Bank of America Corp. BAC -0.50% reached an $11.6 billion settlement with mortgage-finance giant Fannie Mae FNMA +8.37% to settle a long-running standoff over nearly a decade's worth of home loans, the bank's latest bid to resolve its biggest hangover from the acquisition of Countrywide Financial Corp. five years ago.
Fannie Deal Resolves a Bank of America Mortgage Headache - WSJ.com
Monday, January 7, 2013
Sunday, January 6, 2013
Swiss bank Wegelin to close after US tax evasion fine
Switzerland's oldest bank is to close permanently after pleading guilty in a New York court to helping Americans evade their taxes.
Wegelin, which was established in 1741, has also agreed to pay $57.8m (£36m; 44m euros) in fines to US authorities.
It said that once this was completed, it "will cease to operate as a bank".
The bank had admitted to allowing more than 100 American citizens to hide $1.2bn from the Internal Revenue Service for almost 10 years.
Wegelin, based in the small Swiss town of St Gallen, started in business 35 years before the US declaration of independence.
It becomes the first foreign bank to plead guilty to tax evasion charges in the US.
Other Swiss banks have in recent years moved to prevent US citizens from opening offshore accounts.
US Attorney Preet Bharara said: "The bank wilfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from US law enforcement."
He added that it was a "watershed moment in our efforts to hold to account both the individuals and the banks - wherever they may be in the world - who are engaging in unlawful conduct that deprives the US Treasury of billions of dollars of tax revenue".
Otto Bruderer, a managing partner at the bank, admitted that Wegelin had sheltered US clients from tax between 2002 and 2010, and said it was aware that its conduct had been "wrong".
Mr Burderer's further admission that assisting tax evasion was common practice in Switzerland has caused huge concern among the Swiss banking community, according to the BBC's Switzerland correspondent, Imogen Foulkes.
"Some Swiss financial analysts are already speculating that Wegelin's $58m fine, which many had expected to be higher, was kept low by the US authorities in return for Wegelin clearly implicating the rest of the Swiss banking community in tax evasion," she said.
Inevitable demise
Wegelin effectively ceased to function as a Swiss bank almost a year ago.
US criminal accusations against three of its executives prompted the bank to sell off its core Swiss and other non-US businesses in January 2011.
The rushed sale protected Wegelin's non-US clients from the fall-out of any legal battle, and reflected fears that few clients would want to continue doing business with a bank being pursued by the US anyway.
The businesses were bought by Raiffeisen Bank, Switzerland's co-operative bank, which has since severed the few business ties that it had with the US.
The sale left Wegelin responsible only for its American clients, including those at the centre of the US authorities' probe.
Wegelin as an institution was then itself indicted by US authorities in February last year, and later declared a fugitive from justice when the bank's executives failed to appear in a US court.
The bank had vowed to fight the charges, claiming that because it only had branches in Switzerland, it was bound only by its home country's relaxed banking laws.
Its decision to cave in, and wind down its one remaining business, has made the bank's demise inevitable.
"Usually when you cave in to the USA, you do it because you just want to get rid of it," said Dr Peter V Kunz, an economic law professor at the University of Bern.
Having sold off all its non-US businesses, Mr Kunz believes the bank's partners would have been keen to end a potentially interminable legal dispute with the US in order to recover as much of the sale proceeds as possible from what had in effect become a shell company.
The desire to end the legal battle would have been given added pique by the fact that Wegelin's partners have personal financial liability for the bank.
'Aggressively pursuing'
Jeffrey Neiman, a former US federal prosecutor who was involved in a previous investigation into Swiss banks, said: "It is unclear whether the bank was required to turn over American client names who held secret Swiss bank accounts.
"What is clear is that the Justice Department is aggressively pursuing foreign banks who have helped Americans commit overseas tax evasion."
It remains to be seen whether US authorities will continue with, or drop, parallel charges against three Wegelin bankers, Michael Berlinka, Urs Frei and Roger Keller.
The decision to throw in the towel also marks a turnaround for Konrad Hummler, Wegelin's managing director since 1991, and one of the partners whose own personal finances were potentially at stake.
Mr Hummler, who is also chairman of the Swiss daily newspaper Neuer Zuercher Zeitung, has previously been unusually outspoken among Swiss bankers in calling for the country's authorities to block any disclosure of banking client details to the US authorities.
The Wegelin case comes four years after a far larger Swiss bank, UBS, agreed to pay a $780m fine to US authorities related to tax evasion charges. UBS also agreed to reveal the details of US account holders.
However, UBS neither pleaded nor was found guilty. Instead it and US prosecutors came to what is called a deferred prosecution agreement, with the fine being paid in exchange for the charges being dropped.
