"Hedge funds trailing the Standard & Poor’s 500 (SPX) Index for the last five months are giving up on bearish bets and buying stocks at the fastest rate in two years.
A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010, according to data compiled by the International Strategy & Investment Group."
"Money managers struggling to catch up with the gains have contributed to the rally that pushed the S&P 500 up 27 percent since October as economic reports beat estimates. Market bulls say they are a continuing source of cash that can move stocks higher. Bears say capitulating hedge funds are further evidence that equities have risen too far, too fast as economic growth remains sluggish, warning that the pool of potential buyers is being depleted. "
Monday, March 26, 2012
Shell Oil Stuck with Iran's Money
Royal Dutch Shell is struggling to pay off $1 billion that it owes Iran for crude oil because European Union and U.S. financial sanctions now make it almost impossible to process payments, industry sources said.
Four sources said the oil major owes a large sum to the National Iranian Oil Co (NIOC) for deliveries of crude, with one putting the figure at close to $1 billion. A debt of that size would equate to roughly four large tanker loads of Iranian crude or about 8 million barrels.
"Shell is working hard to figure out a way to pay NIOC," said an industry source, who requested anonymity. "It's very sensitive and very difficult. They want to stay on good terms with Iran, while abiding by sanctions."
A Shell spokesman declined to comment.
The European Union toughened financial sanctions and placed a ban on Iranian oil imports on January 23, but gave companies until July 1 to wind down their existing business.
With daily contract volumes of 100,000 barrels, Shell ranked as Iran's second biggest corporate client - along with France's Total - behind Turkey's Tupras.
Shell CEO Peter Voser said on March 7 the company would take its final deliveries of Iranian crude "within a matter of weeks".
Rigorous U.S. and European financial measures, aimed at punishing Iran for its nuclear program have already come into force, making it increasingly difficult to pay for and ship crude from Iran, say oil executives.
"There are big frustrations with the payment route - the U.S. pressure is really working," said a senior oil source. "It's now nearly impossible to use the banking system."
Such financial restrictions were in part behind Total's decision to stop purchasing Iranian crude at the end of last year, industry sources say. Total also bought about 100,000 barrels per day from Tehran.
http://www.reuters.com/article/2012/03/25/us-shell-iran-idUSBRE82O07420120325
Four sources said the oil major owes a large sum to the National Iranian Oil Co (NIOC) for deliveries of crude, with one putting the figure at close to $1 billion. A debt of that size would equate to roughly four large tanker loads of Iranian crude or about 8 million barrels.
"Shell is working hard to figure out a way to pay NIOC," said an industry source, who requested anonymity. "It's very sensitive and very difficult. They want to stay on good terms with Iran, while abiding by sanctions."
A Shell spokesman declined to comment.
The European Union toughened financial sanctions and placed a ban on Iranian oil imports on January 23, but gave companies until July 1 to wind down their existing business.
With daily contract volumes of 100,000 barrels, Shell ranked as Iran's second biggest corporate client - along with France's Total - behind Turkey's Tupras.
Shell CEO Peter Voser said on March 7 the company would take its final deliveries of Iranian crude "within a matter of weeks".
Rigorous U.S. and European financial measures, aimed at punishing Iran for its nuclear program have already come into force, making it increasingly difficult to pay for and ship crude from Iran, say oil executives.
"There are big frustrations with the payment route - the U.S. pressure is really working," said a senior oil source. "It's now nearly impossible to use the banking system."
Such financial restrictions were in part behind Total's decision to stop purchasing Iranian crude at the end of last year, industry sources say. Total also bought about 100,000 barrels per day from Tehran.
http://www.reuters.com/article/2012/03/25/us-shell-iran-idUSBRE82O07420120325
Shell Oil Stuck with Iran's Money
Royal Dutch Shell is struggling to pay off $1 billion that it owes Iran for crude oil because European Union and U.S. financial sanctions now make it almost impossible to process payments, industry sources said.
Four sources said the oil major owes a large sum to the National Iranian Oil Co (NIOC) for deliveries of crude, with one putting the figure at close to $1 billion. A debt of that size would equate to roughly four large tanker loads of Iranian crude or about 8 million barrels.
"Shell is working hard to figure out a way to pay NIOC," said an industry source, who requested anonymity. "It's very sensitive and very difficult. They want to stay on good terms with Iran, while abiding by sanctions."
A Shell spokesman declined to comment.
The European Union toughened financial sanctions and placed a ban on Iranian oil imports on January 23, but gave companies until July 1 to wind down their existing business.
With daily contract volumes of 100,000 barrels, Shell ranked as Iran's second biggest corporate client - along with France's Total - behind Turkey's Tupras.
Shell CEO Peter Voser said on March 7 the company would take its final deliveries of Iranian crude "within a matter of weeks".
Rigorous U.S. and European financial measures, aimed at punishing Iran for its nuclear program have already come into force, making it increasingly difficult to pay for and ship crude from Iran, say oil executives.
"There are big frustrations with the payment route - the U.S. pressure is really working," said a senior oil source. "It's now nearly impossible to use the banking system."
Such financial restrictions were in part behind Total's decision to stop purchasing Iranian crude at the end of last year, industry sources say. Total also bought about 100,000 barrels per day from Tehran.
http://www.reuters.com/article/2012/03/25/us-shell-iran-idUSBRE82O07420120325
Four sources said the oil major owes a large sum to the National Iranian Oil Co (NIOC) for deliveries of crude, with one putting the figure at close to $1 billion. A debt of that size would equate to roughly four large tanker loads of Iranian crude or about 8 million barrels.
