UPDATE: IMF Cuts Global Growth Outlook to 3.4% Jul 24, 2014 11:08AM

(Updated - July 24, 2014 11:08 AM EDT)

IMF sees 3.4 percent world growth this year, versus 3.6 percent in April.

UPDATE - Some highlights from the updated World Economic Outlook:

• The global growth projection for 2014 has been marked down by 0.3 percent to 3.4 percent, reflecting both the legacy of the weak first quarter, particularly in the United States, and a less optimistic outlook for several emerging markets. With somewhat stronger growth expected in some advanced economies next year, the global growth projection for 2015 remains at 4 percent.1/

• Global growth is expected to rebound from the second quarter of 2014, as some of the drivers underlying first quarter weakness, such as the inventory correction in the United States, should have only temporary effects, and others should be offset by policies, including in China. But the first-quarter setback will only be partially offset.

• Downside risks remain a concern. Increased geopolitical risks could lead to sharply higher oil prices. Financial market risks include higher-than-expected U.S. long-term rates and a reversal of recent risk spread and volatility compression. Global growth could be weaker for longer, given the lack of robust momentum in advanced economies despite very low interest rates and the easing of other brakes to the recovery. In some major emerging market economies, the negative growth effects of supply-side constraints and the tightening of financial conditions over the past year could be more protracted.

• In many advanced and emerging market economies, structural reforms are urgently needed to close infrastructure gaps, strengthen productivity, and lift potential growth.


UPDATE: IMF Cuts Global Growth Outlook to 3.4% Jul 24, 2014 11:08AM

(Updated - July 24, 2014 11:08 AM EDT)

IMF sees 3.4 percent world growth this year, versus 3.6 percent in April.

UPDATE - Some highlights from the updated World Economic Outlook:

• The global growth projection for 2014 has been marked down by 0.3 percent to 3.4 percent, reflecting both the legacy of the weak first quarter, particularly in the United States, and a less optimistic outlook for several emerging markets. With somewhat stronger growth expected in some advanced economies next year, the global growth projection for 2015 remains at 4 percent.1/

• Global growth is expected to rebound from the second quarter of 2014, as some of the drivers underlying first quarter weakness, such as the inventory correction in the United States, should have only temporary effects, and others should be offset by policies, including in China. But the first-quarter setback will only be partially offset.

• Downside risks remain a concern. Increased geopolitical risks could lead to sharply higher oil prices. Financial market risks include higher-than-expected U.S. long-term rates and a reversal of recent risk spread and volatility compression. Global growth could be weaker for longer, given the lack of robust momentum in advanced economies despite very low interest rates and the easing of other brakes to the recovery. In some major emerging market economies, the negative growth effects of supply-side constraints and the tightening of financial conditions over the past year could be more protracted.

• In many advanced and emerging market economies, structural reforms are urgently needed to close infrastructure gaps, strengthen productivity, and lift potential growth.


SEC Adopts Money Market Fund Reform Rules Jul 23, 2014 02:39PM

The Securities and Exchange Commission today adopted amendments to the rules that govern money market mutual funds. The amendments make structural and operational reforms to address risks of investor runs in money market funds, while preserving the benefits of the funds.

Today’s rules build upon the reforms adopted by the Commission in March 2010 that were designed to reduce the interest rate, credit and liquidity risks of money market fund portfolios. When the Commission adopted the 2010 amendments, it recognized that the 2008 financial crisis raised questions of whether more fundamental changes to money market funds might be warranted.

The new rules require a floating net asset value (NAV) for institutional prime money market funds, which allows the daily share prices of these funds to fluctuate along with changes in the market-based value of fund assets and provide non-government money market fund boards new tools – liquidity fees and redemption gates – to address runs.

“Today’s reforms fundamentally change the way that money market funds operate. They will reduce the risk of runs in money market funds and provide important new tools that will help further protect investors and the financial system,” said SEC Chair Mary Jo White. “Together, this strong reform package will make our markets more resilient and enhance transparency and fairness of these products for America’s investors.”

With a floating NAV, institutional prime money market funds (including institutional municipal money market funds) are required to value their portfolio securities using market-based factors and sell and redeem shares based on a floating NAV. These funds no longer will be allowed to use the special pricing and valuation conventions that currently permit them to maintain a constant share price of $1.00. With liquidity fees and redemption gates, money market fund boards have the ability to impose fees and gates during periods of stress. The final rules also include enhanced diversification, disclosure and stress testing requirements, as well as updated reporting by money market funds and private funds that operate like money market funds.

