted that an increase in the rate of growth of debt to income can be alarming, but noted that the indicator is not entirely useful in his view as no one is asked to repay their entire mortgage in one year, for example, and the ratio measures total debt versus annual income.

Finally, the report found the number of Canadian households considered “financially vulnerable” increased to about 6.5% in 2010, still lower than levels seen in 2000 and 2001, but slightly above the 12-year period from 1999 to 2010.

The Bank of Canada applies this term to households that spend 40% or more of their gross income on total debt payments and the number tends to increase as the economy and employment weaken, the report said.

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Tight oil rises to front of mind | Energy | News | Financial Post

Tight oil rises to front of mind | Energy | News | Financial Post:

Just when it seemed the Earth was serving up its last drops of oil, squeezing from tough spots such as the oil sands in northern Alberta and the deepest seas offshore Brazil, a new oil age is emerging.

Tight oil, a catch-all for oil trapped in shale, carbonate or sand formations recoverable with the type of drilling methods that revolutionized the natural-gas side of the business, is reviving the oil sector on a scale that only a couple of years ago would have been unthinkable.

“It turns out there are a lot of big piles of oil in North America,” said Denver-based John Schopp, vice-president for the North Rockies and new ventures at Encana Corp., one of the companies in a hurry to turn it into new revenue.

Calgary-based Encana, a pure natural-gas producer that is feeling the pinch of low gas prices, hopes its new oil thrust will make it a more balanced gas/oil producer.

“With shale gas it took a few years to get it to work for everybody,” Mr. Schopp said. “With oil, obviously we are in an earlier inning than we are with gas, but the rate of change is quicker because of all the tricks that we have learned.”

The full potential of tight oil is not yet known. What is known is that the sector is repositioning itself to make the most of it, encouraged by the performance of fields such as the Bakken straddling North Dakota and Saskatchewan, one of the continent’s most significant sources of oil. If new plays such as the Niobrara in Colorado, the Eagle Ford in Texas, the Cardium in Alberta or the Viking in Saskatchewan have similar encores, and if the same pattern is repeated around the world, oil could be with us for a long time yet.

“We are finding oil in a lot of places that frankly, we knew it was there, we just didn’t know how to get it out,” said John Richels, president and CEO of Oklahoma City-based Devon Energy Corp. “Taking this new technology … and applying it to many of these areas is opening some new doors. In a world scene where we are producing 86 million barrels a day, it probably doesn’t have the same kind of impact as it did in the natural gas business, which was more of a North American market, but it certainly has some big potential in the right areas.” Devon, previously a natural gas focused company, directed 90% of its capital to oil and natural-gas liquids targets in 2011.

Tight oil’s rise happened at uncharacteristic speed for the oil patch. For example, it took decades for the oil sands to catch on as an economic resource. But the oil community started converting to tight oil in a big way barely two to three years ago, with smaller companies in Canada and the United States leading the way.

What prompted it all? Natural gas prices were low and oil prices were high, said Dan Themig, president of Packers Plus Energy Services Inc. It helped that horizontal drilling/hydraulic fracturing technologies were performing well on tight oil, and that producers could squeeze oil or natural gas liquids from lands such as the Montney they had acquired to produce gas.

“And then it was up to a bunch of engineers coming up with crazy ideas like our system,” Mr. Themig said.

The Calgary-based private company helped fuel the revolution with technological advances such as its ‘ball drop.’

Mr. Themig, a professional engineer, invented it after leaving an international oil services company a dozen years ago.

The technology involves launching a ceramic ball the size of an orange with fluid into a horizontal well. When the ball reaches the bottom it activates a port and opens a sleeve. Sand is pumped down at high pressure to fracture the rock. When the fracturing is completed, another ball is launched to fracture the next stage. The same process is repeated at high speed multiple times, resulting in what is known as multi-stage fracking.

“It started with shale gas, and then it went to shale oil, then it went to some really tight oil plays like the Cardium, and now the most recent trend is the liquids rich gas,” Mr. Themig said.

“The thing that has really put the fuel on the fire is the liquids rich gas. It’s redefined why we would drill a gas well. We don’t drill a gas well any more for the gas. It’s the liquids that are making those wells economic and are going to continue to bring capital in the industry.”

Packers Plus now has 600 employees all over the world. Its tools are being deployed in Russia, China, Argentina, Saudi Arabia and elsewhere, providing a measure of how quickly the search for tight oil is spreading.