"Shell is working hard to figure out a way to pay NIOC," said an industry source, who requested anonymity. "It's very sensitive and very difficult. They want to stay on good terms with Iran, while abiding by sanctions."
A Shell spokesman declined to comment.
The European Union toughened financial sanctions and placed a ban on Iranian oil imports on January 23, but gave companies until July 1 to wind down their existing business.
With daily contract volumes of 100,000 barrels, Shell ranked as Iran's second biggest corporate client - along with France's Total - behind Turkey's Tupras.
Shell CEO Peter Voser said on March 7 the company would take its final deliveries of Iranian crude "within a matter of weeks".
Rigorous U.S. and European financial measures, aimed at punishing Iran for its nuclear program have already come into force, making it increasingly difficult to pay for and ship crude from Iran, say oil executives.
"There are big frustrations with the payment route - the U.S. pressure is really working," said a senior oil source. "It's now nearly impossible to use the banking system."
Such financial restrictions were in part behind Total's decision to stop purchasing Iranian crude at the end of last year, industry sources say. Total also bought about 100,000 barrels per day from Tehran.
http://www.reuters.com/article/2012/03/25/us-shell-iran-idUSBRE82O07420120325
Europe Paying More Than USD 10 per Gallon of Gas
"For the first time since June 2011, the average price for Gas across the 27 European nations just broke above USD10/gallon. With the US on average above USD4/gallon (at its highest since May), it is perhaps worth looking under the covers at just what nations have been hurt the most in the last year by the money-printing-insanity-experiment rising price of crude. Italy has been hit the hardest with Fiat Uno drivers paying 18% more this year than last for a litre of petrol. As The Economist points out, only the Dutch and Norwegians pay more than the Vespa riders but perhaps it is worthwhile noting just how low (on average) the US price is compared to its global peers (for now) and the fact that only the French are paying less this year than last"
zerohedge.com
zerohedge.com
Corzine Going Down in MF Global Fiasco
Former MF Global official Edith O'Brien said in an October 2011 email that CEO Jon Corzine gave "direct instructions" to transfer $200 million from a customer account to cover an overdraft in a JPMorgan account in London, according to a congressional memo released on Friday.
Steven Goldberg, a spokesman for Corzine, noted that Corzine did ask that the JPMorgan overdraft be corrected, but never gave any instructions to misuse customer funds.
"He never directed Ms. O'Brien or anyone else regarding which account should be used to cure the overdrafts, and he never directed that customer funds should be used for that purpose," Goldberg said.
The October 28 email, written days before MF Global's collapse, was released in advance of a House Financial Services subcommittee hearing scheduled next week on the collapse of brokerage MF Global and the continued search for missing customer funds. The committee this week subpoenaed O'Brien to appear before the panel.
Congressional and regulatory officials have been investigating whether customer funds were improperly transferred in the chaotic days before the firm collapsed and what executives knew about the status of various accounts.
The $200 million transfer in customer funds from a JPMorgan Chase & Co (NYS:JPM - News) account was made to cover a $175 million overdraft in one of MF Global's accounts at the bank in London, the memo said.
The congressional memo notes that segregated customer accounts like the one in question can contain funds that belong to the futures brokerage and can be used for transfers.
The memo says, however, that JPMorgan chief risk officer Barry Zubrow called Corzine directly to seek assurances that the funds being transferred belonged to MF Global and did not include customer funds.
The bank followed up with a letter requesting written assurances that all MF Global transfers -- "past, present and future" -- complied with Commodity Futures Trading Commission rules about keeping customer money separate from the broker's own, according to the memo.
Laurie Ferber, MF Global Holding's chief lawyer, balked at the request as being too broad and instead wanted to narrow the written assurance to only the October 28 transfer, the memo said.
O'Brien, who wrote the email, served as an assistant treasurer in the firm's Chicago office.
A representative for JPMorgan Chase was not immediately available for comment.
O'Brien hasn't been accused of any wrongdoing, and she could choose to invoke her right against self-incrimination at the hearing next week.
Next week's hearing is the latest in a series of congressional efforts to grill former senior managers of MF Global.
Former Chief Executive Jon Corzine, Chief Financial Officer Henri Steenkamp and Chief Operating Officer Bradley Abelow have all testified to Congress, and disavowed any intent to misuse customer funds and any specific knowledge of how that misuse may have occurred.
They haven't been formally accused of any wrongdoing.
Steven Goldberg, a spokesman for Corzine, noted that Corzine did ask that the JPMorgan overdraft be corrected, but never gave any instructions to misuse customer funds.
"He never directed Ms. O'Brien or anyone else regarding which account should be used to cure the overdrafts, and he never directed that customer funds should be used for that purpose," Goldberg said.
The October 28 email, written days before MF Global's collapse, was released in advance of a House Financial Services subcommittee hearing scheduled next week on the collapse of brokerage MF Global and the continued search for missing customer funds. The committee this week subpoenaed O'Brien to appear before the panel.
Congressional and regulatory officials have been investigating whether customer funds were improperly transferred in the chaotic days before the firm collapsed and what executives knew about the status of various accounts.
