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  Tuesday, 29 Mar 2011 | 2:10 PM ET

The New FDIC Risk Retention Rules Reject Insurance

Posted By: John Carney
Government Regulation
CNBC.com
Government Regulation

One of the more controversial provisions of the new mortgage risk retention rules proposed by financial regulators today is that they don’t allow banks to correct weaknesses in mortgage pools by purchasing credit protection.

Before the financial crisis , banks regularly wrapped mortgage-backed securities with insurance in order to get a higher credit rating. The idea was that the insurance diminished the possible investor losses on the securities, since the insurance company would have to pay if the underlying mortgages defaulted.

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  Tuesday, 29 Mar 2011 | 1:20 PM ET

Meet Adam Smith: The Ex-Galleon Portfolio Manager And Controversial Star Witness That Says Raj Is Guilty, And His Brother Is Too

Posted By: Katya Wachtel, Business Insider
Raj Rajaratnam co-founder of the Galleon Group hedge fund.
Getty Images
Raj Rajaratnam co-founder of the Galleon Group hedge fund.

This afternoon, former Galleon trader Adam Smith will take the stand in the Raj Rajaratnam insider trading trial.

He plead guilty to insider trading earlier this year, and is one of the government's star witnesses.

"I knew what I was doing was wrong," Smith told the court in January . "I am forever remorseful about this terrible mistake."

In their complaint against Smith, the SEC said:

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  Tuesday, 29 Mar 2011 | 12:16 PM ET

The FDIC Introduces New Risk Rules for Banks

Posted By: John Carney
american_bank.jpg

The new risk retention rules proposed by regulators today are far more stringent than major banks had hoped they would be.

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  Tuesday, 29 Mar 2011 | 11:25 AM ET

Could Peru Threaten Global Economic Recovery?

Posted By: Jeff Cox
Peru
Steve Allen | Brand X Pictures | Getty Images
Peru

The turmoil in Peru may not exactly match up to what’s happening in Libya, Japan or some of the other world’s hotspots, but traders are carefully watching political upheaval in the metal-producing South American nation.

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  Tuesday, 29 Mar 2011 | 10:41 AM ET

Does JPMorgan's AT&T Loan Signal a Credit Bubble?

Posted By: John Carney
JPMorgan3_new.jpg
Getty Images

The giant $20 billion bridge loan JPMorgan Chase made to finance AT&T's acquisition of T-Mobile USA may be a leading indicator that a new credit bubble is forming.

Moody's is warning that the loan might encourage other banks to take on too much risk in pursuit of underwriting fees, in a repeat of the mad rush to make loans we saw in the second half of 2007, according to the Financial Times .

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  Tuesday, 29 Mar 2011 | 10:09 AM ET

Crisis In Japan Costs Man Group $2 Billion

Posted By: John Carney
Rescue workers carry a body from the rubble in Rikuzentakata, Japan.
Getty Images
Rescue workers carry a body from the rubble in Rikuzentakata, Japan.

London's Man Group performed an nifty feat of media management today.

The Financial Times is reporting that the Man Group, the worlds second-largest hedge fund manager by assets under management, lost more than $2 billion over in a single month as a result of the crisis in Japan. That's not exactly the kind of thing investors like to read in headlines.

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  Tuesday, 29 Mar 2011 | 9:50 AM ET

Susan Tose Spencer: DeMaurice Smith Should Be Fired

Posted By: Lori Ann LaRocco
NN_c_suite_200.jpg

The latest chapter in the NFL lockout has Tom Brady along with nine other players filing their final brief in support of their claim ahead of the April 6 injunction hearing.

The class representatives claim in the brief that by barring the players from off season workouts and delaying the free agency period, the owners are inflicting "irreparable harm" on them.

I caught back up with Susan Tose Spencer, former Philadelphia Eagles' vice president, legal counsel and acting GM in 1984. Spencer was at the negotiation table during the strike of 1982 on the latest developments.

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  Tuesday, 29 Mar 2011 | 9:25 AM ET

Rajaratnam's Brother in Alleged Galleon Coverup

NN_morning_call_200.jpg

Federal prosecutors considering manslaughter charges for BP managers [Bloomberg]

Did AT&T curry favor in the T-Mobile deal with 1,500 cupcakes? [NYTimes]

Private exchange wants to challenge NYSE, Nasdaq [CNBC.com via reuters]

Rajaratnam's brother in alleged Galleon coverup [WSJ]

Economic data today includes Case-Shiller Home Price Index and consumer confidence report [CNBC.com via AP]

»Read more
  Tuesday, 29 Mar 2011 | 7:26 AM ET

Was AIG Clueless or Criminal?

Posted By: John Carney
AIG
AIG

A top AIG executive’s testimony to the financial crisis panel reveals a profound lack of understanding of the mortgages derivatives business that helped cripple the insurance giant.

Andrew Forster headed up the London office of AIG Financial Products \(AIGFP\)—the group that sold credit protection on mortgage-backed securities. His group—sometimes called “ground zero of the financial crisis”—agreed with Goldman Sachs to provide credit protection on a mark-to-market basis for various mortgage securities.

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  Monday, 28 Mar 2011 | 4:44 PM ET

Muni Bonds in 'Deep Freeze'

Posted By: Ash Bennington

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