The final rules provide a two-year transition period to enable both funds and investors time to fully adjust their systems, operations and investing practices.

Norm Champ, director of the SEC’s Division of Investment Management, said, “Today’s adoption of final money market fund reforms represents a significant additional step to address a key area of systemic risk identified during the financial crisis. These reforms are important both to investors who use money market funds as a cash management vehicle and to the corporations, financial institutions, municipalities and others that use them as a source of short-term funding.”

The SEC today also issued a related notice proposing exemptions from certain confirmation requirements for transactions effected in shares of floating NAV money market funds. Additionally, the SEC re-proposed amendments to the Commission’s money market fund rules and Form N-MFP to address provisions that reference credit ratings. The re-proposed amendments would implement section 939A of the Dodd-Frank Wall Street and Consumer Protection Act of 2010, which requires the Commission to review its rules that use credit ratings as an assessment of credit-worthiness, and replace those credit-rating references with other appropriate standards.

The rules adopted today will be effective 60 days after their publication in the Federal Register, and the re-proposal will have a 60-day public comment period following its publication in the Federal Register.


UPDATE: FAA Extends Israel Flight Restrictions (DAL) (AAL) (UAL) Jul 23, 2014 12:36PM

(Updated - July 23, 2014 12:36 PM EDT)

FAA extends Israel flight restrictions.

UPDATE - The FAA also released a statement from July 22nd, which is reproduced below:

At 12:15 EDT on July 22, 2014, the FAA issued a Notice to Airmen (NOTAM) informing U.S. airlines that they are prohibited from flying to or from Israel's Ben Gurion International Airport for a period of up to 24 hours. The notice was issued in response to a rocket strike which landed approximately one mile from Ben Gurion International Airport on the morning of July 22, 2014. The NOTAM applies only to U.S. operators, and has no authority over foreign airlines operating to or from the airport.

The FAA immediately notified U.S. carriers when the agency learned of the rocket strike and informed them that the agency was finalizing a NOTAM.

The FAA will continue to monitor and evaluate the situation. Updated instructions will be provided to U.S. airlines as soon as conditions permit, but no later than 24 hours from the time the NOTAM went into force.

The text of the NOTAM reads:

!FDC 4/3630 ZZZ PART 1 OF 2 SECURITY ISRAEL POTENTIALLY HAZARDOUS SITUATION—ISRAEL AIRSPACE DUE TO THE POTENTIALLY HAZARDOUS SITUATION CREATED BY THE ARMED CONFLICT IN ISRAEL AND GAZA, ALL FLIGHT OPERATIONS TO/FROM BEN GURION INTERNATIONAL AIRPORT (LLBG) BY U.S. OPERATORS ARE PROHIBITED UNTIL FURTHER ADVISED. A. APPLICABILITY. THIS NOTAM APPLIES TO ALL U.S. AIR CARRIERS OR COMMERCIAL OPERATORS, ALL PERSONS EXERCISING THE PRIVILEGES OF AN AIRMAN CERTIFICATE ISSUED BY THE FAA EXCEPT SUCH PERSONS OPERATING U.S.-REGISTERED AIRCRAFT FOR A FOREIGN AIR CARRIER, AND ALL OPERATORS OF AIRCRAFT REGISTERED IN THE UNITED STATES EXCEPT WHERE THE OPERATOR OF SUCH AIRCRAFT IS A FOREIGN AIR CARRIER. B. PERMITTED OPERATIONS. THIS NOTAM DOES NOT PROHIBIT PERSONS DESCRIBED IN PARAGRAPH A FROM CONDUCTING FLIGHT OPERATIONS WITHIN THE TERRITORY AND AIRSPACE OF ISRAEL WHEN SUCH OPERATIONS ARE AUTHORIZED EITHER BY ANOTHER AGENCY OF THE UNITED STATES GOVERNMENT WITH THE APPROVAL OF THE FAA OR BY AN EXEMPTION ISSUED BY THE ADMINISTRATOR. 1407221615-1407231615EST END PART 1 OF 2