The $200 million transfer in customer funds from a JPMorgan Chase & Co (NYS:JPM - News) account was made to cover a $175 million overdraft in one of MF Global's accounts at the bank in London, the memo said.
The congressional memo notes that segregated customer accounts like the one in question can contain funds that belong to the futures brokerage and can be used for transfers.
The memo says, however, that JPMorgan chief risk officer Barry Zubrow called Corzine directly to seek assurances that the funds being transferred belonged to MF Global and did not include customer funds.
The bank followed up with a letter requesting written assurances that all MF Global transfers -- "past, present and future" -- complied with Commodity Futures Trading Commission rules about keeping customer money separate from the broker's own, according to the memo.
Laurie Ferber, MF Global Holding's chief lawyer, balked at the request as being too broad and instead wanted to narrow the written assurance to only the October 28 transfer, the memo said.
O'Brien, who wrote the email, served as an assistant treasurer in the firm's Chicago office.
A representative for JPMorgan Chase was not immediately available for comment.
O'Brien hasn't been accused of any wrongdoing, and she could choose to invoke her right against self-incrimination at the hearing next week.
Next week's hearing is the latest in a series of congressional efforts to grill former senior managers of MF Global.
Former Chief Executive Jon Corzine, Chief Financial Officer Henri Steenkamp and Chief Operating Officer Bradley Abelow have all testified to Congress, and disavowed any intent to misuse customer funds and any specific knowledge of how that misuse may have occurred.
They haven't been formally accused of any wrongdoing.
BATS Pulls IPO After Trading Glitches
BATS Global Markets, a stock exchange that had just gone public, has taken the highly unusual step of withdrawing its initial public offering following a trading setback in the company's stock and in the shares of some of the companies that trade on its platform.
“Although our affected market has reopened, in the wake of today’s technical issues, which affected the trading of certain stocks, including that of BATS, we believe withdrawing the IPO is the appropriate action to take for our Company and our shareholders,” Joe Ratterman, chairman, president and CEO of BATS, said in a statement Friday.
“Although our affected market has reopened, in the wake of today’s technical issues, which affected the trading of certain stocks, including that of BATS, we believe withdrawing the IPO is the appropriate action to take for our Company and our shareholders,” Joe Ratterman, chairman, president and CEO of BATS, said in a statement Friday.
Financial Crisis in Greece
Definitely worth watching
http://www.youtube.com/watch?feature=playe...d&v=Zvl9N9GdraQ
http://www.youtube.com/watch?feature=playe...d&v=Zvl9N9GdraQ
Thirteen year old gold sale has cost UK GBP11 billion
Gordon Brown’s sale of 400 tons of gold in 1999 has cost the United Kingdom GBP11 billion, said the Chancellor of the Exchequer, George Osborne, in his 2012 budget speech.
Osborne said the decision to sell the gold was “. . . one of the worst economic judgements ever made by a chancellor.” Brown was Chancellor of the Exchequer under the then ruling Labour Party.
Osbourne’s dig at the opposition Labour Party during his Tuesday budget speech led to an uproar in House of Commons. He also announced the Treasury is getting back into bullion.
“We are also taking the opportunity to rebuild Britain’s reserves, which had fallen to historically low levels,” said Osborne.
“I can confirm our gold holdings have risen in value to £11 billion. This does not include the 400 or so tonnes of gold sold a decade ago for £2 billion, and which would now be worth six times that at over £13 billion pounds.”
Osborne suggests that the decision to sell was made by Brown despite misgivings from his officials
Osborne said the decision to sell the gold was “. . . one of the worst economic judgements ever made by a chancellor.” Brown was Chancellor of the Exchequer under the then ruling Labour Party.
Osbourne’s dig at the opposition Labour Party during his Tuesday budget speech led to an uproar in House of Commons. He also announced the Treasury is getting back into bullion.
“We are also taking the opportunity to rebuild Britain’s reserves, which had fallen to historically low levels,” said Osborne.
“I can confirm our gold holdings have risen in value to £11 billion. This does not include the 400 or so tonnes of gold sold a decade ago for £2 billion, and which would now be worth six times that at over £13 billion pounds.”
Osborne suggests that the decision to sell was made by Brown despite misgivings from his officials
BofA Tests an Option to Foreclosure
Bank of America Corp is launching a pilot program that will allow homeowners at risk of foreclosure to hand over deeds to their houses and sign leases that will let them rent the houses back from the bank at a market rate.
While the initial scope of the "Mortgage to Lease" program is small—the bank began sending letters Thursday offering leases to 1,000 homeowners in Arizona, Nevada and New York—it represents a big change in the way banks deal with borrowers who can't afford their mortgages.
.Until now, banks have focused the bulk of their borrower outreach on modifying mortgages, usually by reducing the monthly payments. When that doesn't work, most foreclosure alternatives require homeowners to leave their house, typically through a short sale, in which the bank approves the sale for less than the amount owed. Banks often insert clauses forbidding the new owner from renting the property back to the former owner.
The new approach is unlikely to be expanded unless banks conclude that avoiding eviction reduces costs associated with taking back, maintaining and reselling properties. If a significant number of borrowers are willing and able to rent the homes, Bank of America could ultimately sell the properties to investors that agree to keep them as rentals.
Already, in a growing number of housing markets, investors are buying foreclosures and converting them into rentals, often filling them with families that have gone through foreclosure.
