Oct 16 (Reuters) – Citigroup Inc Chief Executive
Vikram Pandit resigned abruptly on Tuesday after months of
simmering tensions with the board of directors, a shocking
change at the top of the No. 3 U.S. bank.
A statement from Chairman Michael O’Neill said Michael
Corbat, previously chief executive for Europe, Middle East and
Africa, would succeed Pandit as CEO and as a board member.
By Sam Forgione
This week’s Weekend Reads may drive you back to the big news of the week: The Debates.
Just as the candidates’ tone and tenor seemed to drive judgments as to who won and lost, some stories were written about sparring between politicians and bankers, billionaires on whether a bankrupt Mexican company should be let off the hook, the banks and the foreclosed-upon, and the more milder subject of volatility investing. In the case of the Foreign Policy and DealBook links, the attitudes of the parties involved seem more important than their logic. And a winner and a loser probably won’t come to you. At least here, unlike in the voting booths, you can stay undecided.
So it appears Uncle Ben a/k/a Fed Reserve Chairman Ben Bernanke finally gets it: to fix the U.S. economy, you need to fix housing. The trouble is the Fed’s remedy of buying $40 billion worth of mortgage backed securities each month may not do the trick.
Bernanke argues that buying MBS will push mortgage rates even lower–something that will spur loan refinancings and make it easier for people to buy a home. He believes a rush of new home buying will spur home construction and create job, jobs, jobs.
By Matthew Goldstein
The FHFA continues to reveal as little as possible about its pilot project of selling foreclosed homes to private investors in bulk sales.
With surprisingly little fanfare, the Federal Housing Agency announced this week that Pacifica Companies, a little-known San Diego investment firm, is the first company to emerge as the winner in the pilot project. Pacifica is buying 699 single-family homes that are part of Fannie Mae’s REO portfolio in Florida.
By Matthew Goldstein and Jennifer Ablan
Jamie Dimon’s coat of teflon is wearing well, even as the criminal and regulatory investigation into the London Whale trading scandal deepens.
Shares of JPMorgan Chase, which plunged more than 20 percent in the days after the bank revealed in May that the trading losses were much worse than previously believed, have rallied back. The stock is now trading around $38.66 a share. On May 10, when the bank disclosed after the bell that it had lost at least $2 billion on derivatives bets made by a group of London-based traders, the stock closed at around $40.
By Matthew Goldstein and Jennifer Ablan
There’s nothing surprising about FHFA head Ed DeMarco’s decision to nix the idea of writing down some of the debt owed by cash-strapped homeowners on mortgages guaranteed by Fannie and Freddie. DeMarco, whose agency regulates Fannie and Freddie, has been a consistent opponent of principal reductions–something we pointed out last October in our story on the need for a “great haircut” on consumer loans and including student and mortgage debt to stimulate the economy.
But DeMarco’s renewed opposition comes at a time that there is a growing consensus that something needs to be done on the housing front to get the U.S. economy going, as opposed to simply churning along at the current anemic rate of growth. More and more economists are saying that reducing mortgage debt will not only reduce foreclosures, it will give ordinary Americans more money to spend on goods and services.
(Reuters) – Oliver Chang, the former head of U.S. housing strategy at Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz), on Wednesday announced the opening of an investment firm that intends to spend up to $1 billion to acquire distressed, single-family homes over the next two years.
Sylvan Road Capital is launching with a $300 million investment from an undisclosed private equity firm, the new firm said.
Jenn Ablan likes to tell me that people are always writing about PIMCO and Bill Gross, the long reigning “king of bonds.” And when you think of it there’s a lot of truth to that assertion.
Gross’ mammoth $263 billion Total Return Fund gets endless coverage because–by its very size–it really is the bond market. It’s one reason why so much ink is spilled whenever the Total Return Fund has a month where investors pull more money out of the fund than put in. And it’s why there’s so much analysis of what Gross & Co. are doing with Treasuries and mortgage-backed securities–and whether they are using lots of leverage and derivatives to boost exposures.
July 27 (Reuters) – California Lieutenant Governor Gavin
Newsom on Friday warned influential investor group Securities
Industry and Financial Markets Association to “cease making
threats to the local officials of San Bernardino County” over a
plan to use eminent domain to seize underwater mortgages from
San Bernardino County, located east of Los Angeles, and some
of its towns have set up a joint authority that would use the
power of eminent domain to forcibly purchase distressed
mortgages. Rather than evict homeowners through foreclosure, the
public-private entity would offer residents fresh mortgages with
July 22 (Reuters) – U.S. prosecutors and European regulators
are close to arresting individual traders and charging them with
colluding to manipulate global benchmark interest rates,
according to people familiar with a sweeping investigation into
the rigging scandal.
Federal prosecutors in Washington, D.C., have recently
contacted lawyers representing some of the suspects to notify
them that criminal charges and arrests could be imminent, said
two of those sources, who asked not to be identified because the
investigation is ongoing.