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STORIES:
Real
estate bubble bursts for California lawmakers too - (www.latimes.com) In the boom years, several
California legislators bought homes but are now having trouble keeping up with
mortgages or avoiding big losses. State lawmakers typically keep modest
quarters near the Capitol to use when they're in town, with help from their
tax-free expense allowance of $28,000 a year. Assemblyman Tony Mendoza bought a
three-bedroom home instead, paying $463,000 for it after his 2006 election. "If
you bought property, property values would go higher," said the Democrat,
whose main home is in Artesia. "So I figured as soon as I get there
[Sacramento], I will buy the house." But now he is one of at least 10
legislators who didn't fare well in a real estate climate that once showed no
sign of cooling. The housing market tanked, the recession lingered and
legislators' pay was cut. Unlike some predecessors who made handsome profits on
second residences in Sacramento or in their districts before the downturn,
these lawmakers have found themselves unable to pay their mortgages or stuck
with homes that would sell at a loss, or both.
NEIL
BAROFSKY: Here's The Real Reason The Feds Are Furious At The New York Regulator
Going After Standard Chartered - (www.businessinsider.com)
According to CNBC's Steve
Leisman, the Feds are even saying that the head of the NYDFS, Benjamin Lawsky,
hijacked the investigation and may have over-stated the case, which could lead
to a lower fine for Standard Chartered. They were also given little notice that
the case was being filed. It all sounds very complicated, so having never been
a regulator ourselves, Business Insider reached out to Neil
Barofsky, former Special Inspector General of TARP and author of called Bailout: An Insider Account of How Washington
Abandoned Main Street While Rescuing Wall Street. We figured he
could explain why The Feds would be upset about someone from outside D.C.
filing a case like this. Here's what he said: "If you want to understand
exactly what's going on here, reread the four or five pages in chapter 1 of my
book about my battles with Washington over the FARC case. Exactly the same
thing happening here. They'd rather trash a potentially legitimate case than
admit that they were asleep at the switch, especially now after the recent
revelations about their failures with LIBOR and HSBC."
Despite Record Fraud Payouts, Most Execs Avoid Jail - (www.cnbc.com) Pharmaceutical companies, military contractors, banks and other corporations are on track to pay as much as $8 billion this year to resolve charges of defrauding the government, analysts say — a record sum and more than twice the amount assessed last year by the Justice Department. The surge in penalties is because of a number of factors, including the resolution of longstanding actions against drug makers and military contractors, as well as lawsuits brought against mortgage lenders after the financial crisis. But it also reflects a renewed emphasis on corporate fraud, as the Justice Department devotes more resources to the issue and demands higher penalties from companies.
Emerging Markets Experiencing Capital Outflows - (www.reuters.com) There's always something
comforting about dining in a restaurant where locals are eager to eat. Yet even
as foreign investors pile back into emerging markets this year - searching for
growth, yield and sovereign credit stability so elusive in the big developed
markets these days - there is something unnerving about seeing domestic capital
spinning out the same revolving door in some countries. Russia's deputy economy
minister Andrei Klepach said on Monday the government may double its existing
2012 net capital outflow forecast to $50 billion, and even that's still below
private forecasts of a $65 billion drain. Although more modest than last year's
outflow of $80.5 billion and well under the worst moments of the 2008/09 credit
shock, domestic money continues to exit the country at a brisk pace.
Meet The
Wall Street Regulator Who Pissed Off The Fed, The Treasury, And The Entire City
Of London - (www.businessinsider.com)
The Superintendent of
Financial Services Benjamin Lawsky, who is now being referred to as the "rogue regulator", has certainly
put his regulatory agency and himself on the map. Earlier this week,
little known/newly formed regulator the New York Department of Financial
Services released bombshell allegations that Standard Chartered
helped facilitate hundreds of billions of dollars worth of transactions for
Iran, which is currently under sanctions by the U.S. What's
more is the bank, whose stock price has been hammered, could also lose its
banking license in the state. On top of all that, his agency's actions have reportedly ticked off the Federal Reserve and the U.S.
Treasury for going around them.
New
study contends renting is superior investment to owning for most Americans
- (www.ochousingnews.com)
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