Executives last year began to ask themselves "isn't there a way to sort of combine that whole process and keep the borrower in the property? It's just better for the market," said Ron Sturzenegger, the Bank of America executive who last summer was put in charge of the unit that handles troubled mortgages.
Bank of America became the nation's largest mortgage originator after its 2008 purchase of Countrywide Financial Corp., but over the past year it has retreated from the mortgage market. The initial pilot is limited to loans that Bank of America holds on its books. Homeowners can't apply for the program—only those who receive letters from the bank can participate.
Borrowers would agree to a what is known as a "deed-in-lieu" of foreclosure, where they essentially sign over ownership of the property to the lender. This is less costly to the bank and also does less damage to a borrower's credit than a foreclosure.
Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure.
.In exchange, former owners would be offered one-year leases with options to renew the leases in each of the following two years at rents that the bank determines are at or below the current market price. Borrowers would have to demonstrate an ability to pay the market rent.
For example, based on a sampling of home values and rental rates in Phoenix recently, a consumer with a $250,000 mortgage and monthly payments of $1,600 could swap the house for a lease, renting the home for $900, depending on the condition of the property and the neighborhood.
Consumer advocates and some investors have long called for less disruptive alternatives to foreclosures, given the limits of loan-modification programs. "You still have a lot of people that are facing foreclosures, and this is a way to keep people in their homes that is obviously much better," says Dean Baker, co-director of the Center for Economic Policy and Research.
Foreclosures, particularly if properties are vacant, can drag down housing values in a neighborhood.
Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure. Bank of America is reaching out to borrowers who have exhausted other alternatives to foreclosure or who haven't responded to earlier solicitations. Homeowners with second mortgages or other liens won't be selected.
Mr. Sturzenegger said the success of the current pilot would determine whether Bank of America expands the effort. "We're optimistic but realistic. If we get a great takeup rate and the process works, we'll roll it out," he said.
The program is the latest example of how banks are experimenting with ways to deal with a large overhang of foreclosed properties. Some lenders have begun offering incentive payments of up to $30,000 to borrowers who agree to short sales.
Fannie Mae rolled out a "deed-for-lease" program in late 2009 but it hasn't been widely used. Some industry analysts say that banks haven't aggressively marketed the initiative.
Already, investors have approached Mr. Sturzenegger about purchasing pools of leased properties from Bank of America. One of those investors is Laurie Hawkes, president of American Residential Properties, a Scottsdale, Ariz.-based firm that has bought nearly 800 homes in the Phoenix area as rentals. If homes are realistically priced, Ms. Hawkes says her firm would "definitely" be interested in buying them.
Foreclosures have slowed sharply in some states amid heavy scrutiny of allegedly forged paperwork used by processing firms. Banks completed 860,000 foreclosures last year, down from 1.1 million in 2010, according to CoreLogic Inc.
"One of the outcomes of the 'robo-signing' scandal is that it is more difficult to foreclose," said Mr. Baker. "It's more worthwhile for banks to pursue alternatives."
tp://online.wsj.com/article/SB1000142405...u=MKTW&mod=MKTW
While the initial scope of the "Mortgage to Lease" program is small—the bank began sending letters Thursday offering leases to 1,000 homeowners in Arizona, Nevada and New York—it represents a big change in the way banks deal with borrowers who can't afford their mortgages.
.Until now, banks have focused the bulk of their borrower outreach on modifying mortgages, usually by reducing the monthly payments. When that doesn't work, most foreclosure alternatives require homeowners to leave their house, typically through a short sale, in which the bank approves the sale for less than the amount owed. Banks often insert clauses forbidding the new owner from renting the property back to the former owner.
The new approach is unlikely to be expanded unless banks conclude that avoiding eviction reduces costs associated with taking back, maintaining and reselling properties. If a significant number of borrowers are willing and able to rent the homes, Bank of America could ultimately sell the properties to investors that agree to keep them as rentals.
Already, in a growing number of housing markets, investors are buying foreclosures and converting them into rentals, often filling them with families that have gone through foreclosure.
Executives last year began to ask themselves "isn't there a way to sort of combine that whole process and keep the borrower in the property? It's just better for the market," said Ron Sturzenegger, the Bank of America executive who last summer was put in charge of the unit that handles troubled mortgages.
Bank of America became the nation's largest mortgage originator after its 2008 purchase of Countrywide Financial Corp., but over the past year it has retreated from the mortgage market. The initial pilot is limited to loans that Bank of America holds on its books. Homeowners can't apply for the program—only those who receive letters from the bank can participate.
Borrowers would agree to a what is known as a "deed-in-lieu" of foreclosure, where they essentially sign over ownership of the property to the lender. This is less costly to the bank and also does less damage to a borrower's credit than a foreclosure.
Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure.
.In exchange, former owners would be offered one-year leases with options to renew the leases in each of the following two years at rents that the bank determines are at or below the current market price. Borrowers would have to demonstrate an ability to pay the market rent.
For example, based on a sampling of home values and rental rates in Phoenix recently, a consumer with a $250,000 mortgage and monthly payments of $1,600 could swap the house for a lease, renting the home for $900, depending on the condition of the property and the neighborhood.
