This conflict was the biggest single factor behind the recent exchange of asset management for brokers by Citigroup and Legg Mason, and it also lay behind an unsuccessful attempt by Morgan Stanley earlier this year to purchase BlackRock.
In many places, class warfare has gone much farther with suffocating regulations, exchange controls, asset seizures, arbitrary imprisonment and other measures that suppress private property rights and throttle a market economy.
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Some firms have separate systems for different asset classes, such as foreign exchange, equities, and options.
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Islamic scholars agree money is simply a means of exchange and not an asset, and should therefore not grow over time.
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Earlier this year, Merrill Lynch (nyse: MER - news - people ) agreed to sell its asset management group to BlackRock in exchange for a 49% ownership.
That way the payments for goodwill, which as in exchange for a 1231 asset will get capital gain treatment, go directly to the the professional without passing through the corporation.
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Surges of dirty money can artificially inflate or deflate asset prices, making interest rates and exchange rates more volatile.
Unfortunately, because QE involves the exchange of one risk-free asset (bank reserves) for another (Treasury securities), QE does nothing to increase the amount of risk-free assets available to the market.
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"Our partnership with them and the consequent exchange of ideas has certainly been an asset, " he says.
Rather, they hold fixed allocations in several asset classes using low-cost index funds or exchange-traded funds (ETFs) and rebalance their portfolios back to a target as needed.
When implementing asset allocation strategies, I have found that it is becoming increasingly more common to utilize exchange-traded products (ETPs) in addition to mutual funds, stocks and bonds, for certain asset classes, styles and sectors.
Holders of precious metals or other major tradable (fungible) assets worldwide need to monitor the foreign exchange rate of the currency in which their asset is held.
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Buy the fund and you are buying YPF even cheaper since the fund trades on the New York Stock Exchange at a 29% discount to net asset value.
In Watt's Latin America Equity fund, for example, you are getting shares of YPF, an integrated oil company in Argentina that trades at 6.5 times estimated cash flow (expected 1998 earnings plus depreciation). (The comparable ratio for Exxon is about twice that.) Buy the fund and you are buying YPF even cheaper, since the fund trades on the New York Stock Exchange at a 29% discount to net asset value.
Some want a central trade-quoting facility for lumpy asset-backed products: regulators have approached the New York Stock Exchange.
What these salesmen don't say is that there are other ways to soften or forestall a capital gains hit: installment sales, exchange funds, Section 1031 exchanges or just leaving the asset in your estate.
Asset-price rises are also a problem for emerging economies with flexible exchange rates.
Shareholder returns are at the mercy of commodity prices, drilling gambles, perpetual asset sales and acquisitions, and hedging talents on both commodities and foreign exchange desks.
Stress tests of the largest 17 commercial banks showed that most of the banks seem resilient to isolated shocks, including a sharp reduction in real estate and other asset values, shifts in the yield curve, and changes in the exchange rate.
Today, there are many style-based index funds, exchange-traded funds (ETFs), and style-based asset class funds that can be used to create a tilt.
Toscafund Asset Management disclosed in a filing with the U.S. Securities and Exchange Commission that it had acquired a 6.0% stake in Washington Mutual, giving a lift to the bank's impoverished shares.
Shaw, Thomas Peterffy, chairman of Interactive Brokers, Leonard Amoruso, the general counsel of Knight Capital, a partial owner of the newest U.S. stock exchange Direct Edge, and Jeff Engelberg, senior trader at Southwestern Asset Management.
Toscafund Asset Management disclosed in a filing with the U.S. Securities and Exchange Commission that it had acquired a 6.0% stake in Washington Mutual (nyse: WM - news - people ), giving a lift to the bank's impoverished shares.
Since 1970 exchange-rate moves in developed markets have generally been dwarfed by asset-price shifts. (The exceptions have occurred in countries that have tried to maintain currency pegs.) Currency risk has been of such little concern to institutional investors that many do not bother to hedge it.
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As a result, I believe that there now exists an intriguing opportunity for inclusion of this alternative asset class (i.e. real estate), through investment vehicles such as REITs and exchange-traded funds, in diversified growth portfolios.
To achieve price stability, it would require the Fed to monitor a full range of asset prices including not only goods and services, but also the price of gold and the foreign exchange value of the dollar.
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All of which makes this a good time to launch a new approach to trading intellectual property, says Gerard Pannekoek, the boss of IPXI, a new financial exchange that lets companies buy, sell and hedge patent rights, just like any other asset.
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