EIC/Wall Street investigations
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Oct 2, 2011

Special Report: A “great haircut” to kick-start growth

NEW YORK (Reuters) – More than three years after the financial crisis struck, the economy remains stuck in a consumer debt trap.

It’s a situation that could take years to correct itself. That’s why some economists are calling for a radical step: massive debt relief. Federal policy makers, they suggest, should broker what amounts to an out-of-court settlement between institutional bond investors, banks and consumer advocates – essentially, a “great haircut” to jumpstart the economy.

Sep 21, 2011

Bond giant PIMCO closing in on first bank deal

NEW YORK (Reuters) – A $2.3 billion investment fund managed by bond giant Pacific Investment Management Co that is largely targeting distressed U.S. banks is trying to get regulatory approval for one of its first major transactions — a deal involving a North Carolina community bank.

The Federal Reserve Bank of Richmond is reviewing an application for a company set-up by the year-old PIMCO Bravo Fund to acquire an ownership stake of roughly 20 percent in ECB Bancorp Inc (ECBE.O: Quote, Profile, Research, Stock Buzz).

Sep 14, 2011

Goldman asset management CIO Domotorffy retires

Sept 14 (Reuters) – Katinka Domotorffy, the head of Goldman
Sachs Group Inc’s (GS.N: Quote, Profile, Research, Stock Buzz) quantitative investment strategies
group, will leave the bank at the end of the year, according to
an internal memo, as one of its biggest hedge funds continues
to suffer from weak performance.

Domotorffy is a Goldman veteran who joined the bank in 1998
as a portfolio manager and researcher.

Sep 11, 2011
via Unstructured Finance

Bank of Asbestos

By Matthew Goldstein

All too much of what we do in financial journalism is rush around to get the “scoop” on some big announcement by some corporate chieftain. Things like, the announcement of a new product, a management reshuffling or a bunch of firings. All important stuff and all stuff that could impact earnings and stock movements. But sometimes the big picture of what really is working for a company or is ailing it, gets lost in the scoop chase.

So that’s why we took a step back to look at some potentially radical solutions for fixing Bank of America, which right now has come to represent much of what remains broken with the U.S. housing market.

Sep 9, 2011

Insight: Extreme makeover BofA: An asbestos solution

NEW YORK (Reuters) – It worked for asbestos so why not for toxic mortgages?

When some look at all of the litigation arising from Bank of America’s big role in the U.S. mortgage mess, they start thinking of asbestos and how thousands of lawsuits arising from that cancer-causing product brought down many manufacturers more than a decade ago.

Sep 9, 2011

Insight – Extreme makeover Bank of America: An asbestos solution

NEW YORK (Reuters) – It worked for asbestos so why not for toxic mortgages? When some look at all of the litigation arising from Bank of America’s big role in the U.S. mortgage mess, they start thinking of asbestos and how thousands of lawsuits arising from that cancer-causing product brought down many manufacturers more than a decade ago.

The solution back then to dealing with claims filed by more than 750,000 workers exposed to asbestos was the creation of dozens of “asbestos settlement trusts,” which have paid out tens of billions dollars in damages. Some of them are still going strong today.

Sep 9, 2011

Extreme makeover Bank of America: An asbestos solution

NEW YORK, Sept 9 (Reuters) – It worked for asbestos so why
not for toxic mortgages?

When some look at all of the litigation arising from Bank of
America’s big role in the U.S. mortgage mess, they start
thinking of asbestos and how thousands of lawsuits arising from
that cancer-causing product brought down many manufacturers more
than a decade ago.

Aug 19, 2011

Insight: The madness of Wall Street

NEW YORK (Reuters) – The best thing to be said of the recent stomach-churning turmoil on Wall Street is that it’s taking place in August, a time of year when many people are lounging at the beach or camping in the woods and not paying attention to stocks.

But for everyone else not on a ‘stockation,’ watching the markets rise and fall like giant ocean swells has been an unnerving experience that some finance professionals worry could reshape investor behavior for months and years to come.

Aug 19, 2011

The madness of Wall Street

NEW YORK, Aug 19 (Reuters) – The best thing to be said of
the recent stomach-churning turmoil on Wall Street is that it’s
taking place in August, a time of year when many people are
lounging at the beach or camping in the woods and not paying
attention to stocks.

But for everyone else not on a ‘stockation,’ watching the
markets rise and fall like giant ocean swells has been an
unnerving experience that some finance professionals worry could
reshape investor behavior for months and years to come.

Aug 14, 2011
via Unstructured Finance

Who changed the financial crisis narrative?

By Matthew Goldstein

So riddle me this: How did we go from blaming “banksters” for all our financial ills to now casting teachers, cops and firefighters as overpaid government slackers who are keeping an economic recovery from picking up steam?

Somewhere, somehow, the narrative of the worst financial crisis since the Great Depression changed. Not too long ago, all the talk was about exotic securities backed by crappy mortgages, inadequate bank regulation, excessive CEO pay and burdensome consumer debt. Now the conversation in Washington and Wall Street is more focused on overly generous pensions for public employees and the levels of government spending on the poor, for education, new roads and middle class health benefits.