Consumer advocates and some investors have long called for less disruptive alternatives to foreclosures, given the limits of loan-modification programs. "You still have a lot of people that are facing foreclosures, and this is a way to keep people in their homes that is obviously much better," says Dean Baker, co-director of the Center for Economic Policy and Research.
Foreclosures, particularly if properties are vacant, can drag down housing values in a neighborhood.
Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure. Bank of America is reaching out to borrowers who have exhausted other alternatives to foreclosure or who haven't responded to earlier solicitations. Homeowners with second mortgages or other liens won't be selected.
Mr. Sturzenegger said the success of the current pilot would determine whether Bank of America expands the effort. "We're optimistic but realistic. If we get a great takeup rate and the process works, we'll roll it out," he said.
The program is the latest example of how banks are experimenting with ways to deal with a large overhang of foreclosed properties. Some lenders have begun offering incentive payments of up to $30,000 to borrowers who agree to short sales.
Fannie Mae rolled out a "deed-for-lease" program in late 2009 but it hasn't been widely used. Some industry analysts say that banks haven't aggressively marketed the initiative.
Already, investors have approached Mr. Sturzenegger about purchasing pools of leased properties from Bank of America. One of those investors is Laurie Hawkes, president of American Residential Properties, a Scottsdale, Ariz.-based firm that has bought nearly 800 homes in the Phoenix area as rentals. If homes are realistically priced, Ms. Hawkes says her firm would "definitely" be interested in buying them.
Foreclosures have slowed sharply in some states amid heavy scrutiny of allegedly forged paperwork used by processing firms. Banks completed 860,000 foreclosures last year, down from 1.1 million in 2010, according to CoreLogic Inc.
"One of the outcomes of the 'robo-signing' scandal is that it is more difficult to foreclose," said Mr. Baker. "It's more worthwhile for banks to pursue alternatives."
tp://online.wsj.com/article/SB1000142405...u=MKTW&mod=MKTW
BofA Tests an Option to Foreclosure
Bank of America Corp. BAC +2.60%is launching a pilot program that will allow homeowners at risk of foreclosure to hand over deeds to their houses and sign leases that will let them rent the houses back from the bank at a market rate.
While the initial scope of the "Mortgage to Lease" program is small—the bank began sending letters Thursday offering leases to 1,000 homeowners in Arizona, Nevada and New York—it represents a big change in the way banks deal with borrowers who can't afford their mortgages.
.Until now, banks have focused the bulk of their borrower outreach on modifying mortgages, usually by reducing the monthly payments. When that doesn't work, most foreclosure alternatives require homeowners to leave their house, typically through a short sale, in which the bank approves the sale for less than the amount owed. Banks often insert clauses forbidding the new owner from renting the property back to the former owner.
The new approach is unlikely to be expanded unless banks conclude that avoiding eviction reduces costs associated with taking back, maintaining and reselling properties. If a significant number of borrowers are willing and able to rent the homes, Bank of America could ultimately sell the properties to investors that agree to keep them as rentals.
Already, in a growing number of housing markets, investors are buying foreclosures and converting them into rentals, often filling them with families that have gone through foreclosure.
Executives last year began to ask themselves "isn't there a way to sort of combine that whole process and keep the borrower in the property? It's just better for the market," said Ron Sturzenegger, the Bank of America executive who last summer was put in charge of the unit that handles troubled mortgages.
Bank of America became the nation's largest mortgage originator after its 2008 purchase of Countrywide Financial Corp., but over the past year it has retreated from the mortgage market. The initial pilot is limited to loans that Bank of America holds on its books. Homeowners can't apply for the program—only those who receive letters from the bank can participate.
Borrowers would agree to a what is known as a "deed-in-lieu" of foreclosure, where they essentially sign over ownership of the property to the lender. This is less costly to the bank and also does less damage to a borrower's credit than a foreclosure.
Enlarge Image
CloseiStockphoto
Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure.
.In exchange, former owners would be offered one-year leases with options to renew the leases in each of the following two years at rents that the bank determines are at or below the current market price. Borrowers would have to demonstrate an ability to pay the market rent.
For example, based on a sampling of home values and rental rates in Phoenix recently, a consumer with a $250,000 mortgage and monthly payments of $1,600 could swap the house for a lease, renting the home for $900, depending on the condition of the property and the neighborhood.
Consumer advocates and some investors have long called for less disruptive alternatives to foreclosures, given the limits of loan-modification programs. "You still have a lot of people that are facing foreclosures, and this is a way to keep people in their homes that is obviously much better," says Dean Baker, co-director of the Center for Economic Policy and Research.
Foreclosures, particularly if properties are vacant, can drag down housing values in a neighborhood.
Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure. Bank of America is reaching out to borrowers who have exhausted other alternatives to foreclosure or who haven't responded to earlier solicitations. Homeowners with second mortgages or other liens won't be selected.
Mr. Sturzenegger said the success of the current pilot would determine whether Bank of America expands the effort. "We're optimistic but realistic. If we get a great takeup rate and the process works, we'll roll it out," he said.
The program is the latest example of how banks are experimenting with ways to deal with a large overhang of foreclosed properties. Some lenders have begun offering incentive payments of up to $30,000 to borrowers who agree to short sales.
Fannie Mae rolled out a "deed-for-lease" program in late 2009 but it hasn't been widely used. Some industry analysts say that banks haven't aggressively marketed the initiative.
