Category Archives: Inside jobs

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Runs still threaten the repurchase market: 2014 in review

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As 2014 comes to a close,  it’s tempting to try to assess how much systemic risk has been wrung out of the repurchase market by six years of reforms. A fair summary would be: Much proposed but little imposed. In … Continue reading

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A new entry to the repo underworld

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To Lehman Brothers’ repo 105’s and Lee Farkas’ repo fakes, we can now add Barclays’ repo stars. All are transactions viewed by regulators as trickery and deceit. Stars are explained in “Global taxation: Fiscal frustrations” by Megan Murphy and Jeff Gerth, … Continue reading

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Black: Why CEOs haven’t been busted

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“Unless you imprison the fraudsters, sophisticated financial scams grow ever more destructive. It seems as if we have forgotten this lesson,” writes William K. Black for Bloomberg News May 10 in an article headlined “Why CEOs avoided getting busted in … Continue reading

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The underbelly of securitized banking is emerging

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The underbelly of securitized banking is showing, as investors and traders fight over the scraps left after the financial crisis of 2007-2008. One battle that has gotten media attention is a class action against JP Morgan Chase, where pension funds that were clients … Continue reading

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Repo fraud “happens all the time,” says convicted Farkas

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Securitized banking has its first 21st Century big-time crook. Lee B. Farkas, chairman of one of the largest privately owned mortgage lending companies in the U.S. when it collapsed in 2009, was convicted by a jury April 19 of a … Continue reading

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Will ‘ring-fencing’ work better than ‘firewalls’ did?

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We’re hearing a lot about “ring-fencing” these days. That sounds suspiciously like “firewalls” to some of us who covered the S&L calamity 20 years ago. Sheila Bair, chairman of the Federal Deposit Insurance Corp., thinks bank holding companies should ring-fence their investment banking operations … Continue reading

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WSJ: ‘Investors’ hot for riskier mortgage securities

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Investors are “climbing over each other” to invest in higher-yielding mortgage securities like those issued by PennyMac, which RepoWatch wrote about December 9, according to the Wall Street Journal April 11. These securities pay a higher return because they are … Continue reading