Daily Archives: December 11, 2015

Citigroup Trader Fired Over Currency Probe Sues in Singapore

A former Citigroup Inc. trader fired over claims she and a colleague colluded to rig the currency market sued the bank in Singapore for wrongful dismissal.

Tian Yuhui, fired the day she returned to work after a four-month maternity leave, is suing for loss of income, deferred stocks and cash awards and for her job to be reinstated, according to a lawsuit filed in August at the Singapore High Court. She’s also asking Citicorp Investment Bank (Singapore) Ltd., the bank’s local unit, to rescind “adverse notifications” sent to regulators.

Citigroup was entitled to terminate the currency spot options trader in May, the bank said in its defense filed with the court in October. The bank in a 2014 internal probe uncovered five chats from 2011 to 2013 with a Japanese colleague, according to court papers. The bank claims the chats revealed her “intention to trade with a view to affect or manipulate” the U.S. dollar-Japanese yen spot price around the time of the 3 p.m. Tokyo fix, a key currency market benchmark.

Read on.

Workers respond to Bank of America’s “spin” on layoffs

WKTV.com:

Bank of America officials say new jobs are coming here to the call center on Horatio Street and while that might be true, the 250 current employees will soon be out of a job and not guaranteed one of those new ones.

Those employees were told they would have to reapply for the new jobs, and they are hearing the jobs won’t be the same and the pay won’t be as high.

The wife of one worker took to social media saying:

“Your recent press release is slightly misleading.  My spouse received a phone call today that changed the future for our family. It should say we are sorry this is in the best interest for the company.  Don’t lie….don’t make it out to be some grand hiring spree….great for our local economy.   It’s not. These people will make less, spend less.”

Several employees reached out to us saying the same thing but were told they could not go on camera or they would lose their severance package. The message below was sent to us via Facebook.

– See more at: http://www.wktv.com/news/Workers_respond_to_Bank_of_Americas_spin_on_layoffs.html#sthash.RDmTF392.dpuf

Bank of America confirms 250 employees will be laid off in June

UTICA, NY– UPDATE: Bank of America officials are now saying 250 employees at the call center in Utica are being laid off.

The workers were told this week that the company is not closing the doors; however, they will be expanding the call center with 400 new jobs.

These 250 workers are not guaranteed one of these jobs though, and they need to reapply for a spot in the expanded center.

We’ve heard from some workers who are upset that the company is making this look like a good economic move for the region. They say these new jobs will be for less money and feel the company is bringing this bad news at the worst time – two weeks before Christmas.

We’re told the current employees will retain their jobs through June.

– See more at: http://www.wktv.com/news/Bank_of_America_claims_Utica_call_center_is_expanding.html#sthash.Dy4Qyt20.dpuf

Star of ‘The Big Short’ backs new mortgage venture

Up until the motion picture The Big Short, which is based on the best-selling book by Michael Lewis, the name Michael Burry was probably unfamiliar to most people.

The comedy motion picture flashes back to the 2008 timeframe where the subprime debacle was just taking hold.

……………………

One of the characters is Michael Burry, played by Christian Bale. According to an article in CNBC, Burry made a fortune in last decade’s financial crisis by betting that the housing bubble would burst, is also gaining a following north of Hollywood, as a Silicon Valley tech investor.

Now, in 2015, the article explained his latest venture. Burry is an early investor in PeerStreet, an online marketplace for real estate-backed loans.

From CNBC:

PeerStreet’s mission is to open up a particular segment of the real estate market — residential, typically non-owner occupied — to a wider swath of investors, thus adding capital to the system and ultimately bringing down borrowing costs.

“What happened in the crisis is there was practically no underwriting — if something could be sold it would be made,” Burry said in an interview. “It’s important for the next-generation alternative lending model that there be controls in place. There’s somebody at the door checking for excess credit risk.”

Read on.

Golden Globe nominations prove you need to see The Big Short

The financial crisis struck a chord with Hollywood this year as two major motion pictures were listed in the nominations for the 73rd Golden Globe Awards, which were announced early Thursday morning.

The Big Short was one of three motion pictures to lead the nominations for the 73rd Golden Globe Awards, which were announced early Thursday morning.

The comedy motion picture flashes back to the 2008 timeframe where the subprime debacle was just taking hold.

The cast of characters bet against the big banks, and potentially, the American economy to get rich while the Empire crumbled.

Add in a couple of Hollywood A-listers and you get The Big Short movie, based on the book by Michael Lewis.