Already, investors have approached Mr. Sturzenegger about purchasing pools of leased properties from Bank of America. One of those investors is Laurie Hawkes, president of American Residential Properties, a Scottsdale, Ariz.-based firm that has bought nearly 800 homes in the Phoenix area as rentals. If homes are realistically priced, Ms. Hawkes says her firm would "definitely" be interested in buying them.
Foreclosures have slowed sharply in some states amid heavy scrutiny of allegedly forged paperwork used by processing firms. Banks completed 860,000 foreclosures last year, down from 1.1 million in 2010, according to CoreLogic Inc.
"One of the outcomes of the 'robo-signing' scandal is that it is more difficult to foreclose," said Mr. Baker. "It's more worthwhile for banks to pursue alternatives."
tp://online.wsj.com/article/SB1000142405...u=MKTW&mod=MKTW
While the initial scope of the "Mortgage to Lease" program is small—the bank began sending letters Thursday offering leases to 1,000 homeowners in Arizona, Nevada and New York—it represents a big change in the way banks deal with borrowers who can't afford their mortgages.
.Until now, banks have focused the bulk of their borrower outreach on modifying mortgages, usually by reducing the monthly payments. When that doesn't work, most foreclosure alternatives require homeowners to leave their house, typically through a short sale, in which the bank approves the sale for less than the amount owed. Banks often insert clauses forbidding the new owner from renting the property back to the former owner.
The new approach is unlikely to be expanded unless banks conclude that avoiding eviction reduces costs associated with taking back, maintaining and reselling properties. If a significant number of borrowers are willing and able to rent the homes, Bank of America could ultimately sell the properties to investors that agree to keep them as rentals.
Already, in a growing number of housing markets, investors are buying foreclosures and converting them into rentals, often filling them with families that have gone through foreclosure.
Executives last year began to ask themselves "isn't there a way to sort of combine that whole process and keep the borrower in the property? It's just better for the market," said Ron Sturzenegger, the Bank of America executive who last summer was put in charge of the unit that handles troubled mortgages.
Bank of America became the nation's largest mortgage originator after its 2008 purchase of Countrywide Financial Corp., but over the past year it has retreated from the mortgage market. The initial pilot is limited to loans that Bank of America holds on its books. Homeowners can't apply for the program—only those who receive letters from the bank can participate.
Borrowers would agree to a what is known as a "deed-in-lieu" of foreclosure, where they essentially sign over ownership of the property to the lender. This is less costly to the bank and also does less damage to a borrower's credit than a foreclosure.
Enlarge Image
CloseiStockphoto
Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure.
.In exchange, former owners would be offered one-year leases with options to renew the leases in each of the following two years at rents that the bank determines are at or below the current market price. Borrowers would have to demonstrate an ability to pay the market rent.
For example, based on a sampling of home values and rental rates in Phoenix recently, a consumer with a $250,000 mortgage and monthly payments of $1,600 could swap the house for a lease, renting the home for $900, depending on the condition of the property and the neighborhood.
Consumer advocates and some investors have long called for less disruptive alternatives to foreclosures, given the limits of loan-modification programs. "You still have a lot of people that are facing foreclosures, and this is a way to keep people in their homes that is obviously much better," says Dean Baker, co-director of the Center for Economic Policy and Research.
Foreclosures, particularly if properties are vacant, can drag down housing values in a neighborhood.
Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure. Bank of America is reaching out to borrowers who have exhausted other alternatives to foreclosure or who haven't responded to earlier solicitations. Homeowners with second mortgages or other liens won't be selected.
Mr. Sturzenegger said the success of the current pilot would determine whether Bank of America expands the effort. "We're optimistic but realistic. If we get a great takeup rate and the process works, we'll roll it out," he said.
The program is the latest example of how banks are experimenting with ways to deal with a large overhang of foreclosed properties. Some lenders have begun offering incentive payments of up to $30,000 to borrowers who agree to short sales.
Fannie Mae rolled out a "deed-for-lease" program in late 2009 but it hasn't been widely used. Some industry analysts say that banks haven't aggressively marketed the initiative.
Already, investors have approached Mr. Sturzenegger about purchasing pools of leased properties from Bank of America. One of those investors is Laurie Hawkes, president of American Residential Properties, a Scottsdale, Ariz.-based firm that has bought nearly 800 homes in the Phoenix area as rentals. If homes are realistically priced, Ms. Hawkes says her firm would "definitely" be interested in buying them.
Foreclosures have slowed sharply in some states amid heavy scrutiny of allegedly forged paperwork used by processing firms. Banks completed 860,000 foreclosures last year, down from 1.1 million in 2010, according to CoreLogic Inc.
"One of the outcomes of the 'robo-signing' scandal is that it is more difficult to foreclose," said Mr. Baker. "It's more worthwhile for banks to pursue alternatives."
tp://online.wsj.com/article/SB1000142405...u=MKTW&mod=MKTW
Jim Rogers: Why You Want To Own Hard Assets In An Age Of Inflation
The Commodity Bull Market Has A Long Way To Run
Author and commentator Jim Rogers believes the US is one of the better places to invest this year. However, he is very concerned about 2013 and 2014, as he sees higher taxes and inflation taking a heavy toll. Rogers sees the commodity bull market continuing in either a strong or weak global economy.
