"Any industry would be proud of an average annual growth rate of 34% over ten years and of a global reach from Austria to Taiwan. But the headlong expansion of exchange-traded funds (ETFs), which by May this year controlled almost $1.5 trillion of assets (not far short of the $2 trillion in hedge funds), has become a matter for concern among financial regulators. Could ETFs be the next source of financial scandal, or even of systemic risk?" Characterizing the Financial sector "like a hyperactive child" that "can never leave a good thing be", The Economist appears to be wishing for the ETFs to be better regulated because "it would be a shame if reckless expansion spoiled a good innovation".
Postcards From Hell — For the last half-decade, the Fund for Peace, working with Foreign Policy, has been putting together the Failed States Index (the 2010 version is out), using a battery of indicators to determine how stable—or unstable—a country is. But as the photos here demonstrate, sometimes the best test is the simplest one: You'll only know a failed state when you see it. [more inside]
An Australian Madoff? Trio Capital, an Australian fund manager, has been ordered to wind up its funds after being unable to account for $123 million in its Astarra fund since investigations began in October. The fund "has a total of $426 million under management - including superannuation savings of about 10,000 Australians." Some worry what this means for more potential frauds in Australia's "privatized social security." [more inside]
GE pledges $10 million to a fund that will assist the families of the firefighters, police officers and emergency rescue personnel who perished while responding to the attack on the World Trade Center. Cisco Systems has made gifts to key relief and support organizations serving the New York City and Washington D.C. areas, including a $6 million donation. Microsoft is making a donation of $10 million in cash and technical services. Know of any other companies that are doing something similar?