This month it completed 60 fractures in a well in the Marcellus shale, its largest number yet, an approach that is increasing recoveries from tight oil reservoirs. With oil prices at US$100 a barrel, technology is evolving quickly.

“We are working on heavier oil areas, and we think at some point we will be in some of the oil sands areas, with more futuristic technology that will significantly change recovery factors there,” Mr. Themig said.

Like other industry players, Encana is in the process of assembling large expanses of lands in such plays as the Duvernay in Alberta, the Collingwood in Michigan, the Tuscaloosa Marine in Louisiana as well as the Niobrara.

While Encana’s production from tight oil is small, the company says it has a long history of re-inventing itself as new opportunities arise.

“The reason we are so excited about this is the high price of oil, coupled with Encana’s experience on execution of tight gas,” Mr. Schopp said.

“It’s what we do and we have a reputation of doing this quite well. It’s almost exactly the same process and it’s fairly easy to transition across from gas to oil.”

The transition to tight oil is blurring the line between oil and natural gas.

Historically, companies were targeting one or the other. Now, industry players are finding plays have a range of fluid composition, ranging from natural gas in the deepest part of the play where it has been cooked more because it’s closer to the centre of the earth, to oil at the shallowest end.

“You can drill for gas, gas with natural gas liquids, gas with condensate which is like gasoline, or has a mixture of oil and gas, or even oil,” Mr. Schopp said. “What you see happening in industry is that in some of these plays the rigs are running on exactly the part of the fluid spectrum that has the most profitability today.”

Marvin Brittenham, Encana’s Team Lead, New Ventures USA, said the technology used to unlock tight oil is essentially the same as the one used to unlock tight gas, but because tight oil is at the beginning of the learning curve, operators are still searching for the optimum solution.

The trends are solid enough that Exxon Mobil Corp. predicts in its 2012 energy outlook that tight oil will contribute about 5% of the world’s liquid fuels by 2040. The International Energy Agency expects the search to yield a 20% increase in liquids production in the U.S. to reach 9.6 million barrels a day in 2016, about 0.7 million b/d more than in its June estimate.

Meanwhile, some are worried. Saudi Arabia frets it could mean the end of its dominance over world oil markets. For the oil sands industry, it could present new competition. While it may not yield the same volumes, tight oil’s costs are lower, it tends to be located near markets, and because it’s lighter it gets a better price.

For the climate change movement, it throws a wrench into strategies, such as targeting oil sands pipelines, to expedite the sunset of fossil fuels to pave the way for renewable energy.

It also challenges peak oil theories that were so prevalent in the past decade and that contributed to rising oil prices.

“We can almost declare this the end of the Hubbert’s curve,” said Michal Moore, a professor of energy economics at the University of Calgary’s school of public policy.

According to U.S. geophysicist M. King Hubbert’s theory, oil is finite and its production declines after hitting a peak.

Hubbert’s Peak was supposed to have arrived in the continental U.S. in the early 1970s, when oil production peaked at 10.2 million barrels per day. According to his disciples, the earth’s overall oil production would peak in the last decade.

Tight oil may not restore those peak levels, but it’s very significant that U.S. production is increasing again after four decades of declines, said Ward Polzin, managing director in Denver at Tudor Pickering Holt & Co., a specialist in mergers and acquisitions in oil and gas shale for the oil and gas investment bank.

He’s seeing a rise in acquisition activity, a lot of it involving oil majors acquiring smaller trailblazers with large land positions or joint ventures involving international companies teaming up with North American players to learn the business.

“It’s hard to stem the tide,” Mr. Polzin said. “But the fact that we are keeping it flat and turning it up slightly is dramatic. That is something we didn’t think we could ever do.”

Posted in: Energy Tags: Business School 2011, Business School 2011: Lessons Learned, Calgary, Dan Themig, Development, Devon Energy Corp., Devon Energy Corporation, Exxon Mobil Corporation, John Schopp, Oil Patch, Oil Sands, Oil. Encana Corp., Packers Plus Energy Services Inc., Shale, Shale Gas, Tight Oil

CLAUDIA CATTANEO

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Gold Bear Market

Soros sees gold prices on brink of bear market

Bloomberg News  Dec 29, 2011 – 1:40 PM ET

By Nicholas Larkin, Maria Kolesnikova and Debarati Roy

Gold is poised to complete its 11th consecutive annual gain, the longest winning streak in at least nine decades, on the brink of a bear market.

