FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
European Separatism Is One Of 2013's Biggest Red Herrings (Financial Times)
Despite separatist demands in Spain, Scotland, and Belgium, Ian Bremmer president of Eurasia Group says European separatism is one of the biggest red herrings of 2013.
Catalonia will move towards a referendum but is unlikely to vote till 2014, and by then a deal with Madrid could calm demands for autonomy. Similarly a call for Scottish autonomy is a 2014 issue. Many Scots are concerned with what this would mean for defense and oil revenues with the UK.
BATS Trading System Errors Add To Concerns About Electronic Trading (Bloomberg)
BATS, the third largest stock exchange operator in the U.S. said that machines that match orders and one options venue had let some trades go through at prices that were lower than the best bid the was available at the time. They also let some violate short sales rules. Customers lost $420,360 because of the violations.
This has added to concerns about electronic trading. BATS CEO Joe Ratterman told The Wall Street Journal that such problems are a "part of the business of being an exchange in an electronic environment".
CHART: Post-Election Years Are Great For Gold Mining Stocks (US Funds)
Federal election years have been bad for gold miners as measured by the Philadelphia Stock Exchange Gold and Silver Index (XAU), according to Frank Holmes at U.S. Funds. Post-election years however tend to be great.
The Health Of The Traditional Brokerage Model Is Being Questioned (The Wall Street Journal)
Traditionally the fourth quarter is the time when brokerages post their strongest results, since it is the time when there is little movement of brokers since it is difficult to transfer registration. And because its the best time for fees and commissions since that is when clients assets are moved to the best tax position.
In coming weeks, the biggest brokerages will report how they did in terms of client-asset growth and adviser retention. If the performance is unchanged it will raise concerns about the viability of the traditional brokerage model.
ROSENBERG: Treasuries Are Selling Off, But We've Seen This Happen 8 Times Since 2007 (Gluskin Sheff)
"The Treasury market has sold off recently, and the 10-year note yield has already moved up nearly 50 basis points from its nearby multi-decade low (jumping more than 20 bps in less than two weeks).
It was overbought then. It is oversold now... but let's not pretend we haven't seen these hiccups before. We have had no fewer than eight such episodes of 50+ basis points spasms since yields peaked in the summer of 2007. Each one did not last long and presented a gift of a buying opportunity for patient investors who have an ability to see the forest past the trees. Typically, these hiccups last 49 trading days and the yield rises an average of 88 bps, with about three quarters of the prior rally being reversed.
Even though this recent setback of Treasuries has exceeded the historical norm in duration and as such a near-term bounce is likely in the offing, recent history suggests it is not impossible to see a move to a 2-2.3% band during this time. But is this nothing more than a blip in what is still a secular bull market in bonds? Recent history would say yes."
