Angelo Mozilo Predicted US Housing Collapse As Fed Overlooked Risk (Bloomberg)
“Not only at Countrywide, but also with other lenders, there is a clear deterioration in the credit quality of loans being originated,” he wrote to company executives on Sept. 1, 2004. “The type of loans currently being originated combined with the unprecedented stretching of all aspects of credit standards could cause a bump in the road that could bring with it catastrophic consequences.”
Citigroup Ignored 2005 Bond Warning After Shedding `Handcuffs' (Bloomberg)
Should they not have done that?
Small Trader Makes Big Waves (WSJ)
Thanks to the nature of futures trading, Daniel Shak's $10 million hedge fund held gold contracts valued at more than $850 million, more than 10% of the main U.S. futures market, and the equivalent of South Africa's annual gold production. But as gold prices started falling this year, the trade, which was a combination of being long and short gold contracts—bets that prices will both rise and fall—started going bad. Monday, he liquidated his position, and is returning money to clients. As a result, the number of gold contracts on CME Group Inc.'s Comex division plunged more than 81,000, to about 500,000, the biggest single reduction ever. While his trade didn't account for all of the contracts, an average daily move is about 3,000 to 5,000 contracts.
Secret To Bank's Big Comeback: A Rich Uncle Named Sam (WSJ)
Before BankUnited FSB collapsed in May 2009, employees lit candles and prayed that Florida's biggest bank would survive the bad loans it made before the housing bubble burst. he miracle came in the form of Uncle Sam, or more precisely, the Federal Deposit Insurance Corp., which sold the failed BankUnited to a group of Wall Street financiers led by a longtime New York banker. The FDIC agreed to reimburse as much as $10.5 billion in future loan losses—and gave the new owners $2.2 billion in cash. The buyers paid $945 million. Since then, BankUnited has become one of the most profitable, highly capitalized financial institutions in the U.S.
Facebook Overvalued In Global Poll Of Investors (Bloomberg)
Sixty-nine percent of investors say Facebook is overvalued after Goldman Sachs invested $450 million in a deal that put the company’s worth at $50 billion, according to the quarterly poll of 1,000 Bloomberg customers who are investors, traders or analysts. Only 10 percent of respondents say Facebook’s valuation is appropriate; 4 percent say it’s worth more.
Geithner: US Recover On Sustainable Path (Reuters)
"I think we are at a beginning, I still think at a very early stage of what's gonna be a long period of exceptional growth in emerging markets around the world," he said.
Report: Arizona fugitive planned suicide by bear (J&C)
A convicted killer who escaped from an Arizona prison said after his capture that he had planned to overdose on heroin at Yellowstone National Park and let bears eat him to end the fear and panic he was experiencing while on the lam. Tracy Province told Mohave County sheriff's Detective Larry Matthews that he had wanted to go up on a mountain, shoot up a gram of heroin and "be bear food." As he was preparing the drug, a voice told him not to go through with the plan, and he changed course in favor of trying to hitchhike to Indiana to see family.
Moynihan: BofA Doesn't Need New Capital (CNBC)
"We have the capital to run our company … we have a clear path to follow the new rules and not have to raise capital," he said.
Ford Posts Lower Profit (Reuters)
Excluding one-time items, Ford posted an operating profit of 30 cents per share for the fourth quarter, well below the 48 cents per share analysts had forecast on that basis.
Moody's Says Time Running Out for U.S. as S&P Cuts Japan (Bloomberg)
The extension of tax cuts enacted under President George W. Bush, the chance that Congress won’t reduce spending and the outcome of the November elections have increased Moody’s uncertainty over the willingness and ability of the U.S. to reduce its debt, the credit-ratings company said yesterday.