Golden Globe nominations for The Big Short include:

  • Best motion picture – musical or comedy
  • Best performance by an actor in a motion picture – musical or comedy – Christian Bale
  • Best performance by an actor in a motion picture – musical or comedy – Steve Carell
  • Best screenplay – motion picture – Charles Randolph, Adam Mckay

Read on.

Morgan Stanley reaches $225 million settlement with NCUA

Morgan Stanley (MS) reached a settlement with theNational Credit Union Administration for $225 million in order to resolve claims arising from losses related to corporate credit unions’ purchases of faulty residential mortgage-backed securities.

This is the most recent in a string of settlements from NCUA.

n 2013, the NCUA filed suit against Royal Bank of Scotland (RBS), Morgan Stanley (MS) and eight other institutions over the sale of nearly $2.4 billion in mortgage-backed securities to U.S. Central Federal Credit UnionWestern Corporate Federal Credit Union,Members United Corporate Federal Credit Unionand Southwest Corporate Federal Credit Union.

In October, Barclays (BCS) and Wachovia, now a part of Wells Fargo (WFC), said they would pay a total of $378 million to NCUA as part of two separate settlements stemming from losses related to purchases of residential mortgage-backed securities.

And in September, RBS agreed to a $129.6 million settlement with the NCUA over similar claims.

Read on.

New House bill would end ‘FICO monopoly’ at Fannie Mae, Freddie Mac

The Goldman Sachs Takeover of the Fed!

With the Fed’s latest hiring of Neel Kashkari as President of the Minneapolis Federal Reserve Bank, Goldman Sach’s former executives will now hold 4 of the 5 Fed President’s seats on the very powerful Federal Open Markets Committee, which is responsible for the formulation of U.S. monetary policy.
Before discussing concerns about these appointments, it would be interesting to revisit some history.
The subprime debacle of 2008 took down a lot of companies and individuals, most especially the American taxpayer. However  several savvy investors made a killing from that financial disaster.
One of those was the powerful investment bank, Goldman Sachs. According to the Wall Street Journal, late in 2006, traders in its Structured Products department convinced bank executives that the “sub-prime market was heading for trouble.” Being smart traders, the bank sold off much of its “stockpile” of mortgage-backed securities. In addition, the bank’s traders bet – what is called “selling short” – that the market would go down.
Regards,
Richard

Lawmakers protect title loan firms while borrowers pay sky-high interest rates

Dec. 9, 2015: This story has been updated.

After years of financial ups and downs, Gloria Whitaker needed some quick cash to help keep a roof over her head.

So she and her son, Devon, went to a TitleBucks store in Las Vegas and took out a $2,000 loan, pledging his gold 2002 Ford F-150 truck as collateral.

Whitaker, 66, said nobody verified she, or her jobless son, could repay the loan, which carried interest of 121.545 percent. When she paid off the loan, she said, the company didn’t give back the title to the truck. Instead, employees talked her into borrowing $2,000 more, which plunged the family deeper into debt, she said. Whitaker knows that was a mistake, but also feels misled by aggressive — and legally dubious — lending tactics.

“I had a hardship,” Whitaker said. “I was between a rock and a hard place.”

In October, Whitaker filed a complaint with state regulators, who say the giant lender, TitleMax, which operates TitleBucks, violated state lending laws and estimate that it overcharged Nevada customers more than 6,000 times this year by nearly $8 million.

“Our position is that they are a bad actor,” said George Burns, who heads the Nevada Financial Institutions Division. “We believe it is very important that we get them under control. We want them to conduct their business legally and not be taking advantage of the public.”

It’s legal in about half the states to pledge a car title as collateral for short-term loans of a few hundred dollars or more. Many of these states allow lenders to tack on interest that can top 300 percent, and to seize and sell off cars when borrowers fail to pay. Most states have either permitted the companies to operate for years, or kept them out with usury laws that cap interest rates.

Title lenders insist they provide a vital financial service to people who can’t take out a bank loan or get credit when they need fast cash.

Consumer advocates scoff at this notion. They argue title lenders prey on low-income people by putting their cars, often their biggest or sole asset, at risk. Title lenders in four states alone — New Mexico, Missouri, Tennessee and Virginia — repossessed at least 92,000 cars in the past two years, according to state records.

“The person who has paid off their car is starting to move up the ladder a little bit,” said Jay Speer, executive director of the Virginia Poverty Law Center in Richmond. Virginia is home to nearly 500 title-lending shops.

Read on.