Monday, 22 Nov 2010 | 4:51 PM ET

New Fannie & Freddie Litigation the Next Ugly Shoe to Drop in Mortgage Repurchase Nightmare?

Posted By: Ash Bennington

Are Fannie Mae and Freddie Mac, the enormous Government Sponsored Enterprises (GSEs) that purchased about three quarters of the total single-family mortgages in the United States, about to step into the repurchase litigation fray ?

Tom Grill | Photographer's Choice RF | Getty Images

If so, it might be very frightening news indeed for the lenders potentially on the hook to repurchase the securities they sold to the GSE's.

First, a little background.

From the RealtyTrac article, a primer on Fannie May and Freddie Mac:

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  Monday, 22 Nov 2010 | 4:27 PM ET

The Stupid Bazooka Theory Rides Again in Europe

Posted By: John Carney

Don’t be so sure that the European Union’s emergency aid package for Ireland will stop the spread of debt concerns to other euro zone countries. In fact, it may accelerate it.

After Greece was bailed out of its own debt troubles this year, the various European government officials all voiced confidence that the stabilization programs put in place would probably not need to be drawn down. Just the existence of the programs—the expression of the will of European government’s to stabilize the markets—would be enough to stabilize markets. Indeed, the Eurocrats insisted that the point of constructing the bailout programs was to avoid ever having to use them.

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  Monday, 22 Nov 2010 | 4:18 PM ET

Diamondback Says It Is Cooperating With FBI

Posted By: John Carney

Diamondback Capital Management, one of the three firms that was raided Monday by the Federal Bureau of Investigation, says that its cooperating with the FBI's investigation .

"We received an inquiry this morning from the FBI," the hedge fund firm said in a statement that was emailed to MarketWatch . "Diamondback is voluntarily cooperating. The firm is fully operational and we, along with our team, continue to manage the portfolio and Diamondback's business for the benefit of our investors," it added.

»Read more
  Monday, 22 Nov 2010 | 4:06 PM ET

Getting Carded for the Holidays

Posted By: Stephanie Landsman

Law student Samuel Jaffe won’t be standing in line in the wee hours of the night hoping to score a Black Friday deal.

Facebook And Target Begin Sale Of Facebook Gift Cards
Getty Images
Facebook And Target Begin Sale Of Facebook Gift Cards

"I'd rather be in a bathrobe at 3am ordering my discount gifts or buying gift cards than being in a stampede," says Jaffe.

A Mercator Advisory Group study finds $70.5 billion was spent on store gift cards last year versus $40 billion in 2003. Even though the amount has nearly doubled in the last six years, the growth pace has begun to stall. Purchases of gift cards were up just over two billion dollars from 2008 to 2009.

"Gift card growth over the past two years has slowed down because of the economy. People have been getting deals. So, why give cash when you can get something 50 to 60 percent off for something impressive," says Eric Beder, Brean Murray, Carret & Co. Retail Analyst.

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  Monday, 22 Nov 2010 | 3:33 PM ET

Hedge Fund Raid

Posted By: Ash Bennington

The FBI conducted raids on three hedge funds today, in connection with its massive investigation on insider trading on Wall Street.


A quick rundown of hedge funds involved:

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  Monday, 22 Nov 2010 | 3:16 PM ET

Here's What's Been Happening on the 26th Floor of the News Corp Building

Posted By: Julia La Roche

The American media magnate and CEO of News Corp, Rupert Murdoch and Apple CEO, Steve Jobs worked secretively to create a tablet-based news outlet operating out of the 26th floor of the News Corp building.

News Corp
Getty Images
News Corp

The tablet-only news outlet called “The Daily” will contain what is being described as “highly visualized” and interactive content.

During the process of creating the project, the 27th and 25th floors were "quarantined" for purposes of secrecy.

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  Monday, 22 Nov 2010 | 2:40 PM ET

Where Will You be Reading This Next Year?

Posted By: Ash Bennington

How you get the news matters—particularly to finance professionals, not just accuracy but speed.

Valerie Everett

If you work for a bank or a hedge fund, and you need to stay on top of what's going on in the world, you probably read The Wall Street Journal. So what does the discussion of such things as news delivery models mean to you? That depends.

In an article in Saturday's New York Times, David Carr addresses just such questions.

Now that the Wall Street Journal is owned by News Corp., Rupert Murdoch is among a very short list of the most powerful men in business news:

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  Monday, 22 Nov 2010 | 1:43 PM ET

The SEC's Absurd War Against Insider Trading

More absurdity from the SEC this week.

The Wall Street Journal Reports they are now investigating what are known as Expert Networks. These are private consulting firms that specialize in providing information and expertise on particular industries and companies. Hedge funds and mutual funds hire them to get an investment edge.

The Journal highlights a company that is being probed by the SEC, which does “channel checks” with manufacturers of technology equipment for bigger companies. That kind of research gives insight into strength of order flow and can provide clues as to the direction of the industry. \(Often times, they are run by, or staffed with, former employees of the companies in question. Sounds similar to the revolving door of members of congress who become lobbyists.\)

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  Monday, 22 Nov 2010 | 1:16 PM ET

The Government May Still Have Nothing on SAC Capital

Posted By: John Carney

*Update: The FBI raided two hedge funds run by former SAC Capital employees, according to a report. A third hedge fund has also been raided, although it is unclear right now if there is any connection to SAC Capital.*

It’s been clear for nearly a year that the government has been targeting Steve Cohen’s SAC Capital in its insider trading dragnet. But it seems like the government keeps coming up empty.

The Federal Bureau of Investigation’s Special Agent B.J. Kang—the guy who arrested Bernie Maddoff and Galleon founder Raj Rajaratnam—first investigated allegations of trading irregularities at SAC three years ago, although the inquiry concluded with no charges being filed against the firm. Reuters investigative reporter Mattew Goldstein first reported the investigation in 2009 .

Kang’s 2007 investigation sprang from a lawsuit filed a year earlier by Fairfax Financial Holdings, a Canadian insurance company, against 20 or so hedge funds—including SAC Capital—and stock analysts alleging the defendants were part of a scheme to sell the company’s stock short, have negative analyst reports published, then profit when the stock dropped. Critics of the lawsuit described it as a way of attempting to chill criticism of the company.

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  Monday, 22 Nov 2010 | 12:04 PM ET

Countrywide Documentation Disaster to Explode at Bank of America?

Posted By: Ash Bennington

The mortgage documentation mess keeps getting stickier.


The latest is this: Countrywide Financial, now owned by Bank of America , appears not to have properly transferred necessary mortgage documents when it sold loans to other banks, which then in turn created residential mortgage backed securities (RMBS) from the loans.

The documents Countrywide failed to provide are critical to the owners of the RMBS because without them homeowners can question the legal right of banks to foreclose on their homes.

What's new here? Based upon testimony delivered in a New Jersey bankruptcy court, this may have been a matter of policy at Countrywide—not just a case of a one-off error.

Based on Bank of America's current ownership of Countrywide Financial, it is possible that the largest bank in America, when ranked by deposits, may potentially be held liable for the problem.

Perhaps the biggest challenge in grasping the nature of the problem is that the details can overwhelm our ability to see the forest for the trees, so let's walk through it one step at a time.

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    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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