George Soros, the billionaire who two years ago called it the “ultimate asset bubble,” cut 99% of his holdings in the first quarter, Securities and Exchange Commission data show. Hedge fund managers John Paulson, Paul Touradji and Eric Mindich also sold bullion this year. While speculators in New York futures are the least bullish in 31 months, the median estimate in a Bloomberg survey of 44 traders and analysts is for prices to rally as much as 40% to US$2,140 an ounce in 2012.

The divergence of views is widening after prices declined 19% from a record close of US$1,900.23 on Sept. 5, or 1 percentage point away from a bear market. As some investors retreated to cash amid a US$10-trillion slump in global equity values since May, others bought more metal, taking holdings in exchange-traded products to an all-time high two weeks ago. Bullion’s 7.6% gain in 2011 means it’s on track to beat stocks, bonds and the dollar for a second straight year.

“It’s done its job this year of protecting investors,” said Michael Cuggino, 48, who helps manage about US$15-billion of assets, including US$3-billion in gold, at Permanent Portfolio Funds in San Francisco and correctly predicted in February that prices would keep rising. “Gold has been all over the place. If you bought gold at US$1,800 then you aren’t too happy. Some people will get out of gold, but the longer-term investors will remain.”

Trading Partners

Bullion was at US$1,530.07 at 2:35 p.m. in London, below this year’s average of US$1,572.47 and six times more than when the bull market began in 2001. The MSCI All-Country World Index of equities declined 10%, on track for the worst year since 2008, and the Dollar Index, a measure against six major trading partners, advanced 2%. Fixed-income securities around the world gained 4.3% this year, the weakest performance since 2007, Bank of America Corp. indexes show.

Investment in physical metal is cooling. The U.S. Mint’s sales of American Eagle gold coins in November were the weakest since June 2008, data on its web site show. Holdings in bullion- backed ETPs fell about 35 metric tons since reaching a record on Dec. 14, according to data compiled by Bloomberg. They are still 140 tons higher than at the start of 2011 and the total of 2,326 tons, valued at about US$116-billion, exceeds the reserves of all but four central banks. ETP holdings climbed 0.3% yesterday, the first increase in two weeks.

Federal Reserve

Demand had strengthened most of this year as Europe’s debt crisis widened and the Federal Reserve pledged to keep interest rates near zero until at least mid-2013. The European Central Bank cut rates to 1% on Dec. 8, matching the record low of the euro era that began in 1999. That increases the appeal of bullion because it generally earns investors returns only through price gains.

“The longer-term trends, mainly government fiscal and monetary policies, haven’t changed,” said Tom Winmill, who helps manage more than US$200-million of assets from Walpole, New Hampshire, for Midas Funds and whose Midas Perpetual Portfolio may increase its 19% investment in bullion and gold mining companies in the next quarter. “Gold has that preservation-of-wealth role and was probably used quite a bit in the last several weeks.”

Options traders are also bullish, with the top nine holdings all betting on higher prices. The two most widely held contracts give holders the right to buy gold at US$2,000 by the end of March and May, data from the Comex exchange show.

Hedge Funds

That contrasts with money managers, who cut their wagers on a rally to 117,151 futures and options in the week ended Dec. 20, from as many as 253,653 in August, according to data from the Commodity Futures Trading Commission. The hedge funds and other speculators are now the least bullish since May 2009, a month in which gold jumped 10 percent.

Paulson, the billionaire fund manager mired in the worst slump of his career, sold 36% of his stake in the SPDR Gold Trust in the third quarter, an SEC filing showed. New York- based Paulson & Co. remains the biggest investor in the largest gold-backed ETP, with a stake valued at US$3.17-billion.

The 56-year-old manager’s Gold Fund was this year’s best performer among his US$28-billion fund family through about mid- December, people familiar with the figures said last week. Redemption requests for the end of the year were about US$2-billion, two people briefed on the matter said last month. Stefan Prelog, a spokesman, declined to comment.

‘Rational’ Buying

Soros Fund Management LLC, based in New York, sold almost all its shares in the SPDR Gold Trust and the iShares Gold Trust in the first quarter, SEC data show. Its 81-year-old founder, who made US$1-billion breaking the Bank of England’s defence of the pound in 1992, said in January 2010 that buying at the start of a bubble was “rational.”