Author and commentator Jim Rogers believes the US is one of the better places to invest this year. However, he is very concerned about 2013 and 2014, as he sees higher taxes and inflation taking a heavy toll. Rogers sees the commodity bull market continuing in either a strong or weak global economy.
Apple Shares Go Batty, But Stock Trading Back to Normal
Apple shares dropped sharply just a few minutes ago, falling a whopping 9.4% and hitting a low of $542.80.
Shares were halted after hitting a single-stock circuit breaker.
Looks like a fat-finger trade, but no conclusive evidence yet. We’ll check back shortly.
UPDATE: Apple shares just resumed trading and are currently down 0.3% at $597.58. The stock was halted for five minutes from 10:57 a.m. Eastern Time to 11:02.
2nd UPDATE: It appears a bad trade triggered the halt. Stocks are halted if they swing more than 10% in a span of five minutes. This allows market participants time to regroup and to prevent further erroneous trades from undermining the market.
3rd UPDATE: According to FactSet, at 10:57:28, orders placed through the BATS Global Markets came in well below where Apple had previously been trading. Orders first came in at $551.66 and microseconds later went as low as $542.80 before the stock was halted.
To be sure, there were just a couple hundred shares traded at these levels.
Still, the issue occurs as BATS is having troubles of its own. Here’s what colleague David Benoit at Deal Journal reported:
BATS has an alert on its website that it is “actively investigating an issue.” The exchange issued an alert at 10:48 a.m. that there were “system issues in symbols range A through BF.”
4th UPDATE: CNBC is now reporting that Nasdaq is canceling the erroneous Apple trades made on the BATS exchange.
http://blogs.wsj.com/marketbeat/2012/03/23/uh-oh-apple-shares-halted-single-stock-circuit-breaker-triggered/?mod=yahoo_hs
Shares were halted after hitting a single-stock circuit breaker.
Looks like a fat-finger trade, but no conclusive evidence yet. We’ll check back shortly.
UPDATE: Apple shares just resumed trading and are currently down 0.3% at $597.58. The stock was halted for five minutes from 10:57 a.m. Eastern Time to 11:02.
2nd UPDATE: It appears a bad trade triggered the halt. Stocks are halted if they swing more than 10% in a span of five minutes. This allows market participants time to regroup and to prevent further erroneous trades from undermining the market.
3rd UPDATE: According to FactSet, at 10:57:28, orders placed through the BATS Global Markets came in well below where Apple had previously been trading. Orders first came in at $551.66 and microseconds later went as low as $542.80 before the stock was halted.
To be sure, there were just a couple hundred shares traded at these levels.
Still, the issue occurs as BATS is having troubles of its own. Here’s what colleague David Benoit at Deal Journal reported:
BATS has an alert on its website that it is “actively investigating an issue.” The exchange issued an alert at 10:48 a.m. that there were “system issues in symbols range A through BF.”
4th UPDATE: CNBC is now reporting that Nasdaq is canceling the erroneous Apple trades made on the BATS exchange.
http://blogs.wsj.com/marketbeat/2012/03/23/uh-oh-apple-shares-halted-single-stock-circuit-breaker-triggered/?mod=yahoo_hs
Vermont senators blast the JOBS Act after Senate passes it
Vermont Sens. Bernie Sanders (I) and Patrick Leahy (D) on Thursday trashed the Jumpstart Our Business Startups (JOBS) Act, saying it could lead to another financial crisis.
The Senate voted 73 to 26 to pass the bill, which was aimed at making it easier for small business’s to raise capital. But critics warned the bill severely weakened investor protections by easing various Securities and Exchange Commission regulations.
“The so-called ‘JOBS Act’ is an extremely anti-consumer, anti-investor, and anti-jobs bill,” Sanders said in a statement. “As currently drafted, the bill is opposed by the Securities and Exchange Commission chairman (as well as past SEC chairmen appointed by both political parties); AARP; the AFL-CIO; the Consumer Federation of America; Consumers Union; and the Council of Institutional Investors, among many others. There is good reason for the opposition.”
“At best, this bill could make it easier for con artists to defraud seniors out of their entire life savings by convincing them to invest in worthless companies. At worst, this bill has the potential to create the next Enron or Arthur Andersen scandal or an even worse financial crisis.”
Leahy added that deregulation could jeopardize the entire American economy.
“The top priority of Congress should be creating new jobs to help Vermonters get back to work, not reopening loopholes in federal law that led to catastrophic scandals like Enron, WorldCom and Bernie Madoff,” he said.
The House voted 390 to 23 to approve the JOBS Act two weeks ago.
The Senate version of the bill included an amendment that placed restrictions on crowdfunding, where businesses gather small investments from a very large amount of people. The House will have to accept the Senate version of the bill before it can be signed into law by President Barack Obama.
http://www.rawstory.com/rs/2012/03/22/vermont-senators-blast-the-jobs-act-after-senate-passes-it/
The Senate voted 73 to 26 to pass the bill, which was aimed at making it easier for small business’s to raise capital. But critics warned the bill severely weakened investor protections by easing various Securities and Exchange Commission regulations.
“The so-called ‘JOBS Act’ is an extremely anti-consumer, anti-investor, and anti-jobs bill,” Sanders said in a statement. “As currently drafted, the bill is opposed by the Securities and Exchange Commission chairman (as well as past SEC chairmen appointed by both political parties); AARP; the AFL-CIO; the Consumer Federation of America; Consumers Union; and the Council of Institutional Investors, among many others. There is good reason for the opposition.”
