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    Daily Digest 12/25 – States Feel Recession Impact, Hedge Fund Tracks Twitter, Snow Lessons for Supermarkets

    by DailyDigest

    Saturday, December 25, 2010, 1:16 PM

  • States Continue to Feel Recession’s Impact
  • Hedge Fund Will Track Twitter to Predict Stock Moves
  • Bernanke Backs Moody’s Critic in Debate Over Money Fund Ratings
  • When Will The Recession End? Part 133 Why Russia Doesn’t Fit Into BRIC
  • Snow Lessons For Supermarkets
  • Calling For A Run On A Bank To Be Made Illegal, Say Ministers
  • GE to Sell Mortgage Assets to Santander

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Economy

States Continue to Feel Recession’s Impact (woodman)



The worst recession since the 1930s has caused the steepest decline in state tax receipts on record. State tax collections, adjusted for inflation, are now 12 percent below pre-recession levels[1], while the need for state-funded services has not declined. As a result, even after making very deep spending cuts over the last two years, states continue to face large budget gaps. At least 46 states struggled to close shortfalls when adopting budgets for the current fiscal year (FY 2011, which began July 1 in most states).

Hedge Fund Will Track Twitter to Predict Stock Moves (solidswede)



The Derwent Absolute Return Fund Ltd., set to start trading in February with an initial 25 million pounds ($39 million) under management, will follow posts on the social-networking website. A trading model will highlight when the number of times words on Twitter such as “calm” rise above or below average. A paper by the University of Manchester and Indiana University published in October said the number of emotional words on Twitter could be used to predict daily moves in the Dow Jones Industrial Average. A change in emotions expressed online would be followed between two and six days later by a move in the index, the researchers said, and this information let them predict its movements with 87.6 percent accuracy.

Bernanke Backs Moody’s Critic in Debate Over Money Fund Ratings (solidswede)



Bernanke, in a Dec. 9 letter to Anthony J. Carfang, partner in Chicago consulting firm Treasury Strategies, said market developments that reinforce speculation whether money funds may be bailed out are a “concern” and sponsor support should be addressed in the context of planned reforms of the industry. Carfang in November criticized a proposal by Moody’s Corp. that its ratings of money funds take into account the likelihood of a parent bailout in the event of losses. Bernanke, in the letter, encouraged Carfang to submit his views of the Moody’s proposal to the Securities and Exchange Commission.

When Will The Recession End? Part 133 Why Russia Doesn’t Fit Into BRIC (walter)



The acronym BRIC  which was coined by Goldman Sachs about 6 years ago,  stands for Brazil, Russia, India and China. Many people have taken this term for granted, assuming that these four potentially  prosperous “developing” nations  will equally contribute to and drive economic global growth in the next decade. Unfortunately, some of the assumptions that we took for granted about Russia prior to 2008. no longer hold true.

Snow Lessons For Supermarkets



The supermarket revolution was one of the much-hyped success stories of 20th-century consumer capitalism. We can walk into a store at almost any time of day or night, anywhere in the UK (and most of Europe or North America), and see tens of thousands of food items all vying for our money and attention. This is unimaginable wealth compared to a hundred years ago, and to what most of the world experiences. Supermarkets have come to epitomise progress, western lifestyles and the “right to choose”. Retail chief executives regularly receive their peers’ admiration and accolades. Politicians are in love with retailing, as the model for NHS reform, “big society”, you name it.

Calling For A Run On A Bank To Be Made Illegal, Say Ministers (alan)



The government is to make it a criminal offence to call for a run on a bank and is preparing draft legislation to put out to consultation in January. Justice minister Ivo Opstelten and finance minister Jan Kees de Jager want to stop people making public statements calling for bank clients to pull out their cash, they said in a memo to parliament.

GE to Sell Mortgage Assets to Santander



The sale fits with GE Capital’s strategy “to exit non-strategic businesses that lack scale to help reduce GE Capital’s balance sheet while investing in core industrial” and other businesses said Mark Begor, president and chief executive of GE Capital’s restructuring operations. Santander said the deal will make its Mexican operations “the second leading provider of mortgages” in Mexico, according to Marcos Martinez Gavica, executive vice president of Grupo Financiero Santander. Santander Mexico already has a network of retail branches and the acquisition is aimed to help it grow its mortgage business.





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