EIC/Wall Street investigations
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Oct 26, 2012
via Unstructured Finance

Becoming comfortably numb to income inequality

By Matthew Goldstein and Jennifer Ablan

About a year ago, Nobel Prize-winning liberal economist Joseph Stiglitz made a surprise appearance at the Occupy Wall Street camp site in Zuccotti Park, giving a speech to rally the protestors and support their causes of bringing attention to the economic divide between the 1 percent and everyone else in the U.S.

Today, the protestors in lower Manhattan have all but disappeared with the attention on Occupy Wall Street gone along with it.

Oct 24, 2012

Stiglitz: Obama, Romney still need to address housing market

By Jennifer Ablan and Matthew Goldstein

(Reuters) – Nobel Prize-winning economist Joseph Stiglitz chided U.S. President Barack Obama and Republican presidential candidate Mitt Romney for not seriously addressing the troubled U.S. housing market during the recent series of presidential debates.

The Columbia University economics professor said in an interview with Reuters TV that the two men have shied away from discussing the uneven U.S. housing market recovery because neither has concrete solutions for helping financially strapped homeowners and both are wary of offending the banks.

Oct 18, 2012
via Unstructured Finance

Some Hedge Funds Throwing in Keys as “Landlords”

By Matthew Goldstein and Jennifer Ablan

All year the big money has been talking up one of the more intriguing trades to emerge from the housing crisis: buying up foreclosed homes in large scale and rent those out for several years and then unload them when the price is right. But questions about the so-called rent-to-own trade are being raised now that an early mover in the space, hedge fund giant Och-Ziff Capital, is looking to cash in its chips now and is abandoning the idea of operating foreclosed homes as rental properties for years to come.

Now we’re not quite ready to declare the foreclosed home rent-to-own trade is dead as the tireless, prolific financial bloggers at ZeroHedge did in a good riff on our exclusive story on Och-Ziff’s decision. But Daniel Och’s concern that the income to be generated from renting out foreclosed homes may not be as high as originally anticipated bears close scrutiny because it could spell trouble for other hedge funds, private equity firms and smaller money managers counting on rental income to generate an annual 8 pct or greater return on investment.

Oct 17, 2012

Exclusive: Och-Ziff hedge fund looks to exit landlord business

NEW YORK (Reuters) – One of the first big hedge funds to try to profit from a rebound in the U.S. housing market by investing in foreclosed homes is looking to cash out, even as other institutional investors are still getting in.

Och-Ziff Capital Management Group LLC, the $31 billion hedge fund led by Daniel Och, recently told its investment partner, 643 Capital Management, that it wants to exit from the foreclosed homes business, said several people familiar with the matter.

Oct 16, 2012

Citi’s CEO Pandit exits abruptly after board clash

By Matthew Goldstein, Carrick Mollenkamp and Rob Cox

(Reuters) – Citigroup Inc’s Vikram Pandit quit as chief executive on Tuesday after months of simmering tensions with the board – an abrupt change that surprised investors and employees of the third-largest U.S. bank.

Pandit told Reuters the decision to leave was his own, and that he had been contemplating the move for some time.

Oct 16, 2012

Citi’s Pandit in shock resignation after board clash

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.

Oct 12, 2012
via Unstructured Finance

UF Weekend Reads

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.

Sep 14, 2012
via Unstructured Finance

UF Weekend Reads

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.

Sep 13, 2012
via Unstructured Finance

FHFA is not on an REO speed wagon when it comes to full disclosure

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.

Sep 6, 2012
via Unstructured Finance

Jamie Dimon’s teflon coating

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.