Daily Archives: March 30, 2016

PAC vs. Super PAC and group led by backers of Clinton filed three complaints with FEC against Sanders

So what is the difference between a PAC vs. a Super PAC?:

A PAC, or political action committee, is a type of organization that collects campaign contributions from members and donates those funds to campaign for or against candidates, ballot initiatives or legislation.

An organization becomes a PAC when it receives or spends more than $2,600 to influence a federal election.

A Super PAC, also known as “independent-expenditure only committees” may not make contributions to candidate campaigns or parties, but may engage in unlimited political spending independently of the campaigns. Unlike PACs, Super PACs can raise funds without any legal limit on donation size.

 

And what sets it apart from the presidential superPACs? The donor list…From Wikipedia on PAC:

At the state level, an organization becomes a PAC according to the state’s election laws.

  • Contributions from corporate or labor union treasuries are illegal, though they may sponsor a PAC and provide financial support for its administration and fundraising;
  • Union-affiliated PACs may only solicit contributions from members;
  • Independent PACs may solicit contributions from the general public and must pay their own costs from those funds.

Federal multi-candidate PACs may contribute to candidates as follows:

  • $5,000 to a candidate or candidate committee for each election (primary and general elections count as separate elections);
  • $15,000 to a political party per year; and
  • $5,000 to another PAC per year.
  • PACs may make unlimited expenditures independently of a candidate or political party

 

And from on the SuperPAC:

According to FEC advisories, Super PACs are not allowed to coordinate directly with candidates or political parties. This restriction is intended to prevent them from operating campaigns that complement or parallel those of the candidates they support or engaging in negotiations that could result in quid pro quo bargaining between donors to the PAC and the candidate or officeholder. However, it is legal for candidates and Super PAC managers to discuss campaign strategy and tactics through the media.

And in the latest news on the Democratic Presidential race,  group led by backers of Hillary Clinton filed three complaints on Tuesday with FEC against Bernie Sanders.

USA Today:

A group led by backers of Hillary Clinton filed three complaints Tuesday with the Federal Election Commission against Sen. Bernie Sanders and two super PACs that support him.

The American Democracy Legal Fund, established by David Brock, charges that Sanders and his campaign repeatedly accepted contributions in excess of the $2,700 legal limit for individuals per election.

Another complaint alleges a Facebook ad encouraging donations after Sanders’ New Hampshire win did not disclose who paid for the communication. Finally, the legal fund accuses the super PAC Progressive Kick of illegally using Sanders’ name and claims that group and the super PAC Nurses National Nurses United for Patient Protection are illegally coordinating with the Sanders campaign.

The Sanders campaign last month described an FEC warning about excessive contributions as “standard” and said the campaign would address the FEC’s questions. On Tuesday, the campaign dismissed the Brock group’s complaint as frivolous and noted it follows Clinton’s chief strategist Joel Benenson call for Sanders to change his negative tone.

“Just one day after the Clinton campaign said we needed to change our tone, the leaders of their coordinated super PAC, which is funded by millions from Wall Street, filed baseless and frivolous complaints with the FEC,” Sanders campaign manager Jeff Weaver said in a statement. “Tells you all you need to know.”

The Clinton campaign declined to comment on the complaints.

Brock, founder of the pro-Clinton super PAC Correct the Record, has targeted Sanders throughout the campaign, raising questions about his commitment to the Black Lives Mattermovement and his medical records.

MSNBC reports this is the first time ADLF has filed a complaint against a Democrat.

And who is super PAC Progressive Kick?According to the website:

Progressive Kick is a national progressive SuperPAC & 527, focused on elections and incumbent accountability.
We target the United States Congress and state legislators.

And who are the super PAC Nurses National Nurses United for Patient Protection? According to website:

National Nurses United, with close to 185,000 members in every state, is the largest union and professional association of registered nurses in U.S. history.

NNU was founded in 2009 unifying three of the most active, progressive organizations in the U.S.—and the major voices of unionized nurses—in the California Nurses Association/National Nurses Organizing Committee, United American Nurses, and Massachusetts Nurses Association.