Switzerland's other major bank, Credit Suisse - with over a trillion dollars in total assets and another trillion in clients' money - remains under investigation by the US authorities, as does another high profile bank, Julius Baer, which is about a fifth of the size of Credit Suisse, as well as 11 other mainly local, cantonal banks.
Friday, January 4, 2013
Barter Currency "Tem" used in Greece to beat economic crisis
It's been a busy day at the market in downtown Volos. Angeliki Ioanitou has sold a decent quantity of olive oil and soap, while her friend Maria has done good business with her fresh pies.
But not a single euro has changed hands – none of the customers on this drizzly Saturday morning has bothered carrying money at all. For many, browsing through the racks of second-hand clothes, electrical appliances and homemade jams, the need to survive means money has been usurped.
"It's all about exchange and solidarity, helping one another out in these very hard times," enthused Ioanitou, her hair tucked under a floppy felt cap. "You could say a lot of us have dreams of a utopia without the euro."
Where The Jobs Are: "55 And Older"
A good jobs report? Sure, if one is 55 and over. In December the American jobs gerontocracy continued its relentless course, and as the two charts below summarize since Obama's first term, some 2.7 million jobs in the 16-55 year old category have been lost. The "offset": 4 million jobs for Americansbetween 55 and 69. For all those young people graduating from college (with $150,000 in student loans) who are unable to get a job, here is our advice: tell your parents, and grandparents, to retire already. Oh wait, they can't because Bernanke destroyed their savings. Oops - better luck next time.
Job "gains" for all Americans 54 and younger vs those 55 and older:
And the same broken down by segment:
Source: BLS
Busy January For Europe - Complete Monthly Event Calendar
Investor relief that the US fiscal cliff has been averted and optimism that the political compromise will make a small positive contribution to 2013 GDP are, for now at least, making investors forget about longer-term implications for debt sustainability and (temporarily) relax on euro matters. The Italian general election is over seven weeks away and until then the focus will probably remain on US fiscal developments (or FOMC expectations). However, European debt repayments are expected to top EUR40 billion in January and following today's German auction the onslaught of European auctions begins along with the ECB meeting next week (no rate change expected) followed soon after by the Eurogroup finance minister meetings. Plenty of headline-risk worthy dates here...
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Thursday, January 3, 2013
EES: Currency Markets mixed ahead of NFP
Data was released indicating that applications for jobless benefits increased 10,000 to 372,000 in the week ended Dec. 29, the Labor Department reported today in Washington. The Euro (FXE) was down on this news. It comes ahead of tomorrow's Non-Farm Payroll release, notably the most significant economic data release in currency markets (not including central bank or interest rate announcements).
The Euro and Yen (FXY) traded off their highs. The Yen has been on a downward spiral since a new government in Japan announced plans to strategically debase the currency.
http://seekingalpha.com/article/1092991-currency-markets-mixed-ahead-of-nfp
Tuesday, January 1, 2013
2013 brings in new laws, new regulations
Some new laws in 2013:
- Same-sex couples in Maryland will be able to marry.
- California clergy members will not have to perform same-sex marriages if they object.
- Partial birth abortion by physicians and non-physicians will not be performed in New Hampshire except to save the life of the mother.
- Sex offenders in Illinois will not be able to dress up as Santa Claus or the Easter Bunny or give out candy during Halloween.
- Employers in Oregon will not be allowed to advertise a job opening if they won't consider applicants who are unemployed.
http://www.cnbc.com/id/100335341
http://www.breitbart.com/Breitbart-TV/2012/12/31/California-Rings-In-New-Year-With-800-New-Laws
Homeowners behind on their mortgage payments and negotiating with their banks to find a way to work things out won't have to worry about getting a surprise foreclosure notice.
Women will have expanded access to birth control, as registered nurses will be able to dispense contraceptives such as the pill.
Apartment dwellers concerned about the possibility of carbon monoxide poisoning will be able to breathe easier.
Employers will not be allowed to require workers or job applicants to divulge their social media accounts or provide passwords to them.
Those are among the legal changes in California that will kick in Tuesday as a result of some of the 876 laws signed by Gov. Jerry Brown in 2012. By historic standards it was a somewhat low number but was the most new laws put on the books in the state since 2006.
The following is a list of some new laws. More information on them is available by searching the bill number under "Bill information" at http://www.leginfo.ca.gov.
- Bankruptcy protection: AB 929 permits debtors to keep items such as tools of their trade and an automobile so that they will be better positioned to engage in work or seek employment after going through a bankruptcy.
- Bear hunting: SB 1221 bars hunters from using trained dogs to track bears, chase them into trees and bay to summon hunters to shoot the bears.
- Birth control: AB 2348 authorizes registered nurses to dispense hormonal contraceptives such as the pill, patch and ring. Women will not have to see a doctor but will have to undergo a routine health assessment.
