AIG COMMODITY INDEX

March 18, 2009 at 11:46 pm | Posted in Economics, Financial, Globalization, Research | Leave a comment

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DJ-AIG COMMODITY INDEX

Dow Jones Indexes

Dow Jones Indexes
Dow Jones & Co., Inc.
P.O. Box 300
Princeton NJ
08543-0300

Contact:

(US): +1.609.520.7249
(Asia): +86.10.6581.4090 x403
(Europe): +49.69.29.725.180
E-mail:
djindexsupport@dowjones.com

DJ-AIGCI

DJ-AIG Commodity Index

DJ-AIG Commodity Index Advisory Committee

DJ-AIG Commodity Index Supervisory Committee

To determine its component weightings, the DJ-AIGCI relies primarily on liquidity data, or the relative amount of trading activity of a particular commodity. Liquidity is an important indicator of the value placed on a commodity by financial and physical market participants. The index also relies to a lesser extent on dollar-adjusted production data. The index thus relies on data that is endogenous to the futures markets (liquidity) and exogenous to the futures markets (production) in determining relative weightings. All data used in both the liquidity and production calculations is averaged over a five-year period.

The component weightings are also determined by several rules designed to insure diversified commodity exposure. Disproportionate weighting of any particular commodity or sector may increase volatility and negate the concept of a broad-based commodity index, unduly subjecting the investor to micro-economic shocks in one commodity or sector. To help insure diversified commodity exposure, the DJ-AIGCI relies on several diversification rules. Among these rules are the following:

As of the annual reweightings of the components

* No related group of commodities (e.g., energy, precious metals, livestock and grains) may constitute more than 33% of the index .

* No single commodity may constitute less than 2% or more than 15% of the index.

In consultation with the DJ-AIG Commodity Index Advisory Committee, the DJ-AIG Commodity Index Supervisory Committee meets annually to determine the composition of the index in accordance with the rules established in the DJ-AIGCI Handbook. The Supervisory Committee consists of employees of AIG-FP and Dow Jones. DJ-AIG Commodity Index Advisory Committee members are drawn from the academic, financial and legal communities. The new target weights for the commodity components were determined and approved by the Dow Jones-AIG Commodity Index Supervisory Committee in August 2008 with changes in index composition effective January 2009.

The DJ-AIGCI is reweighted and re-balanced each year in January on a price-percentage basis. In consultation with the DJ-AIG Commodity Index Advisory Committee, the DJ-AIG Commodity Index Supervisory Committee meets annually to determine the composition of the index in accordance with the rules established in the DJ-AIGCI Handbook. Rebalancing and reweighting means that, in general, the index may reallocate out of commodities that have appreciated in value and into commodities that have underperformed. To the extent that commodity markets exhibit mean-reverting characteristics over time, this approach may help enhance performance.

Dow Jones-AIG Commodity Index

The Dow JonesAIG Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14th, 1998.

Unlike equities, which entitle the holder to a continuing stake in a corporation, commodity futures contracts specify a delivery date for the underlying physical commodity. In order to avoid delivery and maintain a long futures position, nearby contracts must be sold and contracts that have not yet reached the delivery period must be purchased. This process is known as “”rolling” a futures position. The DJ-AIGCI is a “rolling index”.

The Index Family

The DJ-AIGCI family of indexes includes both the DJ-AIGCI (which is calculated on an excess return basis) and a total return index based on the DJ-AIGCI (the DJ-AIGCITR). While the former reflects the return of its underlying commodity price movements only, the latter reflects the return on a fully collateralized investment in the index.

In addition, there are nine sub-indexes, representing the major commodity sectors within the index: Energy (including petroleum and natural gas), Petroleum (including crude oil, heating oil and unleaded gasoline), Precious Metals, Industrial Metals, Grains, Livestock, Softs, Agriculture and ExEnergy.

The DJ-AIGCI family of indexes also consists of single commodity indexes on all of the components currently part of the DJ-AIGCI, plus cocoa, in excess and total return versions. In addition, the DJAIGCI family consists of forward indexes, designed to represent the composition of the index one, two and three months into the future, and are named accordingly: DJ-AIG Commodity Index 1 Month Forward, DJ-AIG Commodity Index 2 Month Forward and DJ-AIG Commodity Index 3 Month Forward. The family also includes 3 month forward indexes on each of our single commodity and sector sub-indexes. These forward indexes meet the increasing demand to track exposure to longer-dated commodity futures contracts. Excess and total return versions of each index are available. Yen, Euro, Swiss Franc and Pounds Sterling denominated versions of the DJ-AIGCI and the DJ-AIGCITR also are available.

