There are lies, darned lines, and ... Some of these figures are wildly off if read without the footnotes.
Ms. White's published speech footnote 1 says that the $63 trillion figure came from an analysis that tended toward double counting. That's generous, as the ICI figure (from 2014 Investment Company Fact Book) is less than half: $30.0 trillion invested worldwide, and "just" $17.1 trillion in the US.
Likewise, footnote 2 says "certain entities" were double counted in coming up with almost 10,000 funds. (The ThinkAdvisor reporting omitted "almost".) The number is actually closer to 7500. M*'s database (using its premium screener and "distinct portfolio only" filter) reports 7,353 distinct mutual funds (and 1672 ETFs), while the ICI reports 7,707 US funds, and 76,200 worldwide.
Ms. White talks about the need for "a more comprehensive approach ... to address the risks associated with ... the use of derivatives [by mutual funds]." Meanwhile, Congress is debating a relaxed approach to the use of derivatives by banks with FDIC-insured money.
When funds use derivatives (or any other vehicle) it's your money - you win or you lose. I'm not one to play fast and loose with my investments, but at least it's the same person who stands to win or lose by these risks. (So clear disclosure might be sufficient - investors can dial up or dial down their risk.) With the banks, it's heads they (their executives and shareholders) win, tails you (the taxpayer/FDIC) lose.

Hi Scott: You are are correct. A further 50% drop to the $25-$30 dollar area would signal something very wrong with the global economy. I won't, however, rule it out.
My point was more that percentage numbers can be deceiving. From a purely mathematical perspective, there's always another 100% left.
I liked Bill Gross's comments on Bloomberg Friday. In effect - the Fed appears to have their heads in the sand (my words - not his) on this deflation question.
Added rambling: There would seem to be strategic opportunities in all the service industries you cite for a good fund manager to make you some money if you have time to wait. I'm optimistic and will increase my allocation to the broadly diversified natural resource sector as we near $50 and $40. On the other hand, these funds will be facing enormous outflows as investors panic and flee. So, it will be a little harder for even the best managers to turn their funds around.

I wrote a thread with some concerns regarding the fracking theme in June: http://www.mutualfundobserver.com/discuss/discussion/13960/some-concerns-with-the-fracking-theme
I didn't think that the concerns would quite lead to this end result, but I do think that:
A. You still stay away from small, aggressive and over-leveraged. Oil feels like it has no bid and it could easily continue lower. If it does, you are already seeing distressed debt for smaller companies. You have $550B in energy debt and many of those companies weren't making money - now they REALLY aren't. There are values already for those with a longer-term time horizon, but I'd really stay with the more mid-to-large players and away from the speculative, smaller, highly indebted ones.
B. There are companies that are not oil companies that have gotten hit because of this. Railroads are down. Obviously, oil by rail is a big story, but railroads aren't going anywhere and oil certainly isn't the majority of what these railroads are carrying.
C. The pipelines have gotten hit but they are not price-sensitive, they are volume sensitive. Many of the pipeline companies that I follow have been positive - Interpipeline (IPPLF) had a great quarter and raised the dividend. Doesn't matter, stock still gets obliterated.
"Oil's lost 50% this year. Next year it can still lose another 50% .... and another 50% on top of that if it wants to."
If that happens, what does the market as a whole do, as that's saying something considerably worse than mere oversupply issues.

FYI: Securities and Exchange Commission Chairwoman Mary Jo White says the Commission is taking a magnifying glass on the regulation of the asset management industry and mutual funds in particular, pointing out that in 2013, 57 million American households, or 46% of those households, are invested in one of the 10,000 U.S. mutual funds that hold more than $63 trillion of assets under management.
Regards,
Ted
http://www.thinkadvisor.com/2014/12/12/secs-white-vows-to-get-tougher-on-mutual-funds?t=portfolio-construction&page_all=1

Hmm ... Very difficult to pull off. Markets can remain irrational longer than most of us can remain solvent. The time needed for a bounce-back can be painfully long as those of us who thought Japan looked cheap in 1997 learned the hard way. It looked even cheaper a decade later. Percentages are funny things. Oil & some producers have lost 50 percent this year. That might imply some kind of floor? Nope. They can still drop another 30, 40, or 50 percent next year if they want to.
It's very hard to time incremental purchases going down. Tendancy is to buy too early, than to throw good money after bad, than to get frustrated and bail at a loss before rewards are realized.
However, rewards can be phenomenal if one gets it right.
Delphi - I've been doing what you recommend with the "play money" segment of my portfolio (less than 30% of total assets). And it hurts. I believe that 3 or 4 years from now I'll be pleased with the results. However, that's not for certain. Get into a serious deflationary spiral and all bets are off.

