A flurry of new Exchange-Traded products

With banks looking for new ways to generate revenue, exchange-traded products have caught their eyes. Deutsche Bank and Lehman Bros. have both begun issuing ETNs, which are, unlike iPath ETNs from Barclays, exotic products allowing you to invest in previously untapped markets.


DB ELEMENT ETNs

Lehman Brothers Opta ETNs

Super Return Conference (Munich, Germany)

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MBS 101

You've heard the acronyms (GNMA, FNMA, FHLC, CMO, MBS, CDO, the list goes on...), now learn what they mean:

Head on over to:

CTools:
MII Resources / 07-08 / General / Investing Resources

or directly:
PIMCO Mortgage Basics*

*Courtesy of PIMCO

Sam Zell opines (with Jack Welch)

A few takeaways from today's interview on CNBC:

On business- It doesn't make sense for a debate to exist about what you will do with your asset. If you don't understand something find out where the information comes from, and stay agile to be able to adjust.

On the economy- The worries over the economy are unfounded and 2008 will be a "reasonable" year. Housing starts have already bottomed out and the recovery will start this spring.

On the markets- There are all kinds of market opportunities in this environment.

On the election- "I've been working on my wife for the last 12 years, and I'm making some progress...logic can overcome liberalism."

The North side of ETFs

For all of those interested in the rapidly growing ETF market, market behemoths may have a new challenger: Northern Trust. That's right, the low-key custody bank is making a run at SSgA and BGI. Filings with the SEC show plans to launch 23 ETFs initially, almost all of which are unique to today's marketplace.

The 23 ETFs Northern Trust plans to launch:

• S&P/ASX 200 Index Fund (Australia)

• BEL 20(r) Index Fund (Belgium)

• Hang Seng China Enterprises Index Fund

• CAC40(r) Index Fund (France)

• DAX(r) Index Fund (Germany)

• FTSE/ATHEX 20 Index Fund (Greece)

• Hang Seng Index Fund (Hong Kong)

• ISEQ 20 Index Fund (Ireland)

• TA-25 Index Fund (Israel)

• S&P/MIB Index Fund (Italy)

• TOPIX Index Fund (Japan)

• FTSE Bursa Malaysia 100 Index Fund

• AEX-Index(r) Fund (The Netherlands)

• PSI 20(r) Index Fund (Portugal)

• RTS Index Fund (Russia)

• FTSE Singapore Straits Times Index Fund

• FTSE/JSE Top 40 Index Fund (South Africa)

• TSEC Taiwan 50 Index Fund

• FTSE 100 Index Fund (United Kingdom)

• FTSE SET 30 Index Fund (Thailand)

• Dow Jones Wilshire 4500 Index Fund

• Dow Jones Wilshire Global Total Market Index Fund

• Tokyo Stock Exchange REIT Index Fund

Information care of P&I.

MII Stockpitch 2008!

CPI = Trouble

The Consumer Price Index (CPI) increased 0.4% in January. The expectatation was for an increase of 0.3%, so at least initially today's data doesn't seem too bad. But the reality is that the CPI is up 4.3% versus a year ago and up at a 6.8% annual rate in the past three months.

Energy prices are up 19.6% versus last year.

Food and beverage prices are up 4.8% versus last year.

Excluding food and energy, the “core” CPI was up 0.3% in January (0.311% unrounded) – the highest one-month increase in more than five years. The core CPI is up 2.5% versus a year ago and up at a 3.1% annual rate in the past three months.

According to FT Advisors' Brian Wesbury & Bob Stein, this data strongly suggests that the Fed "needs to stop ignoring inflation. In the past three months the CPI is up at a 6.8% annual rate. With the exception of the two months immediately following Hurricanes Katrina and Rita this is the largest gain since 1990. At 4.3% consumer inflation is higher than the 3.9% yield on the 10-year Treasury, and that’s before investors pay taxes on the interest. Even “core” consumer prices are accelerating, with ex-food/energy prices up at a 3.1% annual rate in the past three months. Long-term, the five-year moving average of overall inflation remains in a steady uptrend (see chart to the right). Monetary policy has been accommodative since late 2001, which means an already serious inflation problem will continue to climb in the years ahead."

While its impossible to ignore data and even more difficult to disagree with Wesbury & Stein's argument when they have this kind of data to back it up, it has to be acknowledged that M1 growth has been absolutely flat over the last 2-3 years. That, and the weaker economy, suggests that inflation may well tame over the next few quarters. For the market's sake it must or the Fed is going to be very hard pressed to make a claim for more rate cuts.

By the way Wolfe, this supports your post below... credit is given where credit is due, no pun intended.

Into the Clear?

This article from BV talks about the inflationary pressure our economy is under due to increasing commodity prices. Combined with the weak monetary policy in the last 10 years there is too much money out there chasing too few goods. I think this situation we face is unlike any other we have seen before because of globalization. Will the continued growth of developing nations drive commodity prices higher? I don't know, but the Fed should be on alert.

Might Stickers Cure the Economy?

The Shops at Atlas Park has come up with another "brilliant" way to cure the economy. Stickers.

First the "rebate", now stickers. Great.

Here is the story behind it:

Back in the nineteen seventies, the Ford administration asked the public to "Whip Inflation Now” by, among other gimmicks, wearing "WIN" buttons. Inflation was roaring along at seven percent but the public was asked to believe that war-driven spending and an inflated money supply were not the cause of economic troubles. Instead it was magic or something, and little pins could make it go away. That didn’t work out, and it wasn’t until Paul Volker took control of the Fed and raised interest rates that inflation actually got whipped.

Now The Shop at Atlas Part (Glendale, NY) is planning on giving away money ($20k) as well as stickers to stimulate retail shopping. Will this work?


“Giving away $20,000 will not solve a thing. Nor would giving away $342.8 billion dollars, if every shopping center in the country was silly enough to do the same thing,” Michael Shedlock writes. (Hat tip: FT Alphaville.)

This is exactly the same thing the US is doing with the rebate. Stimulus+ (Tax to pay for stimulus)=$0 impact on the economy.

Click here to get a "I Support the Economy Sticker." If sticker. Warning- this is an actual sticker!

Thanks to dealbreaker.com for the picture of the stickers.

A look inside the secretive world of Cerberus

Below is a link to a letter sent to LPs in Cerberus International Partners LP, the Cerberus partnership that purchased Chrysler from DaimlerChrysler last year.

Investors Note