The fund’s gold sales preceded a decision in July to return the less than US$1-billion managed for outsiders and focus on family and foundation money. It bought more SPDR Gold Trust shares in the third quarter and added options, SEC data show. Michael Vachon, a spokesman, declined to comment.

“Gold became very overbought,” said Charles Morris, who oversees about US$2.2-billion of assets at HSBC Global Asset Management in London and cut his bullion holdings to 6% at the end of November from 15% six months ago. “It will at least consolidate following this almighty rally. When the new bull market arrives, maybe a year or so away from now, then gold will once again prove to be a leading asset.”

‘End of Road’

Dennis Gartman, the economist and author of the Suffolk, Virginia-based Gartman Letter, said Dec. 13 that traders were witnessing the “death of a bull.” He sold the last of his gold the previous day and said Dec. 23 his outlook was neutral. The “megatrend” in bullion is “in all likelihood near the end of the road,” Markus Mezger, co-founder of Zug, Switzerland-based Tiberius Asset Management AG, which manages about US$2.5-billion of assets, said in its 2012 outlook report on Dec. 23.

Eton Park Capital Management LP, founded by 44-year-old Mindich, sold the last of its SPDR Gold Trust shares in the third quarter, according to SEC data. The holding was valued at US$135-million based on the average price over those three months. Jonathan Gasthalter, a spokesman for the New York-based company, declined to comment.

Touradji Capital Management LP, led by its 40-year-old founder, sold all of its shares in the SPDR Gold Trust in the first three months of the year before buying back about 26% of that stake in the third quarter, the data show. Its largest holding in publicly traded equities remains Barrick Gold Corp., the world’s biggest miner of the metal. Prelog, also a spokesman for Touradji, declined to comment.

‘Makes People Nervous’

“Gold is going to go higher, but it’s not going to go in a straight line,” said Martin Murenbeeld, the 67-year-old chief economist at Toronto-based DundeeWealth Inc., which manages about US$100-billion in the Dynamic Mutual Funds. “Gold has given positive returns, but it doesn’t necessarily do it in the way that gives comfort, and that makes people nervous.”

Projections for a steady dollar may stall a gold rally. The Dollar Index, which gained 8% since the end of October, will reach 80.3 in the first quarter, from 80.6 now, the median of 10 analyst forecasts compiled by Bloomberg shows. The 30-week correlation coefficient between the currency and bullion is at – 0.48, with a figure of -1 meaning the two always move in opposite directions.

Trading Patterns

Bullion’s decline since reaching an intraday record of US$1,921.15 on Sept. 6 means it is heading for a quarterly average of US$1,684. While that’s the second-highest in data going back to 1920, it’s 10% or more below what Societe Generale SA, Barclays Capital and BNP Paribas SA predicted in September. This year’s high still managed to exceed the expectations of all but five of 35 analysts and traders surveyed by Bloomberg a year ago, who had a median estimate of US$1,700.

The metal closed below its 200-day moving average on Dec. 14 for the first time since January 2009, a sign for some investors who study charts of trading patterns and prices to predict trends that the rout has further to go. Prices have rallied as much as 2.7% since then and also gained after breaching the moving average in each year from 2003 to 2009.

Gold’s high in September has yet to exceed previous records when adjusted for inflation. The metal peaked at US$850 in 1980, equal to US$2,335 today, according to a calculator on the website of the Federal Reserve Bank of Minneapolis.

Central Banks

Mining companies are forecast to make the most profit ever. Barrick, based in Toronto, will report net income of US$4.72-billion this year and US$6.01-billion in 2012, according to the mean of 11 analyst estimates compiled by Bloomberg. Shares of the company, which Bloomberg Industries estimates mines about 9% of the world’s gold, fell 17% in New York this year. It’s trading at 9.1 times estimated earnings, down from 13.4 a year ago, data compiled by Bloomberg show.

The drop in gold may spur more buying from central banks, putting a “floor” under prices, said Adrian Day, who manages about US$170-million of assets as the president of Adrian Day Asset Management in Annapolis, Maryland. The banks may add 600 tons to reserves next year, the most since at least 1970, according to Goldman Sachs Group Inc., which on Dec. 1 said bullion would reach US$1,940 in 12 months.

