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Bishop' Bomber Expected To Strike With Real Ammo

The man who calls himself "The Bishop" and who has sent six threatening letters and two dud pipe bombs over the past 18 months is expected to strike again, the Associated Press reports. One of the pipe bombs was sent to American Century on Jan. 31. Then, on Feb. 1, a similar explosive was found in a Chicago office building.

But next time, given that "The Bishop's" letters have become increasingly menacing, the bombs could be real, warns Stratefor counterterrorism expert Fred Burton.

"He's progressing," Burton said. "He's taking his thoughts, which in his mind are reality. He's heading down a garden path of violence. It's almost impossible to be able to tell when he will mail his next devices-but he will."

Even though the post office, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives and local law enforcement are involved and have released a sketch of a suspect in his mid-30s, catching the offender is going to be hard and will probably require the help of the public, Burton said. Postal inspectors are offering a reward of up to $100,000 for information.

As to who the person is, Burton believes he is mentally ill, highly intelligent and a loner, although he might have a family.

Analysts Catering to Hedge Funds at Mutuals' Expense

Analysts at investment banks are giving less time to mutual fund portfolio managers who call them looking for stock insight and more time to hedge funds, Bloomberg reports. The reason is because hedge funds are more lucrative clients, given their needs for prime brokerage, securities loans and complex trades, and managers at investment banks are instructing their analysts to cater to these preferred clients.

According to Greenwich Associates, the average hedge fund pays $33 million a year in commissions, while the average mutual fund pays $16 million, or less than half.

Steven Roukis, for instance, director of research for Matrix Asset Advisors, used to spend half an hour on the phone with analysts five years ago. Today, he said, he's lucky if he even gets five minutes.

"You have to call at off-peak hours, like early in the morning," Roukis said. Michael Gambardella, a well-regarded steel analyst with JPMorgan, confirms that he used to give his time freely to asset managers, even those who weren't clients, but today screens his calls and spends more than half the day speaking to hedge funds.

Ross Miller, a finance professor at the State University of New York at Albany, worries that less research could affect the performance of mutual funds, particularly small fund shops. "Smaller mutual fund managers, who are strongly dependent on sell-side research, will get burned," Miller said. "They'll either get gobbled up, go out of business or become hedge funds."

PowerShares DWA ETF Tracks Peers, Patterns

A new exchange-traded fund from PowerShares and Dorsey Wright & Associates promises to be truly technical, tracking 100 stocks on peer-performance and patterns, rather than executive interviews and financial statements, according to MarketWatch.

"When people hear technical analysis, they think of black magic or something," said Tom Dorsey, president of Dorsey Wright. "But our method is really about measuring supply and demand in the marketplace and quantifying those trends. Our process is very long-term in nature."

If the ETF had been open from 2001, its method would have beaten the S&P 500 8.76% per year on average between 2001 and 2006. Expenses have been capped at 0.60%, and are rebalanced quarterly.

"It's another in the line of ETFs to take a known active strategy and put it into the form of a quantitative index to capture most of that process," said Jim Wiandt, editor of the Journal of Indexes. "It's a trend that's driving the industry."

Dorsey said the fund is not highly correlated to the overall market, and will perform best when markets are either clearly rising or falling, but will do little in a stagnant market. "It's a tool to use in a well-diversified portfolio to manage trends. This isn't designed as a one-stop type of fund," he said.

Sun Life Financial Debuts Income ON Demand'

Sun Life Financial is hoping to reach out to Boomers scared off by the "use it, or lose it" nature of guaranteed annuity income with a new program that allows investors to "store" their income, tax-deferred.