“At best, this bill could make it easier for con artists to defraud seniors out of their entire life savings by convincing them to invest in worthless companies. At worst, this bill has the potential to create the next Enron or Arthur Andersen scandal or an even worse financial crisis.”
Leahy added that deregulation could jeopardize the entire American economy.
“The top priority of Congress should be creating new jobs to help Vermonters get back to work, not reopening loopholes in federal law that led to catastrophic scandals like Enron, WorldCom and Bernie Madoff,” he said.
The House voted 390 to 23 to approve the JOBS Act two weeks ago.
The Senate version of the bill included an amendment that placed restrictions on crowdfunding, where businesses gather small investments from a very large amount of people. The House will have to accept the Senate version of the bill before it can be signed into law by President Barack Obama.
http://www.rawstory.com/rs/2012/03/22/vermont-senators-blast-the-jobs-act-after-senate-passes-it/
Zap your brain into the zone
Whether you want to smash a forehand like Federer, or just be an Xbox hero, there is a shocking short cut to getting the brain of an expert
I'm close to tears behind my thin cover of sandbags as 20 screaming, masked men run towards me at full speed, strapped into suicide bomb vests and clutching rifles. For every one I manage to shoot dead, three new assailants pop up from nowhere. I'm clearly not shooting fast enough, and panic and incompetence are making me continually jam my rifle.
My salvation lies in the fact that my attackers are only a video, projected on screens to the front and sides. It's the very simulation that trains US troops to take their first steps with a rifle, and everything about it has been engineered to feel like an overpowering assault. But I am failing miserably. In fact, I'm so demoralised that I'm tempted to put down the rifle and leave.
Then they put the electrodes on me.
I am in a lab in Carlsbad, California, in pursuit of an elusive mental state known as "flow" - that feeling of effortless concentration that characterises outstanding performance in all kinds of skills.
More here.....
http://www.newscientist.com/article/mg21328501.600-zap-your-brain-into-the-zone-fast-track-to-pure-focus.html?full=true
I'm close to tears behind my thin cover of sandbags as 20 screaming, masked men run towards me at full speed, strapped into suicide bomb vests and clutching rifles. For every one I manage to shoot dead, three new assailants pop up from nowhere. I'm clearly not shooting fast enough, and panic and incompetence are making me continually jam my rifle.
My salvation lies in the fact that my attackers are only a video, projected on screens to the front and sides. It's the very simulation that trains US troops to take their first steps with a rifle, and everything about it has been engineered to feel like an overpowering assault. But I am failing miserably. In fact, I'm so demoralised that I'm tempted to put down the rifle and leave.
Then they put the electrodes on me.
I am in a lab in Carlsbad, California, in pursuit of an elusive mental state known as "flow" - that feeling of effortless concentration that characterises outstanding performance in all kinds of skills.
More here.....
http://www.newscientist.com/article/mg21328501.600-zap-your-brain-into-the-zone-fast-track-to-pure-focus.html?full=true
Securities watchdog probes high-frequency trading firms
(Reuters) - The U.S. securities watchdog is looking at whether some high-frequency trading firms have used their close links to computerized stock exchanges to gain an unfair advantage over other investors, the Wall Street Journal said.
The Securities and Exchange Commission is focusing on computer-driven trading platforms of exchanges, including BATS Global Markets Inc (BATS.Z), the paper said, citing people familiar with matter.
Specifically, it will examine whether firms collude to limit competition or manipulate markets, it quoted a person with knowledge of the matter as saying.
Regulators have sent letters to a number of high-speed firms requesting information about their trading activities and communications with exchanges, the paper said, adding that the probe is still in its early stages and there is no suggestion of wrongdoing by trading firms or exchanges.
BATS declined to comment to the Journal. SEC and BATS could not immediately be reached for comment by Reuters outside regular U.S. business hours.
High-frequency firms rely on rapid-fire trades and short-term strategies to earn profits on fleeting price imbalances.
The SEC probe stems from a broad look at computer trading that regulators initiated after the "flash crash" in May 2010, when stocks fell and rebounded sharply within minutes, following glitches in computer-trading systems, the Journal said.
http://www.reuters.com/article/2012/03/23/us-sec-highfrequencytrading-idUSBRE82M08E20120323
The Securities and Exchange Commission is focusing on computer-driven trading platforms of exchanges, including BATS Global Markets Inc (BATS.Z), the paper said, citing people familiar with matter.
Specifically, it will examine whether firms collude to limit competition or manipulate markets, it quoted a person with knowledge of the matter as saying.
Regulators have sent letters to a number of high-speed firms requesting information about their trading activities and communications with exchanges, the paper said, adding that the probe is still in its early stages and there is no suggestion of wrongdoing by trading firms or exchanges.
BATS declined to comment to the Journal. SEC and BATS could not immediately be reached for comment by Reuters outside regular U.S. business hours.
High-frequency firms rely on rapid-fire trades and short-term strategies to earn profits on fleeting price imbalances.
The SEC probe stems from a broad look at computer trading that regulators initiated after the "flash crash" in May 2010, when stocks fell and rebounded sharply within minutes, following glitches in computer-trading systems, the Journal said.
http://www.reuters.com/article/2012/03/23/us-sec-highfrequencytrading-idUSBRE82M08E20120323
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