- Boat registration fee: AB 2443 requires owners of boats used in freshwater bodies to pay an additional registration fee of up to $10 — the precise amount is not yet set — to pay for inspection and infestation control programs to prevent the spread of invasive mussels in state waterways.
- Carbon monoxide: The final phase of a 2010 law, SB 183, starts Tuesday when owners of apartment complexes will have to have installed carbon monoxide detectors in every dwelling unit with a fossil-fuel-burning furnace or appliance, fireplace or attached garage.
- Drug overdose reporting: AB 472 allows any person to report a drug-related overdose to authorities or seek medical assistance for a drug overdose without being subject to arrest on suspicion of possession of or being under the influence of illegal drugs. People would not have immunity from prosecution for laws involving illegal sales or forcible administration of drugs.
- Electronic proof of insurance: AB 1708 allows drivers to use electronic proof-of-insurance documents displayed on mobile devices when asked for that information by a police officer responding to an auto accident or issuing a traffic citation. Motorists will continue to get paper proof-of-insurance forms from their insurance companies unless they request otherwise.
- Homeowners' bill of rights: SB 900 institutes new protections for homeowners seeking to avoid losing their homes to foreclosure. Among other provisions, it prohibits lenders from initiating the foreclosure process during the time an application for loan modification is being reviewed and requires lenders to provide homeowners with a single point of contact as they navigate their request for a loan modification.
- Legacy license plates: Under AB 1658, the Department of Motor Vehicles will start accepting applications for specialized licenses plates that replicate plates from the past. Styles from the 1950s, '60s and '70s will be available. The DMV will not begin production unless at least 7,500 are ordered.
- Off-road vehicles: Clarifying a previous law that goes into effect Tuesday and mandates that passengers in off-road vehicles must sit only in places designed by the manufacturer to be seats, AB 1266 removes a previous requirement that passengers in such seats have both feet on the floorboard.
- Pickets at funerals: SB 661 makes it a misdemeanor to engage in picketing targeted at a funeral from one hour before the services begin to one hour after they end.
- Religious attire: AB 1964 adds religious dress and grooming practices to categories protected by fair housing and employment laws.
- Same-sex marriage: SB1140 specifies that if same-sex marriages become legal in California, no priest, minister, rabbi or authorized person of any religious denomination could be required to solemnize a marriage that is contrary to the tenets of his or her faith.
- Social media: AB 1844 prohibits employers from requiring or requesting an employee or job applicant to disclose a user name or password for the purpose of accessing personal social media accounts, or to access his or her accounts in the presence of the employer. Employees cannot be discharged, disciplined or retaliated against for failing to comply with such requests.
- Sporting events: AB 2464 requires the owner of any professional sports facility, such as baseball stadiums or basketball arenas, to post written notices with a text message and telephone number that spectators may use to contact security to report disturbances or a violent act.
Read more: http://www.vcstar.com/news/2012/dec/30/new-year-to-bring-876-new-laws-to-california/#ixzz2Gk2gnXMD- vcstar.com
Monday, December 31, 2012
EES: While The World Watches Fiscal Cliff, Shinzo Abe Creates Fiscal Disaster In Japan
The Yen is down 12% against the U.S. Dollar since September. While most are watching the fiscal cliff situation win Washington, Shinzo Abe is creating a fiscal canyon in Japan. Shinzo Abe has been elected with an effective platform of devaluing the Yen.
http://seekingalpha.com/article/1087451-while-the-world-watches-fiscal-cliff-shinzo-abe-creates-fiscal-disaster-in-japan
http://seekingalpha.com/article/1087451-while-the-world-watches-fiscal-cliff-shinzo-abe-creates-fiscal-disaster-in-japan
Sunday, December 30, 2012
Shinzo Abe fuels fire of Currency War in Japan
What has been a building theme for some time, central bank intervention in the markets, is going to go into overdrive in 2013, with the brewing currency war among the major central banks as each tries to devalue its way to prosperity. But don’t blame central bankers (at least not completely). Political leaders deserve a big dollop of the blame as well.
The unappreciated spark to this currency-war trend is something noted today by Opinion page columnist Dan Henniger: “A reality has become too obvious for the world’s dazed inhabitants not to notice: The greatest threat to the upward arc of human progress is the collapse of public policy making. That is the biggest cliff of all.”
In Japan, they’ve elected the seventh prime minister in six years. In Europe, they’ve raised kicking the can to an art form. In the U.S., the fiscal cliff debate shows how deadlocked, and ineffective, the government has become. In the wake of this, central bankers are stepping into the breach.