The Methodology

To determine its component weightings, the DJ-AIGCI relies primarily on liquidity data, or the relative amount of trading activity of a particular commodity. Liquidity is an important indicator of the value placed on a commodity by financial and physical market participants. The index also relies to a lesser extent on dollar-adjusted production data. The index thus relies on data that is endogenous to the futures markets (liquidity) and exogenous to the futures markets (production) in determining relative weightings. All data used in both the liquidity and production calculations is averaged over a five-year period.

The component weightings are also determined by several rules designed to insure diversified commodity exposure. Disproportionate weighting of any particular commodity or sector may increase volatility and negate the concept of a broad-based commodity index, unduly subjecting the investor to micro-economic shocks in one commodity or sector. To help insure diversified commodity exposure, the DJ-AIGCI relies on several diversification rules. Among these rules are the following:

  • No related group of commodities (e.g., energy, precious metals, livestock and grains) may constitute more than 33% of the index as of the annual reweightings of the components.

  • No single commodity may constitute less than 2% or more than 15% of the index.

In consultation with the DJ-AIG Commodity Index Advisory Committee, the DJ-AIG Commodity Index Supervisory Committee meets annually to determine the composition of the index in accordance with the rules established in the DJ-AIGCI Handbook. The Supervisory Committee consists of employees of AIG-FP and Dow Jones. DJ-AIG Commodity Index Advisory Committee members are drawn from the academic, financial and legal communities. The new target weights for the commodity components were determined and approved by the Dow Jones-AIG Commodity Index Supervisory Committee in August 2007 with changes in index composition effective January 2008.

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ECONOMIC CYCLE RESEARCH

March 18, 2009 at 6:53 pm | Posted in Economics, Financial, Globalization, History, Research, USA | Leave a comment

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ECRI: Recession Lesson‏

Economic Cycle Research Institute

(ECRI)

Melinda Hubman (melinda@businesscycle.com)

Wed 3/18/09

Hi

To the extent you continue to have interest in the U.S. business cycle, you may want to read a couple of recent ECRI Op-Eds available free online, “Choosing Recession” (Forbes), “Risk of Redefining Recession” (CNN), and “What Does GDP Mean to Me” (NPR).

Kind regards,

Melinda Hubman

Economic Cycle Research Institute (ECRI)

Tel.: +1.212.557.7788

Countries Covered

ECRI’s Record

Testimonials

ECRI: Recession Lesson‏

Economic Cycle Research Institute (ECRI)

Melinda Hubman (melinda@businesscycle.com)

Wed 3/18/09

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BANK FOR INTERNATIONAL SETTLEMENTS BIS REVIEW NO. 31: GLOBAL CRISIS

March 18, 2009 at 3:39 pm | Posted in Economics, Financial, Globalization, Research, World-system | Leave a comment

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BIS Review

Bank for International Settlements

BIS Review No 31 available

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

Wed 3/18/09

Please find BIS Review No 31 attached as an Adobe Acrobat (PDF) file.

Alternatively, you can access this BIS Review on the Bank for International Settlements’ website by clicking on http://www.bis.org/review/index.htm.

What’s included?

BIS Review No 31 (18 March 2009)

Axel A Weber: What role is economic and monetary union playing in mitigating the impact of the global crisis?

Jean-Claude Trichet: What lessons can be learned from the economic and financial crisis?

Zhou Xiaochuan: Some observations and analyses on savings ratio

Ardian Fullani: Developments in the Albanian financial system

Mary C Nkosi: Risk based supervision in Malawi

please e-mail press.service@bis.org.

BIS Review

Bank for International Settlements

BIS Review No 31 available

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

http://www.bis.org/review/index.htm

Wed 3/18/09

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U.S. INTERNATIONAL TRANSACTIONS

March 18, 2009 at 2:38 pm | Posted in Economics, Financial, Globalization, History, Research, USA | Leave a comment

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BEA News:

U.S. Int’l Transactions 4th Qtr 2008‏

U.S. Bureau of Economic Analysis

(subscribe@bea.gov)

The U.S. Bureau of Economic Analysis (BEA)

Wed 3/18/09

The U.S. Bureau of Economic Analysis (BEA) has issued the following news release today:

The U.S. current-account deficit–the combined balances on trade in goods and services, income, and net unilateral current transfers–decreased to $132.8 billion (preliminary) in the fourth quarter of 2008, the smallest deficit since the fourth quarter of 2003, from $181.3 billion (revised) in the third quarter of 2008.