Reply to Derf:
1. I cannot say or recommend what you should do with regard to buying individual stocks because I do not know how it fits in with your current investment portfolio and temperament. You certainly can purchase or average into some of the ETFs or ETNs that have been beaten down and increase your exposure to the energy sector.
2. Regarding your MF managers: Your MF managers SHOULD be looking for bargains and unjustly beaten down stocks and scaling into them . However, most will act as if they are "deer caught in the headlights" and do nothing until well after the fact because they are seeking a false "margin of safety". AFTER these stocks have bounced back and gained 25% to 50% in a few months they will THEN have their security blankets and begin nibbling. How can you tell which of your MFs have managers that are investors or deer?
Very simple. Take each MF you have and look it up on Morningstar (M*). Click on "Performance" and then click on "Expanded View". This will show your fund's performance year-by-year for the past ten years. Now, go to the year 2009, which is when the bear market ended and the market reversed violently to the upside, and see how your MF did compared to its peers, i.e., compared to the average for its M* sector. If your fund did not outperform its peers in 2009 then its manager was asleep at the switch or frozen with fear and did not buy stocks when they were extreme bargains.
As an example: WSCVX (Walthausen SC Value fund) returned 42.39% in 2009 compared to the M* SCV average of 31.32% in 2009. Clearly, Walthausen scooped up value stocks and the fund lived up to its name. OAKLX (Oakmark Select) is another example of a fund whose manager, Bill Nygren, bought aggressively at the bottom, returning 52.46% versus the LC blend average of 24.29% for that year.

A 50% decline in the price of WTI crude over the past three months without any fundamental change from what has/had occurred throughout the first half of the year, and the extreme selloffs in many energy stocks and other stocks with peripheral association to oil is a gift from the gods. In any given 1-2 year period there is a stock market black swan event that is totally unexpected and unrelated to the fundamentals. Rather, it is an emotion-driven event that takes on a life of its own, overshooting to the upside or downside.

The stock market is a forward discounting mechanism - not backward looking. This decline might be overdone. But, the oversupply/storage and production are real as is the weak economic projections for many countries.
So, there may be a bounce, before continued decline.
"Don't try to catch a falling knife." Dex

I'm glad you posted this separately as I agree with you on a lot of it. I added to CNI today.
I'll also toss in PAGP as an non k-1 alternative to PAA. In terms of MLPs, I own EPD and ETE, both of which offer discounts on reinvested divs. I also own MLP-like Canadian co IPPLF, which also offers a small DRIP discount.
I'll also throw in the commodities exchanges as a long-term holding. ICE has done well through this period.

A 50% decline in the price of WTI crude over the past three months without any fundamental change from what has/had occurred throughout the first half of the year, and the extreme selloffs in many energy stocks and other stocks with peripheral association to oil is a gift from the gods. In any given 1-2 year period there is a stock market black swan event that is totally unexpected and unrelated to the fundamentals. Rather, it is an emotion-driven event that takes on a life of its own, overshooting to the upside or downside. This is an extraordinary investing opportunity and you should have already made your Xmas shopping list and be averaging into the best of the stocks and ETFs that have been decimated.
Examples:
1. Mid and small cap energy stocks: WLL, OAS, CXO, CLR. These are NOT stocks with extraordinary debt or leverage within their sector and they have declined between 50% to 70% in just 3-4 months. WLL already trades well below book value.
2. ETFs: energy exploration & production (PXE, PXI).
MLPs (MLPI, MLPX)
3. MLPs: EPD, MMP, PAA, WPZ. These are companies that transport oil or natural gas and are involved in various aspects of the energy infrastructure. A high percentage of their revenues come from long-term, fee-based contracts with built-in price escalators. They will get paid regardless of the price of WTI crude and the energy demand in the US shows little sign of abating. The U.S. is not in a recession nor does anyone really see one on the horizon based upon recent employment data, retail sales figures, corporate profits, etc., These stocks have sold off about 20% in three months and they pay dividends between 4% to 8% (WPZ).
4. GLOG (GasLog): Off nearly 50% from its high this year, price:book ratio of 1.5 and a nearly 3% dividend. This stock is involved in liquid natural gas cargo transport and the price of WTI crude should not logically result in a loss of 50% NAV. Do you really think the demand for inexpensive natural gas by emerging market countries and European countries that are totally dependent upon imports for their energy needs will evaporate for the remainder of the decade??
5. Transports: Specifically, the railroad stocks: GBX, TRN, CP, CNI. Railroad stocks with ANY exposure to transport of oil have also been dragged down, even if oil transport makes up a small fraction of their total business.
6. Chemical stocks: WLK, LYB. Both stocks are involved in oil refining and production of gasoline additives although this is not a majority of their businesses. Both have lost 45% in the past three months and LYB sports a dividend approaching 4%.
I could go on but the point is obvious: if you are not slowly buying ETFs and top quality stocks that are now on sale by averaging in you need to ask yourself what you are waiting for. Are you the same "investor(s)" that would not buy stocks or ETFs in March 2009 after the S&P 500 had lost 55% of its value because you were waiting for it to decline another 20% ?? Because the CNBC "experts" said the S&P 500 was going to decline to 400 or 500 and the world's financial system was going to collapse and vaporize??
FWIW, I am slowly buying into many of the above names with the understanding and expectation that my initial positions will lose between 5% to 25% over the next month or two. However, that is why one slowly scales into a position. When the turn does come it will literally happen overnight and these stocks will gain 5% to 10% a day for several consecutive days and then you will say that you've missed the turn and it is too late to get in.
These are not dot.com stocks or biotech stocks with promising Phase I or Phase II trials for a single drug. These are established, well run businesses with very real assets and earnings. You will not catch the precise bottom but 2 or 3 years from now these will be very profitable investments and you will ask yourself why you missed this investing opportunity.