“The bubble is in paper currency creation, not in physical gold,” said Ben Davies, the London-based manager of the Hinde Gold Fund, which gained 22% in the first 11 months of the year and invests in bullion stored in a Swiss private bank’s vaults. “Calls for a top in the market are premature.”

Bloomberg News

MF Global Chief Missing $1.2B is Financial Adviser to EPA - MF Global - Fox Nation

MF Global Chief Missing $1.2B is Financial Adviser to EPA - MF Global - Fox Nation:

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Online Christmas shopping sales soar - Business - CBC News

Online Christmas shopping sales soar - Business - CBC News:

A growing number of shoppers apparently need only the briefest of breaks before diving back in, especially if they can log in to shop.

IBM found that online shopping jumped 16.4 per cent on Christmas Day over last year, and the dollar amount of those purchases that were made using mobile devices leaped 172.9 per cent.

IBM tracks shopping at more than 500 websites other than Amazon.com, which is the largest. It found a huge increase in the number of shoppers making their purchases with iPhones, iPads and Android-powered mobile devices.

In fact, nearly seven per cent of all online purchases were made using iPads, just 18 months after the tablet computers were released by Apple Inc., said John Squire, chief strategy officer for IBM's Smarter Commerce unit.

The online uptick continued on Monday. As of 3 p.m. ET, shopping was up 10 per cent over Dec. 26, 2010. And the expectation was that the pace of buying would increase as the day wore on and consumers clicked on sales at various retailers.

Squire said consumers were chasing sales on both Sunday and Monday. The data did not show what portion of purchases was made using gift cards.

Canadians boosted spending by 15.4 per cent on Cyber Monday (Nov. 29) compared to dollars spent during the comparable period in 2010, Moneris Solutions reported earlier this month.

© The Associated Press

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SEC Ups Its Game to Identify Rogue Firms - WSJ.com

SEC Ups Its Game to Identify Rogue Firms - WSJ.com:

By JEAN EAGLESHAM And STEVE EDER

It is the Securities and Exchange Commission's new "most-wanted" list: a chart covered with handwritten notes, yellow highlighter and the names of about 100 hedge funds.

The hedge funds have one thing in common: Their performance seems too good to be true, with some trouncing the overall market and others churning out modest results without ever suffering a down month. Some funds on the list stumble but still always outperform rival hedge funds.

"There is serious fraud in this space, and we have been attacking it," said Bruce Karpati, co-chief of the SEC's asset-management enforcement unit. The hedge-fund chart dominates a corner of his lower Manhattan office.

The list is the low-tech product of a high-tech effort by the SEC to crack down on fraud at hedge funds and other investment firms. After the agency failed to detect the $17.3 billion Ponzi scheme by Bernard L. Madoff, who wowed investors with steady returns over several decades, SEC officials decided they needed a way to trawl through performance data and look for red flags that might signal a possible fraud.

In 2009, the SEC began developing a computer-powered system that now analyzes monthly returns from thousands of hedge funds. Officials won't say exactly how it works or how much it cost to build, but the agency has announced four civil-fraud lawsuits filed as a result of what it calls the "aberrational performance initiative."

One hedge fund sued by the SEC reported annual returns of more than 25% by allegedly overvaluing its assets, including Nigerian warrants. A hedge fund of funds achieved its seemingly great returns by allegedly overriding internal controls on vetting outside funds, causing it to sink investor money into frauds.

Encouraged by the results so far, SEC officials are widening the computer-powered scrutiny to mutual funds and private-equity funds. That means data on more than 20,000 funds are being fed into the SEC's computers or soon will be.

The enforcement-by-the-numbers machine isn't popular on Wall Street, where some investment managers are worried they might get snagged in an investigation simply because their numbers look too good.

SEC enforcement chief Robert Khuzami rattled some people this year when he suggested that any fund with returns that steadily topped market indexes by 3% could catch the agency's eye. The SEC now says it doesn't set such thresholds.

"There are people out there who have been committing fraud, and we want to get them and get them out of the system," said Robert Leonard, a partner at law firm Bingham McCutchen LLP who represents hedge funds. "I'm concerned there probably will be some chilling effect for managers who are knocking the cover off the ball."

Robert Kaplan, the other co-chief of the SEC's asset-management enforcement unit, said it isn't so simple. After the SEC's machine spits out the name of a specific hedge fund, the SEC's 65-person asset-management enforcement unit starts looking for an explanation for the numbers.