Combining the unparalleled record of accomplishments for nurses and patients embodied in the proud history of those nurses associations, which for some span more than 100 years, the establishment of NNU brought to life the dream of a powerful, national movement of direct care RNs.

Nurses National Nurses United for Patient Protection endorsed Sanders for President in August 2015 as this same organization endorsed Obama in 2012.

Trump’s tariff plan could boomerang, spark trade wars with China, Mexico

Donald Trump’s threats to slap steep tariffs on Chinese and Mexican imports may have won him votes in Republican primaries but they would likely backfire, severely disrupting U.S. manufacturers that increasingly depend on global supply chains.

The Republican presidential front-runner’s campaign pledges to impose 45 percent tariffs on all imports from China and 35 percent on many goods from Mexico would spark financial market turmoil and possibly even a recession, former trade negotiators, trade lawyers, economists and business executives told Reuters.

“I don’t mind trade wars when we’re losing $58 billion a year,” Trump said in a Feb. 25 debate, referring to the 2015 U.S. goods trade deficit with Mexico. Economists dispute the idea the United States is “losing” money as the trade deficit is simply the difference between what the United States imports and what it exports to a country.

“Imposing tariffs or putting up trade barriers may sound good, but it will hurt our economy and credibility,” said Wendy Cutler, the former acting deputy U.S. Trade Representative who helped lead U.S. negotiations in the 12-nation Trans-Pacific Partnership trade deal last year.

Read on.

HSBC to introduce mortgage loans in 2016

Daily News Egypt:

HSBC is lining up several lending products and is planning to introduce mortgage loans during 2016, head of Retail Banking and Wealth Management at HSBC Mustafa Ramzi told Daily News Egypt.

“The intent to cater for this need is there,” Ramzi said. He added that the bank will start offering this product to its premier clients and clients who are relationship-managed.

Further details of client categories to whom the bank plans to offer the mortgage loans are still being considered, the bank executive highlighted.

“We are still in the development stage but we will introduce it this year,” Ramzi said. “We might [offer it in different stages] but it is something that we are evaluating and it something our customers need.”

 

Deutsche Bank agrees to pay $4 million for trading violations

A Deutsche Bank AG unit will pay more than $4 million to settle allegations that it failed to properly report data on millions of options trades, according to a Financial Industry Regulatory Authority (FINRA) document.

The alleged conduct between 2010 and 2015 violated FINRA rules aimed at identifying holders of large options positions who may be trying to manipulate the market or violate other industry rules, the Wall Street watchdog said in its settlement with the unit, Deutsche Bank Securities Inc.

Deutsche Bank did not admit to or deny FINRA’s findings, according to the settlement, which was dated Monday and posted to FINRA’s website on Tuesday.

A Deutsche Bank spokesman declined to comment on the settlement, which included a fine of $4.07 million (2.8 million pounds) to FINRA.

Read on.

U.S. district judge strikes down designation of MetLife as ‘too big to fail’

U.S. District Judge Rosemary Collyer on Wednesday struck down the designation made by the heads of the country’s financial regulatory agencies that major insurer MetLife Inc (>> Metlife Inc) is systemically important to the U.S. financial system.

MetLife had argued in court that the Financial Stability Oversight Council (FSOC) used a secretive and flawed process when, in 2014, it determined that a collapse of the insurer could devastate the U.S. financial system just as much as failure of a major bank such as Citigroup (>> Citigroup Inc).

Collyer’s opinion is currently sealed, but parts may be made public next month, according to the judge’s order, which also said the federal government may appeal.

Read on.

Goldman Sachs and Bear Stearns: A Financial-Crisis Mystery Is Solved

Source of CNBC report revealed in commission report

So…Kyle Bass, former Bear Stearns exec and hedge fund manager that killed Bear Stearns…

WSJ:

It has been called the bombshell that blew up Bear Stearns.

It happened on Wednesday, March 12, 2008, shortly after 9 a.m. in an interview broadcast on CNBC. There, reporter David Faber asked Bear Stearns chief Alan Schwartz to respond to reports thatGoldman Sachs wouldn’t “accept the counterparty risk of Bear Stearns.”

