EIC/Wall Street investigations
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Mar 8, 2013
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The amazing shrinking pile of non-agency mortgage debt

By Matthew Goldstein

Many cash-strapped, unemployed or underemployed people are still struggling with too much consumer and household debt. But there is one kind of debt that is getting smaller and smaller–mortgage bonds issued during the U.S. housing bubble by Wall Street banks and finance firms that isn’t guaranteed by either Fannie Mae of Freddie Mac.

The outstanding dollar value of  so-called private label residential mortgage bonds, or non-agency mortgage debt, is $909 million, according to stats compiled by CoreLogic and mutual fund firm Doubleline Capital. At its peak in July 2007, the total of private label mortgage debt was $2.2 trillion.

Mar 5, 2013
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Ray Dalio went into this year even more bullish than we thought

By Matthew Goldstein

Hedge fund titan Ray Dalio is really bullish on stocks and all things risky–at least he was in early January.

A few weeks ago, our competitors at Bloomberg and The Wall Street Journal did a good job reporting on Dalio’s macro market thesis for 2013 when they got a transcript of an investor call (Bloomberg) and a sneak peak at Bridgewater Associates’ year-end report to investors (WSJ). But after taking my own recent look at Bridgewater’s year-end investor note–book is probably a better description for the 300-page plus bound treatise–you realize that bullish just doesn’t describe Bridgewater’s stance going in 2013.

Mar 4, 2013
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The retailization of the single family home rental play

By Matthew Goldstein

It started slowly but the push by Wall Street into the single family rental market is fast becoming a Main Street play as well.

Last year, one of the big stories on Wall Street and in the U.S. housing market was the push by institutional investors to raise billions of dollars to snap-up foreclosed homes and rent them out while waiting for the right time to sell them. It’s become the biggest “long” bet on housing for private equity giants like Blackstone, which has already spent close to $3 billion buying up more than 16,000 foreclosed homes.

Feb 20, 2013
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The dollars keep rolling in for foreclosed home funds

By Matthew Goldstein

Today, The Wall Street Journal reports that foreign investors have caught the gold rush mentality that surrounds the market for foreclosed homes in the U.S. But domestic-based firms are still doing quite well themselves in raising big dollars to buy-up foreclosed homes with an eye to renting them out before eventually selling them.

A foreclosed home fund managed by Tom Barrack’s Colony Capital recently disclosed in a regulatory filing that it had raised $536.7 million from 54 “accredited” investors. The fund relied on JPMorgan Chase’s wealth management team to do some of the selling.

Feb 19, 2013
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Jim Chanos and the bears come out of hibernation

By Matthew Goldstein 

The year is young, but so far its been a rough one for bearish stock investors with the S&P 500 is up 7.25% The surge in equity prices has left  a lot of short sellers–traders who bet on a stock sliding in value–with glum looks on their faces. And it’s with that bullish backdrop that several dozen of Jim Chanos’ closest friends gather in Miami for the noted short seller’s annual meeting of the bears.

The gathering of 40 or so people from Wednesday through Friday is a chance for Chanos and other like minded investors to kick around their best short ideas. A year ago, there was a lot of talk about shorting companies in the natural gas space.

Feb 12, 2013
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One more try at the Great Refi

By Matthew Goldstein

Don’t be surprised if President Obama includes a line or two in his State of Union address this evening about the need for a plan to allow millions of struggling homeowners whose mortgages are packaged into so-called private label mortgage-backed securities to get a chance to either refinance their loans or restructure them.

The Washington Post is reporting today that mortgage refinancing may be one of the laundry list of items Obama will talk about tonight. And for several months now, investors in private mortgage-securities–deals issued by Wall Street banks and financial firms and not guaranteed by Fannie or Freddie–have been quietly bracing for the Obama administration to move forward with a new refinancing effort.

Feb 6, 2013
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Wall Streeters find life really is greener on the other side

Ex Wall Streeters talk about the better life working at a startup

Here’s a post from UF contributor and intrepid Wall Street reporter Lauren T. LaCapra, who is on assignment:

By Lauren Tara LaCapra

“One last question,” the moderator asked the panel of former Wall Streeters now working for fast-growing tech startups. “Would any of you go back to banking?”

Feb 5, 2013

In lawsuit against S&P, a surprise appearance from Talking Heads

NEW YORK (Reuters) – When the housing market was on the road to nowhere in 2007, one ratings analyst found an unlikely muse: the post-punk band Talking Heads.

The analyst wrote a parody of the rock group’s 1983 hit, “Burning Down the House,” and emailed it to friends. His version of the song ended up in a 128-page lawsuit that the U.S. Department of Justice filed against rating agency Standard & Poor’s late Monday.

Jan 25, 2013

Goldman finds a way past Volcker with new credit fund

NEW YORK, Jan 25 (Reuters) – Goldman Sachs Group is looking
to raise up to $600 million from its wealthy customers for a
publicly traded credit fund that will provide loans to mid-sized
companies – believed to be the first fund of its kind for the
Wall Street bank.

The new fund, in which Goldman (GS.N: Quote, Profile, Research) could invest another
$150 million of its own money, is being structured as a business
development company, an investment vehicle that is specifically
exempt from the so-called Volcker Rule that puts limits on some
activities by Wall Street firms.

Jan 25, 2013

Exclusive: Goldman finds a way past Volcker with new credit fund

NEW YORK (Reuters) – Goldman Sachs Group is looking to raise up to $600 million from its wealthy customers for a publicly traded credit fund that will provide loans to mid-sized companies – believed to be the first fund of its kind for the Wall Street bank.

The new fund, in which Goldman could invest another $150 million of its own money, is being structured as a business development company, an investment vehicle that is specifically exempt from the so-called Volcker Rule that puts limits on some activities by Wall Street firms.