Now, this isn’t necessarily a bad thing — for equities. Indeed, stocks have had quite a nice run since Fed Chairman Ben Bernanke launched his big quantitative easing program in March 2009. So long as the whole intricate Rube Goldberg machine doesn’t collapse, all this central bank pumping should be good for stocks. Indeed Wells Capital’s Jim Paulsen, one of the biggest bulls out there, sees the S&P 500 hitting a lofty, and record, 1700 in 2013.
In Japan, the new prime minister, Shinzo Abe, was put into office on a platform that was primarily based upon forcing the Bank of Japan to ramp up its stimulus efforts, indeed to run what amounts to unlimited easing until inflation hits a certain point (2%, in this case).
Not only is Abe pressing his thumb down on the BofJ, he’s also appointed a finance minister, former prime minister Taro Aso, who will be ready to spend all those freshly printed yen, as Dennis Gartman noted this morning:
With Mr. Abe pushing for aggressive fiscal spending and an aggressive Bank of Japan and with Mr. Aso at the helm of the Ministry of Finance…to which the Bank of Japan must report…it is certain the the bank will be forced to create yen that shall be spent aggressively and perhaps even shockingly over the course of the next several months.
It isn’t very different in Europe, where the Byzantine eurocrats seem able only to keep the euro crisis from spiraling out of control. In a long newspaper interview, Germany’s Jens Weidmann, president of the Deutsche Bundesbank, said “I find it strange that politicians, who should be leading the way and making the decisions, wish to file in behind us and be guided by us.”
Henninger gave a quick “no comment” to the fiscal cliff drama, but that is the best illustration of the failure of public policy: the United States, the world’s largest economy, is being brought to the brink because its political class can’t do two basic things: pass a budget and set tax tables. In the wake of that, the central bank is acting despite the misgivings of its leadership.
Bernanke has been cajoling, imploring, and warning D.C. about the dangers of inaction all year. He has been adamant about the fact that Fed policy can’t make up for political failures. But with D.C. unable to get past itself, the Fed is filling the vacuum as best it can.
As the world’s most important central bank, the Fed is leading the way on this one, and with Bernanke adopting an essentially unlimited stimulus program, other banks are following. Until the political class, however, gets its act together, it’s hard to see how or why the emphasis on monetary policy will wane.
Writing “come together” on the side of coffee cups is a nice gesture, but it’s going to take a lot more from voters to prod the squabbling politicians across the continents, and until then, central banks are going to be very active.
http://blogs.wsj.com/marketbeat/2012/12/27/a-story-about-central-banks-currency-wars-and-politicians/
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French court rejects 75 percent millionaires' tax
France's Constitutional Council on Saturday rejected a 75 percent upper income tax rate to be introduced in 2013 in a setback to Socialist President Francois Hollande's push to make the rich contribute more to cutting the public deficit.
The Council ruled that the planned 75 percent tax on annual income above 1 million euros ($1.32 million) - a flagship measure of Hollande's election campaign - was unfair in the way it would be applied to different households.
Friday, December 28, 2012
Marijuana Industry Support Grows - 2 Stocks To Own If It Hits
The news regarding the legalization of marijuana in several states hit usjust before the 2012 holiday season. While it is true that the focus of Washington, and much of the markets has been on the fiscal cliff, the legalization movement has been growing steadily.
http://seekingalpha.com/article/1084571-marijuana-industry-support-grows-2-stocks-to-own-if-it-hits
http://seekingalpha.com/article/1084571-marijuana-industry-support-grows-2-stocks-to-own-if-it-hits
Thursday, December 27, 2012
Forex Broker spreads, swaps, and quotes
MyFxBook now publishing Forex Broker swaps and spreads:
http://www.myfxbook.com/forex-broker-swaps
http://www.myfxbook.com/forex-broker-spreads
http://www.myfxbook.com/forex-broker-quotes
http://www.myfxbook.com/forex-broker-swaps
http://www.myfxbook.com/forex-broker-spreads
http://www.myfxbook.com/forex-broker-quotes
Wednesday, December 26, 2012
EES: Euro Overvalued at current levels
Europe's demand for steel fell 8% in the last year, according to the world's largest steelmaker by volume.
Steelmaker ArcelorMittal (MT) on Friday took a $4.3 billion write-down on the value of its flailing European division and said it sees little prospect for an improvement in the region's sluggish economy any time soon.Luxembourg-based ArcelorMittal, the world's biggest steelmaker by volume, said the goodwill-impairment charge will be included in its fourth-quarter earnings. The news resulted in a downgrade by Fitch Ratings, the third by a ratings firm since August.
The significance of this information is that it shows that real demand for steel in the 'real' economy (manufacturing, shipping, etc.) is down, whereas in the U.S. it's up. For Europe, this is a bad economic sign. Similar to the Baltic Dry Index, a decline in steel indicates a decline in the real economy.
http://seekingalpha.com/article/1081561-euro-overvalued-at-current-levels-and-due-for-a-sell-off
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