Some of the hedge funds on the list in Mr. Karpati's office are "just very good" performers, Mr. Kaplan said, while others seemed suspicious but the activity wasn't clear-cut enough for the SEC to launch an investigation or file a civil lawsuit.

Mr. Kaplan wouldn't say how many hedge funds flagged by the "aberrational performance initiative" wind up as the target of an SEC probe. But the results were encouraging when the SEC tested the computer system in 2009, he said. "We spotted several cases that we'd recently filed and some others we were already investigating," Mr. Kaplan said.

The system is designed partly to detect returns that barely budge when markets are volatile. That might have set off alarms inside the SEC about Mr. Madoff. The SEC has been criticized for failing to identify the Ponzi scheme and for its failure to respond to whistleblowers and their warnings that Mr. Madoff's operations were a fraud. Mr. Madoff's firm collapsed in December 2008, and he is serving a 150-year prison sentence.

Among the civil-fraud suits that have resulted from the initiative is one filed against ThinkStrategy Capital Management LLP, which attracted SEC attention partly because it seemed able to defy stock-market gravity.

In 2008, ThinkStrategy reported a 4.6% return on its Capital Fund-A hedge fund. It was the sixth year in a row that Chetan Kapur, a 36-year-old New Yorker, seemed to have a Midas touch. In contrast, the average hedge fund fell roughly 19% in 2008, with losses in eight of the year's 12 months, according to data from Hedge Fund Research Inc.

The SEC alleged in its civil-fraud suit against Mr. Kapur that the 4.6% return figure was faked. The hedge fund actually had a 90% loss in 2008, according to the SEC's lawsuit.

The SEC accused Mr. Kapur of continuing to report positive returns for the hedge fund even after it was liquidated and ceased trading, as a way of attracting investors to his other funds. Mr. Kapur also repeatedly inflated his firm's assets under management in investor reports and invented a nonexistent management team, the SEC alleged in its civil-fraud suit.

Without admitting or denying wrongdoing, Mr. Kapur agreed to a lifetime ban from the investment industry. A federal court soon will rule on penalties in the case. Mr. Kapur's lawyer, Sam Lieberman of Sadis & Goldberg LLP, said the settlement is a "favorable development that will allow him to focus on his new business outside the securities industry."

Messrs. Karpati and Kaplan said the data crunching has helped trigger a number of investigations. For private-equity funds, SEC enforcement officials are zooming in on excessive valuations of funds' holdings.

Mr. Kaplan said the number crunching on mutual funds has led to an unspecified number of probes "we're doing that come from similar analysis of outliers."

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9-11 WTC Biggest Gold Heist in History: $300 Billion in Bars - YouTube

9-11 WTC Biggest Gold Heist in History: $300 Billion in Bars - YouTube: ""

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Donald Trump: Focus on your Goals and Priorities

"Education should never be underestimated. It is a foundation, and foundations matter. I also know the importance of focus, even diligent efforts can leave you without results. I call this striving without thriving. What's the point of that?"

"Powerful people are focused people."*

To thrive, not just survive, focus on your learning goals. You need a plan to acquire the knowledge you will need to compete in your chosen field. Invest your time wisely by having clear, written goals, priorities and a plan acquire the skills needed on Wall Street, like accounting and finance.

"Don't learn the hard way, which is often the too late way. Invest your time wisely...", say The Donald.

Learning to focus on your priorities will give you a head start in the race for business success.

* Donald Trump, writing the Forward to "The Power of Focus - for college students" by Les & Andrew Hewitt

Too Pig to Fail

Congress

Daily Quotes

Investors in the corporate bond market do not enjoy the same access to information as a car buyer or, dare I say, a fruit buyer.

- SEC Chairman Arthur Levitt

Wikiquote quote of the day:

We have reversed the usual classical notion that the independent
"elementary parts" of the world are the fundamental reality, and that
the various systems are merely particular contingent forms and
arrangements of these parts. Rather, we say that inseparable quantum
interconnectedness of the whole universe is the fundamental reality,
and that relatively independent behaving parts are merely particular
and contingent forms within this whole.
--David Bohm

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Here's the chart.

(And for what it's worth, the current 300-day moving average right now is somewhere around $1538/oz.)and Gold is at $16000 per Oz. today....

Read more: http://www.businessinsider.com/chart-of-the-day-gold-vs-the-300-day-moving-average-2011-12?
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