Fannie Mae

Imagine...

Now imagine what might happen next...

Bank of America's Winning Excuse: "We Didn't Mean To"

A federal appeals court overturned a $1.3 billion judgement against Bank of America, ruling that good intentions at the outset shield bankers from fines for subsequent fraud... “Is the idea that a good state of mind initially can insulate you from fraud later on?” exclaimed one law professor, adding, "that would be a very strange and troubling doctrine...it almost seems like the 2nd Circuit fell victim to a lawyer’s trick."

Wells Fargo Reintroduces 3% Down Mortgages

Wells Fargo & Co. is rolling out a new mortgage for borrowers making minimal down payments, an offering that could allow the bank to step back significantly from a controversial Federal Housing Administration program. The bank’s new mortgage allows borrowers?with credit scores?as low as 620 on a scale of 300 to 850?to make down payments of as little as 3%, while also allowing them to use income from family members or renters to qualify.

How Hedge Funds Invest Heavily In Washington D.C.'s Culture Of Corruption

If you want to get a sense of what’s motivating Donald Trump and Bernie Sanders voters, it’s a desire to take people like Robert Shapiro, remove them from the halls of power, and toss them into a cardboard box on the street. Of course, that won’t be happening any time soon, but that’s what a lot of people want. As we detail below, confirmed recently by Congressman X, Washington is infested by the secretive world of the dark money groups representing mercenary hedge funds in their insatiable quest for more and more money. In many ways, it’s merely a microcosm of America in 2016. A culture in which ethics has become so irrelevant, it isn’t even a nuisance; it simply never factors into the equation.

Frontrunning: May 13

  • Nerves dominate before U.S. retail numbers (Reuters)
  • Stocks Give Up Week’s Gains as Commodities Fall; Yen, Bonds Rise (BBG)
  • Apple Invests $1 Billion in Didi, Uber’s Rival in China (WSJ)
  • Dollar hits two-week high, posts best fortnight since February (Reuters)
  • OPEC Sees Rival Oil Production Declining as Markets Rebalance (WSJ)
  • Trump on best behavior as he woos Republicans but differences remain (Reuters)

Bill Ackman Releases Ghastly Portfolio Update; Defends Valeant, Other Money-Losing Investments

Ackman just released his disastrous Q1 Portfolio Update, in which he made zero macro comments, and instead spent the entire letter defending his various investments such as Air Products, Canadian Pacific (of which he sold 30% of its position on April 22), Fannie Mae, his Herbalife short which recently has cost him even more hundreds of millions in losses, Howard Hughes Company, Mondelez (where he also sold 20 million share on March 16), Nomad Foods, Platform Specialty Products, Restaurant Brands, and Zoetis (where he sold a 16.85mm share block on May 9 taking his stake from 8.6% to 5.0%). Why all the liquidations? Because of Valeant of course, which remains Ackman's biggest headache, and to whose defense he dedicated the most time.

The Cult Of Central Banking Is Dead In The Water

So what is to be done, as Lenin once queried? In a word it is this. Fire the Fed. Attend to supply side policy. Let market capitalism do the rest. The cult of central banking is dead in the water.

The Party Is Over: Regulators Propose To Cap, Defer And Clawback Wall Street Bonuses

Coming off a year in which Wall Street experienced the lowest average bonus since 2012, it now has to brace itself for new regulation on incentive compensation. One of the last pieces of Dodd-Frank to be written and implemented, regulators are looking to firm up the rules surrounding incentive pay for banks. The final regulation, once agreed upon, will not just apply to banks, it will also apply to investment advisers, broker dealers, credit unions, and executives at mortgage finance companies Fannie Mae and Freddie Mac according to the Wall Street Journal.

U.S. Home Prices Are 14% Overvalued According To Bank of America

In order to gauge the ‘fair value” of home prices, we typically compare prices to the trend in income. The logic is simple – the more income one earns, the more housing he/she can access. However, prices will occasionally diverge from income, as we are experiencing now and clearly did during the early 2000s. As we have been arguing, home prices are currently overvalued - by our estimates 14% on a national level.

Bernie vs. Ron Paul: There's No Comparison

The comparison of Bernie to Ron goes like this: both launched insurgent, anti-establishment presidential campaigns while in their 70s, shook up their respective party establishments, and attracted large youth followings. But Bernie is no Ron. More importantly, Ron urged his followers to read and learn. Bernie’s platform merely regurgitates the fallacies and prejudices his young followers already imbibed in school. What more is there to read?