No Mike. They'll sort it out. That's probably why they include a separate (earlier) "record date" before the distribution date. Shouldn't have any effect. But a nice thought. You'll get today's price - but not the X-Dividend payment the other shareholders received. Should work out the same.
(I'm assuming the $$ is in some type of tax-sheltered plan like an IRA or 401k. It not, than there are some tax ramifications)

Hank, funny you should say that about PRWCX. I decided to sell my stake in FAAFX on Thursday to shift that money into PRWCX today, which I did. Does that mean I got a 10% bargain on that purchase of PRWCX? I'm always confused on distributions affecting price.

ACDJX was down 7.11% and ARYVX down 5.86%. I'll have some extra shares for the future so as always its not the big loss it seems.

Ouch is right. Tame little PRWCX dropped over 10% today - distribution.

Here is an update about the recent performance of ICMUX. Per M*, its performance since 8/31/14 and the performance of some other funds mentioned in this thread are as follows:
ICMUX: -4.4%
RPHYX: +0.3%
RSIVX: -0.8%
DLINX: -0.6%
M* High Yield Bond Index: -4.4%
Per M*, ICMUX has an effective duration of only 1.19 years and has 34% allocated to cash. But, its loss since 8/31/14 is as great at M*'s high yield bond index!
Looking at their holdings, there is a substantial allocation to the energy sector including the top two holdings. This probably explains the size of the loss.
Perhaps this fund will rebound quickly and demonstrate the difference between volatility and risk. Allocating some of their cash at the right time could help.
But, recent performance suggests ICMUX is a market cycle fund and not a fund for someone looking for a smooth ride and an easy exit if the need might arise to sell shares in a relatively short period of time.

http://blogs.barrons.com/incomeinvesting/2014/12/12/alaska-north-dakota-wyoming-munis-at-risk-from-falling-oil/?mod=BOL_hp_blog_ii
Something for the muni fans like Dex and I to think about. Puerto Rico is a junk muni while the others are investment grade. Still, if munis ever feel the pain of falling oil, the junk credits will get hit the hardest.

FYI:
Regards,
Ted
WSJ Slant: http://www.wsj.com/articles/u-s-stock-futures-drop-along-with-oil-prices-1418390833
Bloomberg Slant: http://www.bloomberg.com/news/print/2014-12-12/u-s-index-futures-fall-after-s-p-500-rebound-as-oil-outlook-cut.html
Reuters Slant: http://www.reuters.com/assets/print?aid=USKBN0JP1DA20141212
MarketWatch Slant: http://www.marketwatch.com/story/us-stocks-end-with-biggest-weekly-decline-in-years-2014-12-12
Markets At A Glance: http://markets.wsj.com/us
Sector Tracker: http://www.sectorspdr.com/sectorspdr/tools/sector-tracker

http://www.marketwatch.com/story/us-producer-prices-show-broad-based-declines-in-november-2014-12-12
Analysts said the weak inflation trend was likely to continue until next year.

Probably the same analysts and economists (ex Gundlach) who were almost universal in their predictions that interest rates had only one way to go in 2014 and that was up. Which analysts and economists thought the big market in 2014 would be junk muni bonds? Price shot out of the gate in January 2014 and then months later the analysts and economists all jumped on the price bandwagon trying to explain fundamentally why it was such a strong bull market.

http://www.marketwatch.com/story/us-producer-prices-show-broad-based-declines-in-november-2014-12-12
Analysts said the weak inflation trend was likely to continue until next year.

US 10 year at 2.11% the 52 week low is 1.91%
When will it hit 1%?
Germany, Spain, Italy, UK all lower then the US!

A close below 2% and I pay Heezsafe $250 or if he has disappeared, I simply contribute to David and the board. This will be less than 1/10 of 1% of what I made in junk munis this year. The moral of the story is trade what you see, not what you think!! In other words, go with price and only price and leave your opinions and beliefs (and especially those of the experts) behind. No way did I ever think rates would get this low. In fact, I was among the mass of misinformed who thought rates had only one way to go at the beginning of the year and that was up.

US 10 year at 2.11% the 52 week low is 1.91%
When will it hit 1%?
Germany, Spain, Italy, UK all lower then the US!