The full text of the release on BEA’s web site can be found at:

http://www.bea.gov/newsreleases/international/transactions/transnewsrelease.htm.

The Bureau of Economic Analysis

Visit us on the web at http://www.bea.gov/.

U.S. Bureau of Economic Analysis · 1441 L Street NW ·

Washington DC 20230 · 202-606-9900

BEA News: U.S. Int’l Transactions, 4th Qtr 2008‏

U.S. Bureau of Economic Analysis

(subscribe@bea.gov)

The U.S. Bureau of Economic Analysis (BEA)

http://www.bea.gov/newsreleases/international/transactions/transnewsrelease.htm.

Wed 3/18/09

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NUCLEAR FUSION: TWO BOOKS

March 18, 2009 at 5:43 am | Posted in Books, History, Research, Science & Technology, USA | Leave a comment

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The Fusion Quest

by Professor T. Kenneth Fowler (Author)

Editorial Reviews

Fusion as a source of energy has been a long-sought but never-achieved dream of the scientific establishment. The idea sounds simple enough: create cheap, limitless energy by the same processes that fuel the sun. The problem, however, is scale: how to reproduce the continual fusion of hydrogen atom nuclei in a reactor that is much, much smaller than the sun. This is the puzzle T. Kenneth Fowler describes in Fusion Quest, a book that argues passionately in favor of continued fusion research. Though there has yet been little success in the field, Fowler insists that so much progress has been made that fusion power will likely be possible within the next century. He spends most of the book explaining the challenges that face physicists in realizing this dream. The Fusion Quest is more technical than the average popular science book and will probably appeal more to those readers who have some background in physics and mathematics.

From Booklist

Starting a fusion reaction, as in an H-bomb, is one thing; controlling fusion to generate power is another, almost fantastic, thing. According to Fowler, a prime mover in the civilian thermonuclear field for decades, fusion technology has so far advanced that reactors are foreseeable within the next 50 years. He hopes to inspire the rising generation of science students to enter a field whose holy grail, in theory, promises an unlimited quantity of pollution-free power. The difficulty resides in the tremendous problem of containing a ministellar core without destroying the reactor, and Fowler discusses the development of two solutions: magnetic confinement of hydrogen plasma and the laser compression of hydrogen. He clearly explains the physical essentials of plasma behavior, magnetic fields, and lasers that govern the design of reactor projects, all of them costly, big, and international. Nonspecialist introductions to fusion are scarce; Fowler allows libraries to fire up bright tyros dreaming of trying out a tokamak.

Product Details:

  • Hardcover: 272 pages

  • Publisher: The Johns Hopkins University Press

  • March 6, 1997

  • Language: English

  • ISBN-10: 0801854563

  • ISBN-13: 978-0801854569

Sun in a Bottle: The Strange History of Fusion and the

Science of Wishful Thinking

by Charles Seife (Author)

Editorial Reviews

From Publishers Weekly

Fifty years ago scientists and futurists glowingly predicted a future in which cars would run on little fusion cells and the world would extract deuterium from the oceans for an inexhaustible supply of energy. Like all too many shining visions, fusion turned out to be a mirage. Award-winning science journalist Seife (Sun in a Bottle) takes a long, hard look at nuclear fusion and the failure of one scheme after another to turn it into a sustainable energy source. Many readers will remember the 1989 cold fusion debacle, but Seife explains why tabletop fusion isn’t all that difficult to achieve. The problem, as with all fusion devices except the hydrogen bomb, is to produce more energy than the fusion process consumes. The two most promising approaches today use plasma and lasers, but again, Seife reports, scientists have been repeatedly frustrated. The United States and several other industrial nations recently agreed optimistically to sink billions of dollars into a 30-year fusion power project. Seife’s approachable book should interest everyone concerned about finding alternative energy sources.