!FDC 4/3630 ZZZ PART 2 OF 2 SECURITY OPERATORS SHOULD CALL THE DOMESTIC EVENTS NETWORK (DEN) AT 202-493-5107 FOR AUTHORIZATION. C. EMERGENCY SITUATIONS. IN AN EMERGENCY THAT REQUIRES IMMEDIATE DECISION AND ACTION FOR THE SAFETY OF THE FLIGHT, THE PILOT IN COMMAND OF AN AIRCRAFT MAY DEVIATE FROM THIS NOTAM TO THE EXTENT REQUIRED BY THAT EMERGENCY. THIS NOTAM WILL BE UPDATED WITHIN 24 HOURS, OPERATORS SHOULD CONTINUE TO MONITOR U.S. NOTAMS FOR CHANGES OR UPDATES. 1407221615-1407231615EST END PART 2 OF 2


UPDATE: FAA Extends Israel Flight Restrictions (DAL) (AAL) (UAL) Jul 23, 2014 12:36PM

(Updated - July 23, 2014 12:36 PM EDT)

FAA extends Israel flight restrictions.

UPDATE - The FAA also released a statement from July 22nd, which is reproduced below:

At 12:15 EDT on July 22, 2014, the FAA issued a Notice to Airmen (NOTAM) informing U.S. airlines that they are prohibited from flying to or from Israel's Ben Gurion International Airport for a period of up to 24 hours. The notice was issued in response to a rocket strike which landed approximately one mile from Ben Gurion International Airport on the morning of July 22, 2014. The NOTAM applies only to U.S. operators, and has no authority over foreign airlines operating to or from the airport.

The FAA immediately notified U.S. carriers when the agency learned of the rocket strike and informed them that the agency was finalizing a NOTAM.

The FAA will continue to monitor and evaluate the situation. Updated instructions will be provided to U.S. airlines as soon as conditions permit, but no later than 24 hours from the time the NOTAM went into force.

The text of the NOTAM reads:

!FDC 4/3630 ZZZ PART 1 OF 2 SECURITY ISRAEL POTENTIALLY HAZARDOUS SITUATION—ISRAEL AIRSPACE DUE TO THE POTENTIALLY HAZARDOUS SITUATION CREATED BY THE ARMED CONFLICT IN ISRAEL AND GAZA, ALL FLIGHT OPERATIONS TO/FROM BEN GURION INTERNATIONAL AIRPORT (LLBG) BY U.S. OPERATORS ARE PROHIBITED UNTIL FURTHER ADVISED. A. APPLICABILITY. THIS NOTAM APPLIES TO ALL U.S. AIR CARRIERS OR COMMERCIAL OPERATORS, ALL PERSONS EXERCISING THE PRIVILEGES OF AN AIRMAN CERTIFICATE ISSUED BY THE FAA EXCEPT SUCH PERSONS OPERATING U.S.-REGISTERED AIRCRAFT FOR A FOREIGN AIR CARRIER, AND ALL OPERATORS OF AIRCRAFT REGISTERED IN THE UNITED STATES EXCEPT WHERE THE OPERATOR OF SUCH AIRCRAFT IS A FOREIGN AIR CARRIER. B. PERMITTED OPERATIONS. THIS NOTAM DOES NOT PROHIBIT PERSONS DESCRIBED IN PARAGRAPH A FROM CONDUCTING FLIGHT OPERATIONS WITHIN THE TERRITORY AND AIRSPACE OF ISRAEL WHEN SUCH OPERATIONS ARE AUTHORIZED EITHER BY ANOTHER AGENCY OF THE UNITED STATES GOVERNMENT WITH THE APPROVAL OF THE FAA OR BY AN EXEMPTION ISSUED BY THE ADMINISTRATOR. 1407221615-1407231615EST END PART 1 OF 2

!FDC 4/3630 ZZZ PART 2 OF 2 SECURITY OPERATORS SHOULD CALL THE DOMESTIC EVENTS NETWORK (DEN) AT 202-493-5107 FOR AUTHORIZATION. C. EMERGENCY SITUATIONS. IN AN EMERGENCY THAT REQUIRES IMMEDIATE DECISION AND ACTION FOR THE SAFETY OF THE FLIGHT, THE PILOT IN COMMAND OF AN AIRCRAFT MAY DEVIATE FROM THIS NOTAM TO THE EXTENT REQUIRED BY THAT EMERGENCY. THIS NOTAM WILL BE UPDATED WITHIN 24 HOURS, OPERATORS SHOULD CONTINUE TO MONITOR U.S. NOTAMS FOR CHANGES OR UPDATES. 1407221615-1407231615EST END PART 2 OF 2


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