Mr. Schwartz said the firm’s counterparties still were trading with Bear Stearns. Hours later, CNBC reported that Goldman was indeed still doing trades with Bear Stearns.

In the eyes of many on Wall Street, however, the damage was done. Confidence in Bear Stearns quickly evaporated—and with it the firm’s ability to survive.

By that evening, Bear Stearns’s ability to borrow in the overnight repurchase market was drying up, with some money-market funds warning that they might be hesitant to provide repo funding in the morning, according to government records. The following evening, Bear Stearns informed the Securities and Exchange Commission that it would be “unable to operate normally on Friday.”

On Friday, the Federal Reserve agreed to back a rescue loan from J.P. Morgan Chase & Co. Over the weekend, the firm was forced to sell itself outright to J.P. Morgan at a fraction of where shares had been trading when the week started. ​​Recently released materials from the U.S. government’s investigation into the financial crisis give new detail on how this incident came about.

A former Bear Stearns executive named Kyle Bass of Hayman Capital Management LP—a well-known hedge-fund manager—was the source for Mr. Faber, according to formerly confidential government records.

​Mr. Bass, who is based in Dallas, is best known for making a fortune during the housing crisis by betting against subprime mortgages. His fund now has a multibillion-dollar bet that the Chinese yuan and Hong Kong dollar will fall.

​Mr. Bass’s role ​came to light in the Financial Crisis Inquiry Commission records released by the National Archives earlier this month. Those include a memorandum describing an interview withThomas Marano, former head of mortgages at Bear Stearns. Mr. Marano told a panel of investigators that Mr. Bass was Mr. Faber’s source.

Messrs. Bass and Faber declined to comment.

At the time, hedge funds were concerned about Bear Stearns’s financial health. They were attempting to get other Wall Street firms to take their place in trades with Bear Stearns on credit-default swaps used to short mortgage-backed securities, in a trade known as a “novation.” Those trades would reduce or eliminate a hedge fund’s exposure to Bear Stearns.

“There were several investors who tried to novate, but Kyle Bass was memorable because I reached out to him to find out his concerns. I heard on CNBC that he had told them that he had tried to novate with Goldman, and they said that they would maybe take it, but he wasn’t sure,” Mr. Marano is quoted in the memo.

CNBC hadn’t, however, actually disclosed Mr. Bass’s role. Mr. Faber has never said publicly who his source was.

“I reached out with a Bear salesperson to Kyle, and he indicated that he attempted to novate to Goldman and that he shared a conversation about Goldman not wanting to novate with David Faber of CNBC. I said it’s all over CNBC, and he said that he couldn’t believe that David Faber put that all over the air. He was shocked that it was out there,” Mr. Marano said, according to the memo.

 

Funds Blame Wells Fargo for Bad-Loan Losses

SAN FRANCISCO (CN) – Wells Fargo has blown billions of investor dollars by ignoring problems with bad loans that went into mortgage-backed securities, BlackRock and other huge financial services firms claim in state court.
PIMCO, Prudential Insurance, TIAA-CREF, Group Alliance, Kore Advisors, Sealink Funding and DZ Bank joined BlackRock in class action filed Monday against Wells Fargo in San Francisco Superior Court.
Wells Fargo was supposed to look out for the interests of the investors in more than 250 residential mortgage-backed securities trusts for which it acted as trustee, but the mutual fund groups say the bank failed to react to “overwhelming evidence of defective loans.”
“This class action seeks to recover billions of dollars in damages caused by Wells Fargo’s abdication of responsibility causing the beneficiaries of the trusts to lose billions of dollars,” the companies say in the complaint.
Between 2004 and 2008, the mutual funds claim they invested $241.6 billion in 267 mortgage-backed securities trusts overseen by Wells Fargo.
While Wells Fargo has played a role in all parts of the mortgage-backed securities market, the lawsuit focuses on its role as a trustee.
To create mortgage-backed securities, banks originate loans or purchase them from other originators. They then pool them together and package those pools into securities. Investors in the securities receive some of the principal and interest payments made by mortgage borrowers.

Read on.