"A shame for our industry"

Vanguard Group chief executive John Brennan on mutual fund performance ads: They're “endemic to our business, and I think that's a shame for our industry.” See Brennan's interview in the Journal of Indexes.

Any analyst coverage better than none

OK, sure, public companies that lose analyst coverage tend to be dogs. But even after controlling for all other factors that might lead to the delisting of the firm, a trio of academics says the drop in coverage leads to a dramatic increase in the probability that the firm will delist. Their study provides evidence in support of the importance of analyst coverage to firms. But the authors note that analysts have little incentive to cover a stock unless there are investment banking or trading opportunities. The companies studied look to be many microcaps. Question: Does this mean that analysts really are effective in defrauding the public into believing that the dog stocks they cover really do have merit?

Credit Rating Agencies at Legal Risk

Are the credit rating agencies at risk for helping structure complex securities? A study reported in the Financial Times says they are. Moody's, Fitch and S&P's say no. But the study's authors say by helping to create deals, the agencies could lose their First Amendment argument against lawsuits.