Analysis of Investment-Oriented Articles

"Will Europe �Sift' Investors?" reports on the aftermath of the investor rebellion at German stock-exchange operator Deutsche B�rse AG, where shareholders had ousted top Deutsche B�rse executives following hedge fund agitation. Attempting to balance shareholder democracy and the reluctant granting of voting rights, the German government is considering tougher control of hedge funds, possibly converting to granting voting rights on the length of time stock is held to hold short-term investors at bay. This tactic is currently in use in France, where the practice does not appear to be accomplishing its purpose; it tends to favor shareholders favorable toward management rather than those who are long-term holders (Reilly C16).

The issue that the article primarily addresses is that of short-term financial investors who do not invest foreign capital in Germany in a way that actually helps the economy. The hedge fund investors invest for a short term, then withdraw their money; this is speculative investing, and it does not generate growth. The purpose of permitting foreign investments is to use the money over the long term for creating jobs and building companies, but when the money invested and counted on suddenly disappears, the opposite effect occurs. Jobs are lost and companies are weakened. Germany wants to restrict investments to serious investors whose money can be counted on.

"Ahead of the Tape" provides a forecast of the marke

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he same time that a soft jobs report was issued, and that has precipitated a turning point at which stocks that were previously scorned drug producers, persnnal-products colpanies, liquor companies, utilities, and food-makers are now considered the mainstays of the market. The climate on Wall Street is tense, with investors wondering how the bubble will burst. Some stocks have turned around, but others are still languishing. Investors are waiting to see what the Fed does before betting heavily on cyclical stocks ("How Stock Investors" C1). The bull market has apparently reached its peak, and the economy is slowing down; as a result, investors are becoming more cautious. Investors are regrouping and returning to investments and investment strategies that work better in an ordinary, non-bullish market. Stocks that have been doing well up to now in the bull market are being bypassed for stocks that perform better in a mediocre market, like drug company stocks. Cyclical stocks are too risky in a market in transition, and most investors are avoiding them. "Ten-Year Note Flirts With Fall to 4%" discusses how the market shift is affecting credit markets. U.S. Treasury notes have been performing amazingly well, but amid last week's

Category: Economics - A