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STORIES:
Mortgage
Settlement: Half Of Money Siphoned Off By Cash-Hungry States - (www.huffingtonpost.com) After a bruising year-long battle with banks
that resulted in a $25 billion mortgage settlement, the state attorneys
general who led the negotiations could be excused for thinking the hard part
was over. But in the months after that deal was reached, many found themselves
confronted by a new challenge: fighting with lawmakers who want to siphon off
money earmarked for homeowner aid for other uses. A report released
Thursday by Enterprise Community Partners, a housing nonprofit, offers the
clearest indication yet that the state attorneys general -- and by extension,
struggling homeowners -- are losing the fight against those with sticky
fingers. States have diverted more than half of the money allocated for
mortgage relief, $988 million so far, to pet projects and other initiatives,
according to the report.
Cost of Four Euro Exits? $22 Trillion - (www.cnbc.com) A Greek departure from the euro currency,
followed by other southern European countries, would cut 17 trillion euros ($22
trillion) from global economic growth, causing a worldwide recession hitting
the U.S. and China, a study by a German think tank has found. Commissioned by the Bertelsmann foundation, the study by
Prognos looks at four scenarios in which Greece defaults on its debts as
creditor nations grow tired of providing financial aid to other euro zone
countries.
Google's Miss Highlights Big Worry on Wall Street - (www.cnbc.com) Google's stunning earnings disappointment on
Thursday is a dramatic example of what has become Wall Street's latest worry:
revenue is coming in much worse than anyone thought. Overall this earnings
season, third-quarter profits have managed to be a shade better than the
doom-and-gloom forecasts. But company top lines—or the revenue generated that
should be driving those bottom-line profit beats—have been even worse this
quarter than they were last.
Former
GE execs get prison for bid-rigging - (money.cnn.com)
A trio of former financial
executives from General Electric are headed to prison after being found guilty
of defrauding taxpayers in the municipal bond market.
The men
are the first to be sentenced as part of the government's ongoing investigation
of bid-rigging in auctions for the investment of municipal bond proceeds by
some of Wall Street's biggest firms. The probe has yielded 20 indictments so
far, with defendants coming from institutions including Bank of America (BAC, Fortune 500), JPMorgan (JPM, Fortune 500) andUBS (UBS). The three men sentenced Thursday
formerly worked at General Electric's(GE, Fortune 500) GE Capital unit, where
prosecutors say they colluded with counterparts at other firms to rip off bond
issuers. Two men -- Dominick Carollo and Peter Grimm -- received three years in
prison, while the third, Steven Goldberg, got four years.
Germany
Takes Hard Line on Spanish Banks - (online.wsj.com)
Germany's Merkel insisted the
bailout fund can't be used retroactively, meaning Spain's already-heavy debt
load could swell further. German Chancellor Angela Merkel took a hard line
on Spain Friday, saying that Madrid will have to keep on its own balance sheet
the tens of billions of dollars it is about to inject into its banks and won't
be able to transfer them to the euro-zone bailout fund. That position, laid out
after a two-day summit of European Union leaders in Brussels, would mean that
Spanish borrowing from the euro zone to bolster the capital of shaky
banks—estimated to be as much as €60 billion ($78.72 billion)—will swell the
country's already-heavy debt load. Germany's stance appeared to dash hopes,
fostered by the leaders at a summit in June, that the government's capital
injections into the banks could later be transferred to the bailout fund once
an effective euro-wide bank supervisor is in place, something that is now
slated for 2013. The position could hurt the Spanish government's ability to
fund itself on the market, just as interest rates on its bonds have dropped to
multi-month lows.
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