Product Details:

  • Hardcover: 304 pages

  • Publisher: Viking Adult

  • October 30, 2008

  • Language: English

  • ISBN-10: 0670020338

  • ISBN-13: 978-0670020331

NUCLEAR FUSION: TWO BOOKS

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“PRICE CONVERGENCE IN THE EMU”?: BUNDESBANK DISCUSSION PAPER

March 18, 2009 at 3:05 am | Posted in Economics, Financial, Germany, History, Research | Leave a comment

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Bundesbank Discussion Paper‏

The Bundesbank Research Centre

Newsletter Forschungszentrum Bundesbank

(vo5555@newsletter.bundesbank.de)

Tue 3/17/09

Dear customer,

The Bundesbank Research Centre has released a new Discussion Paper (No 06/2009 Series 1).

Author/s:
Christoph Fischer

Title:

Price convergence in the EMU?

Evidence from micro data

Abstract:

The establishment of European monetary union (EMU) was widely expected to cause price convergence among member states. In an investigation of this claim, the present study avoids problems of comparability and representativeness by using an extremely detailed and comprehensive scanner database on washing machine prices and sales volumes for 17 European countries. A hedonic regression yields country-specific time series for quality-adjusted price differentials. Statistically and economically significant deviations from the LOP emerge. Log t tests firmly reject price convergence among EMU countries. Small convergence clusters can be identified but they are unrelated to EMU membership.

http://vo5555.newsletter.bundesbank.de/servlet/rd?l=Diskussionspapiere-JOKA-PJN1-M7DJ-ONL3-NWSL78

http://vo5555.newsletter.bundesbank.de/servlet/cf?email=Richardemelson@hotmail.com&code=JOKA-PJN1-M7DJ-ONL3

+ 01: Deutsche Bundesbank
Forschungszentrum
Research Centre
Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

+ 02: Contact
presse-information@bundesbank.de

Bundesbank Discussion Paper‏

The Bundesbank Research Centre

Newsletter Forschungszentrum Bundesbank

(vo5555@newsletter.bundesbank.de)

Deutsche Bundesbank
Forschungszentrum
Research Centre
Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

Tue 3/17/09

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ECONOMIC ADVISORY BOARD: WHITE HOUSE

March 18, 2009 at 12:09 am | Posted in Economics, Financial, Globalization, Science & Technology, USA | Leave a comment

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Economic Advisory Board

February 6, 2009

Washington (February 6, 2009) – President Barack Obama today signed an executive order establishing the new Economic Recovery Advisory Board. Modeled on the Foreign Intelligence Advisory Board created by President Dwight D. Eisenhower the Board will provide an independent voice on economic issues and will be charged with offering independent advice to the President as he formulates and implements his plans for economic recovery.

The Economic Recovery Advisory Board will provide regular briefings to the President, Vice President and their economic team. The Board will be established initially for a two-year term, after which the President will make a determination on whether to extend the work of the Board.

Members of the Board are distinguished citizens outside the government who are qualified on the basis of achievement, experience, independence, and integrity. The Board will bring a diverse set of perspectives and voices from different parts of the country and different sectors of the economy to bear in the formulation and evaluation of economic policy.

The Board will meet regularly and provide advice directly to the President on the programs to jump-start economic growth and facilitate economic stability. The Board will also focus on how the response to the short-run economic crisis is laying the groundwork for the reforms necessary for longer-run prosperity.

Paul Volcker will serve as Chairman and Austan Goolsbee as Staff Director and Chief Economist.

Members of the Board include:

William H. Donaldson, Chairman, SEC (2003-2005)

Roger W. Ferguson, Jr., President & CEO, TIAA-CREF

Robert Wolf, Chairman & CEO, UBS Group Americas

David F. Swensen, CIO, Yale University

Mark T. Gallogly, Founder & Managing Partner, Centerbridge Partners L.P.

Penny Pritzker, Chairman & Founder, Pritzker Realty Group

Jeffrey R. Immelt, CEO, GE

John Doerr, Partner, Kleiner, Perkins, Caufield & Byers

Jim Owens, Chairman and CEO, Caterpillar Inc.

Monica C. Lozano, Publisher & Chief Executive Officer, La Opinion

Charles E. Phillips, Jr., President, Oracle Corporation

Anna Burger, Chair, Change to Win

Richard L. Trumka, Secretary-Treasurer, AFL-CIO

Laura D’Andrea Tyson, Dean, Haas School of Business at the University of California at Berkeley

Martin Feldstein, George F. Baker Professor of Economics, Harvard University

Economic Advisory Board

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