Capital Advisors' "​Four Steps to Prudently Pursue Yield"

Capital Advisors' just published a paper, "​Four Steps to Prudently Pursue Yield". It says, "With the Fed on hold for an extended period, institutional cash investors need a new perspective on dealing with the prolonged low yield reality. Our four-​step guide reminds investors to expect lower yields in the new environment, increase exposure only to securities supported by strong fundamentals, improve yield potential with moderate maturity extension, and be mindful of the downside risk of over-​extending oneself. The Federal Reserve'​s August 10th decision to reinvest proceeds from its mortgage-​backed securities holdings sent an important signal that the near zero (​0.​00% to 0.​25%) interest rate policy will likely linger longer than previously expected. With the futures market predicting the Fed funds rate stuck on zero through much of 2011, institutional cash investors need a new perspective on how to deal with this prolonged low yield reality." The summary adds, "Given these assumptions, it is possible that the moderate yield increases in money market funds and other cash portfolios in recent months will reverse course in coming weeks. Should one be content with the meager yield, if any, from these commingled vehicles? What are some of the feasible yield opportunities? Should one consider increasing portfolio risk when a double-​dip recession may cause new credit concerns? We hope our four-​step guide provides a helpful perspective to the institutional cash and short-​duration community."

Treasury releases "​Portfolio Holdings of Foreign Securities"

The U.​S. Treasury released a report entitled, "​Preliminary Annual Report on U.​S. Portfolio Holdings of Foreign Securities at End-​December 2009. It shows U.​S. holdings of "​Total Europe" Short-​Term Debt Securities at just $​287 billion, far below a number of recent estimates. The release says, "Preliminary data from the latest annual survey of U.​S. portfolio holdings of foreign securities are now available. The survey measured U.​S. holdings at year-​end 2009 of approximately $​6.​0 trillion, with $​4.​0 trillion held in foreign equities, $​1.​6 trillion in foreign long-​term debt securities (​original term-​to-​maturity in excess of one year), and $​0.​4 trillion held in foreign short-​term debt securities. The previous such survey, conducted as of year-​end 2008, measured U.​S. holdings of $​4.​3 trillion, with $​2.​7 trillion held in foreign equities, $​1.​3 trillion in foreign long-​term debt securities and $​0.​3 trillion held in foreign short-​term debt securities. Final survey results, which will include additional data detail as well as possible revisions to the preliminary data, will be released on October 29, 2010. The survey was a joint effort of the Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System."

TMI "​Treasurer'​s Guide to MMFs

London-​based Treasury Management International published its "​Treasurer'​s Guide to MMFs" last month. The description of the London-​centric compiliation says, "TMI is delighted to welcome our readers to the 2010 edition of our popular Guide to Money Market Funds, published in association with the Institutional Money Market Funds Association. The supplement explores a broad range of topics related to money market funds (​MMFs), such as credit and counterparty risk, the increasing demand for variable net asset value MMFs, and a succinct review of all the latest key regulatory updates by the IMMFA'​s Secretary General. Our readers will also discover a wealth of guidance within the supplement, ranging from a basic A-​Z of the instruments purchased by a money market fund to more technical topics such as credit processes and amortised accounting."

"​Jackson Hole Bubble Clash Shows Challenge for Central Bankers"